Global Business Today: Asia-Pacific Perspective 5th edition by Charles W. L. Hill Solution manual

 
Teaching tip: The globalisation of markets has provided many opportunities and challenges for business organisations. This is true not only for multinational corporations, as minnow companies have shown success in international markets too. Ask students to compare and contrast how and on what basis they choose between competing brands as mentioned above (consumer perspective).
 
The globalisation of production
 
C) The globalisation of production refers to the tendency among many companies to source goods and services from different locations around the globe in an attempt to take advantage of national differences in the cost and quality of factors of production (such as land, labour, capital and energy), thereby allowing them to compete more effectively against their rivals. The examples of Boeing and Lenovo illustrate how production is dispersed. The international dispersal of production also occurs in the service sector (e.g. the radiology services provided by Nighthawk are dispersed internationally). While part of the rationale is based on costs and finding the best suppliers in the world, there are also other factors. In Boeing’s case, if it wishes to sell airliners to countries like China, these countries often demand that domestic companies be contracted to supply portions of the plane—otherwise they will find another supplier (Airbus) who is willing to support local industry. The internet has facilitated the globalisation of production.
 

The emergence of global institutions

 
Over the past half-century, a number of global institutions have been created to help manage, regulate and police the global marketplace, as well as to promote the establishment of multinational treaties to govern the global business system. The World Trade Organization (WTO) is responsible for policing the world trading system and making sure that nations adhere to the rules established in WTO treaties such as the General Agreement on Tariffs and Trade (GATT). The International Monetary Fund (IMF) maintains order in the international monetary system, while the World Bank promotes economic development. The United Nations (UN) maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for human rights, as well as being a centre for harmonising the actions of nations (e.g. on climate change). The United Nations Conference on Trade and Development (UNCTAD), a part of the UN system, focuses on issues related to developing nations.
 
Teaching tip: Climate change is an issue of global scale and is a current focus of the United Nations. Students could discuss how international business may be affected by the possible adverse effects of adaptation and mitigation strategies on economies and on the relations between countries. Students can explore the issues at the site of the United Nations Framework on Climate Change at http://unfccc.int/2860.php.
 

Drivers of globalisation

 
A) Two macro factors seem to underlie the trend towards greater globalisation. The first is the decline in barriers to the free flow of goods, services and capital that has occurred since the end of World War Two; and the second is technological change.
 
Declining trade and investment barriers
 
B) After World War Two, the industrialised countries of the West started a process of removing barriers to the free flow of goods, services and capital between nations. Under GATT, over 100 nations negotiated even further decreases in tariffs and made significant progress on a number of non-tariff issues (e.g. intellectual property, trade in services). With the establishment of the WTO, a mechanism now exists for dispute resolution and the enforcement of trade laws. Talks that began in late 2001 and continue today, the on-again off-again Doha Round, were initially expected to last at least three years, and were focused on cutting tariffs on industrial goods, services and agricultural products; phasing out subsidies to agricultural producers; reducing barriers to cross-border investment; and limiting the use of antidumping laws.
 
Teaching tip: A comprehensive overview of GATT is available at www.ciesin.org/TG/PI/TRADE/gatt.html.
 
Teaching tip: The WTO maintains an excellent website at www.wto.org. This site provides information about recent trade disputes, emerging issues of international trade and the status of current talks.
 
Teaching tip: An interesting and informative site on WTO trade topics is available at: