· Master of Destiny- viewpoint signifies a belief that individuals have the power to control their own lives and shape their future through their choices and actions, essentially being the architect of their own destiny.

· Set Destiny- viewpoint suggests that a person’s life path is predetermined by fate or external forces, leaving little room for personal agency to change the course of their life

Degree of Adaptation

Know local customs and accommodate differences

Evaluate which foreign customs should be adhered to

· Be aware of self-reference criteria

· Own cultural background impacts understanding of other cultures

· Importance of customs varies by country

o GO LOCAL!

§ Establish local web presence

§ Create local content

§ Use local relations

Cultural Imperatives	Business customs and expectations that must be met and conformed to or avoided
Cultural Electives	Behavior or customs that cultural aliens may wish to conform to or participate in, but not required
Cultural Exclusives	Customs or behaviors that foreigners are barred from and most not participate in

The Sovereignty of Nations

Sovereignty

Powers exercised by the state in relation to other countries. Supreme powers exercised over the country’s own members. Characteristics of a sovereign state. Enjoys full legal equality with other states

· Independent and free form all external control

· Governs its own territory

· Selects own political, economic, and social systems

· Has power to enter into agreements with other nations

Political

Nationalism

Intense feeling of national pride and unity

· National interest and security more important than international relations

· Minor harassment and controls of foreign investments are supported

o Restrictions on imports, tariffs, other barriers to trade

o Encouragement of citizens to buy domestic products only,

Confiscation

Seizing of a company’s assets without payment

Expropriation

The government seizes investment but makes some reimbursement for the assets

· Investment sometimes becomes government-run entity

Domestication

· Host country gradually gains control of investment

· Series of government decrees that mandate local ownership and national involvement in company’s management

Multinational Market Regions

Group of countries that:

· Seek mutual economic benefit and associate peace

· Reduce interregional trade and tariff barriers

· Economic cooperative agreements

Free Trade is the Ultimate goal

· Alliances concern some

· Fear of being excluded

· E;g) EU, NAFTA formerly, now USMCA, ASEAN, APEC

Economic Factors

Every Union shares development and enlargement of market opportunities as a basic orientation

· Preferential tariff treatment for participants

· Common tariff barriers against outsiders

· Stimulates internal economic development for all

Strong Unions can settle economic disputes

· Agreements and mechanisms must be in place

· Benefits must outweigh the cost of individual differences

Nations must give up part of sovereignty

· Advantages of union must be clear-cut and significant

· Benefits must greatly outweigh the disadvantages

Political Factors

Equally important as economic factors

· Although economic factors are the basic catalyst for the formation of the union

Participating countries must be generally compatible

· Similar aspirations are important

· Countries won’t surrender part of national sovereignty if not

Unions typically formed in response to external threats

· Members must demonstrate “amenability” in ways that others can be convinced

Political Union

Most fully inter\grated form of regional cooperation

Complete economic and political integration

· Either voluntary or enforced

· If voluntary, the union is referred to as a commonwealth

Commonwealth of Independent States (CIS) made up of former Soviet republics

European Union (EU)

· British exit in 2020 cause immediate delays, complications, and reductions in UK-EU trade

· Long-term economic consequences of “Brexit” unknown

Geographic and Temporal Proximity

Not imperative, but facilitates the functioning of market

· Transportation networks are more developed in close countries

· European bullet trains

· Cheap Labor

· Terrorism

Distance across time zones is most important

· Trade tends to travel more easily in north-south directions than in ancient times

Issues of legal and illegal immigration are important

· Promote economic integration among closer countries

Cultural Factors

Cultural similarities ease the shock of economic cooperation

· Members understand the outlook and views of colleagues

· Agreements between similar countries are most likely to succeed

Current agreements extend beyond cultural boundaries

· European Union is very culinary Diverse

o Language is not as much of a barrier as expected

o Religion still seems to be an issue

Dynamic Growth in the Asia Pacific Region

Asia has been the fastest growing region in the world for the past three decades

· 1996 financial crisis in leading Asian Economies

· Tight monetary policy, appreciating the dollar, declaration of exports all contributed to downturn

· Followed by a period of recovery and growth

Prospects for continued growth are excellent

· Source of new products, technology, vast consumer markets

· 2020 Asian GDP at PPP (Purchasing power Parity) was higher than rest of the world for first time in two centuries

The Peoples Republic of China (PRC)

China fast emerging as competitor in global markets

Must overcome issues to real full potential

· Human rights and legal system major issues in China

· Environmental decline associated with fast growth

· Demographic disaster associated with one-child policy

o Policy ended in 2013; increased to 3 children in 2021

o Reversal of policy has led to gender discrimination in the workplace

· Discrimination against those moving from rural to urban areas

o Future potential depends on:

§ China’s ability to deregulate industry, import modern technology, privatize overstaffed and inefficient State-owned enterprises (SOEs) and attract foreign investments

Delete America- Chinese effort to delete U.S. impact on their technology

·

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