IBTR - International Business and Trade Organization

changing profile of global business environment

1. CHAPTER 1: CHANGING OF PROFILE OF
CHAPTER 1: CHANGING OF PROFILE OF
GLOBAL BUSINESS ENVIRONMENT
GLOBAL BUSINESS ENVIRONMENT


GROUP 1Acuña, Julliene Cyress U.
Alano, Lean B.
Alvarez, Mariel Grace R.

2. Globalization is here. The traditional and
orientation of companies working just within
national borders is declining worldwide. Today,
there are about 195 nations, consisting of around 8
billion people. We are in a rapid process of
conquering nature and expanding our moral circles. INTRODUCTION: GLOBALIZATIONINTRODUCTION: GLOBALIZATION

3. Trade is one of the oldest jobs in human history.
After the Roman Empire collapsed, Europe became
the pulse of trade in the twelfth and thirteenth
Century. In the fourteenth to fifteenth Century,
Columbus, Vespucci, Dias, De Gama, and many
other sailors explored the New World, by order
from their Kings. EARLY INTERNATIONAL TRADEEARLY INTERNATIONAL TRADE

4. Christopher Columbus, an
Italian explorer sailed across
the Atlantic Ocean in 1492. EARLY INTERNATIONAL TRADE: EXPLORERSEARLY INTERNATIONAL TRADE: EXPLORERS Vasco Da Gama, a
Portuguese sailor found a
route from Spain to the East.

6. Bartolomeu Dias, a marvelous Portuguese navigator
with his famous expedition, who led the first European
to sail around South Africa’s Cape of Good Hope. EARLY INTERNATIONAL TRADE: EXPLORERSEARLY INTERNATIONAL TRADE: EXPLORERS

7. From the 16th to 18th century, European countries
depended on international trade as the revenue. Since the
currency of trade was gold and silver, countries measured
trade surplus by adding precious metals and treasure to
the country’s stock. To increase stock, they restrict the
import but then, the export eventually became the first
regulation devoted to international trade, mercantilism. 1.1 MERCANTILISM1.1 MERCANTILISM

8. According to the encyclopedia, mercantilism is based on five
principles.
First, amount of wealth in the world is steady.
Second, a country counts their wealth by the amount of gold and
silver in their stock.
Third, mercantilist favor exports but restrict the import.
Fourth, the value of country’s population was seen as a key to
self-reliance and state power.
Finally, in mercantile system the role of leader such as kingdom
or state, was seen as the dominant role to lead his country to
welfare.

9. COUNTRIES THAT PRACTICED MERCANTILISMCOUNTRIES THAT PRACTICED MERCANTILISM ENGLAND - under Henry VIII &
Elizabeth I → restricted imports,
promoted exports, built navy for
trade protection. FRANCE - under Louis XIV &
finance minister Colbert → protected
industries, limited imports,
encouraged exports.

10. The term mercantilism did not exist until
1763, when it was introduced by Victor de
Riqueti, Marquis de Mirabeau, and later
popularized by Adam Smith in his book
The Wealth of Nations (1776). In this
book, Smith changed the basic way people
thought about international trade. 1.2 ADAM SMITH'S WEALTH OF NATIONS1.2 ADAM SMITH'S WEALTH OF NATIONS

11. Smith's idea of specialization and labor division, in a way,
obscured the mercantilism policies of Henry VIII,
Elizabeth I, and Oliver Cromwell. According to Smith,
specialization helps the country to gain absolute
advantage, where it is more productive if one country
production cost is lower than the other country's
production cost on the same good. 1.2 ADAM SMITH'S WEALTH OF NATIONS1.2 ADAM SMITH'S WEALTH OF NATIONS

12. FIGURE 1.2

13. Figure 1.3 The Revolution of Machines The Industrial Revolution, driven by innovations
like the steam engine and spinning machines,
transformed Britain into the world’s leading
industrial power, reshaping global commerce and
human progress.”

14. Steam Machine
by Englishman Thomas NewcomenThomas Newcomen's steam engines were first used in 1712 to pump
water out of coal and lead mines in Britain, particularly in the West
Country and the Midlands

15. Steam Engine
Improved by James watt James Watt’s improved steam engine was used in factories,
mines, and transportation (steam trains and ships), making
production, travel, and trade faster and easier.

