introduction bblxq final 2

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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Percentage Share of Total FDI Stock 1980-2009

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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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introduction bblxq final 2

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