MGT 304- International Business and Trade

International Trade and International Business are generally used synonymously, but they are not the same.

International trade - involves the exchange of goods and services between different countries of the world.

International business - trade of goods and services, capital, knowledge and technology across borders on a
global scale.

International business transactions - include contractual agreements that permit foreign firms to utilize
services, products and processes from different countries.

Difference between International Trade and International Business

International vs Domestic Business

1.Nationality of Buyers and Sellers:

People or organizations from one country are involved in domestic business whereas, in international
business, people and organizations of different countries take participation.

2. Nationality of other Stakeholders:

Stakeholders such as suppliers, employees, and shareholders belong to one country in domestic or internal
business, and in international business, they can be from different countries.

3. Mobility of Factor of Production:

The degree of mobility of factors of production like labor and capital is comparatively more within a country and
less across different countries. >>to realize all the gains from international exchange and globalization, countries
need to either trade freely or allow factors to move freely between countries.

Free trade, also called laissez-faire, a policy by which a government does not discriminate against imports or
interfere with exports by applying tariffs (to imports) or subsidies (to exports).

General Agreement on Tariff and Trade. Signed in 1947 by 23 countries, is a treaty minimizing barriers to
international trade by eliminating or reducing quotas, tariffs, and subsidies. It was intended to boost economic
recovery after World War II. became law on Jan. 1, 1948. The Phil. became a member in 1979.

The purpose of the GATT was to make international trade easier.

The GATT held eight rounds in total, from April 1947 to December 1993, each with significant achievements and
outcomes.

In 1995, the GATT was absorbed into the World Trade Organization (WTO), which extended it.

4. Customer Heterogeneity Across Markets:

Domestic markets are homogeneous but international markets are relatively less homogeneous due to
differences in language, culture, preferences, customs, etc. across countries.

Customer heterogeneity is variation among customers in terms of their needs, desires, and subsequent
behaviors.

Homogeneous customers – more or less identical in tastes and preferences.

5. Difference in Business Systems and Practices:

The difference in business systems and practices in international business is much more than domestic
business because different countries have different socio-economic development, economic infrastructure, and
market support services.

Because nation-states have unique government systems, laws and regulations, taxes, duties, currencies, cultures,
practices, etc. international business is decidedly more complex that business that operates exclusively in domestic
markets.

Business Systems and Practices include series of tasks or set of activities performed by a group of stakeholders
to achieve an organizational goal. The processes are performed by people or systems in a structured manner to
attain a pre-defined objective.

A system which is aimed at making sure everything is done right.

Step 1: Process Mapping. ...

Step 2: Record the Process. ...

Step 3: Send Process Recording to an Assistant. ...

Step 4: Establish Goals and Critical Factors. ...

Step 5: Review and Finalize. ...

Step 6: Delegate to Employees. ...

Step 7: Review Task and Metrics. ...

Step 8: Monitor Performance.

6. Political System and Risks:

 Domestic businesses have less impact on them from the political environment of the country because they
understand and can predict its impact on business operation whereas international businesses face a different
political environment across countries which are quite difficult to predict.

Political risk is the risk an investment's returns could suffer as a result of political changes or instability in a
country. Instability affecting investment returns could stem from a change in government, legislative bodies, other
foreign policymakers or military control.

Example of Political system and risks: Changes in government policies, new laws, regulatory changes, and
political instability are all examples of potential political risks in business.

7. Business Regulations and Policies:

Domestic businesses have to follow rules, regulations, and policies of a single country whereas international
businesses have to follow rules, regulations, and policies of multiple countries.

8. Currency Used in Business Transactions:

International business transactions involve the use of currencies of different countries whereas domestic
currency is only used in domestic business.

Scope of International Business

1. Merchandise Exports and Imports: International Business allows firms to export and import goods across
different countries.

2. Service Exports and Imports: With the help of international business, firms can offer services to people
belonging to different countries.

3. Licensing and Franchising: Firms can enter into international business using licensing and franchising.

Licensing permits - someone to use the intellectual property rights (IP) of a company. IP rights can be patent,
trademark, manufacturing technology of a product, and the method of selling a product. A license may be given
even for technical or business knowledge or so-called know– how. The license is different from the authorization.

Authorization - is transferring the IPR such as to work or to produce something. With the license the
intellectual property right usually remains with the owner named as licensors, and it is not taken from the one
who receives the license – licensee.