16. Spinning Machine
by Richard Arkwright Richard Arkwright’s spinning machine (water frame) was first used in
textile factories in England, especially at Cromford Mill in Derbyshire
(1771), where water power was used to run the machines and produce
threadfaster.

17. Figure 1.3 the navigation act The Navigation Acts (1651–1660s) regulated Britain’s trade,
fueling demand for coal, cotton, iron, and agriculture, which led
to mass production, the rise of factories, and a sharper divide
between the bourgeoisie and proletariat—an industrial shift
explained by Adam Smith’s The Wealth of Nations (1776) and
later critiqued by Karl Marx’s The Communist Manifesto
(1848)."

18. Figure 1.3 the industrial revolutionThe Industrial Revolution reshaped global commerce
and politics, fueling Britain’s rise as a hegemon with
worldwide allies, whose entangling commitments
ultimately drew Europe and beyond into World War I

19. Figure 1.3After World War I, while Europe struggled with economic
recovery, the United States rose as the new global supplier
and financial power—replacing Britain’s former dominance
in trade and international politics

20. Figure 1.3World War II transformed international relations, with
economists like John Maynard Keynes and Harry Dexter
White shaping institutions such as the IMF (1944) to
safeguard the global economy, while GATT /General
Agreement of Tariffs and Trade (1948) set rules for free
trade.”

21. Figure 1.3World War II transformed international relations, with
economists like John Maynard Keynes and Harry Dexter
White shaping institutions such as the IMF (1944) to
safeguard the global economy, while GATT /General
Agreement of Tariffs and Trade (1948) set rules for free
trade.”

22. Figure 1.4Post–World War II institutions such as the ITO, IMF,
and World Bank were established to restore global
stability, while Webb and Krasner’s hegemonic stability
theory (1989) emphasized that economic openness is
most sustainable under the leadership of a dominant
power.”

23. Figure 1.4Post–World War II institutions such as the ITO, IMF,
and World Bank were established to restore global
stability, while Webb and Krasner’s hegemonic stability
theory (1989) emphasized that economic openness is
most sustainable under the leadership of a dominant
power.”

24. Figure 1.5Figure 1.5
Multinational firms from the United States played a
key role in this growth; a global perspective became
mandatory, even if one's business is domestic in
focus. In particular, corporations must need to be
capable to adapt quickly and creatively to a unique
set of forces and these driving forces cross national,
cultural and geographical boundaries.

25. In the international automotive business for example
there has been spectacular examples of business merger
and some of them lead to failures, epitomized by the
Daimler-Benz sales of the American company Chrysler in
2007 after an unhappy nine-year union between the two
organizations. Early decisions were driven by politics rather
than commercial reality. Many of the Daimler's German
managers seemed reluctant to see the makers of Mercedes
associate with the makers of Dodge.

26. The world economy, particularly with the advent of the
Internet, is moving ever faster toward a highly interrelated,
interdependent state, in which no nation will be immune from
the forces of the global market. Increased interdependency,
however, does not mean market uniformity or universality of
management practices. Cultural, political, and, to some extent,
economic diversity differentiates nations and creates unique
market segments. Managing a business, be it domestic or
international, in present and future time, requires
understanding of these diversities.

27. Social scientists use the terms in-group and out-group. In-group
refers to what we intuitively feel to be "we", while out-group refers to
"they." People are we-versus-they creatures. This brings me to the
challenge on how we can bridge the rules so that we can live
together, and no group is left outside or left behind. Today, few-apart
from those with vested interests who benefit from keeping out the
goods produced by the poor countries-defend the hypocrisy of
pretending to help developing countries by forcing them to open up
their markets to the goods of the advanced industrial countries while
keeping their own markets protected, policies that make the rich
richer and the poor more impoverished-and increasingly angry.

28. IN-GROUPS AND OUT-GROUPS
.IN-GROUP
A social group toward which a member feels respect and logulty
OUT-GROUP
A social groups toward which a person feels a sense of competition or
opposition
Based on the idea that we have valued traits they lack

29. We are in a multi-polar and multi-sector
world and you have to do your homework when
you are staying abroad. These are basic
elements of human connection. Nothing stops a
conversation faster with a Spaniard than if a
name or team is dropped into a conversation,
and you suddenly ask:

30. thank youthank you