3: Global Environment
- Page ID
- 3608
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- 3.1: Why It Matters- Global Environment
- This page emphasizes the importance of understanding the global business environment for consumers, as it influences the availability of goods and services. By examining international items, individuals recognize the impact of trade on daily life. Awareness of this environment leads to better decisions regarding employment, politics, and foreign policies, while a lack of understanding can limit options. Overall, being informed about global trade dynamics is crucial for consumers.
- 3.2: Globalization
- This page discusses absolute and comparative advantage in production, highlighting how they drive specialization and trade. Absolute advantage refers to the efficiency of production with fewer resources, while comparative advantage emphasizes lower opportunity costs. Globalization allows businesses like McDonald's and countries like Ecuador to adapt and thrive in global markets, optimizing resources and enhancing trade opportunities.
- 3.3: Measuring Global Trade
- This page explains how nations measure global trade through tools like the balance of trade and balance of payments, emphasizing their roles in assessing economic strength. The balance of trade reveals trade surpluses or deficits, while the balance of payments accounts for all financial transactions.
- 3.4: Global Buisness Strategies
- This page discusses the advantages and disadvantages of franchising and licensing for expanding brands. While these strategies allow businesses to enter new markets with lower investment and reduced risk, they can lead to losses in control, brand integrity, and profitability. Other methods like joint ventures and foreign direct investment provide local expertise and faster market entry but come with higher risks.
- 3.5: Global Trade Forces
- This page discusses the diverse forces affecting global trade, emphasizing the importance of understanding cultural, political, and environmental factors for international business success. It highlights how a country's political economy influences foreign opportunities, noting the significance of economic freedom and emerging markets.
- 3.6: Global Trade Agreements and Organizations
- This page explores global trade agreements and economic organizations that enhance international trade, focusing on the WTO, World Bank, and IMF. The WTO originated from GATT to oversee trade and support developing nations, while the World Bank and IMF aid economic stability. It also details various trade agreements, including regional trade agreements (RTAs), customs unions, common markets, and economic unions like the EU, which facilitate integration and cooperation among member countries.
- 3.7: Ethical Challenges in the Global Environment
- This page discusses the ethical challenges businesses encounter in the global market, driven by diverse cultural, political, and legal systems. Corruption and bribery are major issues, with the World Economic Forum estimating a loss of over $2 trillion annually. High-profile cases and incidents like the Rana Plaza collapse highlight ongoing labor violations despite efforts to enhance compliance and anti-corruption laws.
- 3.8: Putting it Together- Global Environment
- This page examines the global business environment, emphasizing globalization and the rationale behind international trade based on comparative advantages. It differentiates between comparative and competitive advantages while discussing global market entry strategies such as exporting and joint ventures. Challenges in international business, including cultural and political barriers, are addressed, along with ethical dilemmas influenced by diverse cultural definitions.