Franchising: a marketing system established between two countries or two companies on the basis of an
agreement. a method of distributing products or services involving a franchisor, who establishes the brand's
trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for
the right to do business under the franchisor's name and system.

4. Foreign Investments:

A firm can enter into international business by investing in firms located abroad in exchange for some financial
return.

Foreign investment occurs when foreign companies invest in domestic companies and seek active participation
in their day-to-day operations and key strategic expansion.

Anyone, regardless of nationality, can invest in the Philippines with up to 100% equity. A business with 60%
Filipino equity is considered a Philippine company, while one with more than 40% foreign equity is considered a
foreign-owned domestic company.

Benefits of International Business to Nations:

1. Earning of Foreign Exchange:

 International Business helps a country to collect and earn foreign currency from the investment offered by a
foreign firm in the domestic market. Foreign currency helps in meeting imports of any country from foreign
countries.

2. More Efficient Use of Resources:

International business allows firms to use the resources present in different countries more efficiently. Firms can
bring the newest technologies from which the resources can be utilized more efficiently.

3. Improving Growth Prospects and Employment Potentials:

By setting up new industries and businesses in different countries, the international business helps in improving
the economic growth and employment potential in those countries. Larger scale production contributes to the GDP
as well as generates employment.

4. Increased Standard of Living:

In the presence of an international business, people of any country can consume goods and services produced in
some other countries. It helps in improving the standard of living of those people and the country in general.

Benefits of International Business to Business to Firms:

1.Prospects for Higher Profits:

International business gives scope to firms a whole new market to target.

Firms can sell their products in markets where prices are relatively high and earn more profits.

2. Increased Capacity Utilization:

The products produced by a firm more than the demand in the domestic market can be sold to a foreign market
with the help of international business. The capacity to produce more can be utilized with an expansion in the
market.

3. Prospects for Growth:

Firms can improve the prospects of their growth by getting into the international market. The demand for a
certain product in the domestic market is limited but in the international market, firms can reach new highs.

4. Way Out to Intense Competition in Domestic Market:

When the competition in the domestic market increases, firms can move out of the domestic boundaries to find
a new market. By this, they can counter the intense competition in the domestic market.

5. Improved Business Visions:

Every firm’s vision is to grow, become more competitive, diversify and gain strategic advantage over its
competitors. The international business allows firms to grow and build themselves with greater prospects.

Modes of Entry into International Business

Exporting and Importing:

Exporting goods and services refers to sending them from the home country to a foreign country.

Importing goods and services means purchasing or bringing them from the foreign market to the home
country. This is the easiest way a firm can get into international business as it requires almost no investment in
setting up a production unit in the foreign country, only distribution channels are made to successfully import or
export goods. There are two ways a firm can export or import:
There are two ways a firm can export or import:

Direct Exporting/Importing: In Direct Exporting/Importing a firm directly deals with the customer/supplier of
the foreign country.
Indirect Exporting/Importing: In Indirect Exporting/Importing a firm doesn’t deal with the customer/supplier
directly but with the help of some middlemen.

2. Contract Manufacturing:

Type of international business where a firm establishes a contract with one or a few local manufacturers in
foreign countries to produce goods as per the firm’s specifications and requirements. It can be done in three ways:

It can be done in three ways:

Some intermediate products can be produced through contract manufacturing such as automobile
components from which final products can be made later.
Assembling of products such as laptops, computers, or mobile phones can be done through contract
manufacturing.
Complete manufacturing of products such as garments.

3. Licensing and Franchising:

Licensing and Franchising is another way a firm can enter into international business.

Licensing can be defined as a contractual agreement in which one firm (Licensor) allows another firm
(Licensee) of a foreign country to use its patents, copyrights, trade secrets, or technology. Licensee in return gives
some amount of royalty or commission to the licensor. When there is a mutual exchange of knowledge, technology
or patents happens between firms then it is called cross-licensing.

4. Joint Ventures:

A joint venture can be referred to as a unit jointly established by two or more two firms. It is a form of association
between two or more firms. A foreign firm collaborates with one or some domestic firms to set up a company
jointly owned by both or all of them. A joint venture may be brought up in three ways:

A foreign company buying a stake in a domestic company.

A domestic company buying a stake in an existing foreign company.
Both the foreign and domestic companies jointly establish a new firm.

