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

 
E) Lower labour costs are only one of the reasons why a company might seek to expand in developing countries. These countries might also have lower standards on environmental controls and workplace safety. Nevertheless, since investment typically leads to higher living standards, there is often pressure to increase safety regulations to international levels. No country wants to be known for its poor record on health and human safety. Thus, supporters of globalisation argue that foreign investment often helps a country to raise its standards. In relation to climate change, they argue that the focus should not be on rolling back the trade liberalisation efforts that have fostered economic growth and globalisation, but on getting the nations of the world to agree to tougher standards on limiting carbon emissions and to police any possibility of tit-for-tat ‘green’ trade sanctions that would severely disrupt international business.
 
Teaching tip: There is a very good website on applied global business ethics at www.business-ethics.org. Ethics is examined in more detail in Chapter 8.
 
Teaching tip: The plight of the Pacific Islands threatened by global warming and rising sea levels provides a meaningful introduction to this topic.
 
Globalisation and national sovereignty
 
F) Another concern voiced by critics of globalisation is that in today’s increasingly interdependent global economy, economic power is shifting away from national governments and towards supranational organisations such as the WTO, the EU and the UN. As perceived by critics, the problem is that unelected bureaucrats are now sometimes able to impose policies on the democratically elected governments of nation-states, thereby undermining the sovereignty of those states. The rapid increase of FDI funded by the sovereign wealth funds (SWF) of authoritarian governments has raised security issues among Western democracies.
 
Teaching tip: Less-developed economies are concerned that many MNEs are much larger economic entities than they themselves are and, as a consequence, their unelected boards have more economic and political power than small elected governments. A debate on issues that may arise from this imbalance can be stimulated by comparing the economic size of MNEs to the GNP of developing economies. Data are available from the World Bank’s annual World Development Report and associated indicators (www.worldbank.org) and from UNCTAD’s annual World Investment Report (http://unctad.org/en/pages/DIAE/World%20Investment%20Report/WIR-Series.aspxx).
 
G) With the development of the WTO and other multilateral and regional organisations (such as the EU), the Australia–United States Free Trade Area and the Association of South-East Asian (ASEAN) countries and localities necessarily cede some authority over their actions.
 
Globalisation and the world’s poor
 
H) Critics of globalisation argue that over the past century the gap between rich and poor has become wider, and that the benefits of globalisation have not been shared equally. However, supporters of free trade suggest that the actions of governments have limited economic improvement in many countries. Debt may also be limiting growth in some countries. Today there are various efforts underway to encourage debt-relief programs.
 

Managing in the global marketplace: what’s the difference?

                             
A) An international business is any company that engages in international trade or investment.
 
B) As their organisations increasingly engage in cross-border trade and investment, managers need to recognise that the task of managing an international business (any company that engages in international trade or investment) differs from that of managing a purely domestic business in many ways. Countries differ in their cultures, political systems, economic systems, legal systems and levels of economic development.
 
C) These differences require that businesspeople vary their practices country by country, recognising what changes are required to operate effectively. However, it is necessary to strike a balance between adaptation and maintaining global consistency.
 
D) As a result of making local adaptations, the complexity of international business is clearly greater than that of a purely domestic company. Companies need to decide which countries to enter, what mode of entry to use and which countries to avoid. Rules and regulations also differ, as do currencies and languages.