Subjects:
Business and Information Technology, Economics
Material Type:
Lesson Plan
Tags:
Article, Business Trends, Classroom Activities, Classroom Discussions, Global Business, Global Economy, Reading, Report, Trends
License:
Creative Commons Attribution Non-Commercial
Language:
English
Media Formats:
Downloadable docs

Education Standards

How the Global Economy Affects Domestic Businesses - Lesson and Activity

Overview

This lesson focuses on the current business trend of how the global economy affects domestic businesses and how this trend impacts the workplace. First, use the report to teach the concept to students and to find classroom implications. Then, lead the class in discussion and activities. A downloadable document of the action brief can be found in the Resource Library. For more action briefs such as this one, visit mbastatesconnection.mbaresearch.org and select "Action Briefs" under "Curriculum/Instruction."

Read the action brief.

Instruct students to read the action brief, or read it together as a class. 

Read the action brief below:

How the Global Economy Affects Domestic Businesses

It is a small world . . . after all. This smallness is reinforced when economic ripples are felt throughout the world. This briefing focuses on how the global economy affects domestic businesses. 

Workplace Implications

A global economy presents opportunities and challenges to business. It provides opportunities for new, untapped markets, thereby increasing the level of production and consumption. It can lower the cost of production and the prices consumers pay. Since businesses can focus on maintaining and selling specific inventories vs. a wide variety of inventories, they can take advantage of economies of scale, making specialization profitable.  A global economy also provides access to labor with needed skillsets, regardless of where the skillsets are located.

While China’s economy was growing at unprecedented rates, its businesses were buying up commodities that would be used in production. This drove up commodity prices, making it costlier for U.S. businesses to obtain needed resources. As China’s growth rate slowed and it shifted to a service focus, the resources’ prices decreased.
  
When the value of one country’s currency increases relative to those of other countries, challenges crop up. This situation is currently playing out with the devaluation of the euro and the Chinese yuan. When compared to the value of the U.S. dollar, it’s less costly to buy from businesses in those countries—even with the addition of shipping costs. In turn, U.S. exports decrease.  This negatively affects businesses’ bottom line and eventually employment rates.

Business leaders need to apply a global frame of reference when forecasting, strategizing, and making business decisions. Without that focus, businesses can be blindsided by economic challenges and miss out on economic opportunities. 

 

Class Discussion

Students often have a very narrow view of the world—if “it” isn’t happening locally, “it” doesn’t matter. Broaden students’ world view by discussing world events. Find one or more several events and share them with students. Then, have students reflect on and discuss how the events can potentially affect local businesses. Have students share their ideas with the class. 

Your instructor will share several current world events with you. Reflect on and discuss how these events could potentially affect local businesses in your community. Share your ideas with your classmates.