International Trade and Globalization

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PART 1 GLOBAL BUSINESS ENVIRONMENT

CHAPTER ONE

Globalization
Learning Objectives
After studying this chapter, you should be able to
1. Describe the process of globalization and how it affects markets and production. 2. Identify the two forces causing globalization to increase. 3. Summarize the evidence for each main argument in the globalization debate. 4. Identify the types of companies that participate in international business. 5. Describe the global business environment and identify its four main elements. A LOOK AT THIS CHAPTER This chapter defines the scope of international business and introduces us to some of its most important topics. We begin by presenting globalization—describing its influence on markets and production and the forces behind its growth. Each main argument in the debate over globalization is also analyzed in detail. We then identify the key players in international business today. This chapter closes with a model that depicts international business as occurring within an integrated global business environment.

A LOOK AHEAD
Part 2, encompassing Chapters 2, 3, and 4, introduces us to different national business environments. Chapter 2 describes important cultural differences among nations. Chapter 3 examines different political and legal systems. And Chapter 4 presents the world’s various economic systems and issues surrounding economic development.

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Emirates’ Global Impact
DUBAI, United Arab Emirates—The Emirates Group, founded in 1985 and headquartered in Dubai, is one of the world’s leading commercial air transportation service providers. Emirates has built up a strong brand name as a leader in the aviation industry, particularly in terms of its excellent customer service and its very rapid growth. It provides passenger, cargo, and postal carriage services to approximately 100 destinations worldwide.The company is also involved in the wholesale and retail of consumer goods, in-flight and institutional catering, holiday services, and hotel operations in Europe, the Middle East, the Far East, Africa, Asia, Australasia, and North America. The Group’s operations are global in many ways. Emirates is renowned for its excellent customer service, but how does it attract new customers and keep current customers happy when it operates worldwide in many different countries and cultures? The answer is that global customers need global services too. If you visit Emirates’ Web site (see www.emirates.com) you will see it has multi-language booking services, customized in-flight entertainment and provides international food and drink during the flight. Furthermore, Emirates Group employs about 50,000 people, and it’s interesting to note that its cabin crew is highly diverse in terms of nationality, religion, and languages. In fact, the group operates a global recruitment process, and its staff, from cabin crew to engineers, comes from all over the world. As you read this chapter, consider how globalization is reshaping our personal lives and altering the activities of international companies.1

Source: © Mccarthystudio/ Dreamstime.

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PART 1 • GLOBAL BUSINESS ENVIRONMENT

G

lobalization is reshaping our lives and leading us into uncharted territory. As new technologies drive down the cost of global communication and travel, we are increasingly exposed to the traits and practices of other cultures. As countries reduce barriers to trade and investment, globalization forces their industries to grow more competitive if they are to survive. And as multinationals from advanced countries and emerging markets seek out customers, competition intensifies on a global scale. These new realities of international business are altering our cultures and transforming the way companies do business.

International Business Involves Us All
The dynamic nature of international business affects each of us personally. In our daily communications, we encounter terms such as outsourcing, emerging...
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