5. Wholly Owned Subsidiaries:

When a foreign company establishes a business unit or acquires a full stake in any domestic company, then
they are called wholly-owned subsidiaries. Wholly owned subsidiaries are set by a foreign company to enjoy full
control over their overseas operations. A wholly-owned subsidiary in a foreign country may be established in two
ways:

Setting up of wholly-owned new firm in the foreign land, also called Green Field Venture.
Acquiring an established firm in a foreign country and using that firm to do business in a foreign country.
Citibank Philippines
Coca-Cola Beverages Philippines
Pespsi Cola Beverages Philippines
Delta Motors Corporation
Ford Motor Company Philippines
Manulife Philippines
McDonald's Philippines
Mitsubishi Motors Philippines

International Monetary System

refers to the system and rules that govern the use and exchange of money around the world and
between countries.
governs the rules for valuing and exchanging the currencies of each country.

Special Drawing Right (SDR)

an interest-bearing international reserve asset created by the IMF in 1969 to supplement other reserve
assets of member countries.
 based on a basket of international currencies comprising the U.S. dollar, Japanese yen, euro, pound
sterling and Chinese Renminbi.

The IMF created the SDR as a supplementary international reserve asset in 1969, when currencies were
tied to the price of gold and the US dollar was the leading international reserve asset.

The IMF defined the SDR as equivalent to a fractional amount of gold that was equivalent to one US
dollar.

In 1973, the IMF redefined the SDR as equivalent to the value of a basket of world currencies.

The SDR itself is not a currency but an asset that holders can exchange for currency when needed.

serves as the unit of account of the IMF and other international organizations.
Individuals and private entities cannot hold SDRs.
IMF members – and the IMF itself – hold SDRs and the IMF has the authority to approve other holders,
such as central banks and multilateral development banks, while individuals and private entities cannot hold
SDRs.

Role of the IMF and the WB

IMF’s key roles:

To promote international monetary cooperation.

To facilitate the expansion and balanced growth of international trade.
To promote exchange stability.
To assist in the establishment of a multilateral system of payments.
To give confidence to members by making the IMF’s general resources temporarily available to them under
adequate safeguards.
To shorten the duration and lessen the degree of disequilibrium in the international balances of payments
of members.

The World Bank Group includes the following interrelated institutions:

IBRD, which makes loans to countries with the purpose of building economies and reducing poverty.
IDA, which typically provides interest-free loans to countries with sovereign guarantees.
International Finance Corporation (IFC), which provides loans, equity, risk-management tools, and
structured finance with the goal of facilitating sustainable development by improving investments in the
private sector.
Multilateral Investment Guarantee Agency (MIGA), which focuses on improving the foreign direct
investment of the developing countries.
International Centre for Settlement of Investment Disputes (ICSID), which provides a means for dispute
resolution between governments and private investors, with the end goal of enhancing the flow of capital

Understanding How International Monetary Policy, the IMF, and the World Bank Impact Business Practices.

Businesses seek to operate in a stable and predictable environment by reducing risks and unexpected
issues that can impact both operations and profitability.
Global firms monitor the policies and discussions of the G20 and other economic organizations so that they
can identify new opportunities and use their leverage to protect their markets and businesses.
Global business in the private sector is heavily impacted by the IMF, the World Bank, and other
development organizations.
Many of the projects that the World Bank Group funds in specific countries are managed by the local
governments, but the actual work is typically done by a private sector firm.

International Economic Cooperation Among Nations

Economic cooperation

a component of international cooperation that seeks to generate the conditions needed to facilitate the
processes of trade and financial integration in the international arena by implementing actions with the
purpose of obtaining indirect economic benefits in the medium and long term.
Creation of the GATT, WTO

Regional Economic Integration

an agreement among nations to lower and eventually eliminate tariff and non-tariff barriers to the free
movement of goods and services among nations on a regional basis.
 refers to efforts to promote free and fair trade on a regional basis.

Regional Economic Integration

The four main types of economic integration:

a. Free trade.

The most basic form of economic cooperation where member countries remove trade barriers between
themselves.
Member nations are free to independently determine trade policies with non-member nations.

b. Customs union.

Provides for economic cooperation.

Barriers to trade are removed between member countries.
Members agree to treat trade with non-member countries in a similar manner.

c. Common market.

