06-07-2022
International Business
Management
SESSION 1
1
Evaluation
Component Mode Duration Weightage
Mid Term Exam
( open book) 1.5 hrs 30 %
(Compulsory)
End Term Exam
2 hrs 30%
(Compulsory) ( open book)
Quiz / Assignment 20
Group Project / Including Case study
Participation / presentation in 20
Simulation groups
Total 100 %
7/6/2022 2
2
, 06-07-2022
Globalization!!!
Imagine an American driving to work in car designed by Germans,
assembled in Mexico from components made in Japan, fabricated from
Korean Steel and Malaysian rubber.
She may have filled the car with Petrol from British Petroleum (BP).
The Petrol could have been pumped from the coast of Africa by a
French Oil company that transports it to US by a Greek Shipping Line.
While driving she may have spoken to her stock broker on Apple i-
phone, designed in US, manufactured in China from chips bought from
Taiwan, that were designed by Indian Engineers working for Qualcomm
in India.
7/6/2022 3
3
Drivers of Globalization
Declining Trade and Investment Barriers
1920s-30s: Barriers to international trade and foreign
direct investment
• High tariffs resulted in retaliatory trade policies
GATT lowered barriers
• Uruguay Round (1993)
• Established World Trade Organization (WTO)
7/6/2022 4
4
, 06-07-2022
Drivers of Globalization
Average Tariff on Manufactured Products (%)
Country/Year 1913 1950 1990 2003
France 21 18 5.9 4
Germany 20 26 5.9 4
Italy 18 25 5.9 4
Japan 30 --- 5.3 3.8
Holland 5 11 5.9 4
Sweden 20 9 4.4 4
Great Britain --- 23 5.9 4
United States 44 14 4.8 4
Source: The Economist, June 2004
7/6/2022 5
5
Emerging Economies
Import duties/ tariffs on manufactured products - 2001-2019 (%)
35
30
India
25
Percentage Tarriff %
20
15 Brazil
10
India
5
US and UK
0
0 2 4 6 8 10 12 14 16 18 20
Years
Brazil China Ethiopia United Kingdom India United States
7/6/2022 6
6
, 06-07-2022
Drivers of Globalization
Knowledge Society and Trade Agreements
The value of world trade in merchandised goods has grown
consistently faster than the growth rate in the world
economy since 1950.
• Trade across country borders has grown 26 times more than world
production.
• Knowledge society has produced more informed consumers, driving
demand.
• Removal of restrictions to FDI
• More trade agreements
7/6/2022 7
7
Drivers of Globalization
Role of Technological Change
Communications
• Development of the microprocessor
• Moore’s Law
Internet of things
• Half the world’s population uses the Internet
• Global e-commerce sales over $2 trillion
• The Internet is an equalizer
• Helps overcome constraints of location and time zones
7/6/2022 8
8
International Business
Management
SESSION 1
1
Evaluation
Component Mode Duration Weightage
Mid Term Exam
( open book) 1.5 hrs 30 %
(Compulsory)
End Term Exam
2 hrs 30%
(Compulsory) ( open book)
Quiz / Assignment 20
Group Project / Including Case study
Participation / presentation in 20
Simulation groups
Total 100 %
7/6/2022 2
2
, 06-07-2022
Globalization!!!
Imagine an American driving to work in car designed by Germans,
assembled in Mexico from components made in Japan, fabricated from
Korean Steel and Malaysian rubber.
She may have filled the car with Petrol from British Petroleum (BP).
The Petrol could have been pumped from the coast of Africa by a
French Oil company that transports it to US by a Greek Shipping Line.
While driving she may have spoken to her stock broker on Apple i-
phone, designed in US, manufactured in China from chips bought from
Taiwan, that were designed by Indian Engineers working for Qualcomm
in India.
7/6/2022 3
3
Drivers of Globalization
Declining Trade and Investment Barriers
1920s-30s: Barriers to international trade and foreign
direct investment
• High tariffs resulted in retaliatory trade policies
GATT lowered barriers
• Uruguay Round (1993)
• Established World Trade Organization (WTO)
7/6/2022 4
4
, 06-07-2022
Drivers of Globalization
Average Tariff on Manufactured Products (%)
Country/Year 1913 1950 1990 2003
France 21 18 5.9 4
Germany 20 26 5.9 4
Italy 18 25 5.9 4
Japan 30 --- 5.3 3.8
Holland 5 11 5.9 4
Sweden 20 9 4.4 4
Great Britain --- 23 5.9 4
United States 44 14 4.8 4
Source: The Economist, June 2004
7/6/2022 5
5
Emerging Economies
Import duties/ tariffs on manufactured products - 2001-2019 (%)
35
30
India
25
Percentage Tarriff %
20
15 Brazil
10
India
5
US and UK
0
0 2 4 6 8 10 12 14 16 18 20
Years
Brazil China Ethiopia United Kingdom India United States
7/6/2022 6
6
, 06-07-2022
Drivers of Globalization
Knowledge Society and Trade Agreements
The value of world trade in merchandised goods has grown
consistently faster than the growth rate in the world
economy since 1950.
• Trade across country borders has grown 26 times more than world
production.
• Knowledge society has produced more informed consumers, driving
demand.
• Removal of restrictions to FDI
• More trade agreements
7/6/2022 7
7
Drivers of Globalization
Role of Technological Change
Communications
• Development of the microprocessor
• Moore’s Law
Internet of things
• Half the world’s population uses the Internet
• Global e-commerce sales over $2 trillion
• The Internet is an equalizer
• Helps overcome constraints of location and time zones
7/6/2022 8
8
