Study Analysi The Global Environment The global environment of business is so important that we show it as surrounding all other environmental influences. Two important changes here are the growth of global competition and the increase of free trade among nations. +1.6 MPM World trade, or globalization, has grown thanks to the development of efficient distribution systems and communication advances such as the Internet. Globalization has greatly improved living standards around the world. China and India have become major U.S. competitors. Shop at Walmart and most other U.S. retail stores, and you can't help but notice the number of "Made in China" stickers you see. Call for computer help, and you are as likely to be talking with someone in India as someone in the United States. China has become a key to success for even Hollywood and the movie business. However, world trade has its benefits and costs. War and Terrorism War and terrorism have drained trillions of dollars from the U.S. economy. Some companies-like those that make bullets, tanks, and uniforms- have benefited greatly. Others, however, lost workers to the armed forces, and still others (e.g., tourism) have grown more slowly as money was diverted to the war effort. The threat of more wars and terrorism leads the government to spend even more money on spying and the military. Such expenditures are subject to much debate. The increased unrest in the world adds great uncertainty. This uncertainty is considered by some to be the biggest risk in business. It is difficult to plan when there are so many unknown factors such as how changes in military policy will affect the economy. The threat of terrorism also adds greatly to organizational costs, including the cost of insurance. In fact, some firms are finding it difficult to get insurance against terrorist attacks. Security, too, is costly. Airlines, for example, have had to install stronger cockpit doors and add more passenger screening devices. Like all citizens, businesspeople benefit from a peaceful and prosperous world. One way to lessen international tensions is to foster global economic growth among both profit-making and non-profit organizations. As businesses expand to serve global markets, new jobs will be created in both manufacturing and service industries. Global trade also means global competition. The students who will prosper will be those prepared for the markets of tomorrow. Rapid changes create a need for continuous learning, so be prepared to continue your education throughout your career. You'll have every reason to be optimistic about job opportunities in the future if you prepare yourself well. Case Study Questions: Please critically review the case study and answer following questions in your own words. Critical Thinking Questions 1. In your opinion why even small businesses feel increasing pressure of global competition? 2. Describe in what ways, China and India have become major U.S. competitors? 3. In your own words describe how the US war on terrorism has increased uncertainty and risk in global business? 4. In your own words describe how threat of terrorism can influence the organizational costs of global businesses? 5. Describe how peaceful global business environment can benefit all citizens and businesspeople