Presentation on theme: "Intro to Business, Ethics Business 40 Week 2 Carole K. Meagher 26 January, 2005."— Presentation transcript:
Intro to Business, Ethics Business 40 Week 2 Carole K. Meagher 26 January, 2005
Agenda Roll call, introductions, project ideas Article analysis Before you leave tonight… I need a roster with your group and project idea Week 4 Lead-in
WSJ – Socialism in Football Count off by 4s… 1.Is the NFL better off overall if the teams work together? Why or why not? 2.What types of revenue that are shared? Not shared? Why do some teams make more money than do others? 3.What arguments do the larger-market team owners offer to defend their demands for greater shares of the NFL revenues? 4.What arguments do the smaller-market team owners offer to defend their demands to keep their shares of the NFL revenues?
Economics: Create Wealth Use Scarce Resources to Produce Goods & Services To Distribute Among Competing Groups/Individuals Micro v. Macro Resource Development
$What is produced? $What amount is produced? $What is the method of output distribution? $What is the rate of economic growth? Adapted from: Adapted from: Edwin Mansfield Economics (New York: W.W. Norton, 1976), p.8 Four Whats of an Economic System
Primary Economic Systems Communism Socialism Capitalism (Highly Controlled ) (Little Control ) Mixed
Economic Theories: Capitalism Adam Smith (1776) Early industrial revolution, studied a pin factory Core tenets: Freedom is vital Invisible Hand If everyone maximizes their own good, the overall good will be maximized Base of microeconomic theory Flaw: Micro + Micro + Micro Macro
Quantity(S) High High Low Price(P) S Supply Curve
Price(P) Quantity(D) High Low D Demand Curve
Quantity High Low Price Market Equilibrium SD Surplus Shortage Equilibrium Point
Limits of Free-Markets Inequality of Wealth- Causes National & World Tension Greed Compromises Ethics Potential Environmental Damage Limitations Push Country towards Socialism = Government Regulation
Economic Theories: Communism Karl Marx (1867) Observed extreme, harsh conditions in Europe mid- Industrial Revolution Core tenets: Control of capital invites abuse, thus revolution From each according to his ability, to each according to his needs Centralize control in order to avoid problems Base of macroeconomic theory Flaw: Power still corrupts Government is not as efficient as market
Economic Theories: Socialism Frederick Engels (1880) Mellower version of Communism Core tenets: Sees capitalist system as fundamentally a good way to produce goods and manage an economy Encourages democratic, widespread distribution of wealth, profits Base of most of world economies Flaw: Will people take advantage of a system that protects them from poverty, no matter what?
Economic Theories: Keynesian John Maynard Keynes (1936) Observed Great Depression Core tenets: Maximize aggregate output Described market failures Role of government is to prevent boom/bust, thus stabilize economy Base of current US policy Flaw: Very theoretical… rarely tested in real life circumstances.
Why is the U.S. an Economic Success? Major ReasonPercent* Major ReasonPercent* Constitution85 Free Elections84 Free Enterprise System81 Abundant Resources78 Cultural Diversity71 * Respondents could choose more than one. Source: Investors Business Daily Survey
U.S. Economy Key Economic Indicators Productivity Business Cycles Recession Depression Recovery Stabilization Fiscal Policy Monetary Policy National Debt
U.S. Gross Domestic Product In Billions of U.S. $ Source: U.S. Dept. of Commerce, Bureau of Economic Analysis
U.S. Unemployment (%) Source: U.S. Bureau of Labor Statistics
SOURCE: SOURCE: U.S. Bureau of Labor Statistics What Makes Up The Consumer Price Index?
Consumer Price Index = 100 Source: U.S. Dept. of Labor, Bureau of Labor Statistics
% Change in Labor Productivity- U.S. Source: U.S. Dept. of Commerce, Bureau of Labor Statistics
Chapter 3: Break… Video… Discussion Count off by 3s… 1.Why did Coca-Cola decide to expand into Russia? 2.How did Coca-Cola expand? What steps did they take? 3.Why do Russians buy Coca-Cola instead of local brands?
Growing World Population Source: Population Research Bureau
By Region/Country - % of World Source: Population Research Bureau
Company % of Earnings From Outside U.S. Source: Investment Advisor, August 2000
Leading Goods Exporters/Importers (2001) CountryExportsImports United States 731 1,180 Germany Japan France United Kingdom World Total6,155 6,441 In Billion $ Source: World Trade Organization
Leading Services Exporters/Importers (2001) CountryExports Imports United States Germany Japan France United Kingdom World Total1,460 1,445 In Billion $ Source: World Trade Organization
Why Trade With Other Nations? Allows specialization to maximize production Different natural resources makes trading beneficial
U.S. Trading Partners RegionExportsImports Asia 26.5% 36.3% West. Europe North America Latin America Middle East Africa C./E. Europe/ Baltic States/CIS Total 100% 100% Source: World Trade Organization, 2001
CountryStrengths United States Technology, R & D Spending Finland Univ. Enrollment, Efficient Legal System, Business Ethics Taiwan Cell-phone Ownership, Tech. Innovation, Local Firms Competitiveness Singapore Savings Rate, Math/Science Education, Political Trust Sweden H.S. Enrollment, Press Freedom, Phone Access Global Competitiveness
Global Trade Goods & Services Importing Exporting Measuring Trade Balance of Trade/Payments Trade Deficit
U. S. Trade in Goods & Services ($ Billions) Source: St. Louis Business Monthly, Oct & World Trade Organization Balance of Trade
Sources of U.S. Oil Imports In Millions of Barrels Source: USA Today
U.S. Trade Experience Balance of Payments Debtor Nation Foreign Direct Investment Dumping
Sources of Foreign Direct Investments In the U.S. Source: U.S. Commerce Dept.
Strategies for Reaching Global Markets Licensing Exporting Franchising Contract Manufacturing Joint Ventures Strategic Alliances Subsidiaries-MNCs Foreign Direct Investment
Worlds Largest MNCs Revenue ($Billions) 1)Wal-Mart Stores 217 2)Exxon Mobil 213 3)General Motors 175 4)BP 174 5)Ford Motor 162 6)Daimler Chrysler 136 7)Royal Dutch/Shell Group 135 8)General Electric 125 9)Toyota Motor )Mitsubishi112
Forces Affecting Trading in Global Markets Socio-cultural Economic & Financial Legal & Regulatory Physical & Environmental Trade Protectionism Global E-Commerce-Future
Cultural Differences in Global Markets Language Religion Values & Attitudes Aesthetics Materialism
Did You Know? In Turkey its rude to cross your arms while you are facing someone. In the Arab world the left hand is considered unclean; dont eat with it! In India never pat someones head, its the seat of the soul. The Chinese associate gifts such as straw sandals, clocks and handkerchiefs with funerals.
Whats the 2 nd Most Valuable Global Business Language? Source: Accountemps Poll
Nations That Have Not Converted to the Metric System United States Liberia Yemen Myanmar (Burma) Brunei
Trade Agreements General Agreement on Tariffs & Trade (1948) Uruguay Round of GATT (1986) Lower Tariffs Extend Rules World Trade Organization (1995) Common Markets European Union (EU) Mercosur North American Free Trade Agreement (1994)
Future Global Trade Peoples Republic of China Russia & Others Internet Bypassing laws Greymarkets Items for sale that are otherwise illegal
Week 4 Lead-in Chapters 5 and 6 – Starting your own business Find an article talking about something related to starting your own business, and tie it back to the text. Or, whatever you want, just be thoughtful and buzzword compliant Group rosters!