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Management in global enviornment1


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Management in global enviornment1

  2. 2. Parochialism<br />An obstacle for managers in global business world.<br />Monolingualism should be abolished.<br />Managers who follow “ours is better then their’s”;its difficult for them to compete with other managers.<br />JAPANESE<br />AMERICANS<br />
  4. 4. ETHNOCENTRIC<br />
  5. 5. POLYCENTRIC<br />
  6. 6. GEOCENTRIC<br />
  7. 7. An award winner- American marketing.<br />
  8. 8. When a manager ignore foreign values and custom unfortunately cross culture blunders can happen.<br />“EAT YOUR FINGERS OFF”<br />
  10. 10.
  11. 11.
  12. 12. Understanding the global environment<br /><ul><li>Managers of all type of organization faced with opportunities and challenges of Managing in </li></ul> a global environment. <br /><ul><li>In modern time global trade is being shaped by two forces :
  13. 13. regional trading alliance.
  14. 14. World Trade Organization.</li></li></ul><li>Regional trading alliance<br /><ul><li>Few years ago global competition meant country against country.
  15. 15. Such as France versus Germany and America and Japan.
  16. 16. Regional trading agreements reshaped global competition which mainly involves :
  17. 17. European union (EU)
  18. 18. North American free trade agreements (NAFTA)
  19. 19. Association of southeast Asian nation(ASEAN) </li></li></ul><li>
  20. 20. Map Of European Union<br />
  21. 21. The European union<br /><ul><li>In 1992 formation of European union which include 12 members.
  22. 22. In 1995 three other country joined the group Austria, Finland, and Sweden.
  23. 23. In 2004 EU added 10 new members.
  24. 24. In 2007 there is two other countries joined thus the union include 27 member.
  25. 25. The main aim of nation to reassert their economic position against the united states and Japan.</li></li></ul><li>North American free agreement<br /><ul><li>NAFTA came into existence in1992 between the Mexico, Canada and U.S.A .
  26. 26. The main aim eliminating the barriers to free trade has resulted to strengthening the economic power.
  27. 27. Now 34 countries in the Caribbean region, south America are negotiating a free trade of Americas agreement.</li></li></ul><li>Association of southeast Asiannation<br />It is one of the fastest – growing economic regions of the world.<br />
  28. 28. The World Trade Organization<br /><ul><li>The WTO was formed in 1995.It has evolved from general agreement on Tariffs and Trade (GATT)
  29. 29. It deal with the rules of trade among nations and the total number of members are- 146
  30. 30. The function of WTO is help businesses (import and </li></ul> Export)their business.<br /><ul><li>It play an important role in monitoring and promoting</li></ul> global trade<br />
  31. 31. Different Type of Global Organizations<br />1.Multinational Company (MNC)<br />This type of Organization has operation in multiple country but managed from home country.<br />Characteristic of Ethnocentric attitude<br />Example:-<br />Sony , Deutsche Bank AG ,Merrill Lynch etc. <br />
  32. 32. 2.Transnational Corporation<br />(TNC)<br />Operational in more than one country but decentralizes management to local country.<br />Polycentric Attitude<br />Nestle , Frito -lay etc.<br />
  33. 33. 3.Borderless Organization<br />Geocentric Attitude<br />A firm that has eliminated structural divisions that impose<br />artificial geographic barriers and is organized along<br />business lines.<br />IBM , Telefonica etc<br />
  34. 34. How Organizations Go Global<br />
  35. 35. Why Globalization<br />
  36. 36. Reduce dependence on home market<br />Build more brand and shareholder value<br />Add revenue sources and growth markets<br />Award more franchises in the home country by being<br />global.<br />
  37. 37. How Organizations Go Global<br />STAGE 3<br /><ul><li> Foreign Subsidiary
  38. 38. Joint Venture
  39. 39. Strategic Alliance
  40. 40. Licensing/</li></ul> Franchising<br />STAGE 2<br />Hiring foreign representation<br />Or<br />Contracting with foreign manufactures<br />STAGE 1<br />Directly<br /> or<br /> Indirectly exporting to <br />or <br />importing from foreign countries<br />
  42. 42.
  43. 43.
  44. 44. National Culture<br />Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important.<br />May have more influence on an organization than the organization culture.<br />
  45. 45. <ul><li>Americans are very informal.
  46. 46. Americans are direct.
  47. 47. Americans are competitive.
  48. 48. Americans are achievers.
  49. 49. Americans are independent and individualistic.
  50. 50. Americans are questioners.
  51. 51. Americans value punctuality.
