Question

For the questions below I need a minimum of two paragraphs.

1. What is global business?
2. Describe the impact of global business as it relates to direct foreign investment.
3. List and define the barriers governments erect to control trade.
4. What are the trade-offs between global consistency and local adaptation?

Answer 1

What is global business?

Global business is the buying and selling of goods and services by people from different countries.

Describe the impact of global business as it relates to direct foreign investment.

When a company participates in the global market they are more likely to make direct foreign investments by building a new business or buying an existing business in a foreign country. Direct foreign investments are beneficial in several different ways, such as allowing for products to be produced more economically, growing the customer base along and creating a competitive advantage.

List and define the barriers governments erect to control trade.

Trade Barriers – Government imposed regulations that increase the cost and restrict the number of imported goods

Protectionism – A governments use of trade barriers to shield domestic companies and their workers from foreign competition

Tariff – A direct tax in imported goods

Nontariff Barriers – Nontax methods of increasing the cost or reducing the volume of imported goods

Quotas – A limit on the number or volume of imported products

Voluntary Export Restraints – Voluntarily imposed limits on the number or volume of products exported to a country

Government Import Standards – A standard ostensibly established to protect the health and safety of citizens but is often used to restrict imports

Subsidies – Government loans, grants, and tax deferments given to domestic companies to protect them from foreign competition

Customers Classification – A classification assigned to imported products by government officials that affects the size of the tariff and the imposition of import quotas.

What are the trade-offs between global consistency and local adaptation?

If a company worries to much about their globalization they run the risk of placing management practices and products in places they wouldn’t do well in, on the other hand if they focus to much on localization they could risk losing their cost-effectiveness and producing products way off from the company’s original ideas.