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Global Dimensions of Management
Management 10/e - Chapter 5 2
Planning Ahead — Chapter 5 study questions
What are the management challenges of globalization?
What are global businesses and what do they do?
What is culture and how does it impact global management?
How can we benefit from global management learning?
Management 10/e - Chapter 5 3
Study Question 1: What are the management challenges of globalization?
Key concepts in the challenges of globalization: Global economy
Globalization
International management
Global manager
Management 10/e - Chapter 5 4
Study Question 1: What are the management challenges of globalization?
Global economy Resource supplies, product markets, and business competition are worldwide, rather than local
Globalization The process of growing interdependence of these components in the global economy
Management 10/e - Chapter 5 5
Study Question 1: What are the management challenges of globalization?
Global management• Management in organizations with business interests in more than one country
Global manager Informed about international developments Transnational in outlook Competent in working with multicultural people
Aware of regional developments in a changing world
Management 10/e - Chapter 5 6
Study Question 1: What are the management challenges of globalization?
Global businesses• Conduct for-profit transactions of goods and services across national boundaries
Reasons why businesses go global: Profits Customers Suppliers Capital Labor
Management 10/e - Chapter 5 7
Study Question 1: What are the management challenges of globalization?
Market entry strategies involve the sale of goods or services to foreign markets but do not require expensive investments.
Types of market entry strategies:Global sourcing Exporting Importing Licensing agreement Franchising
Management 10/e - Chapter 5 8
Figure 5.1 Common forms of global business—from market entry to direct investment strategies.
Management 10/e - Chapter 5 9
Study Question 1: What are the management challenges of globalization?
Global sourcing the process of purchasing materials or services around the world for local use
Exporting selling locally made products in foreign markets
Importing buying foreign-made products and selling them domestically
Licensing agreement one firm pays fee for rights to make or sell another company’s products
Franchising a fee is paid for rights to use another firm’s name and operating methods
Management 10/e - Chapter 5 10
Study Question 1: What are the international business challenges of globalization?
Direct investment strategies require major capital commitments but create rights of ownership and control over foreign operations.
Types of direct investment strategies: Joint ventures
operates in a foreign country through co-ownership by foreign and local partners
Strategic alliances a partnership in which foreign and domestic firms share resources and knowledge for mutual gains.
Management 10/e - Chapter 5 11
Study Question 1: What are the international business challenges of globalization?
Types of direct investment strategies: Foreign subsidiaries
o local operation completely owned by a foreign firm
Greenfield investment - builds an entirely new operation in a foreign country
Foreign direct investment. building, buying or buying part ownership of a business in another country.
Insourcing job creation through foreign direct investment
Management 10/e - Chapter 5 12
Study Question 1: What are the international business challenges of globalization?
Criteria for choosing a joint venture partner: Familiarity with your firm’s major business.
Strong local workforce. Future expansion possibilities. Values its customers Strong local market for partner’s own products.
Good profit potential. Sound financial standing.
Management 10/e - Chapter 5 13
Study Question 1: What are the international business challenges of globalization?
Complications in the global business environment: Political risk
the potential loss in value of a foreign investment due to instability and changes in host country
Local legal systems complex and unfamiliar laws can create problems
World Trade Organization resolves trade and tariff disputes among countries.
Protectionism can complicate global trading relationships.
Management 10/e - Chapter 5 14
Study Question 1: What are the international business challenges of globalization?
Regional Economic Alliances NAFTA – North American Free Trade Agreement
CAFTA – Central American Free Trade Agreement
EU – European Union APEC – Asia Pacific Economic Cooperation
SADC – Southern Africa Development Community
Management 10/e - Chapter 5 15
Study Question 2: What are global businesses and what do they do?
Types of global businesses:
Global corporation MNC (multinational corporation) with extensive business operations in more than one foreign country
Transnational corporation MNC (multinational corporation) operates worldwide on a borderless basis
Management 10/e - Chapter 5 16
De acuerdo a su estructura, las empresas multinacionales pueden ser clasificadas en:
Corporaciones integradas horizontalmenteTienen bases de producci en diferentes pa�es pero producen el mismo o muy similar producto. (ejemplos McDonald's, United Fruit Company y BHP Billiton)
Corporaciones integradas verticalmentePrincipalmente producen en ciertos pa�es bienes intermedios, que sirven de abastecimiento para la producci final en otros pa�es (ejemplo: Timex, General Motors y Adidas)
Corporaciones diversificadasProducen diferentes bienes o servicios en diferentes centros de producci a nivel internacional. Por ejemplo, Alstom; Altria Group; Novartis (productora de medicinas y otros productos qu�icos, alimentos, pesticidas, semillas, etc) y Samsung (no solo productos electricos pero tambi駭 industria pesada, entretenimientos, servicios comerciales y financieros, venta al plico, etc)
Management 10/e - Chapter 5 17
Figure 5.2 What should go right and what can go wrong in MNC-host country relationships.
Management 10/e - Chapter 5 18
Study Question 2: What are global businesses and what do they do?
Ethical issues for MNCs: Corruption — illegal practices that further
one’s business interests.
Sweatshops — employing workers at low wages for
long hours and in poor working conditions.
Child labor — full-time employment of children
for work otherwise done by adults.
Sustainable development — meeting current needs
without compromising future needs.
Management 10/e - Chapter 5 19
Study Question 3: What is culture and how does it impact global management?
Culture The shared set of beliefs, values, and patterns of behavior common to a group of people.
Culture shock Confusion and discomfort a person experiences in an unfamiliar culture.
Cultural intelligence The ability to adapt and adjust to new cultures
Ethnocentrism Tendency to consider one’s own culture as superior to others.
Management 10/e - Chapter 5 20
Study Question 3: What is culture and how does it impact global management?
Stages in adjusting to a new culture: Confusion
Small victories
The honeymoon
Irritation and anger
Reality
Management 10/e - Chapter 5 21
Study Question 3: What is culture and how does it impact global management?
Popular dimensions of culture: Language
Low-context cultures and high-context cultures
Interpersonal space proxemics
Time orientation Monochronic cultures and polychronic cultures
Religion Contracts and agreements
Management 10/e - Chapter 5 22
Study Question 3: What is culture and how does it relate to global diversity?
Project GLOBE’s research on leadership practices across cultures
Inhibitors of leadership success
Being a loner Acting uncooperative Being irritableActing autocratic
Management 10/e - Chapter 5 23
Study Question 4: How can we benefit from global management learning?
Comparative management How management systematically differs
among countries and/or cultures.
Global managers Need to successfully apply management
functions across international
boundaries.
Management 10/e - Chapter 5 24
Study Question 4: How can we benefit from global management learning?
Are management theories universal?
U.S. management theories may be
ethnocentric.
Participation and individual performance
are not emphasized as much in other
cultures.
Not all Japanese management practices
can be applied successfully abroad.
Management 10/e - Chapter 5 25
Figure 5.4 Nine cultural dimensions used by Project GLOBE researchers.1.-Da dos ejemplos de empresas que usen las siguientes estrategias y describe por que.
Global sourcingExportingImportingLicensing agreementFranchising
2.-De acuerdo a su clasificacion da 3 ejemplos diferentes a los vistos de empresas multinacionales.
3.-Identifica las nueve dimensiones identificadas por el proyecto clobe para el estudio delas diferencias culturales y ejemplifica a que se refieren.
Entrega en una hoja impresa al comienzo de la clase el miercoles 14 de octubre. Si no cuenta con nombre impreso no se aceptara el trabajo.