Lecture 04

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Multinationals and the Global Environment of

Business

© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

McGraw-Hill/IrwinIntroduction to Business

Chapter Four

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Chapter 4Multinationals and the

Global Environment of Business

1. The role of multinational companies in global

production and trade & its impacts.

2. How multinationals are affected by the

political systems to pursue free trade and

reduce or abolish(廢止 ) tariff barriers.

3. The nature of the specific forces in the global

environment and challenges.

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Chapter 4Multinationals and the

Global Environment of Business

4. The nature of the general forces in

competing industries or countries.

5. Main challenges in managing global business

commerce and business occupations, and

organizing method.

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Chapter 4Multinationals and the

Global Environment of Business

Multinational companies

•Are operating in a global environment

and conditions such as opportunities

and threats that affect the

multinational company’s profitability

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Chapter 4Multinationals and the

Global Environment of Business

Significance of Multinationals•In business commerce, multinationals control the giant production and distribution of products that handle the majority of world trade

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Chapter 4Multinationals and the

Global Environment of Business

Capitalism

Capitalism as a business system

(private ownership of the means of

production and distribution)

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Chapter 4Multinationals and the

Global Environment of Business

Totalitarian (集權國家 )

overnment

One person, usually a dictator, or

party exercises absolute control

over all business and social

activity

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Chapter 4Multinationals and the

Global Environment of Business

CommunismNot only totalitarian but all property is owned by the state (no property rights) or government and distribution is totally controlled by the state

跨國貿亦無思想與社會制度之分

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Chapter 4Multinationals and the

Global Environment of Business

Free trade agreements

（ FTA）Established by countries to reduce or eliminate

price barriers to and are designed to increase

the flow of products among countries

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Chapter 4Multinationals and the

Global Environment of Business

Tariffs

Taxes on imported products that

raises the price and may make them

uncompetitive with the local product

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Chapter 4Multinationals and the

Global Environment of Business

Free Trade Zones The establishment of free trade areas creates an

opportunity for global manufacturing companies as it minimizes the cost and barriers to trade

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Chapter 4Multinationals and the

Global Environment of Business

Global EnvironmentYou may want to think of the global environment as a worldwide marketplace and as the set of forces surrounding you that determine the ability to obtain productive resources of land, labor, capital, and enterprise

Demographic人口統計

Sociocultural (社會文化的 )

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Chapter 4Multinationals and the

Global Environment of Business

Global Environment Every product goes through three stages:

Input Conversion Output In the process of making and selling of goods and

services Evaluate the Peace Corps video and relate to the

global environment of business

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Chapter 4Multinationals and the

Global Environment of Business

Forces in the Global Environment The specific forces directly affect the company’s

business model while general forces affect all multinationals

Specific forces are directly related to profitability and are suppliers, distributors, competitors, and customers

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Chapter 4Multinationals and the

Global Environment of Business

Forces in the Global Environment Customers and competitors are also specific forces and

both affect the company’s market share or that portion of a product sold in a market by one company

Company Shares

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Chapter 4Multinationals and the

Global Environment of Business

Forces in the Global Environment General forces in the global environment affect

multinationals access to resources and determine worldwide demand and include, economic, socio-cultural, demographic, and legal forces

Evaluate the PWE and productivity of Mexican brewery workers in a multicultural organization

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Chapter 4Multinationals and the

Global Environment of Business

Forces in the Global Environment These forces are general because they affect all

multinationals and their suppliers, distributors and customers

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Chapter 4Multinationals and the

Global Environment of Business

Global outsourcing Of suppliers is not only a very controversial issue as it

is the process by which companies purchase supplies, labor or raw materials throughout the world

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Chapter 4Multinationals and the

Global Environment of Business

Global outsourcing An intermediary such as a agent, broker, or

wholesaler is a company that distributes or supplies a product to another company

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Chapter 4Multinationals and the

Global Environment of Business

Challenges of global commerce Building a global competitive advantage, integration

of the Internet into the business models

Profiting from

Global Expansion

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Chapter 4Multinationals and the

Global Environment of Business

Challenges of global commerce Managing ethically Incorporating the differing cultures into global

planning and organizingEvaluate a multinational organization of your

choice and describe their global environment

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Chapter 4Multinationals and the

Global Environment of Business

Globalization Has led to the development of a diverse supply of IT

workers in both Europe and Asia as these workers are linked through the Internet as a part of the global workforce