International business

Lecture No,2Shahzaib khan

The ChangingDemographics

of The Global Economy

The ChangingWorld Outputs

& World Trade Picture

Country Share of world output 1963

Share of world output 2008

Share of world

Exports 2008

USA 40.3% 20.7% 9.3%

JAPAN 5.5% 6.4% 4.5%

Germany 9.7% 4.2% 8.7%

France 6.3% 3.1% 3.8%

UK 6.5% 3.2% 3.9%

Canada 3.0% 1.9% 2.7%

China NA 11.4% 8.4%

The ChangingForeign Direct

Investment(FDI)Picture

Percentage Share of Total FDI Stock, 1980-2000

05

1015202530354045

U.S.A. Japan France Dev.Countries

1980

1990

2000

U.K

.

Ger

man

y

Net

her

lan

ds Figure 1.4

The ChangingNature

of Multinational

Enterprise

The Rise of

MINIMULTI-NATIONALS

Country Of the top260 In 1973

Of the top 500 in 1997

USA 126(38.5%) 162 (32.4%)

JAPAN 9 (3.5) 126 (25.2)

UK 49 (18.8) 34 (6.8)

FRANCE 19 (7.3) 42 (8.4)

GERMANY 21 (8.1) 41 (8.2)

The National Composition of the Largest Multinationals

4

The Changing World Order

The Global Economy

of 21st, Century

The Globalization Debate

Prosperity or

Impoverishment?

Globalization Jobs & Incomes

Globalization Labour policies,

&The Environment

Globalization &

National Sovereignty

http://playit.pk/watch?v=SHyIW-vUhO8

Country DifferencesIN

Political Economy

Political Systems

Collectivism and individualism

Collectivism♦A political system that stresses the

primacy of collective goals over individual goals.

♦Advocated by Plato in the “Republic”.(347-427 BC)

The republic argued that individual rights should be sacrificed for the good of the majority.

Socialism ♦Modern socialists trace their

intellectual roots to Karl Marx(1818-83)

♦ Argued that the pay of workers does not reflect the full value of their labor.

♦Advocated state ownership of production distribution, and exchange(businesses), thereby ensuring that workers were fully compensated for their labor.

Two Approaches Communists: Socialism is achieved through

violent revolution.

Social Democrats: Socialism is achieved through

democratic means.

Political Systems (The system of government in a nation)

Individualism: � Opposite of Collectivism.

� Individual should have freedom in political and economic pursuits.

� Advocated by Aristotle. � Private property is more highly productive than communal property

and will thus stimulate progress

Political Systems� Hume (1711-1776)� Adam Smith (1723-1790) � John Stuart Mill (1806-1873)� Embodied in the U.S.

Declaration of Independence.

Democracy and Totalitarianism

• Democracy– Government by

the people, exercised either directly or through elected representatives.

• Totalitarianism– Government in

which one person or political party exercises absolute control over all spheres of human life and opposing political parties are prohibited

Democracy–Safeguards to protect a

democracy:• Right to freedom of expression, opinion,

and organization.• A free media.• Regular elections in which all eligible

citizens are allowed to vote.• Universal adult suffrage.

Democracy• A fair court system independent

of the political system.

• Relatively free access to state information.

Totalitarianism 4 major forms:

Communism• Collectivism is achieved through

total dictatorship.Theocratic

Political power is influenced by religious principles.

Totalitarianism

Tribal

A political party representing the interests of a particular tribe monopolizes power.

Right-wingGenerally permits individual economic freedom,

but restricts political freedom to prevent the rise of communism.