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lled workers in advanced countries declines as supply for unskilled labour exceeds demand. ? Companies move to countries with fewer labour and environment regulations. – Most panies are ethical? – Regulations can be built into free trade agreements – A well treated labour force is a productive one. ? Loss of sovereignty. – Super national anizations WTO. 114 GLOBALIZATION NEGATIVE ? Countries markets / market structures are different. – . Cultural, political systems, stage of economic development ? Range of mercial and technical problems are wider and more plex. – How best to anize production ? Government intervention in trade and investment creates problems . local content requirements, quotas etc. ? Firms can exaggerate the attractiveness of foreign markets. – focusing on consumer wealth and propensity to consume which place too much emphasis on sales. ? Distance has cultural, administrative or political, economic and geographic dimensions. INTERNATIONAL VS DOMESTIC BUSINESS Implications for International Business Strategy The CAGE Distance Framework ?Cultural Distance –Different languages –Different ethnicities –Different religions –Different social norms ?Geographic Distance –Physical remoteness and/or lack of a mon border –Size of country –Weak transportation munications links ?Administrative/Political Distance –Absence of colonial ties –Absence of political association or hostility –Institutional differences –Trade Barriers ?Economic Distance –Differences in consumer ines –Differences in cost and quality of: natural, financial or human resources。 Infrastructure, information or knowledge Principle Learning Objectives revisited Have you developed an understanding of international business and the globalization of markets and production. Have you developed an understanding of the principle drivers of globalization and the implications of each for international business practice. Have you developed an understanding of the positive and negative effects of globalization. Have you developed an understanding of the critical challenges facing multinational enterprises peting in global and regional markets. Have you developed an understanding of the implications of all of the above for international business strategy and practice.