Why should domestic managers have an understanding of globalization and international business? What are the current views regarding the future of globalization?
Answer: International business comprises a large and growing portion of the world's total business. Global events affect almost all companies. A company operating internationally will engage in modes of business, such as exporting and importing, that differ from those it is accustomed to domestically. To operate effectively, managers must understand these different modes.
The three main views of the future of globalization are as follows: further globalization is inevitable, or international business will grow regionally rather than globally, or forces working against globalization will slow both trends. The view that increased growth in international business is inevitable is supported by the power of MNEs who have multiple production and distribution networks and are able to pressure governments to place fewer restrictions on international business. The view that growth will occur regionally rather than globally is based on studies that show that most "global" transactions actually occur between neighboring countries. Finally, the view that globalization will be slowed by pressure from the antiglobalization movement to raise barriers and reject international treaties and organizations stems from the success of such groups in the past.
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Multinational Business
- Describe the different types of regional economic integration and give an example of each type.
- Explain the static effects and dynamic effects of economic integration. What is the difference between trade creation and trade diversion resulting from economic integration?
- What are the functions of the European Commission, the European Parliament, the Council, and the European Court of Justice?
- What are the rules of origin and regional content provisions of NAFTA?
- What has been the impact of NAFTA on trade and employment in NAFTA nations?
- Identify and briefly compare the major regional trading groups in Latin America, Asia, and Africa.
- Are commodity agreements effective? Why or why not?
- Why is geography important to most regional trade agreements? Provide examples of RTAs to illustrate your answer.
- In a brief essay, explain the roles of the World Trade Organization and the United Nations in international trade.
- What is the difference between a free trade agreement and a customs union? Provide examples of each in your answer.
- What are the disadvantages of import restrictions in regards to creating domestic employment opportunities?
- Explain the rationale for and problems with making the infant-industry argument work as intended.
- Why do developing countries sometimes impose import restrictions to increase their levels of industrialization?
- What is the difference between import substitution policies and export-led development policies? What are the potential effects of each?
- Many companies and industries argue that they should have the same access to foreign markets as foreign industries and companies have to their markets. In a short essay, discuss this issue of "comparable access," or "fairness."
- What are common reasons that governments enact export restrictions? What are the possible negative consequences of such restrictions?
- What is dumping? What are the possible effects of dumping on a country's economy?
- Briefly discuss the four non economic rationales for governmental intervention in the free movement of trade: maintaining essential industries, preventing shipments to unfriendly countries, maintaining or extending spheres of influence, and preserving national identity.
- Describe and compare the different types of tariffs (duties).
- In a short essay, list and discuss the nontariff barriers that relate to direct price influences: subsidies, aid and loans, customs valuations, and other direct price influences.
- List and define the types of nontariff barriers that limit the quantity of goods traded: quotas, embargoes, buy local legislation, standards and labels, specific permission requirements, administrative delays, and reciprocal requirements.
- What are the main arguments for limiting trade in services? What is your opinion on limiting trade in services?
- As an international business manager, how can you benefit from an understanding of international trade theories?
- In a short essay, discuss the theory of mercantilism, and discuss favorable and unfavorable balances of trade as they apply to international business.
- In a short essay, discuss the theory of absolute advantage and the reasons a country's efficiency improves based on this theory.