Why summarize the characteristics, opportunities, and challenges of the global economic environment in which businesses operate?

Before trying to understand the global environment within which business operates, we might ask: What does the world really looks like?—not the picture we see from outer space, but all the people and the environments of daily life? It’s difficult to comprehend something as vast as the world beyond what we know and experience in our own lives, so what if we could shrink the world into a village of just a hundred people and have that village represent the entire global environment? We can all picture a hundred people—in a classroom, at a wedding, or attending a soccer game, so why not picture the world as just one hundred people? That’s exactly what the following video does: It presents a miniature world that might give you a better understanding of the people that make up this place we call Earth.

Learning Outcomes

• Define globalization in the context of international business operations
• Explain why companies and nations engage in global trade
• Summarize the principles of competitive advantage and comparative advantage
• Describe how cultural, economic, and legal or political barriers can impact, restrict, or support international trade
• Describe ethical issues that businesses face when engaging in international markets
• Describe the impact of currency valuation on business operations in global markets
• Explain the roles of the IMF and the World Bank in promoting international trade
• Explain the historical role of GATT in international trade and the WTO’s impact on international trade.