Allows for the creation of an economically integrated market between member countries.
Trade barriers and any restrictions on the movement of labor and capital between member countries are
removed.
There is a common trade policy for trade with nonmember nations, and workers no longer need a visa or work
permit to work in another member country of a common market.

d. Economic union.

created when countries enter into an economic agreement to remove barriers to trade and adopt common
economic policies.

The largest regional trade cooperative agreements are the European Union (EU), the North American Free Trade
Agreement (NAFTA), and the Asia–Pacific Economic Cooperation (APEC). The African Economic

The pros of creating regional agreements:

• Trade creation. These agreements create more opportunities for countries to trade with one another by
removing the barriers to trade and investment. Due to a reduction or removal of tariffs, cooperation results in
cheaper prices for consumers in the bloc countries. Studies indicate that regional economic integration significantly
contributes to the relatively high growth rates in the less-developed countries.

• Employment opportunities. By removing restrictions on labor movement, economic integration can help expand
job opportunities.

• Consensus and cooperation. Member nations may find it easier to agree with smaller numbers of countries.
Regional understanding and similarities may also facilitate closer political cooperation.

The cons of creating regional agreements:

Trade diversion. Member countries may trade more with each other than with non-member nations. This
may mean increased trade with a less efficient or more expensive producer because it is a member country.

• Employment shifts and reductions. Countries may move production to cheaper labor markets in member
countries. Similarly, workers may move to gain access to better jobs and wages. Sudden shifts in employment can
tax the resources of member countries.

• Loss of national sovereignty. With each new round of discussions and agreements within a regional bloc, nations
may find that they have to give up more of their political and economic rights.

The following are examples of Regional Economic Integration:

NAFTA (North American Free Trade Agreement)-An agreement among the U.S.A., Canada, and Mexico.
EU (European Union)-A trade agreement with 15 European countries.
APEC (Asian Pacific Economic Cooperation Forum) - This includes NAFTA members, Japan, and China.
NAFTA (North American Free Trade Agreement)

was signed in 1992 by Canada, Mexico, and the United States and took effect on Jan. 1, 1994.
NAFTA immediately lifted tariffs on the majority of goods produced by the signatory nations. It also calls
for the gradual elimination, over a period of 15 years, of most remaining barriers to cross-border investment
and to the movement of goods and services among the three countries.

EU (European Union)

is a political and economic alliance of 27 countries. : Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg,
Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
promotes democratic values in its member nations and is one of the world's most powerful trade blocs.
Nineteen of the countries share the euro as their official currency.
was created to bind the nations of Europe closer together for the economic, social, and security welfare
of all. It is one of several efforts after World War II to bind together the nations of Europe into a single entity.

APEC (Asian Pacific Economic Cooperation Forum)

is made up of countries, including the U.S., that promote free trade and sustainable development in
Pacific Rim economies.
engages in multiple micro causes, such as intellectual property rights and emergency preparedness, and has
many sub-groups that aim to advance policy and awareness.
has been fundamental in reducing tariffs, improving customs efficiency, and closing the gap between
developing and developed economies.
APEC's principal goal is to ensure that goods, services, capital, and labor can move easily across
borders. This includes increasing custom efficiency at borders, encouraging favorable business climates within
member economies, and harmonizing regulations and policies across the region.
The creation of APEC was primarily in response to the increasing interdependence of Asia-Pacific
economies.
The formation of APEC was part of the proliferation of regional economic blocs in the late 20th century,
such as the European Union (EU) and the (now-defunct) North American Free Trade Agreement (NAFTA).

The United Nations and the Impact on Trade:

Conflict between countries significantly reduces international trade and seriously damages national and
global economic welfare.
In general, global firms prosper best in peaceful times. The primary impact for businesses is in the areas of
staffing, operations, regulations, and currency convertibility and financial management.

• Staffing. It’s easier to recruit skilled labor if the in-country conditions are stable and relatively risk-free.

• Operations. In unstable environments, companies fear loss or damage to property and investment. For example,
goods in transit can easily be stolen, and factories or warehouses can be damaged.

• Regulations. Unclear and constantly changing business rules make it hard for firms to plan for the long term.

• Currency convertibility and free-flowing capital. Often countries experiencing conflict impose capital
controls (i.e., restrictions on money going in and out of their countries) as well as find that their currency may be
devalued or non-liquid.

