GLOBALIZATION

 GLOBALIZATION OF BUSINESS?
Globalization of Business is the change in a business from a company associated with a single
country to one that operates in multiple countries.
 IMPACT OF GLOBALIZATION
The impact of globalization on business can be placed into broad categories:

1. Market globalization
 is the decline in barriers to selling in countries other than in home country.
 This change will make it easier for your company to begin selling products internationally, since
lower tariffs to keep consumer prices lower and fewer
 The companies must consider other cultures when developing their business strategies and
potentially adjust the product and marketing messages if they aren’t appropriate in the target
country

2. Production globalization
 Is the sourcing of materials and services from other countries to gain advantage from price
differences in different nation
 Factors of Production
1. LABOR
2. ENERGY
3. LAND
4. CAPITAL
 By doing this, companies hope to lower their overall cost structure or improve the quality or
functionality of their product offering, thereby allowing them to compete more effectively.

THE EMERGENCE OG GLOBAL INSTITUTION

 As markets globalize and an increasing proportion of business activity transcends national borders, institutions are
needed to help manage, regulate, and police the global marketplace, and to promote the establishment of
multinational treaties to govern the global business system.

WORLD TRADE ORGANIZATION

 is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid
down in trade treaties signed by WTO member states.

BARRIERS IN TRADE AND INVESTMENT

 Many of the barriers to international trade took the form of high tariffs on imports of manufactured goods. The
typical aim of such tariffs was to protect domestic industries from foreign competition.
THE ROLE OF TECHNOLOGICAL CHANGE

 Advances in communication, information processing, and transportation technology, including the

explosive emergence of the Internet and World Wide Web.
 explosive growth of high-power, low-cost computing, vastly increasing the amount of information that
can be processed by individuals and firms
 WWW makes it much easier for buyers and sellers to find each other, wherever they may be located
and whatever their size.
 It allows businesses, both small and large, to expand their global presence at a lower cost than ever
before
 advance and telecommunications bandwidth continues to increase, almost any work processes that can
be digitalized will be, and this will allow that work to be performed wherever in the world it is most
efficient and effective to do so.
 are helping to create electronic global marketplaces so, low-cost transportation has made it more
economical to ship products around the world, thereby helping to create global markets

ETHICS IN INTERNATIONAL BUSINESS

 The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a
profession, or the actions of an organization
 Business ethics are the accepted principles of right or wrong governing the conduct of businesspeople, and an ethical
strategy is a strategy, or course of action, that does not violate these accepted principles.

Ethical Issues in International Business

 Many of the ethical issues in international business are rooted in the fact that political systems, law, economic
development, and culture vary significantly from nation to nation.

EMPLOYMENT PRACTICES

 Employment practices is a term referring to the patterns that maybe observed in a company’s hiring and workplace.
 Some of these issue, such as sexual harassment, discrimination and unfair wages, can become serious liabilities if they
are not treated carefully

HUMAN RIGHTS

 Human rights are moral principles or norms that describe certain standards of human behavior and are regularly
protected as natural and legal rights in municipal and international law

ARTICLE 16-30 THE UNITED NATIONS UNIVERSAL DECLARATION OF HUMAN RIGHTS

• ART. 16 MARRIAGE AND FAMILY

Every grownup has the right to marry and have a family if they want to. Men and women have same rights when
they are married, and when they are separated.

• ART. 17 THE RIGHT YOUR OWN THINGS

Everyone has the right to own things or share them. Nobody should take our things from us without a good
reason.

• ART. 18. FREEDOM OF THOUGHT

We all have the right to believe in what we want to believe, to have religion, or to change it if we want.

• ART. 19 FREEDOM OF EXPERSSION

We all have the right to make up our own minds., to think what we like, to say what we think, and to share our
ideas with other people.

• ART. 20 THE RIGHT TO PUBLIC ASSEMBLY

We all have the right to meet our friends and to work together in peace to defend our rights. Nobody can make us
join a group if we don’t want to.

