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🪸 CHAPTER 1: Introduction to Global and → For businesses, globalization brings many International Business opportunities: they can make more money by selling worldwide and save money by produ...

🪸 CHAPTER 1: Introduction to Global and → For businesses, globalization brings many International Business opportunities: they can make more money by selling worldwide and save money by producing in countries with cheaper labor and resources. → In the past 40 years, the world economy has changed a lot. Before, countries' economies were → Globalization is the move toward a more connected mostly separate from each other because of trade world economy. It has two main parts: the barriers, time differences, languages, and globalization of markets and the globalization of government rules. Now, these barriers are less production. important, and economies are more connected → The globalization of markets means that individual globally. national markets are becoming one big global market. Barriers like trade rules, distance, and culture are becoming less important, making it easier 🎀 The world is changing in three ways: to sell products worldwide. As a result, people in different countries are starting to like and want 1. Cross-border trade and investment are similar things. Products like Coca-Cola, McDonald's, decreasing. Starbucks, and iPhones are examples of this global 2. The world feels smaller because of market trend. improvements in transportation and → The globalization of production means companies communication. get goods and services from different countries to 3. National economies are becoming part benefit from lower costs or better quality. This helps of a global economic system. them save money or improve their products. For example, Boeing outsources many parts for its planes These changes are called globalization. from foreign suppliers. → Today, the global economy is more connected because of faster communication, transportation, and 🪸 The Emergence of Global Institutions financial systems, which create new opportunities → As business becomes more global, we need and challenges for businesses. organizations to help manage and regulate international trade and business. Some key global → Governments and companies have two choices: (1) institutions that help with this are: respond to the challenges posed by this new 1. World Trade Organization (WTO) – environmentor (2) recognize and accept the long- Oversees international trade rules. term consequences of failing to do so. 2. The International Monetary Fund (IMF) and World Bank – IMF helps keep the global → These changes will impact all businesses, and as money system stable, while the World Bank competition grows, only smaller companies focused provides on specific markets may survive if they stick to local low-interest loans to poor countries for big strategies. projects like building roads or dams. 3. United Nations (UN) – Works on various 🪸 Globalization global issues, including business and trade. → means that products and services come from all over the world. → These organizations were set up by agreements example: an American might drive a car designed in between countries and have roles defined by Germany, built in Mexico, with parts from the US, international treaties. Japan, Korea, and Malaysia. The fuel could come from a British-Dutch company. This shows how different countries work together to make things we 🪸 Drivers of Globalizaation use every day. Decline in Barriers: Since World War II, it's → Today, over $5 trillion is traded in foreign become easier for goods, services, and money currencies every day, and about 10 years ago, to move between countries because there are $18.3 trillion in goods and $4.3 trillion in services fewer restrictions. were sold across countries. Popular brands and products like Coca-Cola, Starbucks, Sony, Facebook, Disney, Netfiix, Ikea, and Apple are now global. Technological Change: Advances in  communication, information, and countries for work, like doctors from India to the UK transportation have made it easier to connect or farm workers from Mexico to the US, it affects globally. economies in various ways. Migration can benefit developing countries if skilled workers return home to 🎀 Elements of Economic Globalization start businesses. However, it can also harm economies if skilled workers leave and do not return, international trade leading to a "brain drain" and loss of valuable talent. foreign direct investment capital market fiows → Diffusion of Technology: Advances in technology, like migration (movement of labor) telecommunications and computing, have made it diffusion of technology cheaper and easier to share ideas and knowledge across borders. This includes technical know-how and broader concepts like democracy and free markets. → International trade means countries are buying and However, not all countries benefit equally from these selling more goods and services from each other. Over technological advances. The "digital divide" refers to time, countries are spending a bigger part of their the gap between countries that have access to modern money on imports and selling more of what they technology and those that don’t. make as exports. For example, between 1990 and 2021, the amount of exports increased from 18.9% to 28.9% of total trade. 