Skill Practice: Synthesizing Information

At university, you’ll be asked to combine information from multiple sources. This is called synthesizing information. You’ll do it every day in classes when you combine the information your professor says in lectures with what you’ve read. Sometimes, you’ll notice similarities and differences. For example, the professor might want to offer a slightly different perspective. Other times, the professor might assign different readings on the same topic and want you to synthesize the reading. Either way, the connections may be harder to understand.

Using a Know-Want-Learned (KWL) chart can help you make connections between readings and your own experiences. Before going to a lecture or starting another reading on a similar topic, you can write down what you already know about the topic and what you hope to learn. After listening or reading more, you can write down what you learned and how your understanding of the concepts may have shifted. The next two readings, labeled 6A and 6B, are about trends in global business. Before you read, fill out the KWL chart below. Write down what you know and what you want to learn about global business trends. After you read, make note of what you’ve learned.

Pre-Reading

Reading 6A: Trends in Global Competition^[1]

In this section, we will examine several underlying trends that will continue to propel the dramatic growth in world trade. These trends are market expansion, resource acquisition, and the emergence of China and India.

Market Expansion

The need for businesses to expand their markets is perhaps the most fundamental reason for the growth in world trade. The limited size of domestic markets often motivates managers to seek customers and markets beyond their national frontiers. The economies of large-scale manufacturing demand big markets. Domestic markets, particularly in smaller countries like Denmark and the Netherlands, simply can’t generate enough demand. Nestlé was one of the first businesses to “go global” because its home country, Switzerland, is so small. Nestlé was shipping milk to 16 different countries as early as 1875. Today, hundreds of thousands of businesses are recognizing the potentially rich rewards to be found in international markets.

Resource Acquisition

More and more companies are going to the global marketplace to acquire the resources they need to operate efficiently. These resources may be cheaper skilled labor, scarce raw materials, technology, or capital. Nike, for example, has manufacturing facilities in many Asian countries in order to use cheaper labor. Other companies might look to the developing world for not only labor, but cheaper materials, for their products although environmentalists maintain that those materials might be cheaper because they are less sustainably produced. On the other hand, Honda opened a design studio in southern California to put that “California flair” into the design of some of its vehicles. Large multinational banks such as Bank of New York and Citigroup have offices in Geneva, Switzerland. Geneva is the private banking center of Europe and attracts investments and capital from around the globe.

The Emergence of China and India

China and India—two of the world’s economic powerhouses—are impacting businesses around the globe, in very different ways. The boom in China’s worldwide exports has left few sectors unaffected. From garlic growers in California to jeans makers in Mexico, companies have seen the impact China can have on their business. In a similar way, India’s impact has altered business around the world.

The causes and consequences of each nation’s growth are somewhat different. China’s exports have boomed thanks in large part to foreign investment. Big manufacturers have been lured to China by, in part, low labor costs. The resulting increased production has pushed down prices, globally. Now manufacturers of all sizes, making everything from windshield wipers to washing machines to clothing, are scrambling to either reduce costs at home, or to outsource more of what they make to cheaper locales such as China and India¹⁶.

Indians are playing invaluable roles in the global innovation chain. Hewlett-Packard, Cisco Systems, and other tech giants now rely on their Indian teams to devise software platforms and multimedia features for next-generation devices. Google principal scientist Krishna Bharat set up the Google Bangalore lab complete with colorful furniture, exercise balls, and musical instruments—like Google’s Mountain View, California, headquarters—to work on core search-engine technology. Indian engineering houses use 3-D computer simulations to tweak designs of everything from car engines and forklifts to aircraft wings for such clients as General Motors Corp. and Boeing Co. Recently, experts have speculated that within five years India could overtake Germany as the world’s fourth-biggest economy. By 2050, China should overtake the United States as number one. By then, China and India could account for half of global output¹⁷.

