TOPIC #8 The Future of International Business

1. Reduction of Protectionism 2. European Union 3. NAFTA 4. Impact of Cultural Differences 5. Global Dependency

The Future of International Trade Protectionism a term to describe when countries seek to protect their individual economic interests by imposing tariffs on other countries or restricting external trade. a term to describe when countries seek to protect their individual economic interests by imposing tariffs on other countries or restricting external trade. Economic experts agree that such practices will hurt the global economy as it is all interconnected. Economic experts agree that such practices will hurt the global economy as it is all interconnected. APEC is the fastest growing trading group and largest trading bloc in the world and engages in protectionism practices by imposing tariffs and other trade barriers on countries outside of APEC. APEC is the fastest growing trading group and largest trading bloc in the world and engages in protectionism practices by imposing tariffs and other trade barriers on countries outside of APEC.

European Union (EU) 27 European countries represent a single market in Europe 27 European countries represent a single market in Europe All but the UK and Denmark have adopted a the euro as the single currency to be used in member states All but the UK and Denmark have adopted a the euro as the single currency to be used in member states It has its own elected government It has its own elected government EU court rulings over rule individual country court rulings and/or laws. EU court rulings over rule individual country court rulings and/or laws. Citizens of member states may travel, move, and work freely in each other’s countries. Citizens of member states may travel, move, and work freely in each other’s countries. Population is currently about 370 milion. Population is currently about 370 milion.

Evolution of NAFTA Will NAFTA emerge into a union similar to the EU where citizens of Canada, Mexico, and the US would be able to move freely into each other’s countries where one currency would be used for all three countries? Will NAFTA emerge into a union similar to the EU where citizens of Canada, Mexico, and the US would be able to move freely into each other’s countries where one currency would be used for all three countries?

Impact of Cultural Differences Culture the sum of a country’s way of life, beliefs, customs the sum of a country’s way of life, beliefs, customs Influences how things are purchased, sold, Influences how things are purchased, sold, Sets boundaries on what can or can not be done Sets boundaries on what can or can not be done Impacts preferences, style, values, and norms Impacts preferences, style, values, and norms May be represented by a specific language May be represented by a specific language

Cultural Differences In order to do business with differing cultures, much market research is needed to help companies understand various similarities and differences even when dealing with everyday cultural norms dealing with people such as: In order to do business with differing cultures, much market research is needed to help companies understand various similarities and differences even when dealing with everyday cultural norms dealing with people such as: 1. Punctuality 2. Greetings 3. Nonverbal communication signals 4. Good Manners 5. Decision making

Punctuality Punctuality Norms in North America? People are expected to be People are expected to be on time on time Rely on books, calendars and Rely on books, calendars and even pay a fee sometimes even pay a fee sometimes for missed appointments for missed appointments Punctuality Norms in Other Countries Time is considered flowing, flexible, beyond’s people control Time is considered flowing, flexible, beyond’s people control

Greetings Shaking hands – differs from one country to the next Shaking hands – differs from one country to the next Eye contact made in some countries, not in others Eye contact made in some countries, not in others Bowing before an elder acquaintance versus not bowing at all Bowing before an elder acquaintance versus not bowing at all

Nonverbal Communications Signals Considered rude in Asian cultures to refuse someone’s request, so an Asian business person may not give a direct “no” answer to a sales request Considered rude in Asian cultures to refuse someone’s request, so an Asian business person may not give a direct “no” answer to a sales request A “nod” means “yes” to North Americans but “no” to a Bulgarian. A “nod” means “yes” to North Americans but “no” to a Bulgarian. Shaking the head “side to side” means “no” to North Americans but “yes” to Bulgarians. Shaking the head “side to side” means “no” to North Americans but “yes” to Bulgarians. The sign okay with ones hand is a symbol for money in Japan and is an offensive gesture in Brazil. The sign okay with ones hand is a symbol for money in Japan and is an offensive gesture in Brazil. Personal space interpretations also differs from place to place. Personal space interpretations also differs from place to place.

Good Manners In North America, getting down to business is the norm when to business people meet. In other Asian and Latin American countries it would be considered rude not to discuss family, friends, and favours first to establish a personal relationship before business.

Decision Making In some cultures, decisions are made from the top down approach, in others, from the bottom up approach. In some cultures, decisions are made from the top down approach, in others, from the bottom up approach.

Other Differences North Americans read from right to left. North Americans read from right to left. Israel and Egyptians read left to right. Israel and Egyptians read left to right. This difference may impact the order in which a sequential advertisement is laid out from one country to another. This difference may impact the order in which a sequential advertisement is laid out from one country to another.

Other Sources Wilson Jack et al. The World of Business, 5 th Ed. Nelson Education Ltd., Canada, 2007 Wilson Jack et al. The World of Business, 5 th Ed. Nelson Education Ltd., Canada, 2007