  52. 52. Americans value cleanliness.</li></li></ul><li>HOFSTEDE’S FRAMEWORK FOR ASSESSING CULTURES<br />Dimensions of National culture<br />INTRODUCTION<br /><ul><li>Dutch Psychologist named Dr GeertHofstede
  53. 53. Worked for IBM
  54. 54. Undertook research survey from 1967-1973
  55. 55. Data collected and analyzed from more than 100,000 people in more than 50 countries
  56. 56. He scored each country using a scale of roughly 0 to 100 for each dimension</li></ul>INDIVIDUALISM VERSUS COLLECTIVISM<br />POWER DISTANCE<br />UNCERTAINTY AVOIDANCE<br />QUANTITY VERSUS QUALITY OF LIFE<br />LONG TERM AND SHORT TERM ORIENTATIONS<br />
  58. 58. LOOK AFTER THEIR OWN INTERESTS AND THOSE OF THEIR IMMEDIATE FAMILY</li></ul>COLLECTIVISM<br /><ul><li>A social framework in which people prefer to act as members of a group and protect other members of the group
  59. 59. personal needs are less important than the group's needs. This dimension influences the role government is expected to play in markets</li></li></ul><li>POWER DISTANCE<br /><ul><li>A measure of the extent to which a society accepts the fact that power in institutions and organizations is distributed unequally.
  60. 60. A high power distance society accepts wide differences in power in organizations.
  61. 61. Employees show a great deal of respect for those in authority. Titles, rank, and status carry a lot of weight.
  62. 62. In contrast, a low power distance society plays down</li></ul> inequalities as much as possible<br /><ul><li> Superiors still have authority, but employees are not afraid off or in awe of the boss</li></li></ul><li>UNCERTAINTY AVOIDANCE<br />A low uncertainty culture allows individuals to cope better with risk and innovation.<br />They're also relatively tolerant of behavior and opinions that differ from their own because they don't feel threatened by them.<br />On the other hand, people in a society that's high in uncertainty avoidance feel threatened by uncertainty and ambiguity and experience high levels of anxiety, which manifests itself in nervousness, high stress, and aggressiveness.<br />
  63. 63. QUANTITY VERSUS QUALITY OF LIFE<br />Quantity of life-degree to which values such as assertiveness, the acquisition of money and material goods, and competition prevails.<br />Quality of life is a national cultural attribute that emphasizes relationships and concerns for others<br />Again like Individualism and collectivism.<br />
  64. 64. LONG TERM AND SHORT TERM ORIENTATIONS<br />It looks at country’s orientation towards life and work.<br />People in long term orientation culture looks to the future and value thrift and persistence.<br />A short term orientation values the past and present and emphasizes respect for tradition and fulfilling social obligations.<br />
  65. 65. The globe ….<br />The GLOBE (Global Leadership & Organizational Behavior Effectiveness) is a multi-phase, multi-method research project in which investigators around the world examine the inter-relationships between societal culture, organizational culture & organizational leadership.<br />The idea was conceived by Robert J. House in 1991 but the project fomally began in 1993.<br />
  66. 66. The globe framework for assessing cultures<br />Assertiveness<br />Future orientation<br />Gender differentiation<br />
  67. 67. 4) Uncertainty avoidance<br />5) Power distance<br />6) Individualism/ collectivism<br />
  68. 68. 7) In-group collectivism<br />8) Performance orientation<br />9) Humane orientation<br />
  69. 69. Global ranking of selected countries<br />
  70. 70. Global management in today’s world<br />“arguing against GLOBALIZATION is like arguing against THE LAW OF GRAVITY”- Kofi Annan<br />Doing business globally today isn’t easy.<br />Managers face serious challenges like:<br /> 1) Increased threat of terrorism<br /> 2) Economic interdependence of trading countries<br />
  71. 71. 3) Loss of investments in unstable countries<br />4) Americanization<br />
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  73. 73. Conclusion<br />Successfully managing in today’s global environment will require incredible sensitivity & understanding. Managers need to be aware of how their decisions & actions will be viewed, not only by those who agree, but especially, by those who disagree.<br /> They’ll need to adjust their leadership styles & management approaches according to these diversities.<br />
  74. 74.
  75. 75. questions<br />What is Global Perspective? How do organizations do business globally?<br />Short notes (choose any two):<br /> 1) WTO 2) NAFTA 3) ASEAN<br />MCQs :<br /> 1)Monolingualism is one of the key indicators of parochialism prevalence in a culture:<br /> a) true b) false<br /> 2) Which one of the following regional alliances was formed after the signing of the Masstricht Treaty?<br /> a) European Union<br /> b) ASEAN<br /> c) NAFTA<br />3) According to the GLOBE which country/countries rank the highest in Uncertainty Avoidance?<br /> a) Sweden b) Greece c) Kuwait d) Mexico<br />4) National culture is more influential than an organizational culture- is justified by:<br /> a) Legal-political environment b) Social environment<br /> c) Cultural environment d) Economic environment<br />