Sunny Li Sun - PowerPoint PPT Presentation

1 / 37
About This Presentation

Sunny Li Sun


Scholastic: a record breaking first printing of 12 million copies ... ... – PowerPoint PPT presentation

Number of Views:124
Avg rating:3.0/5.0
Slides: 38
Provided by: utda
Tags: borders | breaking | cnn | frames | free | news | sun | sunny


Transcript and Presenter's Notes

Title: Sunny Li Sun

BA 4371-004 International Business Class 2
Globalizing Business
  • Sunny Li Sun
  • August 30, 2008

Globalizing Harry Potter
  • Big news Harry Potter and The Deathly Hallows
  • hit bookstores worldwide at 1201 a.m. on July
    21, 2007
  • Rowlings genius the overwhelming importance of
    continuing to love in the face of death --The

  • Scholastic a record breaking first printing of
    12 million copies
  • selling an unprecedented 8.3 million copies in
    its first 24 hours
  • The series has already sold 325 million copies
    worldwide and been translated into 66 languages.
  • "Harry Potter" films the fifth of which was
    released 2007 have grossed more than 3.8
    billion globally.

Harry Potter a Rorschach Blot
  • A worldwide character of clashes between various
    forms of traditionalism and modernism
  • French whether or not "Harry Potter"
    indoctrinates youngsters into
    the orthodoxy of unfettered market
  • Swedish decry what they perceive as "Harry
    Potter's" Anglo-American vision of bourgeoisie
    conformity and its affirmation of class and
    gender inequality.
  • Turk the pivots around issues of Turkish
    civilizational identity whether Turkey is part
    of the West, the East, or a bridge between the
    two. A few Turkish writers have even asserted
    that controversies over "Harry Potter" in the
    United States demonstrate how Turks are more
    "Western" than Americans.
  • Russian a country whose concern over
    international status and prestige becomes more
    apparent each day, the newspaper Novaya Gazeta
    created a minor firestorm when it claimed that
    the film visage of Dobby the House-Elf was a
    deliberate insult to President Vladimir Putin.
  • Indonesian Wahhabists view "Harry Potter" as
    promoting paganism and undermining Islam.

  • Globalization refers to close economic
    integration of countries and peoples of the
  • Its impact on
  • Politics
  • Culture (religion)
  • Sports
  • Terrorism
  • Environment
  • Technology
  • You

  • strategy that suggests that barriers to market
    integration at borders are high but not high
    enough to completely insulate countries from each
  • The volume of world trade and investment has
    accelerated since the early 1980s.

(No Transcript)
Hybridization of cultural globalization
  • Unauthorized "sequels explicitly recast in
    local settings and using local
    plot devices.
  • Indian fake novel Harry Potter makes friends
    with a Bengali boy and tours
  • China into Chinese mythological traditions
  • Fans produce a worldwide stream of fiction set in
    the Harry Potter universe, each extending
    elements of the novels to reflect their own
    interests and preferences. For all its often
    crass commercialization, "Harry Potter's" success
    owes something to a process of hybridization
    familiar to scholars of cultural globalization.
  • Americans increasingly see themselves as objects
    of economic globalization, whether in the form of
    "outsourcing" or the impact of Chinese imports on
    U.S. manufacturing. But we still tend to think of
    cultural globalization as synonymous with
    "Americanization." The "Harry Potter" books
    provide a subtle rejoinder to such impressions
    and subvert the equation of globalization with
    relentless homogenization.

Core Question in Our Class
  • What determines the success of countries in the
  • What determines the success of industries in the
  • What determines the success of firms in the
  • What determines the success of individuals in the

Fortune 500 and MNE
  • Concept
  • Foreign Direct Investment (FDI) - investments in,
    controlling, and managing value-added activities
    in other countries
  • Multinational enterprise (MNE) - firm that
    engages in foreign direct investments.
  • Manages production establishments or delivers
    services in at least two countries.
  • have a powerful influence in international
    relations and local economies.
  • play an important role in globalization
  • First MNCs the Dutch East India Company (1602)
  • Fortune 500/2008
  • Texas is home to the most companies (58) on this
    year's list. (NY55 CA 52)
  • http//
  • Foreign revenue account for 37.5 of total sales
  • In 1970, there were approximately 7,000 MNEs
    worldwide. In 2005, the United Nations identified
    over 70,000 MNEs, which controlled 690,000 units
  • The largest 500 account for 80 of the worlds
    FDI. Total annual sales of these 500 firms are in
    excess of 11 trillion (that is, about
    one-quarter of global output)

