What is Globalization? Globalization can be though of in two ways. The first way is to discuss it at a country level looking at the ration of imports vs. exports. A country with a rapidly growing exports is expanding. The concept of globalization can be expanded to the world economy as well. Not only do you consider the amount of finished good traded between counties but resources such as people and investments. (Sawyer & Sprinkle, 2006, pp 13 & 16)
What does Mexico have to gain and lose from companies operating in Mexico?
According to AT Kearney, Mexico is the 24 ranking Global Retail Development county. (AT Kearney, 2005). By increasing the number of jobs available to Mexico, this can help increase it’s attractiveness for company’s to do business and expand into Mexico. In addition, the size of the world economy is measures by the sum of the GDP (Gross Domestic Product) By a company operating in Mexico, this will increase the country’s GDP. (Sawyer & Sprinkle, 2006, pp 4)
What does the U.S. have to gain and lost from a company operating in Mexico?
Loss of jobs is the most that the U.S. has to lose from a company operating in Mexico. In some cases there can be a lost of quality control. In most cases these are lower paying jobs that move to Mexico thus creating a pool of unskilled workers. In addition the United States GDP will drop due to outsourcing in other countries.
How does the macroeconomic stability of that host country affect multinational corporation?
A stable macroeconomic country is important when a country wishes to trade globally, it needs to have a stable financial market. ((Sawyer & Sprinkle, 2006, pp 9, passport (Maddison, 2001)). “The dollar is the dominant vehicle currency for transactions in the world economy.” ((Sawyer & Sprinkle, 2006, pp 9, passport (Maddison, 2001))
Is it economically efficient for the U.S. to move low-skilled jobs to Mexico?
It can be economically efficient for the U.S. to move low-skilled jobs to Mexico, the reason being it can keep costs low for the company, and a company, can pass those savings onto the consumer. In addition it can help develop our Neighboring Country Mexico.
What roles do cross-cultural communication, cooperative decision-making, and collaborative problem solving play in multinational corporation management?
Management can run into several problems dealing with communication, decision-making and collaborative problem soling in a multinational corporation. Language may become issue depending on the country whereas the company may need to have translators on their staff. In addition different cultural may pose a problem as well. Management may need to address this. For instance in Mexican companies don’t work on Sunday’s and it is typically for Mexican’s to take a siesta in the afternoon.
A T Kearney, 2005, The 2005 Global Retail Development Index TM . [Electronic Version], retrieved from http://www.atkearney.com/main.taf?p=5,3,1,110,1 on October 7, 2005. Figure 1
Angus Maddison, The World Economy: A Millennial Perspective, Paris: Organization for Economic Co-Operation and Development, 2001, Tables B-18 and F-2
Sawyer, W.C., & Sprinkle, R.L. (2006 & 2003). International Economics, Second Edition. 2003 by Pearson Education, Inc., Upper Saddle River, New Jersey.