Submitted by: Cindy Barnes
Email:
Date: 1/22 – 2/1
Subject: Advance Business I
Total Points = 30
Grade Level(s): 10, 11 or 12
DescriptionDiscussion 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
- Discuss the growing importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
- Explain the importance of importing and exporting and understand key terms used in 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.
11.0 Explore Economic Principles Related to Business Management. 11.7
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 login and password (/angels2379) choose chapter 3, under instructor resources click on power point presentations and then choose chapter three.
Procedures (Development & Implementation):
- Study Chapter 3 of the text. Use the Learning Goals on page 59 as a guide.
- Learn the definitions of the words/phrases listed under Key Terms in the text on page 84.
- Go over the review and critical thinking questions.
- Study the case materials at the end of the chapter.
- Review the video and slides.
- Examine trends in business occupations in the world. Start with these websites and then find some of your own:
7. Assignment is to list at least five careers that you can work outside the United States along with your key terms.
Evaluation
- Key Terms
- List 5 career outside of the U.S within your key terms document
- 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 (/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 intocars 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 and view Treck: U.S. Companies Competing in Global Markets
Chapter 3 Quiz
Your Results:
The correct answer for each question is indicated by a .Top of Form
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:
/ A) / negotiated rate adjustments between the U.S. government and the World Trade Organization.
/ B) / decisions by the Federal Reserve Board of Governors to declare a new value for the exchange rate.
/ C) / fluctuations in the world price of gold.
/ D) / changes in the supply of and/or demand for dollars in the market for 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