Assignment

On
Globalization and International Linkages
Submitted To
Dr. Sumayya Begum
Associate Professor
Bangladesh University of Professional
Submitted By
Aunnana Sabrin Limpa
(18241065)
Course: International management
Course Code: MGT-3201
Submission Date: 22 July 2020
1. How has globalization affected different world regions? What are
some of the benefits and costs of globalization for different sectors of
society (companies, workers, communities)?
Answer:
Globalization has affected diverse world regions in many ways. While some emerging countries
have not benefited from globalization, the MNCs from developing countries reflected the
increasing inclusion of all regions of the world in the benefits of globalization. The North
America Free Trade Agreement (NAFTA) is revolving the area in to one giant market. The
country continues to establish one of the major trading blocs in the world, with the United States
leading international trade and investment and Canada being its biggest trading partner. Mexico
is one of the strongest Latin American economies, but still suffers from economic problems, as
do many South American countries, some of which seem to be doing better than others such as
Argentina and Brazil. European countries have been most successful in integrating their
economies, taking the top challenge being integrating their former communist neighbours in
Central and Eastern Europe. Asian countries such as Japan, China, the Four Tigers, and South
Asian Countries, once had biggest success at various points in time, are now facing economic
slowdown, with some showing better progress toward recovery than others.

MNCs face the contest of harmonizing the potential returns from investing in various profitable
markets that are currently developing, with the risks of political and economic variability in these
markets. Tactical decisions are currently being made outside national borders, taking into
deliberation the parameters of integrated economic blocs. Workers are mostly impacted by their
own improved mobility (geographically and occupationally), as well as that of their
organizations. Enlarged rate of change and uncertainty demands a diverse skill set and
continuous learning. Increased global competition for jobs, especially from countries with lower
labour costs, necessitates adaptation. Finally, the community primarily benefits in terms of long-
term efficiencies and increased choices. However, communities will vary in the short-term
factors they may face, which could include unemployment and severe competition for their local
industries. MNCs from emerging markets are growing rapidly and expanding their global reach
their global reach in every sector.

2. How has NAFTA affected the economics of North America and

how has the EU affected Europe? What importance do these
economic pacts have for international managers in North America,
Europe, and Asia?
Answer:
NAFTA so far seem to be both bad news and good news. A number of economic developments
have occurred because of this agreement that includes

i. The elimination of traffics as well as import and export quotas

ii. The removal of restrictions on agriculture products, auto parts and energy goods etc.

But there is also an evidence that it has caused a number of jobs and capital to shift from the
more economically advanced nations (particularly the U.S.) to Mexico. On the other hand, once
Mexico gets back on its feet after its economic woes of recent years, there is evidence that, in the
long run, the agreement will benefit all North American nations because it will create increased
efficiencies, more purchasing power, and overall a more economically powerful North America.
The EU has made significant progress over the past decade in becoming a unified market. In
2003, the EU consisted of 15 nations and has since, gained 12 additional nations. Not only have
maximum trade barriers among members been removed, but a subdivision of European countries
has accepted a unified currency called the euro. These economic pacts will force international
managers to stay current on all trade regulations, economic activity, and status. Different
economic systems characterize different countries and regions.

3. Why are Russia and Eastern Europe of interest to international

managers? Identify and describe some reasons for such interest and
also risks associated with doing business in these regions.
Answer:
Russia and Eastern Europe are of interest to international managers because,

They present an opportunity to get in on the "ground floor" so to speak. Even though these
countries have struggled with the transition to a market economy for several years, MNCs that
are willing to take the substantial risks involved with operating in these countries may find
substantial rewards in years to come.

Russia is such a large market, however, and has so much potential for the future that many
MNCs feel they must get involved, especially with a promising rise in GDP.

In Hungary, nationalised hotels have been privatized, and Western firms, fascinated by the low
cost of highly skilled, professional labour, have been entering into joint ventures with local
companies.

However, investment in Russia and Eastern Europe may not produce immediate returns. It may
be years, perhaps even decades, before some investments become profitable.

4. Many MNCs have secured a foothold in Asia, and many more are
looking to develop business relations there. Why does this region of
the world hold such interest for international management? Identify
and describe some reasons for such interest.
Answer:
Asia has been of attention to MNCs because of the marvellous growth in this region in the last
decade. Though the growth has begun to spill off in recent years, Japan, the Four Tigers (Hong
Kong, Taiwan, Singapore, and South Korea), developing South-eastern Asian countries such as
Malaysia, Indonesia, Thailand, and Vietnam, and especially China, continue to present many
investment opportunities. A large population base, comparatively inexpensive labour, and
natural resources have been the vital reasons for investments in this region.

5. Why would MNCs be interested in South America, India, the

Middle East and Central Asia, and Africa, the less developed and
emerging countries of the world? Would MNCs be better off
focusing their efforts on more industrialized regions? Explain.
Answer:
Each of these regions has its own characteristics, which may be attractive to certain multinational
corporations. South America has a trading bloc (MERCOSUR), India has a huge residents base
and significant unused potential, the Middle East has sufficient oil wealth to put it in the
"borderline less developed country" class, and Africa has a great supply of natural resources. Of
course, all of these regions are affected by some significant problems. Multinationals seeing
investment in the less developed and developing countries must carefully weigh the risks and
benefits of functioning in these regions.

6. MNCs from emerging markets (India, China, Brazil) are

beginning to challenge the dominance of developed country MNCs.
What are some advantages that firms from emerging markets bring
to their global business? How might MNCs from North America,
Europe, and Japan respond to these challenges?
Answer:
Several difficulties are faced by multinationals when endeavouring to enter developing markets
such as India, China, or Brazil. MNC’s must continue to be persistent when dealing with these
governments. One response is to help these countries understand that foreign investments have a
optimistic result on the economy. Another substitute would be to threaten to invest the money
into another economy.