Submitted by: Cindy Barnes
Email: schs_business@yahoo.com
Date: 1/22 – 2/1
Subject: Advance Business I
Total Points = 30
Grade Level(s): 10, 11 or 12
Description
Discussion of global markets. Whether students aspire to be an entrepreneur, manager, or
other type of business leader, it’s increasingly important to think globally in planning
their career.
Objectives (Design):
Arizona Content Standards
1.0 Explore careers in the Field of
 Discuss the growing importance of the
Business management and
global market and the roles of comparative
advantage and absolute advantage in global Administrative Services. 1.2
trade.
11.0 Explore Economic Principles
 Explain the importance of importing and
exporting and understand key terms used in Related to Business Management.
11.7
global business.
 Illustrate the strategies used in reaching
global markets and explain the role of
multinational corporations in global
markets.
 Evaluate the forces that affect trading in
global markets.
 Debate the advantages and disadvantages of
trade protectionism.
 Discuss the changing landscape of the
global market and the issue of offshore
outsourcing.
Materials and Resources (Development)
Understanding Business, Nickels, McHugh, McHugh 7th Edition, McGraw -Hill, New
York, New York, 10020 will be the required textbook.
Computers connected to the Internet and Microsoft Office 2003 installed.
Download REAL Player to view the videos. A available projector/computer would
be helpful.
Instructor: Go to the texts online learning http://highered.mcgrawhill.com/sites/007310597x/student_view0/additional_video_clips.html use login and
password (cindy.barnes@eac.edu/angels2379) choose chapter 3, under instructor
resources click on power point presentations and then choose chapter three.
Procedures (Development & Implementation):
1. Study Chapter 3 of the text. Use the Learning Goals on page 59 as a guide.
2. Learn the definitions of the words/phrases listed under Key Terms in the text on
page 84.
3. Go over the review and critical thinking questions.
4. Study the case materials at the end of the chapter.
5. Review the video and slides.
6. Examine trends in business occupations in the world. Start with these websites
and then find some of your own:
http://europe.vault.com/index.jsp
http://money.cnn.com/2006/07/27/technology/bestbizideaslist0727.biz2/index.htm
http://www.emarketer.com/Article.aspx?id=1003195
7. Assignment is to list at least five careers that you can work outside the United
States along with your key terms.
Evaluation
1. Key Terms
2. List 5 career outside of the U.S within your key terms document
3. Complete chapter quiz online or use the attached quiz and email to instructor.
Chapter 3, Competing in Global Markets
Instructor: Go to the texts online learning, use login and password
(cindy.barnes@eac.edu/angels2379) choose chapter 3, under instructor
resources click on power point presentations and then choose chapter three.
Show the videos below at the beginning or end of lectures.
Students: Many people seem to believe that the United States has no need to
trade with other nations. They will tell you we should be entirely self-sufficient
and not involve ourselves with trade to other countries. This attitude assumes
that the United States has all of the raw materials and manufactured goods that
we could possibly need. This simply is not so. Obviously, we import vast
quantities of oil and other minerals that we don't have and many manufactured
goods that we no longer build. These people argue that we're losing jobs to other
countries. This is true. But what kinds of jobs are they? Most are types of jobs
workers in the U.S. simply won't do anymore. There is another factor here.
That is if you consider that Adam Smith knew what he was talking about then you
should realize that resources go ultimately where they can be best put to use.
For example, both Mercedes and BMW moved assembly plants into the United
States because it was more expensive for them to assemble the cars in their own
country than it is to simply ship parts here and have the cars assembled in the
United States. This is also true of many Japanese cars. The reason is fairly
simple, American production workers, equipment and facilities can produce the
cars less expensively than they can be built in Germany or Japan in many
instances.
On the other hand, we find our manufacturers such as Ford or General Motors
are having many parts built in South America or in other parts of the world.
Again the reason is fairly simple, those countries have inexpensive labor and
programs to build factories to put their people to work and make it cost effective
for foreign firms to manufacture products there. This is a rather interesting case
because, for example, Ford Motor Company has four cylinder engines build in
Brazil and flies them here to put in the cars on their production lines. This may
seem quite expensive but the trade-off of flying vs. putting them on a ship is that
the steady stream of engines being flown in so that they arrive just in time to be
put into cars coming down the assembly line reduces inventory costs as well as
manufacturing costs because of the savings involved in having the engines built
in Brazil and no need to store and handle them. They literally roll out of the
airplanes, into the plant and into the cars. This is one example of a Just in Time
(JIT) supply system which we will discuss in detail in later chapters. Does this put
some American workers out of work? Yes it does. But in truth, the number of
people in the United States willing to work on assembly lines continually falls.
Fifty years ago less than 20 percent of high school graduates went on the
college. During that period, holding a job on an assembly line was considered a
good deal. You got union wages, union protection, and you were set for life.
Today, over 60 percent of high school graduates go on to college. Although not
all graduate, almost all have higher ambitions than to work menial jobs in
assembly plants. In addition, automated machines have taken over most of the
repetitive tasks formally done by humans.
