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CHAPTER 3History and Geography:
The Foundations of Culture
History of nations• Pakistan• Bangladesh• Russia• Iraq• Afghanistan• Sikkim• Nepal
Historical Perspective in Global Business
Historical insights of a country are important for understanding:
Attitudes about the role of government and business
Relations between Managers and Subordinates
Sources of Management Authority Attitudes toward Foreign
Corporations
History and Contemporary Behavior
Historical events between nations influence business and history
Why do the Japanese have such strong loyalty toward their companies?
Why is a distribution system so difficult for an outsider to develop?
Why are decisions made by consensus?
History and Cont. Behavior Cont.
Why are the Japanese loyal to family, to country, to company, and to social group?
Why do the Japanese cooperate? Answers found in Japanese history and
Confucian philosophy: Jen: love, benevolent, concerns for one’s fellow men; and Li: describes a combination of manners, rituals, customs, etiquettes
History is subjectiveManifest Destiny: Meant that American were chosen people
to create a model society. It was used to justify US annexation of Texas, Oregon, New Mexico and California and later US involvement in Cuba, Alaska, Hawaii and Philippines
History is subjectiveThe Monroe DoctrineIs a cornerstone of US foreign policy; was
enunciated by President James Monroe1. No further European colonization in the New
World2. Abstention of the US from European political
affair3. Nonintervention of European governments in
governments of the Western Hemisphere
US Intervention in Latin America
• USA attempts to thwart election of Peron in 1946
• Popular revolution neutralized by US economic pressure
• CIA organized invasion overthrows Arbenz (1954)
• Nationalist revolution (1959) and alliance with USSR (1960)
US Intervention in Latin America
• Covert intervention by USA against elected Marxist government of Popular Unity (1970-73)
• Military intervention by USA against elected Marxist government of popular unity
• Evolution (1979)USA funds counter revolutionary movement (1980s)
• Covert intervention by USA to defeat left wing guerrillas (1980 – 88)
US Intervention in Latin America
• US invasion to restore stable government (1983)
• US invasion to arrest President Noriega on charge of drug trafficking (1989)
• Negotiated US invasion to restore democracy (1994)
• North American Free Trade Agreement (NAFTA: !994)
Geography and Global Markets Study of geography is important in the
evaluation of markets Need to be knowledgeable about the effects
of geographic diversity on the economic profiles of various nations
Climate and topography are examined as facets of the broader and more important elements of geography
Climate and Topography
Knowledge about geography, the climate and physical terrain when appraising a market
Influences marketing from product adaptation to more profound influences on the development of marketing systems
Climatic features affect uses and functions of products and equipment
Social Responsibility & Environmental Management
Firms required to be socially responsible especially in foreign markets
Firms should comply regulations against environmental pollution and disposal of hazardous waste
Economic development and protection for the environment can coexist
Sustainable development guides many governments and multinational companies today
Sustainable Development: Key Propositions
There is a crucial and potentially positive link between economic development and the environment
The costs of inappropriate economic policies on the environment are very high
Addressing environmental problems requires that poverty be reduced
Sustainable Development Cont.
Economic growth must be guided by prices that incorporate environmental values
Since environment problems pay no respect to borders, global and regional collaboration is sometimes needed to complement national and regional regions
Natural Resources Importance of natural resources
especially to manufacturing of products Supply of natural resources not endless Human labor provides the
preponderance of energy in many countries
Importance of oil and gas in world energy consumption
Global Population TrendsPeople constitute markets for various categories of
goods. Necessary to know about:
(1) rural/urban population shifts
(2) rates of growth
(3) age levels, and
(4) population control
(5) rural-urban migration of world population
(6) population decline and aging
(7) worker shortage and immigration
World Trade Routes and Communication Links
Knowledge about trade routes over land, sea, and air important in making marketing decisions
The majority of world trade is among the most industrialized and industrializing countries of Europe, North America, and Asia
Need to be aware about communication links—the underpinning of all commerce
Impact of the Internet revolution especially for global marketing of products