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IBUS2301 - Tutorial #11 - Chapters 15 and 17 - international Business Operations


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This tutorial covers the basics of international business operations. First, we look at international production decisions, which are influenced by a range of varying factors. We take a close look at why some manufacturing jobs are returning to the U.S., and why some are still leaving. We look at the cases of Komo, Apple, and Dell Computers. Next, we briefly review global staffing policies, with the three key policies of an ethnocentric, polycentric, and geocentric approach. Examples from Toyota and Sony are reviewed.

Published in: Business, News & Politics
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IBUS2301 - Tutorial #11 - Chapters 15 and 17 - international Business Operations

  1. 1. IBUS2301: International Business Management Tutorial #11, May 26 and 27 Chapters 15 and 17: International Business Operations Tutor: Preston Teeter,
  2. 2. International Business: Asia-Pacific Edition Dowling, Liesch, Gray, Hill Chapter 12 The Organisation of International Business
  3. 3. IBUS2301: Int’l Business Mgmt Next Week • Tutorial feedback – Note: feedback on course structure, design (text, presentations, assignments), etc belongs to lecture feedback • Attendance = x2 • Brief final review – Please email questions in advance
  4. 4. IBUS2301: Int’l Business Mgmt Outline • Global production • Global staffing
  5. 5. IBUS2301: Int’l Business Mgmt GLOBAL PRODUCTION
  6. 6. IBUS2301: Int’l Business Mgmt Global Production What factors influence the location of a firm’s international production activities? • Country factors • Technological factors • Product factors
  7. 7. How do these factors interact with a firm’s strategy and degree of centralization?
  8. 8. IBUS2301: Int’l Business Mgmt Back to the USA? • Watch the following two videos: – – • Questions: 1. Why are some manufacturing jobs returning to the U.S.? 2. How do you think this will play out over the next 10 or 20 years?
  9. 9. Source:
  10. 10. Source:InternationalBusinessTimes
  11. 11.
  12. 12. Source: NY Times
  13. 13. A Typical Unit Cost Curve
  14. 14. IBUS2301: Int’l Business Mgmt Minimum Efficient Scale • Plant to manufacture PCs – 250,000 units/year • Global demand – 35 million units (and rising) • .7% of global demand per factory
  15. 15. Source: USA Today
  16. 16. Source:
  17. 17. Location Strategy and Production
  18. 18. IBUS2301: Int’l Business Mgmt GLOBAL STAFFING
  19. 19. 5/27/2014 IBUS2301: Int’l Business Mgmt What are the various types of global staffing policies? • Ethnocentric approach – Key positions filled by parent-country nationals • Polycentric approach – Host-country nationals manage subsidiaries • Geocentric approach – Seeks best people for key jobs, regardless of nationality Global Staffing
  20. 20. What are the advantages and disadvantages of each approach? Also, what international strategy is each approach best suited for?
  21. 21. Source: NY Times
  22. 22. 5/27/2014 IBUS2301: Int’l Business Mgmt Top reasons for expat failure (US firms): 1. Inability of spouse to adjust 2. Manager’s inability to adjust 3. Other family problems 4. Manager’s personal or emotional maturity 5. Inability to cope with larger overseas responsibilities Expat Failure
  23. 23. Source: Best Countries for Expats (for experience and family)
  24. 24. Source:FinancialTimes
  25. 25. Source: NY Times
  26. 26. Comparison of Staffing Approaches Staffing Approach Strategic Appropriateness Advantages Disadvantages Ethnocentric International • Overcomes lack of qualified managers in host nation • Unified culture • Helps transfer core competencies • Produces resentment in host country • Can lead to cultural myopia Polycentric Localization • Alleviates cultural myopia • Inexpensive to implement • Limits career mobility • Isolates headquarters from foreign subsidiaries Geocentric Global standardization and transnational • Uses human resources efficiently • Helps build strong culture and informal management networks • National immigration policies may limit implementation • Expensive
  27. 27. Questions?