IB7002-3, INTERNATIONAL BUSINESS
IB7002-3, INTERNATIONAL BUSINESS IB7002
Popular in International Business
Popular in International Business
This 8 page Class Notes was uploaded by JC11 on Saturday April 9, 2016. The Class Notes belongs to IB7002 at Northcentral University taught by in Spring 2016. Since its upload, it has received 15 views. For similar materials see International Business in International Business at Northcentral University.
Reviews for IB7002-3, INTERNATIONAL BUSINESS
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 04/09/16
NORTHCENTRAL UNIVERSITY ASSIGNMENT COVER SHEET Student: THIS FORM MUST BE COMPLETELY FILLED IN Follow these procedures: If requested by your instructor, please include an assignment cover sheet. This will become the first page of your assignment. In addition, your assignment header should include your last name, first initial, course code, dash, and assignment number. This should be left justified, with the page number right justified. For example: Save a copy of your assignments: You may need to resubmit an assignment at your instructor’s request. Make sure you save your files in accessible location. Academic integrity: All work submitted in each course must be your own original work. This includes all assignments, exams, term papers, and other projects required by your instructor. Knowingly submitting another person’s work as your own, without properly citing the source of the work, is considered plagiarism. This will result in an unsatisfactory grade for the work submitted or for the entire course. It may also result in academic dismissal from the University. IB70028 Isabel Wan, PhD International Business Assignment 3 Faculty Use Only <Faculty comments here> <Faculty Name> 2 Introduction The purpose of this week’s assignment is to complete an indepth analysis of the economic, political, and social environments of the BRICS countries. In addition, this paper will discuss opportunities and threats in the business environment and the application of global business theories and concepts for developing international business strategies in response to these conditions. Specifically, this week’s paper will discuss the following areas: 1) What influence will the BRICS countries (Brazil, Russia, India, China, & South Africa) have on the United States and its economy by 2025? 2) What are the relationships between China and Brazil? How do they influence each other? How do they influence the global economic community? and 3) Provide a detailed evaluation of the role of each of the BRICS countries; by critically evaluating the political, economic, social, cultural, legal and environmental factors of each country? BRIC Country Influence “Globalization can be defined as the process of social, political, economic, cultural, and technological integration among countries around the world” (Luthans and Doh, 2012). As globalization continues and the access to the world market becomes even more accessible, the influence of emerging countries will continue to increase. By 2025, the influence of the BRICS countries (Brazil, Russia, India, China, & South Africa), will be substantial. Dixon (2009) shares the belief that the BRICS countries will overtake the G6 no later than 2040. A specific example this speaker provided the reference to a company by the name of Aditya Birla, a large producer of copper and aluminum that has decided to enter the retail market in India. This company had no retail stores previously and is expected to rapidly expand into 150,000 retail stores by 2025. 3 Companies like this are able to expand within India due to large, highly capable workforce. If foreign companies continue to invest and build within India, utilizing the low paid, but highly capable workforce, more products can be manufactured and exported. As other countries are continuing to outsource their manufacturing to areas that provide cheaper labor and manufacturing that will certainly affect the global market. U.S. based labor and manufacturing is commonly known to be extremely expensive and as business owners cut costs, they move to outsourcing this function. As this function is outsourced, jobs in the U.S. are lost and the economy suffers. In addition, Goldman Sachs conducted a study that would show the impact of the BRICS countries by the years 2025 on the U.S. The report showed that the expected share of world growth had the potential to increase from 20% to 40% between 2003 and 2025. This growth would account to a 20% increase in their total weight in the world economy. In addition, the report notes the increase of annual salaries to above $15,000 from $3,000 per year in approximately 200,000 million people (Luthans and Doh, 2012). Relationships between China and Brazil and Associated Influences Brazil continues to work towards globalization by increasing the number of trade agreements and strengthening its relationship with China. Another relationship in which Brazil and China are associated is foreign direct investment. Brazil falls in second, directly after China, for foreign direct investment. In addition, Brazil hosts one of the largest mining companies in the world. Brazil exports most of its iron ore production to China. The partnership between Brazil or China influence each other as well as the global economic community. Critical Evaluation of BRICS Countries 4 Significant areas to consider are the political, economic, social, legal and environmental factors of the BRICS countries as they factor into this study. Specifically, each area must be analyzed for the level of influence that they hold within each country in addition to the impacts they can potentially have on the overall international environment. As the overall purpose of the research is to determine the impacts that a particular country will have on the U.S. by 2025; each country needs to be evaluated for each factor. While one factor alone may not have a significant impact, all four when applied can be significant. Cuesta (2014) showed that national economic development and community welfare, determine the success of a country. Trust is also one of the major factors that affect how a country rules its people. With less trust of a people, additional levels of bureaucracy are added to include: 1) restrictions, 2) paperwork, and 3) levels of approvals needed to complete a transaction. With more trust in the country’s people, the