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CHAPTER 3
 History 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 subjective
 Manifest 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 subjective
The Monroe Doctrine
Is a cornerstone of US foreign policy; was
   enunciated by President James Monroe
1. No further European colonization in the New
    World
2. Abstention of the US from European political
    affair
3. 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 Trends
People 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

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INTERNATIONAL BUSINESSES Chapter 3

  • 1. CHAPTER 3 History and Geography: The Foundations of Culture
  • 2. History of nations • Pakistan • Bangladesh • Russia • Iraq • Afghanistan • Sikkim • Nepal
  • 3. 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
  • 4. 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?
  • 5. 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
  • 6. History is subjective  Manifest 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
  • 7. History is subjective The Monroe Doctrine Is a cornerstone of US foreign policy; was enunciated by President James Monroe 1. No further European colonization in the New World 2. Abstention of the US from European political affair 3. Nonintervention of European governments in governments of the Western Hemisphere
  • 8. 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)
  • 9. 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)
  • 10. 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)
  • 11. 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
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. 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
  • 16. 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
  • 17. Global Population Trends People 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
  • 18. 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