Ethics in International Business

is the study and practice of business policies concerning potentially controversial subjects, including
corporate governance, insider trading, bribery, discrimination, and corporate social responsibility in a global
context.
It involves understanding and managing business conduct across different countries and cultures,
respecting local customs, and upholding human rights in all business operations.
Global Business Ethics.
constitute a global code of conduct – a set of principles that establishes ethical standards for employees and
businesses.
begins with a moral code of right and wrong, but modern business ethics has expanded to encompass
supporting social and environmental causes, and being a responsible member of the communities where the
company operates.
Example:

Bribery and corruption

In many countries, corruption can be prevalent in business transactions, where individuals or companies offer
bribes to secure contracts, permits, or favorable treatment.

For example, a multinational construction company bidding for a major infrastructure project in a developing
country may be approached by local officials who request a bribe in exchange for favorable treatment during the
bidding process.

The Organization of Economic Cooperation and Development (OECD) Convention on Anti-Bribery

stated that bribery is illegal not only in the target country, but also in the corporation’s home country.

Role of ethics in international business

It helps businesses build credibility, navigate complex legal landscapes, and avoid reputational harm.
Use of ethical principles helps companies cultivate long-term relationships, meet social and environmental
responsibilities, and thrive in the global marketplace.

Importance of ethics in international business

Business ethics is important in international business because it:

establishes trust and compliance with local laws.

It contributes to sustainable development and mitigates risks.
helps companies build credibility with stakeholders, navigate legal complexities, and avoid reputational
damage.
addresses social and environmental responsibilities, meeting ethical product and service demand.
businesses can foster long-term relationships, create a positive impact, and thrive in the global marketplace.

Principles and moral standards of international businesses:

Despite the difference in culture as well as the legal frameworks operating across countries, some common
elements of business ethics in international business include:

respect for human rights,

fair treatment of employees,
environmental sustainability,
anti-corruption,
respect for intellectual property,
respect for cultural diversity, and
social responsibility.

Stakeholder Analysis

A “stakeholder” is any individual, group, or institution who has a vested interest in the resources of the
project and/or who potentially will be affected by project activities and have something to gain or lose if conditions
change or stay the same.

Stakeholders’ opinions need to be considered in achieving project goals since their participation and
support are crucial to its success, thus the need for stakeholder analysis.

Stakeholder analysis is one of the key steps to establishing support when starting a project.
Reason for Stakeholder Analysis.

every project has stakeholders who have some sort of interest on the project.
helps you discover what your stakeholders need and expect from your project.
allows you to identify key stakeholders, the ones with a positive attitude towards your project and those who
might oppose it.
this will help in developing strategies (according to attitude) by which you can approach stakeholders
choosing the best types of communication to engage with them based on the value they see in the project.
work will be more productive, as you will know where/whom to allocate time and effort properly and
proactively address any potential risks or issues identified.
failing to engage with them can have a direct influence on the project’s outcomes.
to be able to engage with them successfully, there is a need to know exactly who they are, and that's when
stakeholder analysis comes in place.

Stakeholder analysis

is the process of collecting information about any person/s (stakeholder/s) that will be impacted by (or can
impact) the project.
Use survey questionnaires, Interview, FGD
Information: current level of knowledge, skills, and attitudes, preferences and goals, to measure their
satisfaction etc.

Benefits from analyzing stakeholders

1. Being inclusive

everyone is included - all those who are impacted by the project are considered.
everyone, regardless of their mental or physical abilities is understood, appreciated.
Everyone is expected to participate and contribute meaningfully.

2. Engaging effectively

grouping your stakeholders allows you to plan targeted communications for each group and will allow them to
engage more effectively.
Engaging stakeholders is crucial for successful strategic planning. It involves identifying, understanding and
involving people who have a stake in the outcome of the plan.
Effective stakeholder engagement management requires a comprehensive approach that includes ongoing
communication, listening, and collaboration.
stakeholder engagement helps organizations to proactively consider the needs and desires of anyone who has
a stake in their organization, which can foster connections, trust, confidence, and buy-in for your organization’s
key initiatives.
stakeholder engagement can mitigate potential risks and conflicts with stakeholder groups, including
uncertainty, dissatisfaction, misalignment, disengagement, and resistance to change.
Increase the chances of positive engagement. (encourage everyone to engage in something with intent and
purpose.)

