Managing the Global Environment

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  MANAGING THE GLOBAL ENVIRONMENT   THE CHANGING GLOBAL ENVIRONMENT  Global organizations are organizations that operate and compete in more thanone country.  Managers cannot ignore the global environment except at their  peril. They will need to globalize if they want to make it in the 21  st  century. Their managers must understand the global forces and how these factors give rise to opportunities and threats. Traditionally, managers regarded the global environment as closed   —  markets and countries isolated from one another. NowitisclearlyOPEN!   Today,managersregardtheglobal environmentasasourceof importantopportunitiesandthreatsthattheymustrespondto.  Theynowviewtheglobalenvironmentasopen  —  anenvironmentinwhichtheyarefreetobuygoodsfromandsellgoodstowhichevercountriesthey choose.Whathavebeenthefactorsthathaveopenedupthisworld marketplace?Oneisclearlythefallof  theBerlinWallin1989.Globalorganizationsarefreetoestablishforeignsubsidiariestobecomestrongworldcompetitors.  Declining Barriers to Trade and Investment: During the 1920s and 1930s, many countries erected barriers to international trade in the belief that this was the best way to promote their economic well being. One barrier was the tariff  , a tax that a government imposes on imported or exported goods. The aim of import tariffs is to protect domestic industries and jobs from foreign competition.Often the result is a series of retaliatory moves as countries raise barriers against each other. In the 1920s this behavior depressed world demand and helped usher in the Great Depression of the 1930s .Rather than protecting jobs, governments ultimately reduced employment and undermined economic growth.
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