Global Business Today: Asia-Pacific Perspective 5th edition by Charles W. L. Hill Solution manual
Globalisation refers to the trend towards a more integrated global economic system where barriers to cross-border trade and investment are declining, perceived distance is shrinking thanks to advances in transport and telecommunications, and material cultures are more similar across borders. The effects of globalisation can be seen everywhere, from the cars people drive and the food they eat to the jobs they work at and the clothes they wear. The 2007–09 Global Financial Crisis (GFC) highlights the extent of the integration and interdependence in the global economy.
Teaching tip: Students can readily identify global brand names of products from motor vehicles to convenience foods to music. The content of websites of multinational corporations illustrates both the causes and effects of globalisation. A video clip of a TV advertisement (such as one used to sell a motor vehicle in Australia and New Zealand but showing the vehicle with left-hand drive) provides a stimulus to discussion of the globalisation of business.
Teaching tip: The trend towards globalisation has not gone unnoticed at many universities around the world. An organisation called the Network of International Business Schools (www.nibsnet.org) provides a forum for universities and colleges with international business programs to discuss their curricula. Consider visiting this website and providing your students with some examples of how universities and colleges are integrating the realities of globalisation into their business curricula.
Lecture note: International organisations such as the Organisation for Economic Co-operation and Development (OECD, www.oecd.org) provide statistics relating to international trade, foreign investment and migration. The Australian Department of Foreign Affairs and Trade (www.dfat.gov.au) and the New Zealand Ministry of Foreign Affairs and Trade (www.mfat.govt.nz) maintain websites that provide information on international trade issues including statistics on trade between Australia and New Zealand and their trading partners.
B) The rapidly emerging global economy raises a multitude of issues for businesses, including all sorts of new opportunities for businesses to expand their revenues, drive down their costs and boost their profits. It also gives rise to challenges and threats, such as how best to expand into a foreign market; whether and how to customise product offerings, marketing policies, human resources practices and business strategies in order to deal with national differences in culture; and how best to deal with the threat posed by efficient foreign competitors entering the home marketplace.
C) Globalisation is also giving rise to new anxieties for people such as those in the Australian motor vehicle industry, who until recently felt fairly secure in their jobs. Thanks to advances in technology, lower transport costs and an increase in skilled workers in low-cost nations such as India, China and Eastern Europe, the practice of offshoring and trade in services have grown significantly.
D) The opening case on Boeing illustrates the complexities companies face when outsourcing manufacturing and production to foreign suppliers. Engaging suppliers to the point where 65 per cent of production of the 787 Dreamliner was produced offshore, while cost-effective, proved too risky for Boeing to continue unabated. Consequently, discussion of the case on the appropriate extent of engagement in globalisation in order to sustain international competitiveness, using the practices of outsourcing and offshoring, leads into the next topic on the globalisation of markets and the globalisation of production.
What is globalisation?
A) Globalisation refers to the shift towards a more integrated and interdependent world economy.
The globalisation of markets
B) The globalisation of markets refers to the fact that in many industries historically distinct and separate national markets are merging into one huge global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge upon some global norm. However, despite the global acceptance and prevalence of Toyota motor vehicles, McDonald’s hamburgers, Samsung phones, Apple iPads and the like, it is important not to push too far the view that national markets are giving way entirely to the global market, particularly in relation to consumer goods and services. There are still significant differences that frequently require that marketing strategies, product features and operating practices be customised or adapted in a particular country. Most telling is the way multinational companies confront each other as competitors in many global markets. Examples include Coca-Cola and PepsiCo in the soft drink market; Ford and Toyota in motor vehicles; Boeing and Airbus in aircraft; Nike and Adidas in sporting goods; and Caterpillar and Komatsu in earth-moving equipment. Such rivalry is far from ‘friendly’.