An accelerating trend is that both China and India are becoming more important for companies around the world. China will stay dominant in mass manufacturing and is one of the few nations building multibillion-dollar electronics and heavy industrial plants while India is a rising power in software, design, services, and precision industry.

Reading 6B: The United Nations Sustainability Development Goals

Corporations like Albertsons, Unilever, Kimberly Clark, and Siemens are starting to act on the United Nations Sustainability Development Goals. For many years, through corporate social responsibility (CSR) programs, corporations have donated money and employee time to address various social and environmental problems, both globally and locally. The Carnegie Foundation and the Bill and Melinda Gates Foundation are examples of this commitment. While these efforts have achieved some progress in environmental protection, ethical business practices, building sustainable positive impacts, and economic development by organizations, they do require deeper and longer engagement. Because the benefit of this ethical behavior is difficult to quantify, the attention of business is often drawn back to the bottom line and profits.

In 2015, the United Nations member-nations adopted 17 resolutions aimed at ending poverty, ensuring sustainability, and ensuring prosperity for all. The aggressive goals were set to be met over the next 15 years.

1. End poverty in all its forms everywhere.
2. End hunger, achieve food security and improved nutrition, and promote sustainable agriculture.
3. Ensure healthy lives and promote well-being for all at all ages.
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.
5. Achieve gender equality and empower all women and girls.
6. Ensure availability and sustainable management of water and sanitation for all.
7. Ensure access to affordable, reliable, sustainable, modern energy for all.
8. Promote sustained, inclusive, sustainable economic growth; full and productive employment; and decent work for all.
9. Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.
10. Reduce inequality within and among countries.
11. Make cities and human settlements inclusive, safe, resilient, and sustainable.
12. Ensure sustainable consumption and production patterns.
13. Take urgent action to combat climate change and its impacts.
14. Conserve and sustainably use the oceans, seas, and marine resources for sustainable development.
15. Protect, restore, and promote sustainable use of terrestrial ecosystems; sustainably manage forests; combat desertification and halt and reverse land degradation; and halt biodiversity loss.
16. Promote peaceful and inclusive societies for sustainable development; provide access to justice for all; and build effective, accountable, inclusive institutions at all levels.
17. Strengthen the means of implementation and revitalize the global partnership for sustainable development.

Companies like the grocery store chain Albertsons recognize that a robust CSR program can enhance a corporation’s reputation, which can indirectly boost the bottom line. They used number 14 on the United Nations Sustainability Development list in collaboration with World Oceans Day to announce that they as a company pledged to meet the U.N. goals. “We recognize that the wellbeing of people and the sustainability of our oceans are interdependent. As one of the largest U.S. retailers of seafood, we are committed to protecting the world’s oceans so they can remain a bountiful natural resource that contributes to global food security, the livelihoods of hard-working fishermen and the global economy,” said Buster Houston, Director of Seafood at Albertsons Companies. The company is also committed to the concept of fair trade, which guarantees fair pay to producers, and was the first retailer to sell tuna with the fair trade seal.

Siemens, the German-based multinational, also supports the United Nations Sustainability Development goals, which they believe are based on their company values—responsible, excellent, innovative. They define sustainable development as the means to achieve profitable and long-term growth. In doing so, they align themselves with the goals of the UN’s 2030 Agenda for Sustainable Development.

Sources: Thane Kreiner, “Corporations and Social Entrepreneurship: A Shift?” https://www.scu.edu, accessed June 30, 2017; United Nations Sustainable Development website: http://www.un.org, accessed June 30, 2017; “Practicing Sustainability—in the Interest of Future Generations,” https://www.siemens.com, accessed June 30, 2017; “Albertsons Companies Commits to United Nations Sustainable Development Goals, Joins Influential Seafood Task Force,” Cision PR Newswire, http://www.prnewswire.com, June 6, 2017; Ingrid Embree, “How 17 Companies Are Tackling Sustainable Development Goals (and Your Company Can, Too),” Huffington Post,http://www.huffingtonpost.com, September 14, 2016.