🪸 Exporting → In both rich and developing countries, the share of → Direct Exporting: This is when a company sells its exports and imports compared to their total products directly to customers in another country economic output (GDP) has also gone up. This without using middlemen. The company sets up its shows how important international trade is for a own export department to handle everything, like country’s economy. Countries rely on each other researching the market, managing shipping, and more than ever to keep their economies strong by dealing with export paperwork. buying and selling goods and services across borders. → Direct exporting can be more expensive and risky because the company has to manage everything itself. → International trade in services has also grown a But it also offers the chance for higher profits and lot, making up about 19% of all global trade. gives the company more control over how its products Advances in communication technology have made are marketed and sold. it easier for companies to outsource services to countries with lower labor costs, like customer service or software testing. 🪸 The Global Strategy → Foreign direct investment (FDI) happens when a Global Marketing Strategy (GMS): This is a plan that company invests money in businesses outside its helps a company market its products across different home country. countries and regions. It involves coordinating marketing efforts in various places, though it might → Countries used high tariffs (taxes) on imported not cover every country. goods to protect their own industries from foreign competition. This led to retaliatory policies where A key part of a GMS is deciding how to balance two countries kept raising trade barriers against each approaches: other. This reduced global demand and contributed to the Great Depression in the 1930s. 1. Standardization: Using the same marketing strategy everywhere. → Capital Market Flows: Investors in many countries 2. Localization: Adapting the marketing now buy foreign financial assets like international strategy to fit different countries or regions. bonds, stocks, or mutual funds. At the same time, borrowers are seeking funds from abroad. 3. Concentration: Putting most of the Additionally, money sent home by people working in marketing efforts in a few key countries. other countries (remittances) helps fund businesses 4. Dispersal: Spreading marketing in their home countries. activities across many countries. → Migration: When people move to different  🎀 Company Management Orientations: Plato( 427-347 BC) - Socialists, Marx(1818-83) Marx argued that the few benefit at the expense of the many in a capitalist society where 1. Ethnocentric: A company with this individual freedoms are not restricted. orientation focuses on its home country and Plato argued in The Republic that individual tries to market its products the same way rights should be sacrificed for the good of the everywhere. It prefers products from its majority and that property should be owned in own country over those from others. common. 2. Polycentric: This approach is used by multinational companies where each 🎀 Individualism - is a political philosophy that states country has its own managers who adapt the marketing strategy to fit local markets. that an individual should have freedom over economic 3. Regiocentric: Companies with this and political pursuits. orientation group markets by regions and adapt strategies for each region. According to Aristotle: - Individual diversity and private ownership are 4. Geocentric: Global companies use a mix of desirable standard and adapted strategies for all markets, aiming for a universal approach. Individualism is built on two central tenets. Guaranteeing individual freedom and self 🎀 International Operations: Companies operate expression. internationally to either make more money or Letting people pursue their self-interest to reduce costs. achieve the best overall good for society. 1. Economies of Scale: This happens when a 🎀 Democracy - is a system of government where power company produces a lot of products in is vested in the people, who exercise that power directly different markets, leading to lower costs per or through elected representatives. The term comes product because they’re making many units. from the Greek words "demos," meaning "people," and 2. Economies of Scope: This involves "kratos," meaning "rule" or "power," thus literally expanding into new geographic markets meaning "rule by the people." to offer a range of products, which can also lower costs by spreading them over 01. Direct Democracy: In this form, citizens directly various products. participate in decision-making processes, such as voting 🪸 CHAPTER 2: National Differences in on laws or policies. This is more feasible in small communities or organizations but is less practical in Political, Economic, and Legal Systems larger, more complex. There are three systems: political, economic, and legal 02. Representative