1. Fourth Edition International Business

2. CHAPTER 1 Globalization

3. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-3 The Global Retail Market What Drives Globalization  Decline in cross-border investment barriers. Top 25 Retailers Market Share % 20002009 16 40

4. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-4 The Global Retail Market What Drives Globalization  Decline in cross-border investment barriers.  Saturation and slow growth in local markets. Top 25 Retailers Market Share % 20002009 16 40

5. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-5 The Global Retail Market What Drives Globalization  Decline in cross-border investment barriers.  Saturation and slow growth in local markets.  Retailers believed they would benefit from economies of scale from global buying power. Top 25 Retailers Market Share % 20002009 16 40

6. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-6 The Global Retail Market  What characterizes these retailers is that they all held strong domestic market positions. Top 25 Retailers Market Share % 20002009 16 40

7. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-7 The Global Retail Market Globalization Strategies Carrefour, WalMart, Ahold, and Tesco have led the Globalization of retail stores with different strategies: Top 25 Retailers Market Share % 20002009 16 40

8. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-8 The Global Retail Market Globalization Strategies  Carrefour, WalMart, Ahold, and Tesco have led the globalization of retail stores with different strategies:  Ahold: “going global with a local face” Top 25 Retailers Market Share % 20002009 16 40

9. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-9 The Global Retail Market Globalization Strategies  Carrefour, WalMart, Ahold, and Tesco have led the globalization of retail stores with different strategies:  Ahold: “going global with a local face”  WalMart: “Global retail brand” Top 25 Retailers Market Share % 20002009 16 40

10. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-10 But, It Isn’t Easy National differences in tastes and preferences

11. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-11 But, It Isn’t Easy National differences in tastes and preferences Distribution channels

12. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-12 But, It Isn’t Easy National differences in tastes and preferences Distribution channels Culturally embedded value systems

13. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-13 But, It Isn’t Easy National differences in tastes and preferences Distribution channels Culturally embedded value systems Difficulty in establishing common retail model such as:  Ahold: “going global with a local face”

14. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-14 But, It Isn’t Easy National differences in tastes and preferences Distribution channels Culturally embedded value systems Difficulty in establishing common retail model such as:  Ahold: “going global with a local face”  WalMart: “Global retail brand”

15. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-15 But, It Isn’t Easy National differences in tastes and preferences Distribution channels Culturally embedded value systems Difficulty in establishing common retail model such as:  Ahold: “going global with a local face”  WalMart: “Global retail brand” As well as factors like Labor costs, Desirable locations, Sophistication of local supply base. Cause problems for globalization. Therefore, we should not assume globalization is a done deal.

16. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-16 Globalization Trade and investment barriers are disappearing.

17. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-17 Globalization Trade and investment barriers are disappearing. Perceived distances are shrinking due to advances in transportation and telecommunications.

18. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-18 Globalization Trade and investment barriers are disappearing. Perceived distances are shrinking due to advances in transportation and telecommunications. Material culture is beginning to look similar.

19. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-19 Globalization Trade and investment barriers are disappearing. Perceived distances are shrinking due to advances in transportation and telecommunications. Material culture is beginning to look similar. National economies merging into an interdependent global economic system.

20. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-20 Globalization: Pros& Cons Pros Increased revenue opportunity through global sales.

21. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-21 Globalization: Pros& Cons Pros Increased revenue opportunity through global sales. Reduced costs by producing in ‘low cost’ countries.

22. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-22 Globalization: Pros& Cons Pros Increased revenue opportunity through global sales. Reduced costs by producing in ‘low cost’ countries. Cons Different nations = different problems.

23. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-23 Globalization: Pros& Cons Pros Increased revenue opportunity through global sales. Reduced costs by producing in ‘low cost’ countries. Cons Different nations = different problems. Similarities between nations may be superficial.

24. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-24 Globalization: Pros& Cons Pros Increased revenue opportunity through global sales. Reduced costs by producing in ‘low cost’ countries. Cons Different nations = different problems. Similarities between nations may be superficial. Global planning may be easy, but global execution is not.

25. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-25 What is “Globalization”? “The shift toward a more integrated and interdependent world economy.” Markets Production

26. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-26 Globalization of Markets Globalization means “Merging of historically distinct and separate national markets into one huge global marketplace.”

27. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-27 Globalization of Markets Globalization is Facilitated by offering standardized products: Citicorp Coca-Cola Sony PlayStation McDonalds Does not have to be a big company to participate: Over 200,00 U.S. companies with less than 100 employees had foreign sales in 2000.

28. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-28 Globalization Where will globalization most likely prosper better? In consumer goods Or In industrial goods and materials

29. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-29 The Largest Global Markets Not Consumer Goods Not Consumer Goods

30. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-30 The Largest Global Markets Not Consumer Goods Not Consumer Goods Industrial Goods and Materials  Commodities such as aluminum, oil and wheat.  Industrial products such as microprocessors, aircraft.  Financial assets such as U.S. Treasury bills and Eurobonds. Industrial Goods and Materials  Commodities such as aluminum, oil and wheat.  Industrial products such as microprocessors, aircraft.  Financial assets such as U.S. Treasury bills and Eurobonds.

31. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-31 Globalization of Production Why does globalization of production take place?

32. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-32 Why Globalization of Production? “The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor,energy, land and capital).” “Global Products”

33. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-33 Why Globalization of Production? “The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor,energy, land and capital).” This also increases the company’s chance to obtain those countries market for their products as well. “Global Products”

34. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-34 Why Globalization of Production? “The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor,energy, land and capital).” Companies hope to lower their overall cost structure and/or improve the quality or functionality of their product offering - increasing their competitiveness. “Global Products”

35. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-35 Macro Factors Decline in Trade Barriers Decline in Trade Barriers Globalization Technological Change Technological Change

36. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-36 International Trade: When a firm exports goods or services to consumers in another country. Foreign Direct Investment: When a firm invests resources in business activities outside its home country.

37. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-37 General Agreement on Tariffs and Trade Member states (140) in eight negotiating ‘rounds’ worked to lower barriers to the free flow of goods and services. In the most recent round, the Uruguay Round, nations agreed to enhanced patent, copyright and trademark protections and established the World Trade Organization.

38. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-38 Average Tariff Rates on Manufactured Products as Percent of Value 1913 1950 1990 2000 France 21% 18% 5.9% 3.9% Germany 20 26 5.9 3.9 Italy 18 25 5.9 3.9 Japan 30 5.3 3.9 Holland 5 11 5.9 3.9 Sweden 20 9 4.4 3.9 Britain 23 5.9 3.9 U.S.A. 44 14 4.8 3.9 Table 1.1

39. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-39 Fewer FDI Restrictions  Between 1991 and 2000 of the 1,121 changes worldwide in laws governing FDI, 95% created a more favorable investment environment.  During 2000, 69 countries made 150 changes to FDI regulations, 147 or 98% were more favorable to investment.

40. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-40 The Growth of World Trade and Output GDP Trade Figure 1.1

41. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-41 The Role of Technological Change Even though the lowering of trade barriers made globalization a theoretical possibility, the new technologies made it a reality.

42. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-42 The Role of Technological Change Invention and innovations in Microprocessors and telecommunications

43. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-43 The Role of Technological Change Invention and innovations in Microprocessors and telecommunications Container transportation

44. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-44 The Shrinking Globe 1500-1840 1850-1930 1950s 1960s Best average speed of horse-drawn coaches and sailing ships, 10mph. Steam locomotives average 65mph. Steamships average 36mph. Propeller aircraft 300-400 mph. Jet passenger aircraft 500-700mph. Figure 1.2

45. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-45 The Role of Technological Change Invention and innovations in Microprocessors and telecommunications Container transportation The Internet and World Wide Web

46. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-46 Worldwide E-Commerce Growth Forecast Figure 1.2

47. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-47 Implications for Globalization of Production Production dispersed to economical locations due to transportation and communication advances. It has allowed firms to create and manage a globally Dispersed production system, further facilitating Globalization of production

48. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-48 Implications for Globalization of Markets New markets opened through WWW. Jet aircrafts move people and goods. Global media such as (CNN, HBO, MTV) are creating a worldwide culture. New markets opened through WWW. Jet aircrafts move people and goods. Global media such as (CNN, HBO, MTV) are creating a worldwide culture.

49. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-49 The Changing Paradigm of the Global Economy Old: U.S. dominance of the world economy and world trade.

50. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-50 The Changing Paradigm of the Global Economy Old: U.S. dominance of the world economy and world trade. U.S. dominance in world FDI.

51. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-51 The Changing Paradigm of the Global Economy Old: U.S. dominance of the world economy and world trade. U.S. dominance in world FDI. U.S. firms dominance of international business.

52. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-52 The Changing Paradigm of the Global Economy Old: U.S. dominance of the world economy and world trade. U.S. dominance in world FDI. U.S. firms dominance of international business. ½ of the world economies (Communist dominated) were off-limits to western businesses.

53. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-53 The Changing Pattern of World Output and Trade Table 1.2  Output measured by GNP.

54. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-54 Percentage Share of Total FDI Stock, 1980-2000 U.K. Germany Netherlands Figure 1.4

55. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-55 FDI Inflows, 1988-2000 ($ Billions) Figure 1.5

56. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-56 The National Composition of the Largest Multinationals Table 1.3

57. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-57 The Changing World Order The fall of Communism in Eastern Europe and the former Soviet Union.

58. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-58 The Changing World Order The fall of Communism in Eastern Europe and the former Soviet Union. Czechoslovakia has divided itself into two states.

59. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-59 The Changing World Order The fall of Communism in Eastern Europe and the former Soviet Union. Czechoslovakia has divided itself into two states. Yugoslavia has divided into 5 (often warring) successor states.

60. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-60 The Changing World Order The fall of Communism in Eastern Europe and the former Soviet Union. Czechoslovakia has divided itself into two states. Yugoslavia has divided into 5 (often warring) successor states. Pro-democracy movement (suppressed) in China.

61. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-61 The Changing World Order The fall of Communism in Eastern Europe and the former Soviet Union. Czechoslovakia has divided itself into two states. Yugoslavia has divided into 5 (often warring) successor states. Pro-democracy movement (suppressed) in China. Latin America has seen both democracy and free market reforms.

62. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-62 Hopes and Fears of the 21st Century 1. Will economic and political reforms hold?

63. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-63 Hopes and Fears of the 21st Century 1. Will economic and political reforms hold? 2. Economic problems are no longer isolated and can become global.

64. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-64 Globalization Twin engines of prosperity Lower trade barrier

65. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-65 Globalization Twin engines of prosperity Lower trade barriers FDI

66. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-66 Globalization Jobs and Income Firms move jobs to low cost countries.

67. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-67 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce.

68. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-68 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce. Increases income in less developed countries.

69. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-69 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce. Increases income in less developed countries. May lead to income inequality.

70. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-70 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce. Increases income in less developed countries. May lead to income inequality. Labor Policies and the Environment Firms move to countries with weak laws.

71. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-71 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce. Increases income in less developed countries. May lead to income inequality. Labor Policies and the Environment Firms move to countries with weak laws. Economic progress leads to stronger laws.

72. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-72 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce. Increases income in less developed countries. May lead to income inequality. Labor Policies and the Environment Firms move to countries with weak laws. Economic progress leads to stronger laws. By creating wealth and incentives for technology improvements, world will be better.

73. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-73 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce. Increases income in less developed countries. May lead to income inequality. Labor Policies and the Environment Firms move to countries with weak laws. Economic progress leads to stronger laws. By creating wealth and incentives for technology improvements, world will be better. Tie strong laws to international agreements.

74. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-74 Globalization Jobs and Income Firms move jobs to low cost countries. Countries specialize in efficiently produced goods and import those they can not efficiently produce. Increases income in less developed countries. May lead to income inequality. Labor Policies and the Environment Firms move to countries with weak laws. Economic progress leads to stronger laws. By creating wealth and incentives for technology improvements, world will be better. Tie strong laws to international agreements. Firms are not amoral.

75. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-75 Environmental Performance and Income Figure 1.6 5.0 5.5 6.0 6.5 7.0 67891011 Ethiopia Bhutan TanzaniaBangladesh Malawi NigeriaKenya Egypt India China Thailand Tunisia Korea S.Africa Trinidad Bulgaria Ireland Finland Jamaica Germany Netherlands Income Index Environmental Performance Index

76. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-76 Globalization and National Sovereignty Under the new system, many decisions that affect billions of people are no longer made by local and national governments but instead, if challenged by any WTO member nation, would be deferred to a group of unelected bureaucrats sitting behind closed doors in Geneva. The bureaucrats can decide whether or not people in California can prevent the destruction of the last virgin forests or determine if carcinogenic pesticides can be banned from their foods; or whether European countries have the right to ban dangerous biotech hormones in meat… At risk is the very basis of democracy and accountable decision making. Ralph Nader.

77. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-77 Globalization and National Sovereignty WTO EU UN WTO  Founded 1994  140 members  Police GATT trading system  Supranational organizations are limited to powers granted by member countries and serve the collective interests of its members.  Power is derived from the organization’s ability to sway members to action.

78. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-78 Globalization and the World’s Poor Critics argue that globalization has not helped poor. 1870: per capita income of 17 richest nations was 2.4x that of all other countries.

79. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-79 Globalization and the World’s Poor Critics argue that globalization has not helped poor. 1870: per capita income of 17 richest nations was 2.4x that of all other countries. 1990: it was 4.5x larger.

80. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-80 Globalization and the World’s Poor Other factors may have influenced the gap. Totalitarian governments.

81. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-81 Globalization and the World’s Poor Other factors may have influenced the gap. Totalitarian governments. Economic policies that destroyed wealth creation.

82. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-82 Globalization and the World’s Poor Other factors may have influenced the gap. Totalitarian governments. Economic policies that destroyed wealth creation. Little protection of property rights.

83. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-83 Globalization and the World’s Poor Other factors may have influenced the gap. Totalitarian governments. Economic policies that destroyed wealth creation. Little protection of property rights. Expanding populations.

84. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-84 Globalization and the World’s Poor Other factors may have influenced the gap. Totalitarian governments. Economic policies that destroyed wealth creation. Little protection of property rights. Expanding populations. War.

85. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-85 Managing in the Global Marketplace An International Business is any firm that engages in international trade or investment. Managing an international business is different than managing a domestic business: 1. Countries are different.

86. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-86 Managing in the Global Marketplace An International Business is any firm that engages in international trade or investment. Managing an international business is different than managing a domestic business: 1. Countries are different. 2. Problems are more complex.

87. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-87 Managing in the Global Marketplace An International Business is any firm that engages in international trade or investment. Managing an international business is different than managing a domestic business: 1. Countries are different. 2. Problems are more complex. 3. Must work within government regulations.

88. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-88 Managing in the Global Marketplace An International Business is any firm that engages in international trade or investment. Managing an international business is different than managing a domestic business: 1. Countries are different. 2. Problems are more complex. 3. Must work within government regulations. 4. Currency conversion presents unique problems.

89. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-89 Managing in the Global Marketplace An International Business is any firm that engages in international trade or investment. Managing an international business is different than managing a domestic business: 1. Countries are different. 2. Problems are more complex. 3. Must work within government regulations. 4. Currency conversion presents unique problems.