International Business

Sixteenth Edition

Chapter 1
Globalization and
International Business

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Learning Objectives (1 of 2)
1.1 Relate globalization and international
business (IB) to each other and explain why
their study is important

1.2 Grasp the forces driving globalization and IB

1.3 Discuss the major criticisms of globalization

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Learning Objectives (2 of 2)
1.4 Assess the major reasons companies seek to
create value by engaging in IB

1.5 Define and illustrate the different operating

modes for companies to accomplish their
international objectives

1.6 Recognize why national differences in

companies’ external environments affect how
they may best improve their IB performance

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Factors in IB Operations
Objective 1-1
Figure 1.1 Factors in IB Operations

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Globalization and IB
Objective 1-1
• What is Globalization?
• Why Globalization?
• The connection between Globalization and IB.
• Why study IB?

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The Forces Driving Globalization and IB
Objective 1-2
• Globalization
− Has been growing.
− Is less pervasive than generally thought.
− Has economic and noneconomic dimensions.
− Is stimulated by several factors.

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Factors in increased Globalization
Objective 1-2
• Factors in increased Globalization
− Rise in and application of technology
− Liberalization of cross-border trade and resource
movements
− Development of services that support IB
− Growth of consumer pressures
− Increase in global competition
− Changes in political situations and government
policies
− Expansion of cross-national cooperation

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Criticisms of Globalization and IB
Objective 1-3

• Sovereignty
• Environment
• Some people may lose
• Increase to personal stress

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Why engage in IB?
Objective 1-4

• Sales expansion
• Resource acquisition
• Risk reduction

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IB Operating Modes
Objective 1-5
• Merchandise Exports and Imports
• Service Exports and Imports
• Investments

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Types of International Organizations
Objective 1-5
• MNE
• Multinational Enterprise
• Collaborative Arrangements

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Factors Affecting Ability to Operate Abroad
Objective 1-6

• Physical factors
• Institutional factors
• Competitive factors

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