... National Differences in Political Economy By: Roberta Gandy National University November 30, 2014 There are many differences between business in the United States and other countries with the way the political, economic and legal systems are setup. Cultural practices have an influence with the growth of business to include the size of the population, education and the skills learned and practiced for business. Cost, risks, and benefits will help international businesses decide if they want to do business in other countries. The two differences in communist and democratic political systems have a big difference to how some organizations could run and can affect the business even more. I will focus on the political economy which talks about the political, economic and legal systems in the forefront for discussion. Poland grew 1.5% during the 2008-09 financial crisis while others contracted. 1989 Poland became a democracy after four decades of communist rule. 2004 Poland joined European Union giving access to the large consumer markets. Poland embraced market-based economic policies and exports 40% GDP making it a major exporter. Poland kept public debt in check by not allowing it to expand, like other countries did, during a recession. Poland achieved investor confidence and was able to prevent large outflow of funds during economic turmoil. Other countries had their investor pull money out of these economies causing growing...
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... * Production- factors of production- land labor capital * Endowment theory * Lower overall cost * Markets- merging markets * Economies of scale * Institutions * Drivers- decline in barriers, tech changes * Implications: * Lower barriers: optimal location * Tech changes: lower costs * 4 trends in changing demographics * MNE- types of companies involved * Democratic politics, free market economies The World Is: * Prusak- distinguish information from knowledge (difference) * IMPORTANT- the issue of access to info- but no knowledge * Ghemawat- 10% presumption, factors of time zones, languages, proximity shows that distance does matter, the world isn’t flat Opportunities & Challenges of globalization for managers * Differences of managing international vs. domestic * Boeing: benefits of globalization maximize efficiency of production but actually caused problems; lack of planning, communication, not simple for this industry (knowledge intensive industry) better for in house Localization * Standardization is ending, consumers are diverse- customization for local * Data analysis & innovation * Centralized vs localized * SWOT analysis National Differences * Political economy- system of gov. Political, economic & legal influence each other. Collective vs individualism * Economic system- three types: market command, mixed * Legal system- rules...
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...COURSE OUTLINE |Course Code |MKT-403 |Title |International Business | |Credit Hours |3 |Semester |Spring 2014 | |Course |This course is an interdisciplinary and systematic introduction to international business with an emphasis on the:| |Objective |drivers, patterns and trends of globalization | | |national differences in political economy | | |international trade theories and patterns of international trade | | |political economy of international trade and investment | | |implications of regional economic integration | | |global monetary system | | |strategies and structures of international business | | |foreign market entry strategies and international strategic...
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...Global Business Final Exam Notes DRIVERS AND METHODS Lecture 1: Introduction *Globalisation: shift towards a more integrated and interdependent world economy. International Business: Any business that has productive activities in two or more countries (multinational enterprise - MNE). *Globalisation of markets: Merging of historically distinct and separate national markets into a global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge. However, significant differences in culture, politics and economies exist between countries and adaption of products and strategies to local conditions is often necessary for international business to succeed. *Globalisation of production: Sourcing goods and services from locations around the globe in an attempt to take advantage of national differences in the cost and quality of factors of production (labour, energy, land and capital), thereby allowing them to compete more effectively against their rivals Example: Boeing aircrafts use companies s for all over the world for different components (e.g UK, France, Canada, Sweden) Firms are better able to respond to international customer demand due to improvements in transportation technology e.g jet transport; temperature controlled containerized shipping and co-ordinated ship-rail truck systems *Globalisation of institutions: Institutions are needed to help manage, regulate and police the global marketplace and promote the...
