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BA 447

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BA 447 day 8 & 9 Feed back: what would you do If you faced a Tienamen-like situation First of all, you might have considered the risks before hand, i.e. no ... – PowerPoint PPT presentation

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Title: BA 447


1
BA 447 day 8 9
2
Feed back what would you do
  • If you faced a Tienamen-like situation
  • First of all, you might have considered the risks
    before hand, i.e. no surprise?
  • Second, safety of personnel, ex-pats in
    particular because they are not natives
  • Third, what to do with investment?
  • Security of the facility or investment
  • Find out what is happening, scenarios, etc. e.g.
    call your friendly government official, contacts,
    etc.
  • Report to head office and obtain guidance

3
Recap
  • Understand issues in global arena
  • Use Flat World as a jumping off point to identify
    what these issues might be
  • Flat World is familiar
  • web-enabled playing field
  • new players
  • business applications, e.g. supply chains

4
Flat World
  • It has assumptions about entry of new players and
    implications
  • open economies
  • how these opened up
  • who benefits from this new environment
  • those who are not part of the "party
  • It has assumptions about, or can lead us to
    conclude behavior of businesses

5
Flat World for further investigation
  • Governance and corruption deals with how these
    open economies are managed
  • Understanding sources of instability in a country
    or "threats" to businesses
  • Resource issues that may create constraints -
    energy, environment
  • Role and function of agencies such as WTO
  • Issues you identify, find interesting, e.g.
    specific issues like e-waste and take back laws,
    WTO related conflicts, activists

6
Value to global business
  • What must I know to function effectively in a
    specific country? Global arena?
  • What can impact a global business? Country
    specific? Regional?
  • Response when one is in a situation that requires
    understanding of the country?
  • Coverage of issues may help provide background
    basis for understanding prospects or lack of it
    in a target country

7
Overview Governance, corruption, terrorism
  • Review ch 11
  • Discussion
  • Review ch 12
  • Discussion
  • Questions raised

8
Chapter 11
  • What are major conclusions?
  • What are key assumptions?
  • Your opinion?

9
Chapter 11 Other side of flat world
  • Technological optimist or historical determinist
    the brave new world and its dark side/history
    repeats itself
  • The reality of poverty and efforts reduce it
  • Too sick disease and underdevelopment
  • Too disempowered - marginalized
  • Too frustrated ideological, religious
  • Too many Toyotas what if we did succeed in
    making people well-off?

10
Poverty statistics
  • Poverty rates in selected countries
  • http//www.worldbank.org/data/countrydata/countryd
    ata.html
  • Poor are most vulnerable to natural disasters
    tsunamis typhoons hurricanes earth quakes
  • Poor most vulnerable to disease outbreaks
  • Sanitation
  • Access to health centers

11
Poverty
  • Poverty alleviation decades-long goal
  • http//web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EX
    TPOVERTY/0,,contentMDK20153855menuPK373757page
    PK148956piPK216618theSitePK336992,00.html
  • http//www.makepovertyhistory.org/
  • http//www.globalissues.org/TradeRelated/Debt/USAi
    d.asp

12
Poverty and prosperity
  • Mansions, high rises, and slums
  • Benefits to elite (Philippine rates)
  • Caddies 10 a game
  • Household helps 55 a month
  • Driver (stay-in) 130 a month
  • Secretaries starting pay 300 a month
  • Call center pay 300 a month
  • Living wage and minimum wage

13
Too disempowered
  • The rural vote in developing countries, to the
    extent that elections are honest, elections are
    dictated by the masses.
  • Economic growth often does not trickle down.
  • What are the arguments?
  • Global populists argue that the poor do not stand
    a chance

14
Anti-globalization
  • Western-driven movement composed of
  • Upper-middle class with guilt complex
  • Rear-guard push by the old left
  • An amorphous group neoludites?
  • Anti-americanism (power is a magnet for
    criticism)
  • Serious groups focused on how we globalize

15
Response to anti-globalization
  • Reform retail - -
  • Local government focus we can not ignore
    national government.
  • Village by village effort
  • Role of multinationals
  • HPs efforts to help villagers articulate what
    they needed
  • Microsoft program providing computers
  • Community relations projects

16
Another view of poverty reduction
  • Targetted approaches, for example
  • http//www.usaid.gov/
  • http//abcnews.go.com/International/wireStory?id1
    205776
  • The World Bank shifted to reducing corruption.
  • Corruption lack of or poor governance
  • Poor governance perpetuates poverty

17
Islam and terrorism
  • Frustration due to authoritarian regimes and lack
    of economic opportunities
  • Islamist fringe and its supporters
  • Terrorist acts as directed against trust
  • The West, particularly the US, as a convenient
    target for dissatisfied Muslims
  • Establish an Islamist state
  • Feed on frustration due to humiliation - if Islam
    is that great, why are we poor