3. Promoting understanding and alignment

alignment process involves developing a common understanding among the key stakeholders as to the
purpose and goals of the project and the means and methods of accomplishing those goals.
alignment towards a common goal regardless of position, regardless of length of service is essential for
easier communication as to the project goal and its benefits
building trust
seeking help in support of the project.
maintaining accountability across departments.

4. Anticipating issues, Common Issues:

Trying to align many different stakeholders:

stakeholders have varied interest in the project
a large number of different stakeholders can pull the project team in too many directions.
can be challenging for project managers
may introduce additional challenges to the project.
Competing priorities between stakeholders
Stakeholders carry their own expectations and goals into the project. Often, at least a few of these priorities
contradict or compete with each other. Some priorities may be personal, departmental, role-based, or reflect
differences in professional backgrounds.
Resource constraints. Source of conflict
team competing for resources
one project may be using resources that other stakeholders see as essential for their own projects.
Breakdowns in communication
Stakeholders resistant to share information
 data are not provided in a timely manner.

5. Gaining insights

stakeholders may share relevant opinions and views which can be used to improve the project (and as an
additional benefit, gain more of their support).
Understand whose support is most important and how you should prioritize your communication efforts to
get their support.

Stakeholder analysis in project management

Projects that lack engagement with the people who can influence their outcomes will always be in a struggle.
Having a plan is better that having NO plan at all. SA is a great tool to reassess issues so you can establish the
best course of action on how to tackle them.
the best way to avoid issues and even project failure is getting the stakeholders involved in the early stages of
the project.
Projects that lack engagement with the people who can influence their outcomes will always be in a struggle.
Having a plan is better that having NO plan at all. SA is a great tool to reassess issues so you can establish the
best course of action on how to tackle them.
the best way to avoid issues and even project failure is getting the stakeholders involved in the early stages of
the project.
Consider the duration of the project to stipulate how frequently you should conduct a new stakeholder
analysis.
Stakeholder analysis is not supposed to be a one-time process, especially if your project is long. People’s
interest in a project can change, and new stakeholders may be identified in a second analysis conducted six
months after the first one

SA is composed of three parts:

1. Identify,
2. Categorize and
3. Prioritize.

1.Identify the stakeholders.

Who are the stakeholders?

The stakeholders include anyone impacted by the project,
have an interest in the project
can influence the project.
Consider individuals, groups and organizations.
Local communities, residents, partners, suppliers, government, media and the organization’s employees,
investors and clients.

The stakeholders will have a lot of motivations that connect them with the project.

- The project manager must focus on these motivations.

*what interests them.

*their expectations regarding the project (ex. benefits)

This will help the project manager obtain a better level of understanding.

The more you learn about them, the better chances he has to provide them with relevant information that
addresses their concerns.
Stakeholder identification is important for the ff reasons:
determining the best way or ways to manage their expectations.
clear communications purposes during periodic updates or project progress meetings.
understanding and effectively addressing their expectations or concerns.

2. Categorize the stakeholders

The idea is to separate them into groups based on certain criteria, such as commonalities, interests or
motivations.
Categorizing stakeholders helps us to develop stakeholder management strategy related to three areas:

1) how much time to spend with each stakeholder;

2) the most important issues for each stakeholder; and

3) the level of importance of each stakeholder’s concerns.

The most common models used for this exercise are the Interest/Influence Matrix Model. The matrix considers
the levels of involvement and power stakeholders have on your project to classify them into four different
quadrants.

The X-axis represents a stakeholder’s level of power or influence over your project.
The Y-axis indicates their level of interest in your project.
Each quadrant (there are 4) on the map requires a different engagement strategy. A stakeholder’s position on
the map will determine how you engage with them, including the intensity and frequency of engagement.
Stakeholders positions in the map can change over the life of your project. Change in position means a change
in stakeholder engagement strategies accordingly.

High power, high interest:

These are your most important stakeholders, and you should prioritize keeping them happy with your project’s
progress.
can make or break your project. They have the most influence and involvement in the outcome.
Try to manage these stakeholders closely and do everything you can to engage and satisfy them.
Increase focus on your efforts on this group..update and consult with them regularly. This may include special
treatment, such as private information sharing or direct contact.
 Their expectations must always be closely managed

Include the major investors, and key decision-makers (executives).