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...National Differences in Political Economy Learning objectives • Understand how the political systems of countries differ. • Understand how the economic systems of countries differ. • Understand how the legal systems of countries differ. • Be able to explain what determines the level of economic development of a nation. • Discuss the macro-political and economic changes taking place worldwide. • Describe how transition economies are moving towards market based systems. • Articulate the implications for management practice of national differences in political economy. This chapter discusses differences in national political, economic, and legal systems, highlighting the ways in which managers in global settings need to be sensitive to these differences. Political differences are described along two dimensions: collectivist vs. individualist and democratic vs. totalitarian. Economic systems are explored in terms of market characteristics: market economies, command economies, and mixed economies. Legal systems are discussed in terms of the protections they offer for business: intellectual property, product safety, liability and contracts. The opening case explores the political and economic situation in Venezuela since Hugo Chavez was elected president in 1998. The closing case describes the challenges facing Indonesia, a vast country populated mainly by Muslims that stretches over 17,000 islands. Indonesia...
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...Chapter 01 Globalization Answer Key True / False Questions 1. As a result of globalization, we have been moving toward a world in which national economies are (p. 7) relatively self-contained entities. FALSE Over the past three decades a fundamental shift has been occurring in the world economy. We have been moving away from a world in which national economies were relatively self-contained entities. AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand what is meant by the term globalization. Topic: Introduction 2. By offering the same basic product worldwide, firms help to create a global market. TRUE Consumer products such as Citigroup credit cards, Coca-Cola soft drinks, video games, McDonald’s hamburgers, Starbucks coffee, and IKEA furniture are frequently held up as prototypical examples of this trend. The firms that produce these products are more than just benefactors of this trend; they are also facilitators of it. By offering the same basic product worldwide, they help to create a global market. AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand what is meant by the term globalization. Topic: What Is Globalization? 3. A company has to be the size of a multinational giant to facilitate, and benefit from, the globalization of markets. FALSE A company does not have to be the size of multinational giants to facilitate, and benefit from, the ...
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...Communications Skills : CS1 – CS3 Critical Thinking : CT1 – CT3 Team Work : TS1 – TS2 Entrepreneurship : KK1 Ethics and Professional Moral : EM1 – EM2 Leadership : LS1 – LS2 Lecturer Room Telephone/e-mail Prof. Dr. Mohd Nazari Ismail A2-25 mdnazari@um.edu.my Lecture Session: Day/Time Venue Tutorial/Practical Session: Day/Time Venue Isnin 2.00 – 4.00 ptg DK1 Monday 4 – 5 pm; Tuesday 2 – 3 pm; 3 – 4 pm; Thursday 9 – 10 am; Thursday 12 pm – 1 pm; 1pm – 2 pm. BSB 2 Important Dates Test : Examination : Teaching Schedule Week Lecture/Tutorial/Assignment Topic References/Teaching Materials/Equipment 1 Globalization; National Differences in Political Economy; Text book 2 Differences in Culture; Ethics in International Business; International Trade Theory; Text book 3 The Political Economy of International Trade; Foreign Direct Investment;...
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...promotes material prosperity, it comes with a high spiritual and cultural cost, running roughshod over the world’s distinctive cultures and threatening to turn the globe into one big, tawdry strip mall. George Mason University economist and Cato adjunct scholar Tyler Cowen has for years been one of the most insightful and incisive debunkers of that view. What globalization tends to increase difference, we’re used to a certain pattern or model of difference. Different peoples are different, and they live in different places. So there’s what Tibet looks like, there’s what Mexico looks like and there is what Ghana looks like. But that’s only one kind of difference. Another kind of difference shows up in the paths we choose to take through our lives, and I believe that individuals will always wish to choose different paths for their lives. If the world globalizes enough, Mexico, Tibet, the United States, and Ghana won’t necessarily be so geographically distinct. Crossing a border may be less of a shock than it is today. Another difference that is liberated from geography, are the differences among individuals. According to Benjamin Barber one of the problems of globalization is cultural borrowing and cultural mimicry that depend, not on isolated cultures, but on authentic cultures. And...