How does globalization defeat or save Ford?
  • In 1907 Henry Ford proclaimed, "I will
    democratize the automobile," and then made good
    on his promise.
  • Today Ford Motor fights to create a future for
    itself in the face of brutal global competition
    and the green revolution.
  • U.S. market share continued its decade-long slide
    - from 25 in 1997 to 15.6 in 2007
  • Lost 20.1B pretax in the past 2 year in North
    America, but make 1.1B in Europe.
  • Gain 1M in Asia, 1Q 2008 (lost 26M in 2007)
  • Sell 90,791 cars in China, 1Q 2008 (47 growth)

How does globalization defeat or save Ford?
  • 1970s, First world car Escort
  • Midsize Ford Mondeo designed in Europe, called
    Contour in US.
  • One Ford" integrating design, engineering, and
    manufacturing round the world.
  • simplifies engineering requirements,
  • reduces time to market
  • costs less
  • Complexity is reduced
  • purchasing becomes more efficient.
  • In 2004, the European team began designing the
    Fiesta, and the United States dithered over
    whether to join up.

Assume you are a number of Ford Fiesta global
design team.
  • Mk7 Fiesta will be built by AutoAlliance Thailand
    (shares platform with Mazda 2) and Cologne plant
  • Concept
  • expatriate manager (expat) - manager who works
  • international premium - significant pay raise
    commanded by expats when working overseas
  • What will you do in Thailand or Germany?
  • Americans want more powerful air conditioning and
    can't stand hatchbacks (think about BMW new
  • Synchronize new-model plans for each of the major
  • Ford used to use 28 different seat structures
    around the world, involving frames, springs, and
    so forth. Now it has two.

Fortune Global 500 Rank distribution by country
  • In general, over 80 of the 500 largest MNEs
    come from the Triad.
  • Since 1990, the United States has contributed
    about one-third of these firms,
  • the European Union has maintained a reasonably
    steady increase,
  • Japan has experienced the most dramatic variation
    (roughly corresponding to the boom and bust of
    its economy with several years of delay).

Fortune Global 500 Rank distribution by country
  • Among MNEs from emerging economies, those from
    South Korea and Brazil have largely maintained
    their presence,
  • Those from China have been increasingly visible
    since the mid 1990s

Competing on World's manufacturing
  • Measured in real value-added terms, China's share
    in global manufacturing is projected to overtake
    that of the United States by 201617. This is
    helped by the Asian giant's rapid gains in the
    market shares of textiles, basic metals, computer
    equipment, appliances, and mineral products.
  • The manufacturing sector in US 12.5 of GDP,
  • 36 of the Chinese economy is engaged in
  • Compound annual growth rate China 1015
    (based on real, value-added terms) US 3
  • Globally, manufacturing accounts 17 of GDP,
    service sector 65. The U.S. share 21.4 ,
    China 10.8, India 4.6 (based on Purchasing
    Power Parity (PPP) )
  • http//

  • Until the 19th century, China had been the world
    leader in manufacturing for over a millennium
  • 1840, Britain became the worlds biggest
    manufacturer after its Industrial Revolution.
  • The U.S. has been the largest manufacturer by a
    wide margin for over a century. It took the
    global mantle from a declining Britain and held
    off challenges from Germany, the Soviet Union,
    and Japan
  • Over a recently 23-year period, China's share in
    world industrial output rose from 2.2 percent to
    6.9 percent (2006) India's share increased from
    0.9 percent to 1.2 percent
  • On a per capita basis, American workers are far
    more productive than their Chinese counterparts.

(No Transcript)
The new shape of Chinese manufacturing
  • An economic weakling only 20 years ago, China is
    now the worlds second largest manufacturing
    power next to the US
  • FT.Com Published August 7 2008
  • Case 1 Anshan Steel, Chinas second largest
    steelmaker, potentially partners with Arcelor
  • Case 2 How China plays a bigger role in the
    global operation of Luxottica, the worlds
    biggest maker of spectacle frames
  • Case 3 A British entrepreneur who started in
    China with just 5,000 but is aiming to achieve
    an annual sales of 15m in five years

Chinas rise in Global StagePressures or
  • Friedman attends the spectacular closing ceremony
    at the Beijing Olympics
  • 1/Holy mackerel, the energy coming out of this
    country is unrivaled.
  • 2/We are so cooked. Start teaching your kids
  • The relative decline in U.S. manufacturing's
    world share is not a sign of weakening future
    prospects for the United States. Rather, China's
    rapid manufacturing growth will help raise its
    consumer income and infrastructural development
    needs, thus opening up vastly greater trade
    opportunities for the U.S. manufacturing and
    service industries
  • The expanding Chinese market is more likely to
    open up greater opportunities for the United
    States as well as other producers. Several
    important areas of economic growthsuch as
    finance, information technologies, and business
  • In addition to such manufacturing industries as
    aircraft, pharmaceuticals, heavy capital
    equipment, and scientific and medical
    equipmentare all expected to remain larger in
    the United States than in China.

