Principles of International Business Course Introduction

• The speaker, Lon Schiffbauer, introduces himself as the virtual lecturer for the principles of international business course, highlighting his international experience and expertise in the field.

• Lon Schiffbauer has an MBA and a PhD in industrial organizational psychology, and has lived and worked in various countries, including England, France, Japan, and Malaysia, gaining valuable international experience.

• The course will explore the concepts, theories, and practices of international business and globalization over the next 12 lectures.

• The first lecture covers the definition and explanation of globalization, international business, and their effects on daily life.

• Globalization is defined as the shift toward a more integrated and interdependent world economy, where everything is connected and interdependent.

• The speaker uses a picture of South Korea and North Korea to illustrate the effects of globalization, with South Korea having a thriving free market economy and North Korea being isolated from the world economy.

• The concept of integrated means that everything is connected, and the world economy is a fully integrated economy, where individual parts come together to form a single product or system.

• The concept of interdependent means that countries and economies rely on each other, and the world economy does not recognize borders, with money and business flowing across countries.

• The speaker provides examples of globalization, including the COVID-19 pandemic, which disrupted global supply chains, and companies like McDonald's, Ikea, and H&M, which operate globally.

• The globalization of markets refers to the trend of corporations viewing the entire planet as a potential market, rather than being satisfied with distinct national markets.

• Examples of globalization of markets include companies like McDonald's, Ikea, and H&M, which operate globally and have a significant presence in various countries.

• The size and power of global markets are significant, with some companies being considered "too big to fail," and their failure could have severe consequences for the global economy.Here is a summary of the text in detailed bullet points:

• McDonald's has around 40,000 restaurants in 119 countries, employing 1.5 million people, making it a global company with international presence.

• The globalization of production involves sourcing goods and services from around the world to take advantage of local differences in cost and quality of labor, materials, capital, and other resources.

• A single cup of Starbucks coffee can depend on as many as 19 countries, highlighting the complexity of global supply chains.

• International business involves cross-border exchanges of goods, services, people, intellectual property, contractual assets, and liabilities between two or more nations.

• Rio Tinto, an Australian company, owns a copper mine in Utah, USA, employing 2,000 people directly and 14,000 indirectly, demonstrating the impact of international business on local economies.

• In 2017, Utah exported $11.5 billion worth of goods and services, with top destinations including the UK, Hong Kong, Canada, China, and Mexico.

• The state of Utah is heavily reliant on international trade, with one in four jobs tied to international trade.

• Many well-known brands have international origins, including Samsung (South Korea), Adidas (Germany), Panasonic (Japan), HSBC (UK), Shell (Netherlands), Gerber (Switzerland), Budweiser (Belgium), and Ben & Jerry's (acquired by Unilever, a British-Dutch multinational).

• Seven-Eleven, a Japanese company, and Haagen-Dazs, an American company, are examples of global brands with complex international connections.

• There is no such thing as a 100% made-in-one-country product, as global supply chains and international trade are deeply interconnected.

• The "made in the USA" label requires that all or virtually all significant parts and processing of a product must be of US origin, with negligible foreign content.

• The origin of raw materials, machinery, and facilities can make it difficult to determine the true country of origin of a product.

• Globalization has led to concerns about job losses, particularly in manufacturing and low-wage sectors, but it has also created new opportunities for international trade and investment.- The manufacturing sector has been significantly impacted by globalization, with industries such as clothing and furniture being moved to countries like Costa Rica and Bangladesh.

• The white-collar sector, intellectual sector, and management sector have also been affected by globalization.
• Real output in the manufacturing sector has increased, but employment has decreased, with automation being a contributing factor.
• Automation is also being done abroad, which has an impact on employment.
• Lack of regulations is a concern in globalization, particularly in areas such as environmental regulations and labor laws.
• Different countries have different regulations, which can lead to manufacturers taking advantage of lower costs and regulations in other countries.
• Environmental impact is a concern in globalization, as different countries have different regulations and enforcement of environmental laws.
• Labor laws and regulations vary by country, leading to concerns about child labor, forced labor, and exploitation.
• The United States Department of Labor estimates that there are 152 million children involved in child labor and 25 million people involved in forced labor worldwide.
• Child labor and forced labor affect many industries, including coffee, sugar, cell phones, gold, chocolate, clothes, toys, sushi, makeup, and leather goods.
• Supranational organizations, such as the UN and World Trade Organization, can impose policies on countries that may not align with domestic interests.
• The World Trade Organization sets policies around international trade that countries must abide by, which can be seen as a threat to national sovereignty.
• The wage gap is exacerbated by globalization, as those with capital and resources are able to benefit from the system, while those without are left behind.
• In the United States, the richest 1% take home 188 times as much as the bottom 90%, and the top 1% income share has doubled since 1969, while poverty has remained steady.
• Globalization has benefits, such as increased economic integration and interdependence, but it also has significant moral, ethical, and economic costs.