Global management review

1. International Management
Waleed Ghalwash

2. What is GDP?
‫اﻹﺟﻤﺎﻟﻲ‬ ‫اﻟﻤﺤﻠﻲ‬ ‫اﻟﻨﺎﺗﺞ‬

3. Gross Domestic Product (GDP) is the monetary value of all the finished goods
and services produced within a country's borders in a specific time period.
A country's GDP can be calculated using the following formula:
GDP = C + G + I + NX(E-I)
C is equal to all private consumption, or consumer spending.
G is the sum of government spending.
I is the sum of all the country's investment.
NX is calculated as total exports minus imports (NX = Exports - Imports).
What is GDP?

5. https://www.pwc.com/world2050
Global Economy by 2050

6. Global Economy by 2050

7. The Big Mac Index is
published by The Economist as
an informal way of measuring
the purchasing power parity
(PPP) between two currencies
and provides a test of the
extent to which market
exchange rates result in
goods costing the same in
different countries. It
"seeks to make exchange-rate
theory a bit more
digestible".
The Big Mac Index

8. Global Management: managing
operations in more than one country.
Global Manager: is culturally aware
on international affairs.
Global Business: conducts commercial
transactions across national
boundaries.
Global Sourcing: materials or
services are purchased around the
world for local use.
Global management terminology

9. Women in Managerial Positions around
the world

14. Source: International Labor Office, Women in business
and management: gaining momentum (2015)

15. How organizations go Global?

16. How organizations go Global?

17. Global Sourcing
CHINA Manufactures for the World:
70% world’s umbrellas
60% world’s buttons
72% US shoes
50% US appliances
80% US toys

18. Exporting
Exporting accounts for some 10% of global activity.
1. Direct exporting:
the company sells to a customer in another country.
2. Indirect exporting:
the company sells to a buyer (importer or distribution) in the home
country, who in turn exports the product.
3. The Internet:
Initially, Internet marketing focused on domestic sales, large number of
companies started receiving orders from customers in other countries,
resulting in the concept of International Internet marketing (IIM)
4. Direct sales:
Particularly for high technology and big ticket industrial products.

19. Contractual agreements
Long-term, non-equity association between a company and another in a foreign
market.
1. Licensing:
A means of establishing a foothold in foreign markets without large
capital outlays.
2. Franchising:
Expected to be the fastest-growing market-entry strategy.
a. Franchiser — provides a standard package of products, systems, and
management services.
b. Franchisee — provides market knowledge, capital, and personal
involvement in management.

20. Strategic International Alliance
Strategic International Alliance (SIA) is a business relationship established
by two or more companies to cooperate out of mutual need, to share risk in
achieving a common objective. firms enter SIAs for several reasons:
● Opportunities for rapid expansion into new markets.
● Access to new technology.
● More efficient production and innovation.
● Reduced marketing costs.
● Strategic competitive moves.
● Access to additional sources of products and capital.

21. Strategic International Alliance
International joint ventures (IJVs) IS a partnership of two or more
participating companies that have joined forces to create a separate legal
entity. Four characteristics define joint ventures:
● JVs are established, separate, legal entities.
● Acknowledged intent by the partners to share in the management of the JV.
● There are partnerships between legally incorporated entities such as
companies, chartered organizations, or governments, and not between
individuals.
● Equity positions are held by each of the partners.
Sample JV is Bapetco, formed in the early 1980s, as a joint venture between
Shell and the Egyptian General Petroleum Corporation (EGPC).

22. Strategic International Alliance
Consortia is similar to joint ventures and could be classified as
such except for two unique characteristics:
● Typically involve a large number of participants.
● Frequently operate in a country or market in which none of the
participants is currently active.
Consortia are developed to pool financial and managerial resources
and to lessen risks. (the new capital of Egypt)
.

23. Direct foreign investments (FDI)
Direct foreign investments (FDI):
Investment within a foreign country. Companies may invest
locally to:
● capitalize on low-cost labor
● Avoid high import taxes
● Reduce the high costs of transportation to market
● Gain access to raw materials and technology
● Means of gaining market entry.

24. Global corporations vs Global corporations
International companies are importers and exporters, they have no investment
outside of their home country.
Multinational corporations (MNC) have investment in other countries.
● Global corporations have invested and are present in many countries. They
market their products through the use of the same coordinated image/brand
in all markets. Generally one corporate office that is responsible for
global strategy. Emphasis on volume, cost management and efficiency.
● Transnational corporations are much more complex organizations, have a
central corporate facility but give decision-making, R&D and marketing
powers to each individual foreign market.

25. How do you choose a Joint Venture Partner ?
JV operates in a foreign country through co-ownership by
foreign and local partners.
● Familiar with your firm’s major business.
● Employs a strong local workforce.
● Values its customers.
● Has potential for future expansion.
● Has strong local market for its own products.
● Has good profit potential.
● Has sound financial standing.

26. MNC / Host Country . . . Relationships !
What should
go RIGHT
Mutual benefits and
Shared opportunities
● Growth
● Income
● Learning
● Development
What can go WRONG
Host complaints
about MNCs
● Excessive Profits
● Economic domination
● Interference with Gov.
● Limited Tech Transfer
● Disrespect for local
● customs
MNC complaints
about Host
● Profit limitations
● Overpriced
resources
● Exploitative rules
● Foreign exchange
restrictions
● Failure to uphold
contracts

27. Communication vs Cultures

28. Reality
rebalancing,
enjoying new
culture and
adapting to less
desirable elements
Irritation & anger
when “negatives”
overwhelm
“Positives”
Culture Shock stages
The Honeymoon
cultural immersion,
local ways viewed
Small victories
confidence grows
in handling daily
affairs
Confusion
anxious,
uncomfortable,
need advice
Share your experiences with us . . . !

29. Communication vs Cultures
1. Tends to prefer direct verbal interaction.
2. Tends to understand meaning at one level
only.
3. Is generally less proficient in reading
non-verbal cues.
4. Values individualism.
5. Relies more on logic.
6. Employs linear logic.
7. Says no directly.
8. Communicates in highly structure
messages, provides details.
9.
1. Tends to prefer indirect verbal interaction.
2. Tends to understand meanings at many
socio-cultural levels.
3. Is generally more proficient in reading
non-verbal cues.
4. Values group membership
5. Relies more on feeling.
6. Employs spiral logic.
7. Talks around point, avoids saying no.
8. Communicates in simple, ambiguous
messages.

30. Opinion

31. Dealing with problems

32. In restaurant

33. The Boss

34. Me

35. Telling truth

36. Personal branding

37. Talking Money

38. Transportaion

39. Way of life

40. Punctuality

41. Contacts

42. Anger

43. Party

44. Meals

45. Queue When Waiting

46. Why does it matters to consider culture?

47. Thank You