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8/10/2019 Introduction BBLXQ Final 2
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The Organization and
Assessment
of the Module
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Organisation of the module
Lecturer:Xiaoqing Li
Email: [email protected]
Classes will be held: 6:00-8:00 p.m.,ThursdaysStudent presentation classes from 6:00-7.00
p.m. (from week 3). Reading week: week 7
Revision: week 12
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Readings and resources Core readings
Deresky, Helen. 2013. (8thedn.), International Management:Managing Across Borders and Cultures. Pearson Education.(Purchase recommended)
Supplement readings
Bartlett Christopher A. and Paul Beamish. 2011. TransnationalManagement: Text, Cases, and Readings in Cross-Border
Management. McGraw-Hill.
Rodrigues, Carl. 2009 (3rdedn.) International Management.Sage.
Various journal articles
UNCTAD, World Investment Report. various years.
For students without business or economics background:
Charles Hill. International Business: competing in the globalmarket lace. McGraw Hill.
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Group Presentation Group presentation class starts in week 3. Two groups present in each class.
Each group should have 6 students .
30 minutes per group: 20 minutes presentation
followed by 10 minutes discussion. Groups are required to send the lecturer an
electronic copy of their presentation in advance (bythe Thursday before the presentation, at the latest).
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Module Assessment
Individual coursework (100%):
3000 words: +/-10% excluding references
Coursework will be released at the end of week 2.Submission deadline: TBC
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Todays Agenda
What is globalisation?
What drives globalisation?
How has the demographics of the global
economy changed?
What does globalisation mean for firms?
Is the world flat?
What will be covered in this module?
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Readings for todays lecture
Florida, R. (2005), The world is spiky, The Atlantic,296, 3, pp. 4851.
Levitt, T. (1983), The Globalization of markets,
Harvard Business Review, May-June, pp.92-102.
Ohmae, K. (1989), Managing in a Borderless World,Harvard Business Review, May-June.
Porter, M.E. (1990), The Competitive Advantage of
Nations, Harvard Business Review, March/April,
pp.73-93. (See also for more details: Porter, M.E.(1990), The Competitive Advantage of Nations,London: Macmillan).
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What Is Globalization?
What is globalization?The shift toward a more integrated and
interdependent world economy.
Globalisation has two facetsThe globalisation of markets
The globalisation of production
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The Globalization of Markets
Historically distinct and separate nationalmarkets are merging .
A company does not have to be the size of the
giants to facilitate and benefit from theglobalization of markets In US, firms with less than 500 employees
accounted for 97% of all US exporters and almost
30% of all exports by value
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The Globalization of Production
Firms source goods and services fromlocations around the globe to capitalize onnational differences in the cost and quality offactors of production.
Companies can lower their overall cost structure
improve the quality or functionality of their productoffering
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What Is Driving Globalization? (I)
Declining barriers to the free flow of goods,services, and capital Declining barriers for trade
Average tariffs are now at just 4%;
World merchandise trade has grown faster than the worldeconomy since 1950 (WTO);
From 1970 to 2012, the volume of world merchandise tradeexpanded more than 30-fold.
More favorable environment for FDI
Between 1992 and 2009, 90% of the 2700 changes madeworldwide in the laws governing FDI created a morefavourable environment for FDI (UN).
Global stock of FDI was $22.8 trillion in 2012 (32.2% ofGDP)
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D li i T d A d
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Declining Trade AndInvestment Barriers
Average Tariff Rates on Manufactured Products as Percent of Value
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Wh t I D i i Gl b li ti ?
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What Is Driving Globalization?(II)
Technological change Microprocessors and telecommunications
The Internet and World Wide Web
Transportation technology
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Th Ch i D hi
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The Changing DemographicsOf The Global Economy
Four trends are important:1. The changing world output and world trade picture
2. The changing foreign direct investment picture
3.The changing nature of the multinational enterprise
4. The changing world order
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How Has World Output AndWorld Trade Changed?
In 1960, the U.S. accounted for over 40% ofworld economic activity, but by 2009, the U.S.accounted for just 24% a similar trend occurred in other developed
countries In contrast, the share of world output
accounted for by developing nations is rising expected to account for more than 60% of world
economic activity by 2020
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How Has World Output AndWorld Trade Changed?
The Changing Demographics of World GDP and Trade
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How Has Foreign DirectInvestment Changed Over Time?
In the 1960s, U.S. firms accounted for abouttwo-thirds of worldwide FDI flows Today, the United States accounts for less than
one-fifth of worldwide FDI flows
Other developed countries have followed a similarpattern
In contrast, the share of FDI accounted for bydeveloping countries has risen
Developing countries, especially China, have alsobecome popular destinations for FDI
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How Has Foreign DirectInvestment Changed Over Time?
Percentage Share of Total FDI Stock 1980-2009
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How Has Foreign DirectInvestment Changed Over Time?
FDI Inflows 1988-2009
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The changing nature of themultinational enterprise
Multinational enterprise (MNE) - any businessthat has productive activities in two or morecountries
Since the 1960s the number of non-U.S. multinationals has risen.
In 1973, 48.5% of the worlds 260 largest MNEs were US
firms.
By 2008, some 19 of worlds 100 largest nonfinancial MNEs
were US firms. the number of mini-multinationals has risen.
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The Changing World Order Many former Communist nations in Europeand Asia are now committed to democratic
politics and free market economies creates new opportunities for international
businesses but, there are signs of growing unrest and
totalitarian tendencies in some countries
China and Latin America are also movingtoward greater free market reforms
between 1983 and 2010, FDI in China increasedfrom less than $2 billion to $100 billion annually but, China also has many new strong companies
that could threaten Western firms
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How Will The Global Economy Of The21st Century Look?
The world is moving toward a more globaleconomic system
But globalization is not inevitable
Globalization brings risks the financial crisis that swept through South EastAsia in the late 1990s
the recent financial crisis that started in the U.S. in
2007-2008, and moved around the world
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What Does Globali ation
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What Does GlobalizationMean For Firms?
Global companies are becoming less tied tospecific locations
Companies that desire to remain competitivewill have to develop a cadre of experienced
international managers Small companies are also affected by and in
turn affect globalism Technological change means
lower transportation costs low cost information processing and communication low cost global communications networks global communication networks and global media
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Is the world flat? The flat world hypothesis of recentjournalistic best sellers (Friedman, 2006).
a seamless and frictionless world following theprecepts of Ricardian comparative advantage.
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The world is not flat! But rather a world of spikes and blocs
(Florida, 2006)
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Wh t ill b d i thi
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What will be covered in thismodule? Part 1: the global managers environment
Political, economic, legal and technological environment
Social responsibility, ethics and sustainability
Part 2: the cultural context of global management
The role of culture Communicating across cultures
Part 3: the management of international and globaloperations
Formulating strategy Implementing strategy
Organization structure and control systems
Headquarter-foreign subsidiary control relationships
Managing human resources in the international arena
Global innovation management27
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Next week... Lecture 1: The political, economic, legal and
technological environment
Lecture 2: Social responsibility and ethics
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