Module 1 IB 2nd Sem

7/27/2019 Module 1 IB 2nd Sem

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The International Business

Environment

Module 1


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International Business

Operations of the firms with Interests

in Several countries

All commercial transactions (Pvt. &Govt.) between two or more countries

may or may not be for profit

Sales, Investment & Transportation


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Scope

To Attain

Competitiveness

Successful Global Presence

Growth & Stability in Global Market

Why International Business ?

To Expand Sales To Acquire Resources

To Minimize Risks


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Reasons for Recent Growth

Rapid Increase in the Expansion ofTechnology

Liberalization of Cross-bordermovements

Development of Supporting Services

Consumer Pressures Increase in Competition (Local &

Global)


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External Influences on IB

Objectives

Strategy

Means

Physical & Socialfactors

Countervailing

Forces

CompetitiveEnvironment


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Module Coverage

Culture

Cultural Awareness

Dynamics of culture

Behavioural Practices affecting

business

Strategies dealing with cultural

differences


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The cultural Environment

Culture The specific learned norms

based on attitudes, beliefs and values

that exist in every nation as an integralpart of external environments for any

business.

Cultural awareness


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Coty Beauty
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Dynamics of Culture

The Nation as a Point of Reference

We They

Group Similarity

Country A

Managers

Workers

Rural

Urban

Rich

Poor

Country B

Managers

Workers

Rural

Urban

Rich

Poor


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Dynamics of Culture ..

Contd.

Culture formation & dynamics

Language as a cultural stabilizer

Religion as a cultural stabilizer


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the business

Social Stratification System

Ascribed & Acquired Group memberships

Performance Orientation

Gender Based Groups Age Based Groups

Family Based Groups

Occupation

Motivation

Materialism & Leisure Max Weber

Expectation of success & reward

Need Hierarchy


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the business Contd.

Hofstedes Model

Relationship References Power Distance

Ind iv idual ism V/s Col lect iv ism

Risk Taking Behaviour Uncertainty Avoidance

Assert iveness


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Evaluating Hofstedes Model

CountryPower

Distance

Uncertainty

Avoidance

Individualis

m

Masculinit

y

Australia 36 51 90 61

France 68 86 71 43

England 35 35 89 66

India 77 40 48 56

Japan 54 92 46 95

Thailand 64 64 20 34

USA 40 46 91 62


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Evaluating Hofstedes Model

0

10

20

30

40

50

60

70

80

90

100

Australia France England India Japan Thailand USA

Pow er Distance

Uncertainty Avoidance

Individualism

Masculinity


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Strategies for dealing with

cultural differences

Making little or No Adjustments

Communications

Spoken & Written language

Silent language

Culture Shock

Company & Management orientation

Polycentrism, Ethnocentrism,

Geocentrism

Institute the change


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Spoken & Written Language France: Please leave your values here

Mexico: The manager has personally passed all thewater served here ( Assuring the quality of drinkingwater served)

Japan: You are invited to take advantage of thechamber-maid

Norway: Ladies are requested not to have children inthe bar

Switzerland: Because of the impropriety of

entertaining guests of the opposite sex in thebedroom, it is suggested that the lobby be used forthis purpose

Greece: We will execute customers in strict rotation(Only people in the queue will be checked in)


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The Political Environment Political Approaches

Capitalism

Socialism

Political Systems Democracy

Representative Democracy

Totalitarianism

Communist Theocratic

Tribal

Right-Wing


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The Legal Environment

Legal Systems

Common Law

Civil Law

Theocratic Law

Contract Law Protection of Intellectual Property

Product safety & liability


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Color Legal System

Civil law

Common law

Custom

Theocratic law

Common & Civil

law
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The Economic Environment

Market Economy

Command Economy

Mixed Economy

State Directed Economy


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End of Module 1

Thank you

Case study Discussion in Next Class


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Physical & Social Factors

Political Policies & Legal Practices

Cultural Factors

Economic Forces

Geographical Influences


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Competitive Environment

Major Advantage in Price, Marketing,Innovation and other factors

Number & Comparative capabilities ofcompetitors

Competitive differences by countries


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Means

Modes

Import & Export, Tourism & Transport, Licensing& Franchising, Turnkey operations,Management Contracts, FDI/FII

Functions

Marketing, Global Manf. Hub, SCM, Accounting& Finance, HR

AlternativesChoice of countries, Organization & ControlMechanism


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Countervailing Forces

Global v/s National Standards

Country v/s Company competitiveness

Sovereign v/s Cross-National relationships

Documents

Module 1 IB 2nd Sem