TOPIC #8

The Future of International Business

The Future of International BusinessThe Future of International Business

1.1. Reduction of ProtectionismReduction of Protectionism

2.2. European UnionEuropean Union

3.3. NAFTANAFTA

4.4. Impact of Cultural DifferencesImpact of Cultural Differences

5.5. Global DependencyGlobal Dependency

The Future of International TradeThe Future of International Trade

ProtectionismProtectionism a term to describe when countries seek to protect their a term to describe when countries seek to protect their

individual economic interests by imposing tariffs on other individual economic interests by imposing tariffs on other countries or restricting external trade.countries or restricting external trade.

Economic experts agree that such practices will hurt the Economic experts agree that such practices will hurt the global economy as it is all interconnected.global economy as it is all interconnected.

APEC is the fastest growing trading group and largest APEC is the fastest growing trading group and largest trading bloc in the world and engages in protectionism trading bloc in the world and engages in protectionism practices by imposing tariffs and other trade barriers on practices by imposing tariffs and other trade barriers on countries outside of APEC.countries outside of APEC.

European Union (EU)European Union (EU) 27 European countries represent a single market in 27 European countries represent a single market in

EuropeEurope

All but the UK and Denmark have adopted a the euro as All but the UK and Denmark have adopted a the euro as the single currency to be used in member statesthe single currency to be used in member states

It has its own elected governmentIt has its own elected government

EU court rulings over rule individual country court rulings EU court rulings over rule individual country court rulings and/or laws.and/or laws.

Citizens of member states may travel, move, and work Citizens of member states may travel, move, and work freely in each other’s countries.freely in each other’s countries.

Population is currently about 370 milion.Population is currently about 370 milion.

Evolution of NAFTAEvolution of NAFTA

Will NAFTA emerge into a union similar to Will NAFTA emerge into a union similar to the EU where citizens of Canada, Mexico, the EU where citizens of Canada, Mexico, and the US would be able to move freely and the US would be able to move freely into each other’s countries where one into each other’s countries where one currency would be used for all three currency would be used for all three countries?countries?

Impact of Cultural DifferencesImpact of Cultural Differences

CultureCulture the sum of a country’s way of life, beliefs, the sum of a country’s way of life, beliefs,

customscustoms Influences how things are purchased, sold, Influences how things are purchased, sold, Sets boundaries on what can or can not be doneSets boundaries on what can or can not be done Impacts preferences, style, values, and normsImpacts preferences, style, values, and norms May be represented by a specific languageMay be represented by a specific language

Cultural DifferencesCultural Differences In order to do business with differing cultures, much In order to do business with differing cultures, much

market research is needed to help companies market research is needed to help companies understand various similarities and differences even understand various similarities and differences even when dealing with everyday cultural norms dealing with when dealing with everyday cultural norms dealing with people such as:people such as:

1.1. PunctualityPunctuality2.2. GreetingsGreetings3.3. Nonverbal communication signalsNonverbal communication signals4.4. Good MannersGood Manners5.5. Decision makingDecision making

PunctualityPunctuality

Punctuality Norms in North America?Punctuality Norms in North America? People are expected to bePeople are expected to be on timeon time Rely on books, calendars and Rely on books, calendars and even pay a fee sometimes even pay a fee sometimes for missed appointmentsfor missed appointments

Punctuality Norms in Other CountriesPunctuality Norms in Other Countries Time is considered flowing, flexible,Time is considered flowing, flexible,

beyond’s people control beyond’s people control

GreetingsGreetings

Shaking hands – differs from oneShaking hands – differs from one country to the next country to the next

Eye contact made in someEye contact made in some countries, not in others countries, not in others

Bowing before an elderBowing before an elder acquaintance versus not bowing acquaintance versus not bowing at all at all

Nonverbal Communications SignalsNonverbal Communications Signals

Considered rude in Asian cultures to refuse someone’s Considered rude in Asian cultures to refuse someone’s request, so an Asian business person may not give a request, so an Asian business person may not give a direct “no” answer to a sales requestdirect “no” answer to a sales request

A “nod” means “yes” to North Americans but “no” to aA “nod” means “yes” to North Americans but “no” to a Bulgarian. Bulgarian.

Shaking the head “side to side” means “no” to NorthShaking the head “side to side” means “no” to North Americans but “yes” to Bulgarians. Americans but “yes” to Bulgarians.

The sign okay with ones hand is a symbol for moneyThe sign okay with ones hand is a symbol for money in Japan and is an offensive gesture in Brazil. in Japan and is an offensive gesture in Brazil.

Personal space interpretations also differs from placePersonal space interpretations also differs from place to place. to place.

Good MannersGood Manners

In North America, getting down to In North America, getting down to business is the norm when to business is the norm when to business people meet.business people meet.

In other Asian and Latin American In other Asian and Latin American countries it would be considered rude countries it would be considered rude not to discuss family, friends, and not to discuss family, friends, and favours first to establish a personal favours first to establish a personal relationship before business.relationship before business.

Decision MakingDecision Making

In some cultures, decisions are made In some cultures, decisions are made from the top down approach, in from the top down approach, in others, from the bottom up others, from the bottom up approach.approach.

Other DifferencesOther Differences

North Americans read from right to left. North Americans read from right to left.

Israel and Egyptians read left to right.Israel and Egyptians read left to right.

This difference may impact the order in This difference may impact the order in which a sequential advertisement is laid which a sequential advertisement is laid out from one country to another.out from one country to another.

Other SourcesOther Sources

Wilson Jack et al. Wilson Jack et al. The World of The World of Business, 5Business, 5thth Ed. Ed. Nelson Education Nelson Education Ltd., Canada, 2007Ltd., Canada, 2007