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Chapter 20

New Horizons

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Understand the many changing dimensions that shape international business.Learn about and evaluate the international business forecasts made by a panel of experts.Be informed about different career opportunities in international business.

Learning Objectives

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New Horizons

The International Business EnvironmentGlobalization and Trade NegotiationsGovernment PolicyThe Future of International Business ManagementCareers in International Business

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The International Business Environment

Conditions of Change in:

Politics Finance Society Technology

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The Political EnvironmentTransformations

Reshaping of existing political blocks.

Formation of new groupings.

Breakup of old coalitions.

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Planned Versus Market EconomiesEastern and Central Europe will continue to be attractive for international investment.The distinction between developed and less-developed countries is unlikely to change.Environmental protection will be a major force in economic growth.Much of the growth of the global economy will be fueled by the emerging markets of the Asia Pacific region.

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A Divergence of Values

Nations hold differing values and priorities.Divergence of values will require readjustment of activities of the international corporation.

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International FinanceDebt constraints and low commodity prices impose slow growth prospects for developing countries.Developed nations have an incentive to help debtor nations.The United States is the largest debtor nation in the world.

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Effects of Population ShiftsPopulation increase will become a national priority in the industrialized world.Population stabilization continues to be the challenge in the developing world.

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Technological EnvironmentInternet is democratizing global business.Small/medium-sized enterprises can now be full participants in the global marketplace.High technology is a controversial area of economic activity.

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Globalization and Trade Negotiations

Globalization will continue and trade negotiations will continue to experience

difficulties.

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Globalization and Trade Negotiations

Long-term differentiation of countries and firms includes:

Those Who GrowThose Who Grow Those Who CreateThose Who Create

Those Who MakeThose Who Make Those Who CoordinateThose Who Coordinate

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Government PolicyInternational trade activity now affects domestic policy more than ever.Governments will need to coordinate policies that affect the international business environment.Policymakers need a better understanding of the nature of international trade issues.

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The Future of International Business Management

Global change results in an increase in risk.International markets remain a source of high profits.International executives will need to balance the public and the private good.

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International Product PolicyEnvironmental concern is a key issue affecting product planning.Firms will have to plan for the “post-mortem” stage in the product life cycle.Product life cycle will be measured in months or even weeks.Companies will have to deliver more mass customization.An increase will occur in the trend toward strategic alliance.

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International CommunicationsAdvances made in international

communications will have a profound impact on international

management. Most affected will be members of the services sector.

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Distribution StrategiesInnovation will determine new ways of serving markets.More sophisticated distribution systems will also introduce new uncertainties such as risk due to distribution interruptions.

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International PricingWill become increasingly heated.Forward pricing will become increasingly difficult.Price competition will be substantial.Exchange rate movements may play a more significant role in maintaining competitiveness.Nations will attempt to stimulate their international competitiveness through subsidization, targeting, or government contracts.

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Careers in International Business-- To Prepare:

Be well versed in a specific functional business area.Take summer internships abroad.Take language courses.Obtain further in-depth training by enrolling in International Business Courses!

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Opportunities for Women in Global Management

In the mid-1980’s women held 3.3% of overseas positions in U.S. firms.By 2000, 13% of expatriates were women. Expatriates are not seen as women, but rather as “foreigners who happen to be women.” Advantages are added visibility and increased access to clients.

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Employment With A Large Firm

Employees are expected to be grounded in the practice and management of business.Managers are sent abroad because the company expects him or her to reflect corporate spirit.Employees returning from the international route may find few positions available back at headquarters.

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Employment With A Small Firm

May have recently developed an international outlook.With a more limited budget, most of the work may be done by mail, fax, e-mail, or by telephone.International work may involve importing.Small firms provide excellent training ground for international activities.

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Self-EmploymentThe Opportunity to Become a True

International Entrepreneur

Specialized services that might be offered by a consultant include: international market research, international strategic planning, beginning-to-end assistance for international entry or international negotiations. There may be a higher degree of risk involved, but there is also an opportunity for higher rewards.