International Management: Culture, Strategy, and Behavior 11th Edition by Fred Luthans Solution man

Which regions of the world are most likely to benefit from globalization and integration in the years to come, and which may experience dislocations or setbacks?
Answer: Answers may vary, but regions that are likely to benefit from globalization and integration include Asia, Central and Eastern Europe, and South America, at the expense of most developed countries.

 
Key Terms
Chaebols: Very large, family-held Korean conglomerates that have considerable political and economic power
European Union: A political and economic community consisting of 28 member states
Foreign Direct Investment (FDI): Investment in property, plant, or equipment in another country
Globalization: The process of social, political, economic, cultural, and technological integration among countries around the world
International management: Process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural contexts
Keiretsu: An organizational arrangement in Japan in which a large group of vertically integrated companies bound together by cross-ownership, interlocking directorates, and social ties provide goods and services to end users
Management: Process of completing activities efficiently and effectively with and through other people
Maquiladora: Factory, mostly located in Mexican border towns, that imports materials and equipment on a duty- and tariff-free basis for assembly or manufacturing and re-export
Ministry of International Trade and Industry (MITI): A Japanese government agency that identifies and ranks national commercial pursuits and guides the distribution of national resources to meet these goals
MNC: A firm having operations in more than one country, international sales, and a nationality mix among managers and owners
North American Free Trade Agreement (NAFTA): A free-trade agreement between the United States, Canada, and Mexico that has removed most barriers to trade and investment
Offshoring: The process by which companies undertake some activities at offshore locations instead of in their countries of origin
Outsourcing: The subcontracting or contracting out of activities to external organizations that had previously been performed by the firm
United States-Mexico-Canada Agreement (USMCA): a free-trade agreement between the United States, Canada, and Mexico, signed in 2018 to replace the North American Free Trade Agreement (NAFTA) that has continued to eliminate most barriers to trade and investment.
World Trade Organization (WTO): The global organization of countries that oversees rules and regulations for international trade and investment
Review and Discussion Questions
How has globalization affected different world regions? What are some of the benefits and costs of globalization for different sectors of society (companies, workers, communities)?
Answer: North America continues to constitute one of the largest trading blocs in the world; the United States leads international trade and investment, and Canada is its largest trading partner. Mexico is on the verge of becoming the major economic power in Latin America. However, they still suffer from economic problems. Some South American countries also suffer from economic problems, while others seem to do better (e.g., Chile, Brazil, and Argentina until their currency crash). European countries have been most successful in integrating their economies, with the top challenge being integrating their former communist neighbors in Central and Eastern Europe. Although the U.K. is scheduled to leave the EU in October of 2019.  In addition to Japan and China, there are a number of other important economies in the region, including South Korea, Hong Kong, Singapore, and Taiwan. Together, the countries of the ASEAN bloc are also fueling growth and development in the region. India is attractive to multinationals, especially U.S. and British firms. Many people around the world, including those in the West, work for Arab employers. Many African nations remain very poor and undeveloped, and international trade is only beginning to serve as a major source of income. Globalization and the rise of emerging markets’ MNCs have brought prosperity to many previously underdeveloped parts of the world.
How has NAFTA/USMCA affected the economies of North America and how has the EU affected Europe? What importance do these economic pacts have for international managers in North America, Europe, and Asia?
Answer: The original NAFTA countries agreed to a renegotiated trade agreement, called the United States-Mexico-Canada Agreement (USMCA) which will replace NAFTA following its ratification by the US and Canada – Mexico has ratified the agreement. USMCA maintains the key provisions of the original agreement while enacting minor changes aimed at protecting intellectual property rights, altering car manufacturing regulations to encourage more North American manufacturing, and opening the Canadian market to tariff-free dairy imports from the U.S.  The EU has made significant progress over the past decade in becoming a unified market. In 2003, the EU consisted of 15 nations and has since gained 13 additional nations. Not only have most trade barriers between members been removed, but a subset of European countries has adopted a unified currency called the euro. The EU will lose the U.K. as a member in 2019.  These economic pacts will force international managers to stay current on all trade regulations, economic activity, and status. Different economic systems characterize different countries and regions.