• ART. 21 THE RIGHT TO DEMOCRACY

We all have the right to take part in the government of our. Every grown-up should be allowed to choose their own
leaders.

• ART. 22 SOCIAL SECURITY

We all have the right to affordable and housing, medicine, education, and childcare, enough money to live on and
medical help if we are I’ll or old

• ART. 23 WORKERS RIGHT

Every grown-up has the right to do a job, to a fair wage for their work, and to join a trade union

• ART. 24 THE RIGHT TO PLAY

We all have the right to rest from work and to relax

• ART. 25 FOOD AND SHELTER FOR ALL

We all have the right to a good life. Mothers and children, people who are old, unemployed or disabled, and all
people have the right to be cared for.

• ART. 26 THE RIGHT TO EDUCATION

Education is a right. Primary school should be free.

• ART. 27 COPYRIGHT

Copyrights is a special law that protects one’s own artistic creations and writings; others cannot make copies
without permission
 • ART. 28 A FAIR AND FREE WORLD

There must be proper order so we can all enjoy rights and freedoms in our own country and all over the world

• ART. 29 RESPONSIBILITY

We have duty to other people, and we should protect their rights and freedoms

• ART. 30 NO ONE CAN TAKE AWAY YOUR HUMAN RIGHTS

MORAL OBLIGATIONS

• WHAT IS MORAL OBLIGATIONS

that power is constrained not only by laws and regulations, but also by the discipline of the market and the
competitive process, it is substantial. Some moral philosophers argue that with power comes the social
responsibility for multinationals to give something back to the societies that enable them to prosper and grow.

• CORPORATE SOCIAL RESPONSIBILITY

The concept of social responsibility refers to the idea that businesspeople should consider the social consequences
of economic actions when making business decisions, and that there should be a presumption in favor of decisions
that have both good economic and social consequences

• The Roots of Unethical Behavior

Why do managers behave in an unethical manner?

• PERSONAL ETHICS

which are the generally accepted principles of right and wrong governing the conduct of individuals.

• PERSONAL ETHICS

that it is right to behave with integrity and honor, and to stand up for what we believe to be right and true.

• DECISION-MAKING PROCESSES

Several studies of unethical behavior in a business setting have concluded that businesspeople sometimes do not
realize they are behaving unethically, primarily because they simply fail to ask, "Is this decision or action ethical

• ORGANIZATION CULTURE

This brings us to the third cause of unethical behavior in businesses-an organizational culture that deemphasizes
business ethics, reducing all decisions to the purely economic.

• ORGANIZATION CULTURE

The term organization culture refers to the values and norms that are shared among employees of an organization.

• UNREALISTIC PERFORMANCE EXPECTATIONS

cause of unethical behavior has already been hinted at-pressure from the parent company to meet unrealistic
performance goals that can be attained only by cutting comers or acting in an unethical manner

• LEADERSHIP

Leaders help to establish the culture of an organization, and they set the example that others follow. Other
employees in a business often take their cue from business

• SOCIETAL CULTURE

Societal culture may well have an impact on the propensity of people, and organizations, to behave in an unethical
manner.

• SOCIETAL CULTURE

Societal culture may well have an impact on the propensity of people, and organizations, to behave in an unethical
manner.

National Differences in Political Economy

International business is much more complicated than domestic business because countries differ in many ways.
Countries have different political, economic, and legal systems. They vary significantly in their level of economic
development and future economic growth

We use the term political economy to stress that the political, economic, and legal systems of a country are
interdependent; they interact and influence each other, and in doing so they affect the level of economic well-
being

• Political Systems

The political system of a country shapes its economic and legal systems. As such, we need to understand the
nature of different political systems before discussing economic and legal systems.

