Questions and Answers
What is international business?
Commercial transaction that crosses the borders of two or more nations.
What are imports?
Goods and services purchased abroad and brought into a country.
What are exports?
Goods and services sold abroad and sent out of a country.
What is a multinational corporation?
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What defines a born global firm?
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What are some benefits of globalization of production?
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Which of the following statements about globalization is true?
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What has been a recent challenge of globalization?
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What is the General Agreement on Tariffs and Trade (GATT)?
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What role does e-commerce play in globalization?
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The value of all goods and services produced by a domestic economy during a one-year period is known as ___.
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The trend towards greater economic, cultural, political, and technological interdependence among national institutions and economies is known as ___.
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Globalization has no effect on income inequality between nations.
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Which of the following is not a benefit of globalization of markets?
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Study Notes
Learning Objectives
- Identify types of companies in international business: large corporations, emerging market firms, and SMEs.
- Understand globalization's significance for global markets and production.
- Recognize key forces driving globalization.
- Analyze arguments for and against globalization.
- Develop skills for future career relevance.
Apple’s Global Impact
- Supports millions of applications globally.
- Globalization enables Apple to:
- Produce and market products worldwide with minimal modifications.
- Lower production and marketing costs.
- Maintain a coherent global branding strategy.
- Challenges faced include rising nationalism and trade wars.
International Business Overview
- Definition: Commercial transactions crossing borders of multiple nations.
- Imports: Goods/services bought from foreign countries.
- Exports: Goods/services sold to foreign markets.
Key Players in International Business
- Major players include large firms from affluent nations, emerging market companies, and SMEs.
- Multinational Corporations (MNCs): Companies with investments in several countries.
- Foreign Direct Investment (FDI): Purchase of significant assets in another country to exert management control.
- Born Global Firms: Startups with an international focus from the outset, e.g., Airbnb and TikTok.
What is Globalization?
- Characterized by heightened economic, political, cultural, and technological interdependence.
- Distinguished by denationalization unlike internationalization.
- Stages of globalization:
- First Age (mid-1800s to 1920s): High labor mobility, large cargo ships enhanced trade, communications improved.
- Second Age (1989 to present): Technology advancements, regional economic blocs' growth, and the rise of global supply chains.
Globalization of Markets and Production
- Globalization of Markets: Convergence in buyer preferences worldwide.
- Benefits include reduced marketing costs, new market creation, income stream balancing, and global sustainability.
- Globalization of Production: Distribution of production to optimize costs and quality.
- Benefits include access to cost-effective labor, expertise, and necessary inputs.
Drivers of Globalization
- Decreased trade barriers enabled by GATT and WTO.
- Regional Trade Agreements: USMCA, EU, and APEC.
- E-commerce growth fueled by digital connectivity and consumer engagement.
- Innovations in communication and transportation enhance interaction and logistics.
Globalization Debate: Jobs and Wages
- Arguments against globalization:
- Job losses in developed countries, wage decline, and exploitation of low-wage workers.
- Arguments for globalization:
- Promotes wealth, efficiency, and job market flexibility while improving living standards in developing nations.
Globalization and Income Inequality
- Inequality within nations: Persistent wage gaps between occupations.
- Inequality between nations: Broader income disparities amongst rich and poor countries.
Cultural Implications of Globalization
- For globalization: Facilitates economic benefits from diverse skills and perspectives.
- Against globalization: Threatens cultural diversity, leading to homogenization.
National Sovereignty and Globalization
- Concerns about diminished governmental power due to supranational institutions.
- Counterargument: Globalization can enhance democratic processes worldwide.
Environmental Considerations
- For globalization: Corporations often endorse sustainable practices.
- Against globalization: Risk of a "race to the bottom" on environmental regulations.
Skills for the Future Workplace
- Essential skills developed through the course include:
- Application of knowledge and critical thinking.
- Communication abilities.
- Ethical understanding and commitment to social responsibility.
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Description
Test your understanding of globalization and its impact on international business in Chapter 1 of the tenth edition. This quiz covers key concepts such as types of companies involved in global markets and factors driving globalization.