Many seem to believe that it is possible to protect American jobs by setting up
high tariffs and requiring goods to be manufactured here. Even assuming other
nations would not retaliate by raising tariffs on goods we ship, it's a bad idea. As
previously mentioned, resources are ultimately directed to the places where they
can be most efficiently manufactured. This is not a bad thing. What it means is
that if Nike shoes can be less expensively manufactured somewhere else than
here, the costs of the shoes here will be lower. That means everyone will spend
less money on shoes and have more money available for other products. Trying
to put walls around your nation always fails. The end result is usually inflation
and economic stagnation. Nations trying to protect their industries and creating
economic walls with tariffs around themselves were largely responsible for the
Great Depression of the 1930's.
We see Europe creating an economic union tearing down trade restrictions
between nations and removing tariffs between member nations, all in an effort to
improve productivity and reduce costs of goods within the union's borders. This
will be difficult for them to accomplish. Many powerful groups within these
nations have and will continue to resist changes. The reasons are simple. They
say that in their particular country they won't be able to efficiently complete with
products from another nation. It's true, particularly where the government in the
past heavily subsidized a particular industry. There is no doubt that in some of
the economic union's nations some people will be thrown out of work.
This will probably create a great deal of turmoil for a number of years. One of the
reasons this may take some time to resolve is the difficulty in many of these
nations in creating new businesses. Hopefully, the governments as well as
cooler heads in the populace will make it easier for entrepreneurs to create new
businesses and new jobs. This will probably require a major shift away from
socialism.
Some people in nations where such things as the GATT and NAFTA are
implemented will be hurt. But the economies of each of these nations will
improve over the long run as goods and services will be reduced in cost leaving
citizens with more discretionary income. Using the U.S. as an example and if
Adam Smith's theories are correct, all will eventually benefit.
Review the video dealing with Competing in Global Markets. You should come
away with the realization that competing in Global Markets is like competing here
in the U.S. The key in both cases is to learn about your customers and then
produce goods and services to fit their needs. Notice that the U.S. bike
manufacturer in Japan modified the bikes to fit the overall smaller Japanese
physical size (when compared to Americans). A simple idea that made the
difference between success and failure. The bike manufacturer was also wise
enough to approach his potential retail outlets as a Japanese businessman
would, not in the way it would be done in the U.S.
View Video about Global Competition (56k)
View Video about Global Competition (Cable/DSL)
View Video About IBM (56K)
View Video About IBM (Cable/DSL)
Download Chapter 3 PowerPoint Review Slides
If videos are not available go to this site http://highered.mcgrawhill.com/sites/007310597x/student_view0/additional_video_clips.html and view
Treck: U.S. Companies Competing in Global Markets
Chapter 3 Quiz
Select the best answer.
1
Which theory states that a nation should produce and sell goods to other countries
that it produces most efficiently, and buy goods produced more efficiently by other
countries?
A) Comparative advantage.
B) Absolute advantage.
C) Mercantilism.
D) Bilateral advantage.
2
The president of the American Auto Parts Corporation recently testified before
members of Congress, urging them to limit the flow of imported automobile parts into
the United States. She contended that these imports were priced lower than the
foreign producers were charging in their own countries. She believes these foreign
producers are guilty of:
A) dumping.
B) reverse exporting.
C) free trade.
D) bilateral trade surplus.
3
When foreign firms build production facilities in the United States, they are engaging
in:
A) exporting.
B) importing.
C) foreign direct investment.
D) countertrading.
4
Pepsi Cola has entered into a long-term contract with a South African beverage
business. The contract calls for the South African firm to produce and market Pepsi
Cola in South Africa. Pepsi will receive a royalty on each case of soda sold. This is an
example of:
A) licensing.
B) a joint venture.
C) a foreign subsidiary.
D) foreign direct investment.
5
Mo's Hardware, a U.S. retailer, buys much of its inventory from Asian countries. Mo's
Hardware would benefit if the value of the dollar ________ relative to the currencies
of the countries from which Mo's imports.
A) rose
B) fell
C) remained constant
D) floated unpredictably
6
Ted is typical of many U.S. businesspersons. Ted feels the U.S. culture should be the
model for the rest of the world, and that the "American way" of doing things is almost
always the best. Ted is guilty of:
A) xenoculturalism.
B) ethnocentricity.
C) culture shock.
D) counter valuation.
7
Under a system of floating exchange rates, changes in the value of the U.S. dollar
relative to other currencies usually result from:
negotiated rate adjustments between the U.S. government and the
A) World Trade Organization.
decisions by the Federal Reserve Board of Governors to declare a
B) new value for the exchange rate.
C) fluctuations in the world price of gold.
changes in the supply of and/or demand for dollars in the market for
D) the U.S. currency.
8
Many countries use ________________ to protect their domestic industries against
dumping and unfair foreign competition.
A) export limitations
B) global marketing
C) trade protectionism
D) import enhancements
9
The U.S. government has announced a 5 million-pound annual limit on beef
imported from the country of Argentina. This type of trade restriction is called a(n):
A) embargo.
B) revenue tariff.
C) import quota.
D) export cap.
10
Many economists and business experts predict that ________ will potentially be the
growth market of the future.
A) Asia
B) Africa
C) South America
D) the Middle East