Debate on Globalization
  • GDP Density GDP per capita Number of people
    per square kilometer.The darker the colors, the
    higher the GDP density.

Two sides of globalization
  • Contributions of globalization
  • higher economic growth and standards of living,
  • increased sharing of technologies
  • more extensive cultural integration.
  • Critics on globalization
  • undermines wages in rich countries
  • exploits workers in poor countries
  • devastates the environment,
  • compromises human rights,
  • diminishes national sovereignty
  • gives large MNEs too much power

Is globalization increase inequality?
  • Globalization has dramatically increased the
    world's supply of low-skilled labor, damping
    wages for such workers in developed countries.
  • Rapid technological change also has boosted
    demand for high-skilled workers, whose wages have
    risen as demand has exceeded supply.
  • labor unions have lost ground and workers' wages
    have suffered as wealthy countries have shifted
    to service industries from manufacturing
  • http//

Is globalization increase inequality?
  • It's hard to know what to do about it, other than
    to accept it and repair it, rather than try to
    prevent it." In practice, that's likely to mean
    higher taxes on wealthier citizens.
  • Opening up is a good thing for countries that
    have the administrative capacity to deal with it,
    e.g., India.
  • Economic policy
  • Brazil global growth has boosted low-wage
    workers' income levels more than the levels of
    higher earners.
  • Argentina its per capita GDP slide by some 20
    in the 1980s as a series of government
    administrations piled on a debt load that
    eventually became crippling. Since then, real
    wages have fallen and the gap between rich and
    poor has widened.

Three views on globalization
  • A new force sweeping through the world in recent
  • A long-run historical evolution since the dawn of
    human history
  • a pendulum that swings from one extreme to
    another from time to time.
  • Nafta (1994)
  • Free Trade Agreements with Colombia, Panama and
    South Korea (not passed Congress).
  • Is Reagan (or Thatcher) revolution dead? Back New
    Deal (Roosevelt), Great Society (LBJ)?
  • http//

Debates on Globalization Is World Flat or not?
  • Friedman, Thomas leading columnist on the New
    York Times, won three Pulitzer prizes.
  • http//
  • Globalization 1.0 (1500 to 1800) shrank the world
    through the application of energy (sail and later
  • Globalization 2.0 (1800 to 2000) shrank it
    further, the great agent of change being
    multi-national companies (no mention at all of
    world-wide colonisation!) and the changes being
    powered by falling transportation and later
    telecommunication costs.
  • Globalization 3.0 (2001- ) We have just entered
    is powered by software linked to a global
    telecommunication network and is unique in giving
    individuals the power to collaborate and compete
    globally and allowing anyone, anywhere to take
    part and drive development.

Ten flatteners
  • 1/the decline of Russian communism, reduction in
    regulation and freeing of trade etc round the
  • 2/the growth of browser software and fibre optic
  • 3/work-flow software
  • 4/Open source software (e.g.,Linux, Wikipedia)
  • 5/Strategic outsourcing
  • 6/Offshoring
  • 7/Coordinated global supply chains
  • 8/Insourcing
  • 9/'In-forming' (e.g.,information power of Google)
  • 10/'The steroids' - the growth of wireless

Washington Consensus
  • EE will need to fit themselves into the "Golden
  • Privatization
  • free trade
  • low government spending
  • The path is "not always pretty or gentle or
    comfortable. But it's here and it's the only
    model on the rack this historical season."
  • --Thomas Friedman The Lexus and the
    Olive Tree

The Myth of Free Trade and the Secret History of
  • Ha-Joon Chang a heterodox economists at the
    University of Cambridge.
  • Today's rich nations are effectively kicking away
    the ladder ... in order to deprive others of the
    means of climbing up after them.
  • The history of capitalism most of these Bad
    Samaritans suffer a form of historical amnesia
    and do not even realize that they are hurting the
    developing countries with their policies.
  • Fact 1 the Japanese government kicked out
    General Motors and Ford in 1939, subsequently
    bailed out Toyota with public money, and even
    then, the company failed badly with its first
    U.S. export attempts in 1958. Yet Japan
    persevered in its support of the industry, with
    the result that "today, Japanese cars are
    considered as 'natural' as Scottish salmon or
    French wine.