less stringent the regulations seem to be which all goods to be more freely traded. This study also confirmed that specific cultural aspects may well have a positive and significant impact on economic development. While incorporating additional approvals and restrictions may increase the level of transparency and accurateness, the level of productivity and growth may decrease. In these instances, funding will be allocated towards completing the process rather than focusing on additional sales. As the discussion continues, each of the BRICS countries will be evaluated for potential impact to the U.S. economy based upon political, legal, environmental, financial, and cultural factors. Brazil 5 Brazil is listed as a rapid growing and emerging country. Brazil’s political system is cohesive, stable and sound. Brazil also has a strong financial system and stable democratic and political system which are utilized to grow the economy and decrease the poverty level. Brazil’s location is also a factor to economic growth. Brazil is close to the U.S. and has a peaceful relationship with surrounding countries. As the country continues to grow in significant way, it attracts a large, educated, European population looking for greater opportunities only increasing social and cultural growth (Payne, 2013). Russia While Russia emerged out from under a communist nation, the U.S.S.R, the political and social climate of the country remains under an authoritarian style of leadership. Russia did form a partnership with China and if Russia and the U.S. which may significantly impact the U.S. market. Russia’s economy is steadily growing and as the poverty level steadily declines the middle class expands. The culture, while rising out of poverty and corruption, is still faced with numerous environmental and legal challenges (Luthans & Doh, 2012). The main issue that Russia still faces is a high crime rate. India India’s political system is a relatively stable, democratic system that has experienced significant positive growth. In addition, India’s economic system grew significantly, primarily due to foreign investment in the categories of software and IT. While India’s economy may be growing at a significant rate, the country’s public debt is at 80 percent. India’s social, cultural, and environmental factors certainly play a significant role in the country’s growth. While India is a rapidly emerging, the country is limited by such things as clean water, power, and paved 6 roads. Until the infrastructure is upgraded, India may find it increasingly difficult to maintain the current level of growth (Luthans & Doh, 2012). China China’s economy and financial system are doing well. The financial controls that China has in place to ensure that the yuan remains stable are certainly part of the reason why the country is doing so well. By ensuring the country’s national savings model places a significant amount of it’s capital into a savings plan, the country can maintain it’s momentum (Passeri, 2015). China also purchased a large amount of U.S. dollars to leverage the yuan. The legal system is stable but social, cultural, and environmental factors will soon be affected by the large aging population. China implemented a one child per family policy to decrease the rapid population growth, and while the younger population is managed, the older population is not. In the near term, China’s population will become top heavy and the country’s burden will be placed on the young to support the older generation (Zhan, 2013). Resources will need to be moved to ensure the aging population receives appropriate care. South Africa Africa in general has been known as very poor and undeveloped areas. South Africa a component of the overall continent is more stable and wealthy than a significant portion of the northern areas. After the fall of the Apartheid, the country was finally able to begin to rebuild in a positive manner by working towards creating a stable political environment. The legal system is also becoming more stable. The cultural issues of the past racial separation are decreasing but are still active in the area. While there are still issues with the cultural environment, the economy is increasing in stability. The incountry trade agreements are being created and the 7 country is also beginning to do much better financially. The GDP rose by 4.9 percent each year from 2000 until 2008, doubling the previous year’s growth rate (Luthans & Doh, 2012). Conclusion The purpose of this week’s assignment was to complete an indepth analysis of the economic, political, and social environments of the BRICS countries. In addition, this paper will discuss opportunities and threats in the business environment and the application of global business theories and concepts for developing international business strategies in response to these conditions. Specifically, this week’s paper will discuss the following areas: 1) What influence will the BRICS countries (Brazil, Russia, India, China, & South Africa) have on the United States by 2025? 2) What are the relationships between China and Brazil? How do they influence each other? How do they influence the global economic community? 3) Provide a detailed evaluation of the role of each of the BRICS countries; by critically evaluating the political, economic, social, cultural, legal and environmental factors of each country? and 4) What impact will the BRICS countries have on the U.S. economy in the next 25 years? 8 References Cuesta, J. (2004). From economist to culturist development theories: How strong is the relation between cultural aspects and economic development? European Journal of Development Research, 16(4), 868. doi:10.1080/09578810412331332677 Dixon, P. (2009). 24 Emerging markets future trends: BRICS impact on developed world. Retrieved from http://www.globalchange.com/emergingmarketsfuturetrends bricsimpactondevelopedworld.htm Luthans, F., & Doh, J. (2012). International Management: Culture, Strategy, and Behavior 8th New York, NY McGrawHill Irwin Passeri, A. (2015). The evolving role of china in the global economy. Asian Studies Review, 39(1), 158159. Retrieved from http://www.tandfonline.com Payne, R. J. (2013). Global issues. New Jersey: Pearson Education, Inc. Zhan, H. J. (2013). Population Aging and LongTerm Care in China. Generations, 37(1), 5358 6p
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'