18
Muslim Problem
  • Centuries old issue of dealing with Muslim
    population in the Philippines - through Spanish,
    US, Japanese occupation
  • 10 of the population, mainly in South
  • Secessionist? Anti-Christian?
  • Factions within the population
  • MILF, MNLF, Abu Sayaf as splinter group
  • Families and clans also fought each other
  • Terrorist acts - kidnappings, bombings
  • Attract attention to their cause
  • Collect taxes

19
Day 9
  • Finish Ch 11
  • Continue with Too frustrated
  • Too many toyotas
  • Continue with Ch 12
  • Cover following issues with more depth
  • Terrorism
  • Islam
  • Traditional conflicts
  • Internal conflicts
  • Governance and corruption relation to previous
    four

20
Bin-Ladens Cause
  • Well before Sept 11
  • http//news.bbc.co.uk/1/hi/world/south_asia/155236
    .stm
  • Western infidels on sacred ground - foreign
    troops in Saudi Arabia during Kuwait war
  • Corrupt Saudi Arabian government
  • US support for Saudi Arabian government
  • Depletion of natural resources - oil
  • Why conduct attacks on US soil?
  • Al-quaeda as a loose confederation

21
Terrorism in general
  • Objectives
  • Attract attention/support for a cause
  • Destabilization of status quo
  • Methods
  • A small bomb, big bang in the press
  • Guerilla-style efforts, including suicide
    bombers, can tie up a whole army. Therefore,
    cost benefit is in their favor
  • Harassmentleverage for whatever ends they may be
    working for, e.g. extortion, support, etc.

22
Islam
  • Shares common tradition with Judaism and
    Christianity. Quran as correcting Jewish and
    Christian scriptures
  • One God
  • Abrahamic roots
  • http//en.wikipedia.org/wiki/Islam

23
Religion and Government
  • Separation of church and state
  • People are free to worship
  • Government can not dictate/interfere
  • Some democracies have informal relationships
    between church and state
  • Other governments have closer ties

24
Decision making in IRAN
  • Iran-Decision Making Structure.xls

25
Growth and natural resources
  • What if Chinas middle class actually grew? Or
    Indias? What type of lifestyle would they
    emulate?
  • Rise in crude oil prices in 2004 partly
    attributed to unexpected growth in Chinese demand
    for oil.
  • The growth of Chinese requirements for oil (and
    commodities) may subside a bit in next few years.
  • Are there limits to Chinas growth?

26
Resources
  • Broad topic, which includes among others
  • Energy
  • Renewable
  • Non- renewable
  • Commodities, e.g. steel, agricultural products
  • Environmental issues
  • Pollution as we know it
  • Technological pollution, e.g. unsafe technology
  • We will cover these later

27
Quick exercise
  • List all conflicts between countries
  • Which have resulted in actual invasion?
  • What is root of conflict?

28
Ch 12 The Dell Theory of Conflict Prevention
  • Supply chain management means that production in
    different countries are linked
  • For a particular country, this means foreign
    direct investments, jobs, etc.
  • War or any violent conflict that disrupts
    economic activity can disrupt supply chain
  • Such a conflict can also cause investments to
    move to more peaceful locations

29
Back to terrorism
  • Destabilization or terrorist acts may be targeted
    at discouraging investments
  • If the economics are right, a company may opt to
    deal with terrorists by paying taxes
  • In some areas, terrorists often does enough
    damage to increase uncertainty and extract rent.
    This is good business.

30
Historical Conflicts
  • China (Peoples Republic of China) and Taiwan
    (Republic of China)
  • India and Pakistan
  • Japan and China, and Korea
  • UK and Ireland
  • Eastern European hotspots
  • South America??

31
Roots of Conflict
  • Religion as in the case of India and Pakistan
  • Was one country and broke up after independence
  • Ideology China and Taiwan
  • Economic (capture resources) Japan in World War
    II
  • Political with religious undertones (Ireland)

32
Internal conflicts that spill over borders
  • Tribal/ethnic conflict
  • Religion
  • Frustration
  • Control of the country

33
Some conclusions
  • Friedman is right part of the time
  • Business interests will lobby for restraint
  • Economic fall out can be significant
  • In addition, business interests can be the link
    across countries, e.g. overseas chinese
  • In some cases, economic interests are outweighed
    by political or religious causes

34
Discussion within Groups
  • What are the issues raised that are
  • Interesting personally?
  • Have relevance to an international company?
  • Why?
  • What do we need to learn more about?
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