#1

UN (1945): United Nation (preserve peace and security)

GATT: The General Agreement on Tariffs and Trade

WTO: World Trading Organization (policing world trading system)

IMF: International Monetary Funding (overview monetary system)

WB: World Bank [lender of last resort (too much debt that can’t lend money from anywhere anymore)]

G20: an intergovernmental forum comprising 19 countries and the European Union (EU) (98% of the
world’s GDP)

#2
2 factors driving the move towards greater globalization:

 Decline in barriers to free flow of goods, services and capital

 Technological changes (Internet, communication, transportation)

Role of technological change:

- Implication of the globalization of market

 Low cost comm networks help create electronic global marketplace
 Low cost transportation makes it economical to ship products around the world
 A reduction in cultural distance
 A convergence of consumer tastes and preferences
- 4 trends:
 The changing world output and world trade picture (increase the trade)
 The changing foreign direct investment picture (developing countries are increasing in
importing FDIs)
 The changing nature of multinational enterprise (MNE)
 The changing world orders

BRIC (Brazil, Russia, India, China and South Africa)

Globalization for and against

#3
Mid-term:
- Globalization:
 Of market
 Of production
- Global institutions
- Globalization debate
 - Changing demographics of the global economy
National differences in political economy - political, economic and legal systems
- Interdependence, interact and influence each other
Political system: the system of government in a nation

Can be assessed in terms of the degree to which they:

- Emphasize collectivism as opposed to individualism

- Are democratic or totalitarian (độc tài)

Collectivism: a system that stresses the primacy of collective goals over individual goals

- Can be traded to Greek philosopher Pluto

- Today, are supported by socialists

When is empathized, needs of the society as whole are generally viewed as being more important than
individual freedoms

e.g.: Communist countries before 1970: Russia – Soviet Union, Eastern countries, South American,
Vietnam, China, Cuba, Laos, etc.

3 worlds in 1 planet

- 1st world: capitalist countries (US, Western Europe)

- 2nd world: communist
- 3rd world: neutral

Socialism:

 Modern socialists trace their roots to Karl Marx

 Advocates state ownership of the basic means of production

In 20th century -> splits into communists (could only be achieved through revolution and totalitarian
system) and democrats (worked to achieve the same goals by democratic means, no violence…)

Individualism: suggest individuals should have freedom over their economic and political pursuits

- Stresses:
 Individual freedom and self-expression
 Let people pursue their own self-interests -> achieve the best overall goods for society
 Democratic systems and free markets

Democracy:

- Individuals’ right to freedom of expression, opinion and organization

- A free media
- Regular elections (all citizens are allowed to vote)
- Limited terms for elected representatives
 - Nonpolitical state bureaucracy, police force and armed service

Totalitarianism: form of government in which one person/political party exercises absolute control over
all spheres of human life, the opposite ones are prohibited

President

Court Congress

What happened to Detroit? (nghe lại)

Reasons:

Decrease in population (lack of diversify industry, too much reliability to automobile industry ->
outsourcing happens -> declined job)

Competition from other countries (Korea, Japan, etc.)

Automation

Economic systems:

Market economy:

- Privately owned
- Goods and services of a country and the quantity are determined by the supply/demand rules

Command = ‘central planned’:

- Goods and services are managed by the government

- Command economies: Cuba, North Korea, Viet Nam (1986 – Đổi Mới)

Mixed economy:

- Includes some elements of a market economy and some elements of a command economy
 Governments tend to own firms that are considered important to national security
 Governments take over troubled firms considered vital to national interests
- The number of mixed economies in the world today is falling

Pros and cons of market economy and command economy (mid-term)

Socialist - oriented market economy (mid-term)

Open international trade (FDI)

Domestic reform

 Result: poverty fallen to 14%, people can run new businesses -> diversify in brands

Legal system:
Common law: case US, UK, India, etc.

- Based on tradition, precedent and custom

- Found in most of Great Britain’s former colonies, including the US

Differences with civil law: everything in civil law is very straightforward, judge and lawyer are very
important in common law

Civil law: law VN, Russia, etc.

- Based on detailed set of laws organized into codes

- Found in more than 80 countries (Russia, Vietnam, Germany, etc.)

Theocratic law: Islamic

- Based on religious teachings

- Islamic law is the most widely practiced

Property rights and corruptions

- The legal rights over the use to which a resource is put and over the use made of any income
that may be derived from that resource
- Property rights can be violated through:
- Private action: theft, piracy (ăn cắp bản quyền), blackmail
- Public action: public officials,
- Corruptions is present in all countries in some degree, however when a country has a high level
of corruption:
 FDI falls
 International trade falls
 Economic growth falls

The protection of intellectual property:

- Intellectual property: property that is the product of intellectual activity

 Patent
 Copyright
 Trademark



Differences between case (common) law and statutory law

Tend to be instructive,

Judge refers to the past and make decisions

2/3 world population live in common law

Common law based on judge passed

150 countries follow civil law system and 80 follow common law system

#4
Market economy is better for financial developing

Innovation and entrepreneurship help increase economic activity

- Require strong property rights

o Individuals and businesses must have the opportunity to profit from innovate ideas

States in transition:

- Late 1980s, a wave of democratic revolutions swept the world -> many totalitarian regimes
collapsed
- Has been a move away from centrally planned and mixed economies towards free markets

Nature of economic transformation: 3 distinct activities

- Deregulation
- Privatization
- Creation of legal system to protect property rights

1991 reform

starts on july 1st : increases by 9%

licensing abolished (july 24)

closed economy

high tariffs (300%)

uncompetitive market

license needed to conserve foreign exchange

government set exchange rate, bank deposit and lending rates

-> no market economy

1980, eye-opening eighties

1980-81: gross fiscal deficit

90s: creation of markets: foreign exchange market

Reduce on tariffs

rise of FII, capital account liberalized

July 1991: a momentous month

Relationship b/w culture and cost of doing business in country/region

Cross-cultural literacy

Culture not static; actions of MNE can contribute to culture

Some differences example:

Food

Clothes

Personal distancing

Culture: A system of norms and values that are shared among a group o’ ppl and that when taken
together constitute a design for living

Society – a group o’ ppl who share a common set o’ values and norms

Values & norms:

Why is culture important?

 - Must answer a limited number of universal problems, that the value-based solutions are limited
in number and universally known, and that different cultures have different preferences among
them
- Disrespecting cultural differences may lead to confusion, termination in business relations, and
sometimes even physical harms

How are culture, society and nation-state related?

- Are not strictly one-to-one

- A culture can embrace several nations
- Nation-states are political creations (can contain >= 1 culture)

Determinants of culture:

- Social structure
- History
- Geography
- Education
- Language
- Political & economic philosophy
- Religion

Social structure:

- A society’s basic social organization

-

Confusianism

Shintoism

Sikism

Folk religions

Culture and workplace:

- Hofstede’s dimensions of culture:

 Power distance
 Individualism vs collectivism
 Uncertainty avoidance
 Masculinity vs feminity

Ambiguity = dubious, vague (mơ hồ)

Does culture change? Yes. It evolves over time

Factors affecting the change of culture: technology, crisis, etc.

Implications of cultural differences for managers:

 - Important to develop cross-cultural literacy
- Avoid being ill-informed
- Guard against ethnocentrism

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nationalize (quốc hữu hóa) ≠ privatization (tư nhân hóa)

Market potential index (MPI)

7 main instruments of trade policies: tariffs, subsidies, import quotas, voluntarily export restraints, local
content requirements, antidumping policies, countervailing duties (thuế đối kháng)

EVFTA: