The Organization and

Assessment
of the Module

Organisation of the module

Lecturer:
Xiaoqing Li
Email: xiaoqing.li@brunel.ac.uk
Classes will be held: 6:00-8:00 p.m.,

Thursdays
Student presentation classes from 6:00-7.00

p.m. (from week 3).

Reading week: week 7
Revision: week 12
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Readings and resources

Core readings
Deresky, Helen. 2013. (8th edn.), International Management:

Managing Across Borders and Cultures. Pearson Education.

(Purchase recommended)
Supplement readings

Bartlett Christopher A. and Paul Beamish. 2011. Transnational

Management: Text, Cases, and Readings in Cross-Border

Management. McGraw-Hill.
Rodrigues, Carl. 2009 (3rd edn.) International Management.
Sage.
Various journal articles
UNCTAD, World Investment Report. various years.
For students without business or economics background:
Charles Hill. International Business: competing in the global
market place. McGraw Hill.

Group Presentation
Group presentation class starts in week 3.
Two groups present in each class.
Each group should have 6 students .
30 minutes per group: 20 minutes presentation

followed by 10 minutes discussion.

Groups are required to send the lecturer an
electronic copy of their presentation in advance (by
the Thursday before the presentation, at the latest).

Module Assessment
Individual coursework (100%):
3000 words: +/-10% excluding references
Coursework will be released at the end of week 2.
Submission deadline: TBC

Todays Agenda
What is globalisation?

What drives globalisation?

How has the demographics of the global

economy changed?
What does globalisation mean for firms?
Is the world flat?
What will be covered in this module?

Readings for todays lecture

Florida, R. (2005), The world is spiky, The Atlantic,

296, 3, pp. 4851.

Levitt, T. (1983), The Globalization of markets,
Harvard Business Review, May-June, pp.92-102.
Ohmae, K. (1989), Managing in a Borderless World,
Harvard Business Review, May-June.
Porter, M.E. (1990), The Competitive Advantage of
Nations, Harvard Business Review, March/April,
pp.73-93. (See also for more details: Porter, M.E.
(1990), The Competitive Advantage of Nations,
London: Macmillan).
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What Is Globalization?
What is globalization?
The shift toward a more integrated and
interdependent world economy.
Globalisation has two facets
The globalisation of markets
The globalisation of production

The Globalization of Markets

Historically distinct and separate national

markets are merging .

A company does not have to be the size of the
giants to facilitate and benefit from the
globalization of markets
In US, firms with less than 500 employees

accounted for 97% of all US exporters and almost

30% of all exports by value

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The Globalization of Production

Firms source goods and services from

locations around the globe to capitalize on

national differences in the cost and quality of
factors of production.
Companies can
lower their overall cost structure
improve the quality or functionality of their product

offering

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What Is Driving Globalization? (I)

Declining barriers to the free flow of goods,

services, and capital

Declining barriers for trade
Average tariffs are now at just 4%;
World merchandise trade has grown faster than the world
economy since 1950 (WTO);
From 1970 to 2012, the volume of world merchandise trade
expanded more than 30-fold.
More favorable environment for FDI
Between 1992 and 2009, 90% of the 2700 changes made
worldwide in the laws governing FDI created a more
favourable environment for FDI (UN).
Global stock of FDI was $22.8 trillion in 2012 (32.2% of
GDP)
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Declining Trade And

Investment Barriers
Average Tariff Rates on Manufactured Products as Percent of Value

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What Is Driving Globalization?

(II)
Technological change
Microprocessors and telecommunications
The Internet and World Wide Web
Transportation technology

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The Changing Demographics

Of The Global Economy
Four trends are important:
1.
2.
3.
4.

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The changing world output and world trade picture

The changing foreign direct investment picture
The changing nature of the multinational enterprise
The changing world order

How Has World Output And

World Trade Changed?
In 1960, the U.S. accounted for over 40% of

world economic activity, but by 2009, the U.S.

accounted for just 24%
a similar trend occurred in other developed

countries
In contrast, the share of world output

accounted for by developing nations is rising

expected to account for more than 60% of world

economic activity by 2020

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How Has World Output And

World Trade Changed?
The Changing Demographics of World GDP and Trade

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How Has Foreign Direct

Investment Changed Over Time?
In the 1960s, U.S. firms accounted for about

two-thirds of worldwide FDI flows

Today, the United States accounts for less than

one-fifth of worldwide FDI flows

Other developed countries have followed a similar
pattern
In contrast, the share of FDI accounted for by

developing countries has risen

Developing countries, especially China, have also

become popular destinations for FDI

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How Has Foreign Direct

Investment Changed Over Time?
Percentage Share of Total FDI Stock 1980-2009

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How Has Foreign Direct

Investment Changed Over Time?
FDI Inflows 1988-2009

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The changing nature of the

multinational enterprise
Multinational enterprise (MNE) - any business

that has productive activities in two or more

countries
Since the 1960s
the number of non-U.S. multinationals has risen.
In 1973, 48.5% of the worlds 260 largest MNEs were US
firms.
By 2008, some 19 of worlds 100 largest nonfinancial MNEs
were US firms.

the number of mini-multinationals has risen.

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The Changing World Order

Many former Communist nations in Europe

and Asia are now committed to democratic

politics and free market economies
creates new opportunities for international

businesses
but, there are signs of growing unrest and
totalitarian tendencies in some countries
China and Latin America are also moving

toward greater free market reforms

between 1983 and 2010, FDI in China increased

from less than $2 billion to $100 billion annually

but, China also has many new strong companies
that could threaten Western firms
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How Will The Global Economy Of The

21st Century Look?
The world is moving toward a more global

economic system
But globalization is not inevitable
Globalization brings risks
the financial crisis that swept through South East

Asia in the late 1990s

the recent financial crisis that started in the U.S. in
2007-2008, and moved around the world

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What Does Globalization

Mean For Firms?
Global companies are becoming less tied to

specific locations
Companies that desire to remain competitive
will have to develop a cadre of experienced
international managers
Small companies are also affected by and in
turn affect globalism
Technological change means

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lower transportation costs

low cost information processing and communication
low cost global communications networks
global communication networks and global media

Is the world flat?

The flat world hypothesis of recent

journalistic best sellers (Friedman, 2006).

a seamless and frictionless world following the

precepts of Ricardian comparative advantage.

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The world is not flat!

But rather a world of spikes and blocs

(Florida, 2006)

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What will be covered in this

module?
Part 1: the global managers environment
Political, economic, legal and technological environment
Social responsibility, ethics and sustainability
Part 2: the cultural context of global management
The role of culture
Communicating across cultures
Part 3: the management of international and global

operations
Formulating strategy

Implementing strategy
Organization structure and control systems
Headquarter-foreign subsidiary control relationships
Managing human resources in the international arena
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Global innovation management

Next week...
Lecture 1: The political, economic, legal and

technological environment
Lecture 2: Social responsibility and ethics

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