Democracy: Most modern systems. These three interact and influence each other, democracies are representative, where citizens elect and it affects the level of economic well-being. representatives to make decisions on their behalf. These representatives are accountable to the people and can be 🎀 Political Economy - Stresses that the political, legal, removed from office through elections. and economic systems of a country are deemed interdependent. It interacts and influences one another, 03. Constitutional Democracy: This form combines the which then affects the well-being of the economy. principles of democracy with a constitutional framework that limits government power and protects 🎀 Political Systems - It shapes the country’s economic individual rights. and legal systems. It is assessed through two dimensions: (1)Collectivism and Individualism, and (2) 04. Liberal Democracy: A type of representative Democratic and Totalitarian democracy that emphasizes the protection of individual rights and freedoms, often enshrined in a constitution or 🎀 Collectivism: similar legal document. refers to a system that stresses the primacy of collective goals over individual goals 🎀 Economic Systems - An economic system functions When collectivism is emphasized, the needs of as a regulatory framework for managing various the society as a whole are generally viewed as elements of production and distribution, such as capital, being more important than individual labor, land, and other physical resources. freedoms. Types of Economic System  Market Economy - Private Ownership, Profit stability and growth. Policy uncertainty can slow down Motive, Consumer Choice, Price Mechanism. business activity, affect market confidence, and lead to economic volatility. Command Economy - Government Ownership, Central Planning, Limited Consumer Choice Fixed Prices 🎀 Business and Investment Climate: A stable political environment is crucial for attracting domestic and Mixed Economy - Coexistence Of Private And foreign investment. Abrupt policy changes or political Public Sectors, Market And Government instability can deter investors, harming the overall Influence, Social Welfare. investment climate and economic development. 🪸 CHAPTER 3 : National Differences In Economic Development 🎀 Trade and International Relations: Political shifts 🎀 Gross National Income (GNI) - is a comprehensive can lead to changes in international trade agreements assessment of a country's overall income, including the and foreign policies, affecting export-import flows and earnings of its citizens and enterprises, regardless of international partnerships. A country ' s ability to where they are produced. maintain or reshape trade relations can greatly influence its economic position on the global stage. 🎀 Purchasing power parity (PPP) - is a statistic that compares economic production and living standards 🎀 Social Inequality and Welfare: New political across countries. It is an economic theory that analyzes leadership can implement changes in taxation, social different countries' currencies using a "basket of goods" programs, and public spending, which may affect approach. PPP is the exchange rate at which one income distribution and either improve or exacerbate country's currency may be translated into another to social inequality. Welfare reforms can directly impact buy the same quantity of a wide range of goods. the quality of life for citizens. 🎀 The Human Development Index (HDI) - is a FOCUS ON MANAGERIAL IMPLICATIONS composite statistic devised by the United Nations to FIRST-MOVER ADVANTAGES assess and evaluate countries' social and economic progress. It was introduced in 1990 and emphasizes the 🎀 Market Leadership: First movers have the privilege importance of human qualities and opportunities in of being pioneers in their domain. This position of judging development, rather than economic growth leadership often translates into a sizable market share alone and brand recognition. THE NATURE OF ECONOMIC TRANSFORMATION 🎀 Technological Mastery: Being the first in a market allows a company to set the technological standard. This 🎀 Deregulation - refers to the process of reducing or means that they not only gain control over the initial eliminating government controls and regulations in technological landscape but also influence the trajectory various sectors of the economy. Example: Electric of future developments. Power Industry Reform Act of 2001 🎀 Learning Curve: Early entrants get a head start in 🎀 Privatization - involves transferring ownership of understanding the intricacies of the market. They have public assets or enterprises to private individuals or the opportunity to learn from their mistakes, adapt, and organizations. Example: Philippine Long Distance refine their offerings before competitors even enter the Telephone Company (PLDT) scene. 