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...Harvard Business School 9-389-080 Rev. December 5, 1989 Country Analysis Framework This framework takes the nation as the unit of analysis. Effective managers must be able to analyze systematically the national and international environments in which they operate. This note presents a framework to help them do this. Since government actions shape business environments, that is the starting point for country analysis. In this view, nations have strategic purposes, the capacity to mobilize resources, and the power to affect their economies. The country analysis framework has three interrelated components: strategy, performance, and context. Each of these has economic, political, and social dimensions. All governments have a national strategy composed of explicit or implicit goals and a set of policies to achieve those goals. These lead to performance, which can be judged by assessing how well the country is doing economically, politically, and socially. These outcomes also depend on a country’s context, which has domestic aspects (economic, political, social, institutional, and ideological) and international aspects (trading relationships, political links, multilateral institutions, global industries). In turn, the outcomes affect the context for future strategies. Thus, strategy, performance, and context are interdependent. Country analysis can therefore begin with any of the three components, but requires examining all of them. Country analysis is not a...
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...NIGERIA Country Description | Cultural * Major Languages: English (Official Language), Hausa, Igbo, Yoruba. * Religion: Christianity and Islam. * Nigeria is a multinational state. It has more than 500 ethnic groups.Administrative. * Nigeria has maintained its political stability successfully. * Three distinct systems of law in Nigeria: Common Law, Customary Law and Sharia law.Geographic * Nigeria is a costal country, so it has access to the shipping routes. * Inadequate infrastructures for logistics and supply chain.Economic * High potential for growth in economy. * Significant Difference in income levels between rich and poor. * Abundance of workforce. * Untapped market. | Relative Importance | With reference to Essential Business Requirement of COSTCO, we evaluated the significance of the four factors: * Culture *** | * Administrative **** | * Geographic **** | * Economic ** | {key: (****-Most significant) - (*- Least Significant)} | Business Challenges | * Culture * Nigeria has local informal retail shopping market. Significant difference in culture (high context). * Variety of people from different cultures, challenge to please each one. * Administrative * It has an inefficient property registration system. * Government has restrictive trade policies. * Geographic * Inadequate infrastructure. Difficult to reach out to rural customers. * Economic * Regional disparity affects target customers. * Presence of...
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...An Introduction to the New Global Economy and Strategies for Competing Globally APA Headings | Level | Format | 1 | Centered, Boldface, Uppercase and Lowercase Headings | 2 | Left-aligned, Boldface, Uppercase and Lowercase Heading | 3 | Indented, boldface, lowercase heading with a period. Begin body text after the period. | 4 | Indented, boldface, italicized, lowercase heading with a period. Begin body text after the period. | 5 | Indented, italicized, lowercase heading with a period. Begin body text after the period. | 1. Introduction. Provide a brief focus statement about your paper and what the reader can expect. 2. Global World Economy. Discuss the importance of globalization in today’s global economy. 3. Cultural and Political Differences. Discuss cultural and political differences that global managers consider when expanding abroad. Are values and ethics different in each culture? Explain. 4. Going Global Strategies. Explain why companies are forced to expand globally. Discuss possible strategies for competing globally. Evaluate the advantages and disadvantages of the different strategies and policies that firms use to enter foreign markets. What are the main factors that influence a firm’s decision of market entry? 5. Suggestions and Recommendations. Provide practical and specific recommendations and suggestions for managers and expatriate to expand in this country of your choice for this project. ...
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...After being a closed economy for a relatively long time, China is eager to become a globalized economy. This provides an advantageous prospect to companies that are trying to become market leaders through rapid expansion. The main attraction for companies is the availability of ample low cost labor in china. To meet increasing market demands Chinese businesses need to minimize cost, with simple products. The manufacturers should be able to cater to a ballooning market and remain flexible in the production of large and variable quantities. Advantages: Low production costs, Knowledge, Access to several big markets à US and China Disadvantages: Long distance for communication, etc (e.g. time zones), Cultural differences Porters Diamond [1] Factor Conditions : Factors of production¶ into making a product or service like raw material, land and labor. Cheap labor cost, raw material and land in China and India (approximate $3.00 per laptop produced, £1.92, in 7 August, 2010 exchange rate) [2] Home demand conditions : The nature of the domestic national customers can be a source of advantage. Dealing with the sophisticated and demanding customers at national with low cost computers since 1996 and current domestic leader in PC industries in China. Huge market (half population of the world: China and India, and aggressively growing economy with double digit economic growth) [3] Related and Supporting Industries: Local clusters of related and mutually supporting...
