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Management ch4

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  • 1. 8th edition Steven P. Robbins Mary Coulter PowerPoint Presentation by Charlie Cook Copyright © 2005 Prentice Hall, Inc. All rights reserved.
  • 2. LEARNING OUTLINE Follow this Learning Outline as you read and study this chapter. What Your Global Perspective? • Define parochialism and explain why it can lead to problems. • Contrast ethnocentric, polycentric, and geocentric attitudes towards global business. • Describe the advantage and drawbacks of the three attitudes towards global business Understanding the Global Environment • Describe the benefits from free trade. • Tell why the European Union began • Describe the current status of the European Union • Discuss the North American Free Trade Agreement. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–2
  • 3. L E A R N I N G O U T L I N E (cont’d) Follow this Learning Outline as you read and study this chapter. Understanding the Global Environment (cont’d) • Describe other regional trade alliance in Latin America. • Tell about the Association of Southeast Asian Nations. • Describe other regional trade alliances. • Explain the interdependence that globalization involves. • Describe the formation of the World Trade Organization. • Discuss the role of the WTO. Doing Business Globally • Contrast MNCs, TNCs, and borderless organizations. • Relate MNCs, TNCs, and borderless organizations to the three attitudes towards global business. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–3
  • 4. L E A R N I N G O U T L I N E (cont’d) Follow this Learning Outline as you read and study this chapter. Doing Business Globally • Describe the three stages organizations go through as they go global. • Define exporting, importing, licensing, and franchising. • Describe global strategic alliances, joint ventures, and foreign subsidiaries. Managing in a Global Environment • Explain how the global legal-political environment affects managers. • Describe the effect of the global economic environment on managers. • Discuss Hofstede’s five dimensions for assessing cultures. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–4
  • 5. L E A R N I N G O U T L I N E (cont’d) Follow this Learning Outline as you read and study this chapter. Managing in a Global Environment (cont’d) • Explain the nine GLOBE dimensions for assessing cultures. • Discuss the challenges of doing business globally in today’s world. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–5
  • 6. Managing in a Global Environment • Challenges  Coping with the sudden appearance of new competitors  Acknowledging cultural, political, and economic differences  Dealing with increased uncertainty, fear, and anxiety  Adapting to changes in the global environment  Avoiding parochialism Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–6
  • 7. Adopting a Global Perspective • Ethnocentric Attitude  The parochialistic belief that the best work approaches and practices are those of the home country. • Polycentric Attitude  The view that the managers in the host country know the best work approaches and practices for running their business. • Geocentric Attitude  A world-oriented view that focuses on using the best approaches and people from around the globe. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–7
  • 8. Regional Trading Agreements • The European Union (EU)  A unified economic and trade entity  Belgium, Denmark, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom, Germany, Austria, Finland, and Sweden  Economic and monetary union (Euro) • North American Free Trade Agreement (NAFTA)  Eliminated barriers to free trade (tariffs, import licensing requirements, and customs user fees)  United States, Canada, and Mexico Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–8
  • 9. Regional Trading Agreements (cont’d) • Free Trade Area of the Americas • Southern Cone Common Market (Mercosur) • Association of Southeast Asian Nations (ASEAN)  Trading alliance of 10 Southeast Asian nations • African Union Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–9
  • 10. The World Trade Organization (WTO) • Evolved from the General Agreement on Tariffs and Trade (GATT) in 1995. • Functions as the only global organization dealing with the rules of trade among nations. • Has 145 member nations. • Monitors and promotes world trade. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–10
  • 11. Different Types of Global Organizations • Multinational Corporation (MNC)  A firm which maintains operations in multiple countries but manages the operations from a base in the home country. • Transnational Corporation (TNC)  A firm that maintains operations in several countries but decentralizes management to the local country. • Borderless Organization  A firm that has eliminated structural divisions that impose artificial geographic barriers and is organized along business lines. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–11
  • 12. How Organizations Go Global • Three Stages of Globalization  Stage I  Exporting products for sale overseas and importing products from overseas to sell in the home country.  Stage II  Committing to directly sell home-country products in overseas markets or contracting for products to be manufactured overseas and sold in the home country.  Stage III  Licensing manufacturing and franchising services to foreign firms to use the brand name, technology, or product specifications developed by the firm. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–12
  • 13. Other Forms of Globalization • Strategic Alliances  Partnerships between and organization and a foreign company in which both share resources and knowledge in developing new products or building new production facilities. • Joint Venture  A specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–13
  • 14. Managing in A Global Environment • The Legal Environment  Stability or instability of legal and political systems  Legal procedures are established and followed  Fair and honest elections held on a regular basis  Differences in the laws of various nations  Effects on business activities  Effects on delivery of products and services Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–14
  • 15. The Economic Environment • Economic Systems  Market economy  An economy in which resources are primarily owned and controlled by the private sector.  Command economy  An economy in which all economic decisions are planned by a central government. • Monetary and Financial Factors  Currency exchange rates  Inflation rates  Diverse tax policies Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–15
  • 16. The Cultural Environment • National Culture  Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important.  May have more influence on an organization than the organization culture. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–16
  • 17. Hofstede’s Framework for Assessing Cultures • Individualism versus Collectivism • Power Distance • Uncertainty Avoidance • Quantity versus Quality of Life • Long-term versus Short-term Orientation  Individualism: the degree to which people in a country prefer to act as individuals.  Collectivism: a social framework in which Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–17
  • 18. The GLOBE (Global Leadership and Organizational Behavior Effectiveness) Framework for Assessing Cultures • Assertiveness • Individualism/collectivism • Future orientation • In-group collectivism • Gender differentiation • Performance orientation • Uncertainty avoidance • Humane orientation • Power distance Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–18

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