🎀 Legal Systems encompasses the laws and 🎀 Regulatory Leverage: Sometimes, regulatory bodies regulations that govern economic activity, including favor first movers with incentives, subsidies, or property rights, contract enforcement, and business advantageous policies. This can provide an additional regulations. layer of protection and competitive edge Example: Anti-Money Laundering Act BENEFITS OF LATE-MOVER DISADVANTAGES THE IMPLICATIONS OF CHANGING POLITICAL ECONOMY 🎀 Market Share Acquisition: Catching up to established first movers can be an uphill battle, 🎀 Economic Stability and Growth: Changes in especially in markets where the early entrants have political leadership often bring shifts in fiscal and already captured a significant market share. regulatory policies that can directly impact economic 🎀 Brand Building: Building brand recognition and 🎀 Social Structure trust among consumers can be a prolonged and resource intensive endeavor for late movers compared Refers to the organization of individuals and to their pioneering counterparts. groups within a society. 🎀 Missed Opportunities: There is an inherent risk of KEY ELEMENTS OF SOCIAL STRUCTURE missing out on significant opportunities if the market evolves too quickly or if a late mover fails to execute 🎀 Individuals their strategy with precision. Focuses on personal achievements and freedom. Example: Western Cultures 🎀 Costs - are monetary values or various expenses that businesses spend for production and operations. A 🎀 Groups number of political, economic, and legal factors Emphasizes group goals and community. determine the cost of doing business in a country. Example: Eastern Cultures 🎀 Political Risk - are risks that political forces would 🎀 Social Stratification cause drastic changes in a country ’ s business environment. The hierarchical categorization of people based on characteristics like class, wealth, and 🎀 Economic Risk - are activities, such as economic occupation. mismanagement, that may cause changes and adversely 🎀 Caste System affect the profit and other goals of a business. is a closed system of stratification in which social position is determined by the family into 🎀 Legal Risk - risk that a trade partner may which a person is born, and change in that intentionally breach a contract or expropriate position is usually not possible. intellectual property 🎀 Class System rights. a less rigid form of social stratification in which social mobility is possible. 🎀 Class Consciousness 🪸 CHAPTER 4 : DIFFERENCES IN CULTURE refers to a condition by which people tend to perceive themselves in terms of their class 🎀 Culture background and this shapes their relationships is the set of shared beliefs, values, and practices with members of other classes. that define a group of people. Example: Bayanihan RELIGIOUS AND ETHICAL SYSTEM 🎀 Values are the core beliefs or principles that guide how 🎀 Religion people think, act, and make decisions. A system of shared beliefs and Example: Hospitality rituals that are concerned with 🎀 Norms the realm of the sacred. are the specific rules or standards for behavior 🎀 Ethical system that people follow in a society or group. A set of moral principles, or Example: Offering food to guests values, that are used to guide 🎀 Society and shape behavior is a group of people who live together and CHRISTIANITY interact with each other. The world’s largest religion 🎀 Nation State Believe in one God is a political unit with defined borders, a Jesus Christ is the central figure; government, and a population that often Christians believe he is the Son of shares a common culture. God The Bible is the holy book social structure, religion, education, language, Christians often attend church economic philosophy, and political philosophy. and follow the Ten Commandments  social norms of a specific culture. It involves passing on cultural knowledge, traditions, ISLAM language, art, history, and social roles from one The world’s second largest generation to the next. religion Adherents of Islam are referred Cultural Transmission, Cultural Integration, Value to as Muslims Inculcation Believe in one God (Allah) Muhmmad is the prophet who 🎀 CULTURE AND BUSINESS delivered God's message. Culture in a business, often referred to as Five main practices include corporate or company culture, encompasses the praying, giving to the poor, shared values, beliefs, behaviors, and practices fasting, believing in God, and that characterize an organization. going on a pilgrimage to Mecca. Core Values and Beliefs, Behavioral Norms, Work HINDUISM Environment World’s oldest religion Believes in many Gods, but all are 🎀 CULTURAL CHANGE part of one spiritual force Culture is not constant, it evolves over time. Moral force in society requires the acceptance of certain Globalization, Economic and Political Shifts, responsibilities called dharma Environmental Factors, Education and Knowledge Believe in reincarnation and Expansion karma Individuals should be judged by their spiritual achievements 🪸 CHAPTER 5 : ETHICS, CSR AND SUSTAINABILITY BUDDHISM Third oldest religion of the 🎀 BUSINESS ETHICS - business ethics are the moral world principles that act as guidelines for the way a business Does not focus on Gods but on conducts itself and its transactions. self-improvement and understanding life Types: Personal responsibility, Corporate Believes in the Four Noble responsibility, Loyalty, Respect, Trustworthiness Truths, which explain that life Fairness, Social and environmental