Fact 2 US infant industries
  • An array of policies to protect the country's
    "infant industries (a term coined by Hamilton)
    "protective tariffs and import bans subsidies
    export ban on key raw materials import
    liberalization of and tariff rebates on
    industrial inputs prizes and patents for
    inventions regulation of product standards and
    development of financial and transportation
  • If Hamilton was the finance minister of a
    developing country today, the International
    Monetary Fund and the World Bank would certainly
    have refused to lend money to his country and
    would be lobbying for his removal from office.
  • Antebellum cotton-growing South favored low
    tariffs, while the industrializing North wanted
    them high. After the Union's victory, the U.S.
    enacted tariffs that remained the highest in the
    world until World War I.

Fact 3British
  • The first episode of globalization the free
    movement of goods, people, and money that
    developed under British hegemony between 1870 and
    1913, was made possible, in large part, by
    military might, rather than market forces.
  • The imperial free trade followed long years of
    high tariffs and careful protection and nurturing
    of selected British industries
  • banning of superior textile imports from India,
  • blocking the Irish wool industry from exporting
    to foreign nations,
  • prohibiting the American iron industry from
    competing with the mother country.
  • No less an authority than Adam Smith advised the
    Americans not to take up manufacturing.

Market and democracy clash
  • Even though the rich countries have low average
    protection, they tend to disproportionately
    protect products that poor countries export,
    especially garments and textiles. India paid
    almost as much in tariffs to the US government as
    France, despite the fact that the size of its
    economy was only 3 that of France in 2002!
  • Market and democracy clash at the fundamental
    level. Democracy runs on the principle of 'one
    man (one person), one vote. The market runs on
    the principle of 'one dollar, one vote.
  • If developing countries want to leave poverty
    behind and nurture their fledgling industries
    just as today's rich nations once did, they have
    to defy the market.

Globalization and Its Discontents (2002), the
2001 Nobel laureate Joseph E. Stiglitz
My viewpoint looking on global sports
  • International sport dates back to the 19th
    century, and the commercial exploitation of sport
    is even older than that. What is new is the
    degree of commercialisation and its spread to
    emerging markets.
  • Nine of the 20 football clubs in the English
    Premier League last season were owned by
  • Brazilian footballers turn up in leagues from the
    Faroe Islands to Vietnam.
  • India in cricket are creating powerful sports
    businesses of their own.
  • Ambitious countries in Asia and the Gulf want
    their own tennis tournaments and Grand Prix.
  • China Sports in Globalization
  • 1932, Liu Changchun, a sprinter, made his way to
    modern Olympic games, Los Angeles.
  • Xu Haifeng won Chinas first gold medal in 1984,
  • China won 51 gold medals in 2008.

Marriage of media and sport in globalization
  • The sports business is based on the idea that
    people are willing to pay to watch others play,
    and television expands the audience vastly, from
    thousands inside the stadium to millions outside.
    For broadcasters, more eyeballs mean more
    subscribers and advertisers.
  • Successful sportsmen and women are now earning
    sums that the stars of a generation ago could not
    have dreamed of.
  • Top main sponsors pay 866m in money, goods and
    services to the Olympics 2008.

  • "Harry Potter" is already part of the globalizing
    process, with all its complexities, tensions, and
  • Key Concepts
  • Globalization refers to close economic
    integration of countries and peoples of the
  • Semiglobalization
  • Multinational enterprise (MNE) - firm that
    engages in foreign direct investments.
  • Foreign Direct Investment (FDI) - investments in,
    controlling, and managing value-added activities
    in other countries
  • Expatriate manager
  • Key Question in IB
  • What determines the success of firms in the
  • Some trends in Globalization
  • Globalization will defect or save the firm listed
    in Fortune 500?
  • Over 80 of the 500 largest MNEs come from the
  • The rise of China in manufacturing
  • Three views on globalization
  • Two sides of globalization
  • The World is flatted by technology, but market
    and democracy could clash

Next Week
  • Formal Institutions (Chapter 2)
  • Two Political Systems
  • Three Legal Systems
  • Three Economic Systems
Write a Comment
User Comments (0)