1 int mgt in a globalized world

Globalization describes the increasing interconnectedness of countries through trade, investment, people and information across borders.

In the past, countries strongly controlled the crossing of borders for products, people, and capital.

products, people and capital flow more freely across borders, and economies are highly interconnected.

as one market instead of separate national markets.

countries depend on each other economically, for example through trade, supply chains, and investments.

It means that similar products and services are available in many countries around the world.

Products and services can be accessed worldwide, regardless of where they are produced.

Some power shifts from national governments to supranational firms and institutions.

the amount of people living in poverty has decreased since globalization increased.

Because globalization creates positive and negative effects, depending on the perspective.

that globalization has both advantages and disadvantages at the same time.

Because different products are made in different regions of the world, creating winners and losers.

Global production lowers costs and prices, but can also lead to job losses in high-wage countries.

No, globalization has a long history and started thousands of years ago.

Lower costs and new forms of transportation and communication accelerated globalization.

Because they fear losing jobs to low-wage countries.

Trade liberalization and reduced trade barriers

production activities are dispersed across different locations worldwide to minimize costs or maximize quality

low labour costs,

access to technical expertise

better access to resources and supply.

convergence of buyer preferences across countries, lead to similar products being sold worldwide.

new market opportunities,

reduced marketing costs through standardization,

and more stable income streams.

• falling Trade barriers

• technological innovation (communication, transport, info processing)

After WW1 countries introduced barriers of trade

countries raise trade barriers to protect domestic industries, often harming other countries and global trade.

resulted in contribution to great depression 1930

• to promote free trade,

• reduce trade barriers,

• stabilize the international monetary system,

• support economic development.

cooperation beyond national borders, where countries work together and reduce trade barriers to promote economic growth.

BRICS countries benefited from low trade barriers, which helped them grow economically and integrate into the global economy.

Brazil, Russia, India, China, South Africa

increases wealth and efficiency,

creates labor market flexibility in developed countries,

and helps developing countries advance economically.

eliminate jobs in developed countries,

lower wages in developing countries

and lead to exploitation of workers in low-wage countries.

• blue-collar (hands) and white-collar (head) workers

• developing countries can boost income of poor countries by embracing globalization

• income gap between developed and developing countries, which can widen over time.

• nations open to world trade grow faster than rich ones

• nations sheltered from global economy are worse off

1. Size / Performance

Companies generate a significant part of their revenue in foreign countries.

2. Structural

Companies have an international-oriented organizational structure that allows them to operate and sell abroad → applies to large and small companies.

3. Behavioral

Companies adjust their behavior and management practices to foreign and home markets (e.g. culture, customers, regulations).

4. Operational

Companies are economically active across national borders, which has strategic importance.

International companies operate across borders, while MNCs additionally have foreign direct investments (FDI) and subsidiaries in multiple countries.

international companies with foreign direct investments and subsidiaries in multiple countries.

1. Knowledge and implementation problems – different political, economic and legal institutions

2. Cultural differences – require adapted leadership and management behavior

3. Increased complexity and limited rationality – decision biases and reliance on experience

4. Neo-protectionism – new trade barriers to protect domestic industries

• sales growth

• cost advantages

• demand for specific ressources

International Management addresses strategic and leadership challenges that arise from cross-border activities in international companies.

1. International Management focuses on overarching management and leadership problems in international companies

2. International Business focuses on commercial transactions across national borders and functional areas (e.g. marketing, taxation)

Back:

1. It is the only academic discipline dedicated to overarching problems in international companies

2. Few companies operate without international activities

3. International competences are a prerequisite for leadership roles

4. Even normal employees deal with international aspects (suppliers, buyers, competitors)