Management ch4
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  • 1. PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie Cook Copyright © 2005 Prentice Hall, Inc.Copyright © 2005 Prentice Hall, Inc. All rights reserved.All rights reserved. 8th edition Steven P. Robbins Mary Coulter
  • 2. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–2 L E A R N I N G O U T L I N E 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.
  • 3. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–3 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.
  • 4. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–4 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.
  • 5. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 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.
  • 6. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–6 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
  • 7. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–7 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.
  • 8. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–8 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
  • 9. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–9 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
  • 10. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–10 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.
  • 11. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–11 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.
  • 12. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–12 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.
  • 13. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–13 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.
  • 14. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–14 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
  • 15. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–15 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
  • 16. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–16 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.
  • 17. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–17 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
  • 18. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–18 The GLOBE (Global Leadership and Organizational Behavior Effectiveness) Framework for Assessing Cultures • Assertiveness • Future orientation • Gender differentiation • Uncertainty avoidance • Power distance • Individualism/collectivism • In-group collectivism • Performance orientation • Humane orientation