288 33 Powerpoint Slides Chapter 1 Globalization International Business

1
International Business
Rakesh Mohan Joshi Professor & Chairperson, IIFT New Delhi
Copyright @ Oxford University Press International Business R. M. Joshi
Chapter 1: Globalization and International Business
Chapter 1
GLOBALIZATION AND
INTERNATIONAL BUSINESS
Learning Objectives
To explain the concept of globalization
To elucidate factors influencing globalization

To discuss global business expansion strategy for emerging market companies
To explicate the concept of international business

To delineate motives for international business expansion To expound the strategy for managing business in the globalization era
Globalization of Business: A Historical Perspective

In the initial years of human history, there were hardly any formal barriers, such as tariffs or non-tariff
restrictions, for the movement of goods or visa

requirements for the people. The concept of globalization can be traced back to the phenomenon of a
nation-state.
Concept of Globalization
The process of integration and convergence of
economic, financial, cultural and political
systems across the world.
Globalization: A Holistic Approach
Economic Globalization
The increasing integration of national economic systems through growth in international trade, investment and capital flows.
Financial Globalization
The liberalization of capital movements and deregulations,
especially of financial services that led to a spurt in cross-border

capital flows.
Cultural Globalization
Convergence of cultures across the world.
Political Globalization
Convergence of political systems and processes around the world.
Dimensions of Economic Globalization
Globalization of production
Globalization of markets Globalization of competition Globalization of technology Globalization of corporations and industries
Factors Influencing Globalization
Movers of Globalization

Economic liberalization Technological breakthrough
Multilateral institutions
International economic integrations Move towards free marketing systems Rising research & development costs Global expansion of business operations
Advents in logistics management

Emergence of the global customer segment
Factors Restraining Globalization
Regulatory controls
Emerging trade barriers

Cultural factors
Nationalism
War and civil disturbances
Management myopia
Measuring Globalization
Trade Openness KOF Index of Globalization A.T. Kearney/ Foreign Policy Globalization Index
Reasons for Support of Globalization
Maximization of Economic Efficiencies Enhancing Trade Increased Cross-border Capital Movement Improves Efficiency of Local Firms Increases Consumer Welfare
Criticism of Globalization
Developed versus Developing Countries: Unequal Players in Globalization: Widening Gap between the Rich and the Poor Wipes out Domestic Industry Leads to Unemployment and Mass Lay-offs Brings in Balance of Payments Problems Increased Volatility of Markets Diminishing Power of Nation States Loss of Cultural Identity Shift of Power to Multinationals
Response Strategies to Globalization Forces for Emerging Market Companies
Defender Extender Dodger Contender
Concept of International Business
International Trade: Exports of goods and services by a firm to a foreign-based buyer (importer) International Marketing: It focuses on the firm-level marketing practices across the border, including market identification and targeting, entry mode selection, and marketing mix and strategic decisions to compete in international markets.
International
Investments:
Cross-border
transfer
of
resources to carry out business activities.
International Management: Application of management
concepts and techniques in a cross-country environment and

adaptation to different social-cultural, economic, legal, political and technological environments.
International Business: All those business activities which involves cross border transactions of goods, services, and
resources between two or more nations
Global Business: Conduct of business activities in several

countries using a highly co-ordinated and single strategy
across the world.
Reasons for International Business Expansion
Market-Seeking Motives
Marketing opportunities due to life cycles
Uniqueness of product or service
Economic Motives
Profitability
Achieving economies of scale Spreading R&D costs
Strategic Motives
Growth Risk spread
Differences Between Domestic and International Business

Economic Environment Socio-Cultural Environment Legal Environment Political Environment Competition
Infrastructure
Technology
Managing Business in the Globalization Era

Global strategies adopted by business enterprises may include:
Global conception of markets Multi-regional integration strategy Changes in external organisation of multinational firms
Changes in internal organisation

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1

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Chapter 1: Globalization and International Business

To explain the concept of globalization

To elucidate factors influencing globalization

To explicate the concept of international business

Chapter 1: Globalization and International Business

Globalization of Business: A Historical Perspective

restrictions, for the movement of goods or visa

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

systems across the world.

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Globalization: A Holistic Approach

The liberalization of capital movements and deregulations,

especially of financial services that led to a spurt in cross-border

Chapter 1: Globalization and International Business

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Dimensions of Economic Globalization

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Factors Influencing Globalization

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Economic liberalization Technological breakthrough

Advents in logistics management

Chapter 1: Globalization and International Business

Factors Restraining Globalization

Emerging trade barriers

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Reasons for Support of Globalization

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Chapter 1: Globalization and International Business

Response Strategies to Globalization Forces for Emerging Market Companies

Defender Extender Dodger Contender

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Concept of International Business

Chapter 1: Globalization and International Business

resources to carry out business activities.

International Management: Application of management

concepts and techniques in a cross-country environment and

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

resources between two or more nations

Global Business: Conduct of business activities in several

across the world.

Copyright @ Oxford University Press International Business R. M. Joshi

Chapter 1: Globalization and International Business

Reasons for International Business Expansion

Chapter 1: Globalization and International Business

Differences Between Domestic and International Business

Economic Environment Socio-Cultural Environment Legal Environment Political Environment Competition