BM_Chapter 3

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BM_Chapter 3

  1. 1. Chapter 3Managing in a GlobalEnvironment
  2. 2. A Borderless World Organizations and managers are not isolated from international forces: – Trade barriers have fallen – Communication is faster, cheaper – Consumer tastes converge The difficulties and risks of a borderless world are matched by benefits and opportunities (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  3. 3. Four Stages of Globalization *Today the # of global & stateless corporations is increasing and the awareness of national border is decreasing (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  4. 4. International Market Strategies • Exporting – transferring products for sale to foreign countries • Outsourcing – also called off shoring, work activities are done in countries with cheap labor • Franchising – licensing that provides a complete package of materials and services (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  5. 5. Strategies for Entering InternationalMarkets (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  6. 6. China Inc. Many companies are going to China and India, business is boomingMore and more products are manufactured in these countriesChina can manufacture at a much lower costIndia is growing in software design, services and engineering (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  7. 7. The International Business Environment • Planning, organizing, leading and controlling in multiple countries can be challenging – It took McDonalds a year to figure that Hindus in India do not eat beef – In Africa, the baby food includes pictures to aid illiterate consumers • Managers must be aware to operate in the highly competitive global environment (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  8. 8. Key Factors in International Environment (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  9. 9. The Economic EnvironmentResource and Product Markets Companies must evaluate the market demand for their productsExchange Rates Volatility in exchange rates can have major implications on profit (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  10. 10. World Economic Forum GlobalCompetitiveness (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  11. 11. The Legal-Political Environment Political risk is defined as the risk of lost assets, earning power, or managerial control. Managers must be concerned with the political instability of global markets. (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  12. 12. The Sociocultural Environment The values and behaviors that govern U.S. business do not always translate • Social Values • Communication Differences • Other Cultural Characteristics – Language, religion, social organization, education and attitudes (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  13. 13. Hofstede’s Value Dimensions 1. Power Distance 2. Uncertainty Avoidance 3. Individualism and Collectivism 4. Masculinity and Femininity (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  14. 14. GLOBE Project Value Dimensions  Assertiveness  Future orientation  Uncertainty avoidance  Gender differentiation  Power distance  Social collectivism  Individual collectivism  Performance orientation  Humane orientation (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  15. 15. Country Ranking on Selected GLOBE ValueDimensions (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  16. 16. High-Context and Low-Context Cultures (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  17. 17. International Trade Alliances• General Agreement on Tariff and Trade (GATT) – 23 nations in 1947, a set of rules for fair trade• World Trade Organization (WTO) – Maturation of GATT into permanent global institute• European Union – 1957 Alliance to improve economic and social conditions among members; evolved to 27-nation European Union• North American Free Trade Agreement (NAFTA) – Merged the United States, Canada and Mexico into trading bloc (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  18. 18. European Union (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  19. 19. The Globalization Backlash • 68% of Americans say other countries benefit the most from free trade • The United States primary concern is the loss of jobs • Business leaders insist that economic benefits flow back to the U.S. economy – Lower prices – Expanded markets – Increased profits and funds for innovation (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  20. 20. Developing Cultural Intelligence • Managers will be most successful in foreign assignments if they are culturally flexible & able to adapt easily to new situations and ways of doing things (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  21. 21. Developing Cultural Intelligence • Cultural intelligence – ability to use reasoning and observation skills – Culturally flexible – Adapt to new situations • Managers must study the language and learn Cognitive, emotional and physical intelligence (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  22. 22. Developing Cultural Intelligence • Cognitive – Person’s observational & learning skills & the ability to pick up on clues to understanding • Emotional – Concerns one’s self-confidence & self-motivation • Physical – Person’s ability to shift his or her speech patterns, expressions & body language (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  23. 23. Managing Cross-Culturally • Human resources seek managers who will thrive internationally • Global skills will be a key consideration • Self-analysis must take place about family situations  Can you initiate social contacts in a foreign culture?  Can you adjust well to different environments and changes in personal comfort?  Can you manage your future reentry in the job market? (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  24. 24. An Asian Vies of Cultural Differences (c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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