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...Global Business Today 6e by Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 National Differences in Political Economy Introduction Question: What is the political economy of a country? A country’s political economy refers to its political, economic, and legal systems These systems are interdependent, and interact and influence each other A country’s political system has major implications for the practice of international business 2-3 Political Systems A political system is the system of government in a nation Political systems can be assessed in terms of the degree to which they emphasize collectivism as opposed to individualism in terms of the degree to which they are democratic or totalitarian 2-4 Classroom Performance System The political, economic and legal systems of a country are called a) Political systems b) Economic systems c) Legal systems d) Political economy 2-5 Collectivism and Individualism Collectivism refers to a system that stresses the primacy of collective goals over individual goals Collectivism can be traced to the ancient Greek philosopher Plato Today, socialists support collectivism When collectivism is emphasized, the needs of the society as whole are generally viewed as being more important than individual freedoms 2-6 Collectivism and Individualism Socialism Modern socialists trace their roots to Karl Marx who advocated state...
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...Table of Contents: 1.0 Introduction: 2 2.0 Discussion 2 2.1 Globalization 2 2.1.1 Globalization of Markets 3 2.1.2 Globalization Production 3 2.2 National Differences in Political Economy 4 2.2.1 Political Systems 4 2.2.2 Economic Systems 4 2.2.3 Legal systems 4 2.3 Differences in Culture 5 2.3.1 Values and Norms 5 2.3.2 Languages 5 2.3.3 Hofstede’s Model 6 2.4 Economic factors 6 2.4.1Exchange rates 6 2.4.2 Inflation rates 7 3.0 Conclusion 7 4.0 Recommendation 8 5.0 Reference List: 9 6.0 Appendices 10 1.0 Introduction: This report is concentrate on talking about the dangers and opportunities of New Zealand animal husbandry industry that try to start international operations in China. China is one of the world's oldest continuous civilizations, and has most complex cultures. China leads the world in swine production, the total number of hogs reaching about 454.4 million at the beginning of 2001 (55% of the world's total), as compared with 89.8 million in 1952. The number of sheep expanded from 36.9 million in 1952 to nearly 133.2 million in 2001. Pig raising, often pursued as a private sideline by peasants, is the fastest-growing sector of the livestock industry, and hogs and pork products are becoming valuable export earners. In 2001, China produced 65.3 million tons of meat, ranking first in the world with 27% of the total. Some 12.8 million tons consisted of poultry. Pork production in 2001 amounted to 42.9 million tons (first in...
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...International Business Environment BE2501 – Summary Chapter 1 Globalization – refers to the shift toward a more integrated and interdependent world economy. Globalization of markets – refers to the merging of historically distinct and separate national markets into one huge global marketplace. Globalization of products – refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labor, energy, land and capital) General Agreement on Tariffs and Trade (GATT) World Trade Organization (WTO) – is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in the trade treaties signed by WTO member states. International Monetary Fund (IMF) and the World Bank (WB) were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire. The IMF was established to maintain order in the international monetary system; The WB was set up to promote economic development. United Nations (UN) – was established on October 24, 1945, by 51 countries committed to persevering peace through international cooperation and collective security. International trade occurs when a firm exports goods or services to consumers in another country. Foreign Direct Investment (FDI) occurs when a firm invests resources in business activities outside its home country. Stock of foreign direct investment – refers...
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