High power, low interest

These stakeholders have little interest in the project but possess significant power to influence its success, they
have an active role in impacting the project.
Because of their influence in the company, you should work to keep these people satisfied.
since they haven’t shown a deep interest in your project, you could turn them off if you over-communicate
with them.
They can offer great insights and ideas for the project but whom you don’t need to always say yes to.

Examples include regulatory bodies: local authorities, government agencies, local community

Low power, high interest:

keep these people informed and check in with them regularly to make sure they are not experiencing
problems on the project.
these are the people who can have a lot of influence over the project but don’t want to be involved in the
details. Keep them up to date.
(includes colleagues or individuals in an unrelated department like department heads in other departments,
community groups, non-government organizations (NGOs), and local residents.)

Low power, low interest:

These stakeholders have minimal interest in the project and possess limited power to influence its success.

Examples include public, individuals or groups who might be affected by the project but do not have a direct
involvement, or even not know about the project.

3. Prioritize.

Since it’s likely that the project manager won’t be able to meet all needs at the same time.
Consider the POWER-INTEREST GRID: The quadrants show the categories where stakeholders fall. If the
stakeholder has low impact and low influence, they will naturally be a lower priority in engagement. The
opposite is true for those who have a high impact and high influence.
Prioritize the key stakeholder list based on

• their ability to influence change outcomes

• the extent to which they are impacted by the change

•their level of awareness of the program

• their level of support.

IDENTIFYING and PRIORITIZING the key stakeholders for the project is crucial for the following reasons:

ensuring their expectations are met,

their feedback is incorporated, and
their issues are resolved.
Some questions to ask statkeholders in case you want to gather information from them:
What’s your financial or emotional interest in the business’ success?
What do you think about the project?
What motivates you? What are your desires, needs, values or rights?
What resources do you control?
What information from the business do you value most?
What’s the best way to communicate information to you?
Who or what influences what you think about the business?
What can we do to gain more of your support?
What can we do to manage your opinion of the business?

Bit Torrent technology is a technology developed to enable users to share big files over networks. The files
to be shared are however patented, under copyright and owned by media houses. This then makes implementation
of the technology very tricky because whereas it may be useful and probably offer convenience, it could also lead to
infringement of copyright laws.

Stakeholder analysis involves identifying the parties that have interests in the project (Resource papers in
action, 2003). It is vital that as many stakeholders as possible be identified and be involved in the analysis so as to
increase the chances of success of the project in question (Larry, 2000). In the above stated case, the main
stakeholders were identified as:

The media houses.

The bit torrent technology inventors.
Media regulating agencies.
Projected beneficiaries of the bit torrent technology.
Network administrators.
Law enforcement agencies.
Copyright law enforcers.

Stakeholder analysis matrix (Nzaid tools, 2007)

Globalization Debate (GD)

Anthony Giddens the Director of the London School of Economics and Political Science stated that “GD is
about the consequences of globalization, not about the reality of globalization.“

more cross-border trade in physical commodities and an even more dramatic increase in trade in services and
information.
Giddens also stated that it is a fundamental mistake to conceptualize globalization in purely economic terms.
Globalization, is fundamentally social, cultural, and political, not just economic. Globalization is about macro-
systemic changes in the global marketplace and the nature of sovereignty, it is also about the here and now,
about transformations that affect our daily and emotional lives.
"Instantaneous communication changes almost everything. It invades the texture of everyday life, but it also
provides for the restructuring of other institutions.“
Giddens argued that the driving force behind globalization is the information revolution. "Instantaneous
communication which changes almost everything. It invades the texture of everyday life, and it also provides
for the restructuring of other institutions.
World Bank Report on globalization

Globalization has benefited an emerging “global middle class,” mainly people in places such as China, India,
Indonesia, and Brazil, along with the world’s top 1 percent. But people at the very bottom of the income ladder,
as well as the lower-middle class of rich countries, lost out.
The top 1 percent of the world’s earners were big winners. Their real income went up by more than 60 percent
during the 20-year period. In absolute terms, they saw their incomes increase by nearly $23,000 per capita per
year, compared with some $400 for those around the median.
By contrast, incomes were almost stagnant among the world’s poorest 5 percent, despite the fact that real
income did increase for the bottom and the second-lowest deciles.
Either poor countries will become richer, or poor people will move to rich countries