GBT 2e IM ch01.docx

GBT 2e IM ch01.docx

《GBT 2e IM ch01.docx》由会员分享，可在线阅读，更多相关《GBT 2e IM ch01.docx（22页珍藏版）》请在冰豆网上搜索。

GBT2eIMch01

PART1

Globalisation

CHAPTER1

GLOBALISATION

ChapterOutline

OPENINGCASE:

GlobalisationatGeneralElectricandTata

INTERNATIONALBUSINESSGRADUATES

LEARNINGOBJECTIVES

INTRODUCTION

WHATISGLOBALISATION?

TheGlobalisationofMarkets

ManagementFocus:

Globalsizeandstatusdoesnotguaranteelocalsuccess

TheGlobalisationofProduction

THEEMERGENCEOFGLOBALINSTITUTIONS

DRIVERSOFGLOBALISATION

DecliningTradeandInvestmentBarriers

TheRoleofTechnologicalChange

CountryFocus:

TheEcuadorianroseindustry

THECHANGINGSHAPEOFTHEGLOBALECONOMY

TheChangingWorldOutputandWorldTradePicture

CountryFocus:

India’ssoftwaresector

TheChangingForeignDirectInvestmentPicture

TheChangingNatureoftheMultinationalEnterprise

ManagementFocus:

China’sHisense–Anemergingmultinational

TheChangingWorldOrder

TheGlobalEconomyofthe21stCentury

THEGLOBALISATIONDEBATE

Anti-globalisationProtests

Globalisation,JobsandIncomes

Globalisation,LabourPoliciesandtheEnvironment

GlobalisationandNationalSovereignty

GlobalisationandtheWorld’sPoor

MANAGINGINTHEGLOBALMARKETPLACE

KEYTERMS

SUMMARY

INTERNATIONALBUSINESSGRADUATES:

LEARNINGANDASSESSMENTTASKS

CLOSINGCASE

InternationalBusinessGraduateAttributes

Thischapter’scontent,learningresourcesandcasestudiesprovidetheopportunitytodevelopanumberofInternationalBusinessGraduateAttributes,includingthefollowing:

∙IBGA1DisciplineKnowledgeandSkills

∙IBGA2CriticalAnalysis

∙IBGA5Communication

∙IBGA7GlobalPerspective

∙IBGA9Citizenship

LearningObjectives

Afterstudyingthischapter,studentsshouldbeableto:

1.explaintheprocessanddriversofglobalisationandtheopportunitiesandchallengesitcreatesforbusiness.

2.illustratehowtheglobaleconomyhaschangedoverthepast50years.

3.debatetheimpactofglobalisationonissuessuchasjobsecurity,incomelevels,theenvironmentandeconomicdevelopmentindevelopingcountries.

4.comparehowthemanagementofinternationalbusinessdiffersfromthemanagementofdomesticbusiness.

ChapterSummary

Thisopeningchapterintroducesthereadertotheconceptsofglobalisationandinternationaltradeandinvestment,andprovidesanintroductiontothemajorissuesthatunderliethesetopics.Thecomponentsofglobalisationarediscussed,alongwiththedriversofglobalisationandtheroleoftheGeneralAgreementonTariffsandTrade（GATT）anditssuccessor,theWorldTradeOrganisation（WTO）,inloweringbarrierstointernationaltradeandinvestment.Theinfluenceoftechnologicalchangeinfacilitatingglobalisationisalsodiscussed,alongwiththeroleofmultinationalfirmsininternationalbusiness.

Thechapteralsodescribesthechangingshapeoftheglobaleconomy,withaspecialemphasisontheincreasinglyimportantroleofdevelopingcountriesinglobalbusiness.Thisdiscussioniscomplementedbyadescriptionofthechangingworldorderleadingintothe21stcentury.Thechapterendswithacandidoverviewoftheprosandconsofthetrendtowardsglobalisationaddressingissuesassovereignwealthfunds,globalfinancialcrisis,terrorism,theenvironment,offshoringandthelossofjobs.

OpeningCase:

GlobalisationatGeneralElectricandTata

Summary

TheopeningcaseexploresGeneralElectric’sandTata’squesttobecomemajorglobalplayersinthebusinessesinwhichtheyparticipate.Despitethedifferenceinsizeandinthedevelopmentleveloftheircountryoforigin,GeneralElectricandTataarelargeconglomeratesproducingarangeofavastrangeofgoodsandservicesinmarketsaroundtheworld.Over50percentofGE’sandTata’srevenuestodaycomefrominternationalsales,anditisexpectedthatagreatershareoftheirbusinesswillbeinternational.Duringthe1980sand1990s,whenGeneralElectricwasledbyJackWelch,thecompanywasanAmericancompanydoingbusinessinforeignmarkets.Today,undertheleadershipofJefferyImmelt,GeneralElectricismovingtowardbecomingaglobalcorporation.SpurredbyreformstotheIndianeconomyinthe1990s,Tataexpandedinternationallyinordertogainmarketsandknowledgewhichwouldenableittoremaincompetitiveinternationallyaswellasdomestically.LikeGE,Tataaimstobemorethanjustadomesticcompanydoingbusinessinforeignmarkets.

AdiscussionoftheopeningcasecanrevolvearoundthefollowingquestionsaslistedforIBGATask9.

i.Whatmeasurescanbeusedtoassesshow‘international’abusinesshasbecome,acharacteristicUNCTADdescribesas‘transnationality’?