• COLLECTIVISM

Collectivism refers to a political system that stresses the primacy of collective goals over individual goals. When
collectivism is emphasized, the needs of society as a whole are generally viewed as being more important than
individual freedoms. In such circumstances, an individual's right to do something may be restricted on the grounds
that it runs counter to "the good of society" or to "the common good."

 KARL MARX

He is famous for his theories about capitalism and communism. Marx was eloquent in describing the exploitation
of the working class while personally failing to maintain a job for a significant period of time.
 • INDIVIDUALISM

The opposite of collectivism, individualism refers to a philosophy that an individual should have freedom in his or
her economic and political pursuits. In contrast to collectivism, individualism stresses that the interests of the
individual should take precedence over the interests of the state.

• DEMOCRACY

Democracy refers to a political system in which government is by the people, exercised either directly or through
elected representatives

• TOTALITARIANISM

Totalitarianism is a form of government in which one person or political party exercises absolute control over all
spheres of human life and prohibits opposing political parties. The democratic-totalitarian dimension is not
independent of the collectivism-individualism dimension. Democracy and individualism go hand in hand, as do the
communist version of collectivism

• ECONOMIC SYSTEM

We can identify three broad types of economic systems-a market economy, a command economy, and a mixed
economy.

• MARKET ECONOMY

A market economy is an economic system in which the decision regarding investment, production and distribution
are guided by the price signals created by the forces of supply and demand.

• COMMAND ECONOMY

Command economy, the government plans the goods and services that a country produces, the quantity in which
they are produced, and the prices at which they are sold. (central administration)

• MIXED ECONOMY

Between market economies and command economies can be found mixed economies. In a mixed economy,
certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have
significant state ownership and government planning. Mixed economies were once common throughout much of
the world, although they are becoming much less so.

• LEGAL SYSTEM

 The legal system of a country refers to the rules, or laws, that regulate behavior along with the
processes by which the laws are enforced and through which redress for grievances is obtained.
 The legal system of a country is of immense importance to international business. A country's laws
regulate business practice, define the manner in which business transactions are to be executed, and
set down the rights and obligations of those involved in business transactions.
 DIFFERENT LEGAL SYSTEM

 COMMON LAW

Also known as judicial precedent or judge-made law, or case law. Common law is based on tradition, precedent,
and custom

 CIVIL LAW

 A civil law system is based on a detailed set of laws organized into codes. When law courts interpret
civil law, they do so with regard to these codes.
 A civil law system tends to be less adversarial than a common law system, since the judges rely upon
detailed legal codes rather than interpreting tradition, precedent, and custom. Judges under a civil
law system have less flexibility than those under a common law system
 CONTRACT LAW

A contract is a document that specifies the conditions under which an exchange is to occur and details the rights
and obligations of the parties involved. Some form of contract regulates many business transactions. Contract law
is the body of law that governs contract enforcement

• PROPERTY RIGHTS AND CORRUPTION

 the term property refers to a resource over which an individual or business holds a legal title, that
is, a resource that it owns.
 Resources include land, uildings, equipment, capital, mineral rights, businesses, and intellectual
property (ideas, which are protected by patents, copyrights, and trademarks).
 Property rights refer to the legal rights over the use to which a resource is put and over the use
made of any income that may be derived from that resource

• Private Action

private action refers to theft, piracy, blackmail, and the like by private individuals or groups. Although theft occurs
in all countries, a weak legal system allows for a much higher level of criminal action in some than in others.

• INTELECTUAL PROPERTY

 Refers to the creation of the mind, such as inventories; literacy and artistic works; design and
symbols, names and images used in commerce
 Patent- is a grant issued by the government through the intellectual property of the Phil. This
exclusive right gives the inventor the right to exclude others from making, using, or selling the
product of his invention during the life of the patent
 Copy right- are the exclusive legal rights of authors, composers, playwrights, artists, and publishers
to publish and disperse their work as they see fit.
 Trademarks are designs and names, often officially registered, by which merchants or
manufacturers designate and differentiate their products