Question: Globalization and Host Country

question x-1 How has globalization affected different world regions? What are some of the benefits and costs of globalization for different sectors of society?

• Globalization: the process of integration among countries around the world with a vision of a single market entity:

Social Economic Political Technological Cultural

• Internationalization: the process of a business crossing national and cultural borders.

Globalization: Pros and Cons

• Benefits of Globalization: wealth, jobs, technology, lower prices.

• Criticisms of Globalization:

off-shoring of business service jobs to lower-wage countries;

growing trade deficits; slow wage growth; environmental and social impacts.pro con

Global and Regional Integration:

• Global Agreements:

World Trade Organization (WTO)

(General Agreement on Tariffs and Trade

(GATT))

• Regional Agreements:

North American Free Trade Agreement (NAFTA)

U.S.-Central American Free Trade Agreement (CAFTA)

European Union (EU)

Association of Southeast Asian Nations (ASEAN)

Free Trade Agreement of the Americas (FTAA)

x-1

1. Define the four basic predispositions MNCs have toward their international operations.

Four distinct predispositions toward doing things in a particular way:

1. Ethnocentric

2. Polycentric

3. Regio-centric

4. Geocentric strategic predisposition

• Ethnocentric predisposition

– A nationalistic philosophy of management whereby the values and interests of the parent company guide strategic decisions.

• Polycentric predisposition

– A philosophy of management whereby strategic decisions are tailored to suit the cultures of the countries where the MNC operates.

• Regio-centric predisposition

– A philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a