DoGEandTataqualifyasbeing‘international’?

DiscussionPoints:

UNCTADinitsannualWorldInvestmentReportpublishesalistofthelargesttransnationalnon-financialcompanies（TNC）intheworld.UNCTAD’smeasureoftransnatonalityisacompositeindexandistheaverageofthreeratios:

foreignassetstototalassets;foreignsalestototalsales;andforeignemploymenttototalemployment.ForGE,alltheseratiosarejustabove50percent.ThereisnosingleaggregatemeasureforentireTatagroup,butforTataSteelLtd,oneofthelargercompaniesinthegroup,theratiosare65percent,85percentand65percentrespectively.Basedonthesefigures,internationaloperationsareinstrumentaltothegrowthofthesecompanies.

TeachingTip:

StudentscanupdatethesetransnationalityratiosfromtheUNCTADwebsite.

ii.HowdidthereformsoftheIndianeconomyofthe1990saffectTata?

DiscussionPoints:

ThereductionofbarrierstotheflowofforeigntradeandinvestmentincreasedcompetitivepressureonTata.Itwasnowthreatenedbyinternationalcompetitorsinitshomemarketwhereonceitwasinsulatedfromsuchcompetition.Thiscompetitionwasadrivingforceforimprovement.Tataalsogainedadditionalfreedomtoexpanditsowndomesticoperationsastherestrictionsontheprivateownershipofkeyindustrieswererelaxedandcapitalwasallowedtomoveoffshoremorefreelytofinanceforeignmergersandacquisitions.ThesemergersandacquisitionenabledTatatogainthenecessarymarkets,resourcesandexpertiseinatimelywaytoenableittocompeteinternationally.

iii.WhydidGEconsideritnecessarytorelocatesomeofitskeymanagementandoperations?

DiscussionPoints:

UnderJackWelch,GeneralElectricwasanAmericancompanydoingbusinessabroad.JefferyImmeltwantedGeneralElectrictobeatrulyglobalcorporation.Toachievethatgoal,ImmeltreorganisedthecompanyshiftingtheheadofficesofitsvariousbusinessesawayfromtheUnitedStateswheretheyhadbeentightlycontrolled,tothelocationswheretheywereclosetotheircustomers,andgavecountrymanagersmorepower.GeneralElectricalsoopenedR&DcentresinGermany,China,andIndia.Thecompanyhopesthatthiswillhelpitbetterunderstandlocalneeds.Inaddition,thecompanyishiringmorelocalmanagersandusingfewerAmericanexpatriates.GeneralElectricbelievesthatlocalmanagerswiththeirbetterunderstandingoflocallanguageandculturewillbemoresuccessfulatsellingtolocalcompaniesandgovernments.

iv.AgoalofGEwastobecome‘trulyglobal’.Whatisthedifferencebetweenbeing‘international’andbeing‘trulyglobal’?

DiscussionPoints:

Beinginternationalmayinvolvenomorethanreplicatingexistingdomesticproductsandoperationsinforeignlocationswithmostkeymanagementdecisionsbeingmadeathomebyhomenationals.AswithGE,beingtrulyglobalwouldseemoreautonomyforlocalmanagersinforeignmarketsandlessrelianceonexpatriatemanagers.Moreforeignnationalswouldoccupykeymanagementpositionsintheorganisation.Itwouldalsomeanmorelocally-basedR&Dinforeignlocationsthatcouldleadtoproductsandservicesthataremoresuitabletolocalconditions.LocalR&Dandexperiencewouldalsobeasourceofnewideasandinnovationsthatcouldbeadoptedgloballythroughouttheentirecompany,includingthecountryoforigin.Otherthingsbeingequal,businessdecisionsaboutmarketing,productionandstaffingwouldbebasedmoreoncommercialassessmentsgloballythanconcernsfornationalitiesornationalborders.

v.ComparethestrategicthinkingbehindGE’sandTata’sinternationalexpansion.Woulditbecorrecttoclassifyoneasmore‘market-seeking’andtheotherasmore‘resource-seeking’?

DiscussionPoints:

GiventhatbothGEandTatareceivemorethan50percentoftheirsalesinternationally,seekinginternationalmarketsisimportanttobothcompanies.ForGEtheirdomesticmarket,theUSmarket,althoughlargehaslittlefurthergrowthpotential.ForTata,attheexistingstageofIndia’seconomicdevelopment,marketsarenotlargealthoughthepotentialforgrowthissubstantial.Bothcompaniesneedtobeseekingnewmarketsiftheyaretoexpandandprosper.GEisalongestablishedinternationalcompanywithsignificantfinancial,physicalandintellectualresourcesatitsdisposalalthoughitcontinuestoseektoenhancethoseresourcesthroughitsglobaloperations.Tataontheotherhandhaslessinternationalexperienceandhasdeliberatelysoughttoacquiretheresourcesnecessaryforittoprosperintheglobaleconomy.Atthisstageofthecompany’sglobalexpansion,accessingtheappropriateresourcesisprobablymorecrucialtothesuccessofTatathanitiscurrentlytotheongoingsuccessinternationallyofGE.

TeachingTip:

StudentscanexploreGeneralElectric’sandTata’sglobaloperationsattheirrespectivecompanywebsites.

TeachingTip:

StudentsmayalsowanttoexploreGeneralElectricCEOJefferyImmelt’sowntakeonglobalisationatandChairmanTata’sviewofapossiblesuccessorandglobalexpansion