responsibility has suffering, but you can overcome it by following the 🎀 ETHICAL STRATEGY- is a business approach that Eightfold Path prioritizes ethical considerations alongside financial Meditation and mindfulness goals. It's a framework that ensures a company's are important practices for operations align with moral principles, social inner peace responsibility, and environmental sustainability. CONFUCIANISM Types: Compliance-Based Ethical Strategy, Integrity- Not a religion but a Based Ethical Strategy, CSR (Corporate Social philosophy focused on ethics Responsibility) -Based Ethical Strategy, Stakeholder- and good behavior Based Ethical Strategy, Sustainability-Based Ethical Official ethical system of Strategy China until 1949 Teaches respect for elders, ETHICAL ISSUES IN INTERNATIONAL BUSINESS family loyalty, and social harmony 🎀 EMPLOYMENT PRACTICES- Ethical employment Emphasizes moral values and practices are crucial in international business, proper conduct in society particularly when companies operate in countries with lower labor standards. 🎀 EDUCATION refers to the process by which individuals learn 🎀 HUMAN RIGHTS- Human rights violations remain and absorb the values, customs, practices, and a significant concern in many countries where businesses operate. Issues such as freedom of speech, 🎀 JUSTICE THEORIES - Emphasize fairness and assembly, and political repression. equity in the distribution of resources and opportunities. Rawls' theory suggests that societal inequalities should 🎀 ENVIRONMENTAL POLLUTION- Environmental benefit everyone, especially the least advantaged. ethics pose another critical challenge in international business. This often results in significant ETHICS,CSR & SUSTAINABILITY environmental degradation in host countries. CODE OF ETHICS - is a guiding set of principles 🎀 CORRUPTION - Corruption is a pervasive issue in intended to instruct professionals to act in a way that international business, manifesting through bribery aligns with the organization's values and benefits all and unethical dealings with government officials. stakeholders. 🎀 Ethical Dilemma - is a situation where a person or KANTIAN ETHICS - is a universal ethical principle a business has to choose between two or more stating that one should always respect the humanity in conflicting options, each of which has moral or ethical others, and that one should only act in accordance with consequences. In these situations, no option seems rules that could hold for everyone. completely right or wrong, making it hard to decide what is the best action to take STAKEHOLDERS - A stakeholder is an individual or a group of individuals with an interest, often financial, in ROOTS OF UNETHICAL BEHAVIOR the success of a business. The primary stakeholders in a corporation include its investors, employees, customers, 1. Personal Ethics - are the foundational values and and suppliers. moral principles that guide an individual’s actions and decisions. INTERNAL AND EXTERNAL STAKEHOLDERS 2. Decision Making Process - The decision-making 🎀 Internal stakeholders - are individuals or groups process in business refers to the steps taken by directly involved in an organization. individuals or groups in choosing actions that reflect Importance: the organization’s ethical standards. Operational Efficiency 3. Organizational Culture - Organizational culture Decision-Making and Strategy refers to the shared values, beliefs, and norms within a Organizational Culture and Innovation company that influences how employees behave and Accountability and Responsibility make decisions. 4. Unrealistic performance goals - Setting unrealistic 🎀 External stakeholders - interact with the performance goals can lead to unethical behavior in organization but are not part of its internal operations. organizations as employees may feel pressured to Importance: achieve those goals through questionable means. Market Influence 5. Leadership - Leaders serve as role models. Their Supply Chain and Resource Flow behaviors, whether ethical or unethical, influence Financial Health employees’ actions. Reputation and Compliance Community Impact 6. Societal Culture - Societal culture refers to the values, norms, and practices that are prevalent in a particular country or region. 🎀 Corporate social responsibility (CSR) programs, along with philanthropy and volunteer work, allow PHILOSOPHICAL APPROACHES TO ETHICS businesses to help society while enhancing their brand image. 🎀 STRAW MAN APPROACH - Cultural Relativism, TYPES: Righteous Moralist, Naive Immoralist Environmental responsibility Ethical Responsibility 🎀 RIGHTS THEORIES/UNIVERSAL DECLARATION Philanthropic Responsibility OF HUMAN RIGHTS - Argue that all individuals have certain fundamental rights that businesses must FinanciaL Responsibility respect, regardless of location or circumstance. BENEFITS: CSR initiatives strive to have a positive impact on the 🎀 UTILITARIAN APPROACHES - Focus on producing world through direct benefits to society, nature and the the greatest good for the greatest number of people. It community in which a business operations. emphasizes maximizing overall well-being. 🕯💫 Manifesting Perfect/High Score! 💫