1. Globalization
Eka Darmadi Lim – 3094802
Levina Rolanda Tjia – 3094804
May Eka Saputri – 3094814
Cornelis Pieter de Waard - 3112718

2. INTRODUCTION
• Globalization is reshaping our lives and leading us into
uncharted territory
• New technologies  drive down the cost of global
communication and travel
• In barriers to trade and investment  force the industries to
grow more competitive
• Competitive intensifies  seek out customers on a global
scale

3. INTERNATIONAL BUSINESS
• Commercial transaction that crosses the borders of
two or more nations
• Import: goods and services purchased abroad and
brought into a country
• Export: goods and services sold abroad and sent
out of a country

4. TECHNOLOGY MAKES IT POSSIBLE
• Technology perhaps the most remarkable facilitator
of societal and commercial changes today
• When businesses or consumers use technology to
conduct transactions, they engage in e-business (e-
commerce)
• E-business: use of computer network to purchase,
sell, or exchange products; service
customers; and collaborate with partners

5. GLOBALIZATION
• Globalization of markets refers to convergence in
buyer preferences in markets around the world
The benefits:
– Reduce marketing costs
– Creates new market opportunities
– Levels uneven income streams
– Yet local needs are important

6. GLOBALIZATION
• Globalization of production refers to the dispersal of
production activities to locations that help a company achieve
its cost-minimization or quality-maximization objectives for a
good or service
The benefits:
– Access lower-cost workers
– Access technical expertise
– Access production inputs

7. FORCES DRIVING GLOBALIZATION
• Two main forces underlie the globalization of
markets and productions:
1.Falling the barriers to trade and investment
2.Technological innovation

8. Falling barriers to trade investment
• General Agreement on Tariffs and Trade: Treaty
designed to promote free trade by reducing both
tariffs and nontariff barriers to international trade

9. • World Trade Organization: International organization
that enforces the rules of international trade
– Regional trade investment : Smaller groups of nations are
integrating their economies as never before by fostering
trade and boosting cross-border investment. (Example:
NAFTA,APEC)
– Trade and national outputs: With WTO agreements and
regional pacts have boosted world trade and
cross-border investment significantly.

10. • GDP(Gross domestic product): Value off all goods
and services produced by a domestic economy over
a one-year period
• GNP(Gross National product):Value of all goods and
services produced by a country’s domestic and
international activities over a one-year period
• GDP or GNP per capita: Nation’s GDP or GNP
dividend by its population

11. Technological innovation
• E-mail and videoconferencing : Operating across borders and
time zone complicates the job of coordinating and controlling
business activities.
• Internet and world wide web : Companies use the internet
quickly and cheaply contact managers in distant locations.
• Company intranets and extranets
– Intranets: web sites and information networks give
employees access to company data using personal
computers.

12. • Extranets: give distributors and suppliers access to a company’s
database to place orders or restock inventories electronically and
automatically.
• Advancement in transportation technologies : Innovation in
the shipping industry is helping globalize markets and
production by making shipping more efficient and dependable

13. Measuring Globalization
• 4 Variables
– Economic integration . Trade, foreign direct investment,
portfolio capital flows, and investment income
– Personal contact . International travel and tourism
telephone traffic, remittances. And personal
transfers(including compensation to employees)
– Technological connectivity . Internet users , internet hosts,
and secure servers
– Political engagement . Memberships in international
organizations, personnel and financial contribution ton U.N
. Security council missions, international treaties tratified,
and governmental transfers.

14. Today’s globalization in context
• Global economy had finally been reborn
• Today’s globalization are lowering the cost of
telecommunications and binding our world more
tightly together are the drivers of this second age of
globalization-communication satellites, fiber optics,
microchips, and the internet .

15. Introduction to debate
• World bank is an agency created to provide
financing for national economic development efforts
• International monetary funds (IMF) is an agency
created to regulate fixed exchange rates and
enforce the rules of the international monetary
systems.

16. Globalization’s impact on job and wages
• Against globalization
– Eliminates jobs in developed nations
– Lowers wages in developed nations
– Exploit workers in developing nations

17. • For globalization
– Increases wealth and efficiency in all nations
– Generates labor marketing flexibility in developed nations
– Advanced economies of developing nations
– Summary of the jobs and wages debate

18. Globalization’s impact on labor the
environment, and markets
• Labor standards Trade unions claim globalization
reduces labor’s bargaining power and lowers global
standards when international firms are permitted to
continually move to nations with lower labor
standards.
• Environmental protection . Globalization causes a
“race to the bottom”
• Future markets . International firms exploit local
labor markets and the environmental to produce
goods that are then exported back to the home
country

19. Globalization and Income inequality
• Inequality within nations . Focus on three main
branches of the debate, inequality within nations ,
inequality between nations, and global inequity
– Inequality within nations . Is increasing income quality
among people within nations
– Global quality . Inequality debate is whether globalization
is increasing inequality, widening income inequality
between all the people of the world, no matter they live
– Inequality between nations . Globalization is widening the
gap in average incomes between rich and poor nations

20. Globalization and National Sovereignty
• National sovereignty generally involves the idea that
a nation state:
– Is autonomous
– Can freely select its government
– Cannot intervene in the affairs of other nations
– Can control movements across its borders
– Can enter into binding international agreements

21. Globalization : Menace to Democracy ?
• Against globalization is that it empowers
supranational institutions at the expense of national
governments

22. Globalization : Guardian of Democracy?
• Supporters argue that an amazing consequence of
globalization has been the spread of democracy
worldwide

23. Globalization’s influences on cultures
• National culture is a strong shaper of people’s value,
attitudes, customs, beliefs, and communication.
• Globalization eradicates cultural differences
between groups of people or reinforces cultural
uniqueness is a hotly debated topic.

24. KEY PLAYERS IN INTERNATIONAL
BUSINESS
• Multinational Corporations (MNC) is a business that has
direct investments (in the form of marketing or manufacturing
subsidiaries) abroad in multiple countries
• Small companies are increasingly active in international trade
and investment
• The born global firm: a company that adopts a global
perspective and engages in international business from or
near its inception
• Key characteristics of born global firms are an innovative
culture and knowledge-based organizational
capabilities

25. WHY INTERNATIONAL BUSINESS IS
SPECIAL
• Because it occurs within a dynamic, integrated
system that weaves together four distinct elements:
– The forces of globalization
– The international business environment
– Many national business environments
– International firm management
• Globalization is a potent force transforming our
societies and commercial activities in
countless ways

26. WHY INTERNATIONAL BUSINESS IS
SPECIAL
• The international business environment influences
how firms conduct their operations in both subtle
and not-so-subtle ways
• Each national business environment is composed of
unique cultural, political, legal, and economic
characteristics that define business activity within
that nation’s borders
• International firm management is vastly different
from managing a purely domestic business

27. THE ROAD AHEAD FOR
INTERNATIONAL BUSINESS
• Globalization is transforming our world and how
elements of the global business environment are
becoming increasingly intertwined