Chapter Discussion

Understand the influence international organizations have on international businesses.
International organizations can have profound influence on businesses and business-people worldwide. Most of the organizations discussed in this chapter are organizations of governments. As a result, they often speak for their member governments and can have significant power over businesses.

Explain the activities of the United Nations in the economic and social fields as well as those as a peacekeeper/peacemaker in the world’s trouble spots.
The UN organization consists of (1) a 15-member Security Council, of which 5 are permanent members, which is responsible for the UN’s peacekeeping operations, (2) the General Assembly, of which every country is a member and in which every country has one vote, and (3) specialized agencies that conduct studies and assist member-countries in many fields.

Explain the three major parts of the World Bank: its regular loan window, its International Finance Corporation, and its International Development Association.
The World Bank lends money to developing countries for projects and has begun to insist that the borrowers put their economic houses in order as a condition for getting loans. The International Finance Corporation, a very successful arm of the Bank, encourages private business in developing countries.

Explain the original and changed activities of the International Monetary Fund.
The International Monetary Fund helps developing countries with balance-of-payments deficits and cooperates with the World Bank’s efforts to correct borrowers’ fiscal and monetary policies. It began loan renegotiation procedures that have helped deal with the sovereign debt crisis that came to light in the 1980s.

Understand the importance of the World Trade Organization to world business and trade.
The WTO attempts to remove trade barriers worldwide.

Understand the European Union and how it affects business.
The EU is a supranational entity with 15 European member-nations. Its purpose is to integrate the economies of its member-nations, creating a trading region where goods, services, people, and capital move freely. In recent years, the EU has made major steps toward political union as well.

Understand the North American Free Trade Agreement and its impact on business.
NAFTA was ratified by Canada, Mexico, and the Unites States. Negotiations are afoot to admit all Western Hemisphere countries, and some want to open it to the world. However, NAFTA’s potential may not be realized because the U.S. government lost interest and its leadership position in enlarging membership. Into the resulting void has stepped Mercosur, led by Brazil. The EU has approached Mercosur to negotiate free trade between their areas.

Know about the Organization for Economic Cooperation and Development and its use as a source of valuable information.
The OECD is an excellent source of research on many subjects. New countries are joining as they become more market oriented democracies.