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Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
Advanced-Global-Trading
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Advanced-Global-Trading

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AGT was founded in 2010 and its transition into one of the world’s first alternative investment groups with the technology to empower you to trade on the move, is nothing short of remarkable. The …

AGT was founded in 2010 and its transition into one of the world’s first alternative investment groups with the technology to empower you to trade on the move, is nothing short of remarkable. The brainchild of a group of forward-thinking high net worth individuals, AGT employs over 100 people and is on track to achieve its goal of 7 offices worldwide by the end of 2015.

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  1. Managing in a Global Environment CHAPTER 4
  2. Learning Objectives     2 Describe the emerging borderless world and some issues of particular concern for today’s managers. Describe market entry strategies that businesses use to develop foreign markets. Define international management and explain how it differs from the management of domestic business operations. Indicate how dissimilarities in the economic, sociocultural, and legal-political environments throughout the world can affect business operations. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  3. Learning Objectives (contd.)    3 Describe how regional trading alliances are reshaping the international business environment. Describe the characteristics of a multinational corporation. Explain cultural intelligence and why it is necessary for managers working in foreign countries. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  4. Importance of International Business If you are not thinking international, you are not thinking business management 4 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  5. A Borderless World  Business is becoming a unified, global field  Companies that think globally have a competitive edge  Domestic markets are saturated for many companies  Consumers can no longer tell from which country they are buying 5 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  6. 4 Stages of Globalization Exhibit 4.1 6 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  7. Four Stages of Globalization Domestic stage: market potential is limited to the home country production and marketing facilities located at home International stage: exports increase company usually adopts a multi-domestic approach Multinational stage: marketing and production facilities located in many countries more than 1/3 of its sales outside the home country Global (or stateless) stage: making sales and acquiring resources in whatever country offers the best opportunities and lowest cost ownership, control, and top management tend to be dispersed 7 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  8. Global (stateless) Corporations  Number is increasing  Awareness of national borders decreasing  Corporate Examples – – 8 Fred Hassan – Pakistan-born CEO of Schering Plough Mexico-born Fernando Aguirre, CEO of Chiquita Brands Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  9. Strategies for Entering International Markets Exhibit 4.2 9 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  10. Getting Started Internationally  Market – An organizational strategy for entering a foreign market  Global – 10 Entry Strategy Outsourcing (offshoring) Engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country. Also called global sourcing. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  11. International Environment Factors Exhibit 4.3 Economic Legal-Political •Economic development •Infrastructure •Resource and product markets •Per capita Income •Exchange rates •Economic conditions •Political risk •Government takeovers Organization •Tariffs, quotas, taxes •Terrorism, political instability •Laws, regulations Sociocultural •Socio values, beliefs •Language •Religion (objects, taboos, holidays) •Kinship patterns •Formal education, literary •Time orientation 11 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  12. Economic Environment Factors Economic development Infrastructure Resource and product markets Exchange rates Inflation Interest rates Economic growth 12 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  13. Economic Development ● ● Criterion used to classify is per capita income ● Developing countries have low per capita incomes ● LDCs located in Asia, Africa, and South America ● Developed are North America, Europe, & Japan ● 13 Countries categorized as “developing” or “developed” Driving global growth in Asia, Eastern Europe, & Latin America Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  14. Infrastructure A country’s physical facilities that support economic activities  Airports, highways, and railroads  Energy-producing facilities  Communication facilities 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  15. Resource and Product Markets When operating in another country... – – Managers must evaluate market demand To develop plants, resource markets must be available – raw materials and labor Corporate Example – McDonald 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  16. Exchange Rates  Rate at which one country’s currency is exchanged for another country’s  Has become a major concern for companies doing business internationally  Changes in the exchange rate can have major implications for profitability of international operations 16 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  17. The Legal-Political Environment  Political Risk– due to events or actions by host governments ● ● ● ● ● 17 Loss of assets Loss of earning power Loss of managerial control Government takeovers Acts of violence Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  18. Political Instability  Events such as riots, revolutions, or government upheavals that affect the operations of an international company 18 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  19. Laws and Regulations  Government laws and regulations differ from country to country  Make doing business a true challenge for international firms  Internet has increased impact of foreign laws on U.S. companies – expands potential for doing business on global basis 19 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  20. Sociocultural Environment  Culture – shared knowledge, beliefs, values, common modes of behavior, and ways of thinking among members of a society – – – Intangible Pervasive Difficult for outsider to learn  Managers need to understand difference in social values to comprehend local cultures and deal with them effectively 20 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  21. Hofstede’s Value Dimensions  Research = national value systems influence organizational and employee working relationships – Power distance (high = accept inequality) – Uncertainty avoidance (uncomfortable with uncertainty) – Individualism and collectivism (Individualism take care of themselves) – Masculinity/femininity (preference for achievement/assertiveness; femininity for relationship) – 21 Long-term/short-term orientation = 5th dimension Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  22. Four Dimensions of National Value Exhibit 4.4 22 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  23. GLOBE Value Dimensions Global Leadership and Organizational Behavior Effectiveness project More comprehensive view of cultural similarities and differences – – – – 23 Assertiveness Future orientation Uncertainty avoidance Gender differentiation – – – – – Power distance Societal collectivism Individual collectivism Performance orientation Humane orientation Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  24. International Cultural Influences  Other – – – – – Cultural Characteristics Language Religion Attitudes Social Organization Education  Linguistic pluralism – several languages exist  Ethnocentrism 24 – regard own culture superior Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  25. International Trade Agreements  Most visible changes in legalpolitical factors grow out of international trade agreements: – – – – 25 GATT WTO EU NAFTA Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  26. International Trade Alliances       26 General Agreement on Tariffs and Trade (GATT) Signed by 23 nations in 1947 as a set of rules Ensured nondiscrimination, clear procedures, negotiation of disputes, and participation of lesser developed countries in international trade Today, 149 member countries abide by the rules Primary tools WTO uses on tariff concessions, countries agree to limit level of tariffs on imports from other WTO members Most favored nation clause Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  27. WTO  Goal, is to guide and sometimes urge the nations of the world toward free trade and open markets  Encompasses GATT and all of its agreements  Partly responsible for backlash against global trade 27 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  28. European Union  Formed in 1957 to improve economic and social conditions  Has grown to 25-nation alliance  Initiative Europe ’92 called for creation of open markets for Europe’s 340 million consumers  Biggest expansion in 2004 – 10 new members from southern and eastern Europe  Observers barrier  EU’s 28 Euro feared EU would become a trade monetary revolution, introduction of the Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  29. North American Free Trade Agreement ● ● ● ● ● 29 Went into effect on January 1, 1994 Merged the United States, Canada, and Mexico with more that 421 million consumers Breaks down tariffs and trade restrictions on most agriculture and manufactured products August 12, 1992 agreements in number of key areas include: agriculture, autos, transport, & intellectual property January, 2004 -10th anniversary = success and failure Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  30. Other Trade Alliances     30 The Association of Southeast Asian Nations (ASEAN) Mercosur (Argentina, Brazil, Bolivia, Chile, Paraguay, Uruguay) The Central American Free Trade Agreement (CAFTA) Free Trade Area of the Americas (FTAA) Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  31. Multinational Corporations (MNC)  Receives >25% total sales revenues from operations outside parent company’s home country – – Controlled by single management authority – 31 Managed as integrated worldwide business system Top managers exercise global perspective Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  32. Managing in a Global Environment Managers must be sensitive to cultural subtleties  Personal challenges – culture shock  Managing cross-culturally – Leading – Decision making – Motivating – Controlling Managers must be culturally flexible and easily adapt to new situations 32 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

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