Internationalization of Businesses Exam Chapter 1 PDF

**Internationalization of businesses exam** Chapter 1. 1. **Concept and Definitions of Globalization:** - **Globalization Defined**: It\'s described as the closer integration of countries and markets, facilitated by the reduction in transportation and communication costs, and the disma...

**Internationalization of businesses exam** Chapter 1. 1. **Concept and Definitions of Globalization:** - **Globalization Defined**: It\'s described as the closer integration of countries and markets, facilitated by the reduction in transportation and communication costs, and the dismantling of barriers to the free flow of goods, services, capital, knowledge, and people. - **Views on Globalization**: - Based on causes: Cited from Joseph Stiglitz (2002), focusing on the technical and regulatory changes facilitating global integration. - Based on consequences: Cited from Duran (2001), noting the economic and social convergence among countries and how these affect governmental and corporate behaviors globally. 2. **Chronological Stages of Globalization:** - Discusses the key phases of globalization starting from the strong growth of international trade, the significant role of foreign direct investments, to the influence of technological advancements and the formation of new international relations. - **Key Players**: Introduction of new economic powerhouses, namely BRICS (Brazil, Russia, India, China, South Africa), CIVETS, and MINT countries, illustrating the shift towards a multipolar global economy. 3. **Economic Aspects of Globalization:** - Highlights the disappearance of traditional market barriers, leading to a unified \'world market\' where consumer preferences across different nations begin to homogenize. - Discusses the broader implications for businesses that now face opportunities and threats on a global scale, necessitating interactions with distant markets and cultures, thereby transforming multinationals into vast intercultural networks. 4. **Measuring Globalization:** **Country Level**: Methods involve analyzing trade and investment penetration, using data on imports, exports, and foreign direct investments to gauge a country's integration into the global economy. - **Focus:** - Measures the degree to which a country is integrated into the global economy. - **Indicators Used:** - Trade Penetration: Calculated by the sum of imports and exports as a percentage of GDP. This indicator shows how much a country is involved in global trade. - **Foreign Direct Investment (FDI):** - Includes both inflows and outflows, providing insights into how much a country is investing abroad and attracting foreign investments. FDI is further divided into gross FDI (total investments) and net FDI (gross FDI minus disinvestments). - **Purpose:** - To provide a macroeconomic perspective of how globally engaged a country is, using both economic and non-economic indicators like internet access, migration rates, and language skills. - **Company Level**: Differentiates between types of companies based on their level of international activity, from exporting firms to multinational enterprises. Introduces the Transnationality Index (TNI) by UNCTAD, which measures a company\'s extent of international operations in terms of asset distribution, sales, and employment overseas. - **Focus:** - Examines the extent of a company\'s international activities relative to its overall operations. - **Indicators Used:** - Transnationality Index (TNI): Averages three ratios involving foreign assets to total assets, foreign sales to total sales, and foreign employment to total employment, quantifying a company's spread and operational depth in foreign markets. - Type of International Activity: Distinguishes between exporting companies, which focus on selling abroad while maintaining production domestically, and multinational companies, which establish substantial operations and subsidiaries in multiple countries. - **Purpose:** - To understand how a company performs globally and how significant its international presence is in comparison to its domestic operations. - **Sector Level**: Discusses the criteria for a sector to be considered global, emphasizing the dominance of multinational companies and their competitive advantages gained through geographical diversification. - **Focus:** - Evaluates the global nature of an entire industry or sector. - **Indicators Used:** - **Market Leadership:** Determines whether the leading companies in a sector are the same across national markets, indicating a sector\'s competitiveness and global reach. - **Competitive Advantage:** Looks at whether companies in the sector gain significant competitive advantages through international diversification, such as reduced costs, broader market access, or enhanced innovation capabilities. - **Purpose:** - To assess whether a sector is led globally by the same companies and how these companies compete on an international scale. 5. **Concepts and Definitions of Globalization:** a. **Definitions**: Globalization is described as the integration of countries and markets facilitated by the reduction in transportation and communication costs and the removal of barriers to the free flow of goods, services, capital, knowledge, and people. b. **Causes and Consequences:** The slideshow outlines both causes (technical and regulatory changes as described by Joseph Stiglitz) and consequences (economic and social convergence among countries, noted by Duran). 6. **Chronological Stages of Globalization:** - **Evolution:** Describes the phases of globalization, including the growth of international trade, prominence of FDIs, and influence of technological advancements. - **New Economic Powerhouses:** Highlights the rise of BRICS, CIVETS, and MINT countries, indicating a shift towards a multipolar global economy. 7. **Economic Aspects of Globalization:** - Market Changes: Discusses the homogenization of consumer preferences and the transformation of traditional market barriers, which foster a globally unified market. - Global Events: Notes the impact of recent global economic scenarios, such as the US-China trade war and the COVID-19 pandemic, on globalization dynamics. 8. **Elements That Foster Globalization:** - Technological Development: Details how disruptive technologies like AI and robotics are expected to change production, communication, and health systems. - Integration of National Economies: Discusses the reduction of trade and investment barriers through mechanisms like the World Trade Organization and various regional trade agreements. - Internationalization of Companies: Examines how companies view the global market as their potential marketplace, leading to strategies based on the comparative advantage principle. 9. **Corporate Social Responsibility (CSR):** - Definition and Role: Defines CSR as the ethical obligation of companies to mitigate negative externalities of their operations. - ESG and SDGs: Links CSR to environmental, social, and governance (ESG) factors, with strategies framed by the Sustainable Development Goals (SDGs) set by the UN. 10. **Globalization and Corporate Social Responsibility (CSR):** - Although briefly mentioned, the section likely explores how globalization influences CSR practices, suggesting that global businesses must manage their operations in ways that are socially and environmentally responsible to maintain sustainability in diverse international markets.