This document provides an overview of key concepts in international management and globalization. It discusses the challenges of managing global businesses across different cultures and regulatory environments. Some of the main points covered include defining globalization and the role of global managers, different strategies for entering foreign markets and making direct investments, how culture and national differences impact business practices, and common ethical issues that global companies may face.

1. Chapter 5
International
Management

2. Planning Ahead — Chapter 5 Study Questions
1. What are the management challenges of
globalization?
2. What are global businesses and what do they do?
3. What is culture and how does it impact global
management?
4. How can we benefit from global management
learning?

3. Chapter 5 Learning Dashboard
1. Management and Globalization
1. Global management
2. Why companies go global
3. How companies go global
4. Global business environments
2. Global Businesses
1. Types of global businesses
2. Pros and cons of global businesses
3. Ethics challenges for global businesses
4. Global business environments

4. Chapter 5 Learning Dashboard
3. Culture and Global Diversity
1. Cultural intelligence
2. Silent languages of culture
3. Tight and loose cultures
4. Values and national cultures
3. Global Management Learning
1. Are management theories universal?
2. Global learning goals

5. Management and Globalization
• Key concepts in the challenges of globalization:
– Global economy: global economy can be seen as the economy of
global society and national economies
– Globalization: process of international integration arising from the
interchange of world views, products, ideas, and other aspects of culture
– Global management: management of a global company with
different views, products and cultures.
– World 3.0: global prosperity and how to achieve it
– Global manager: has the capability to manage amid the
complexity of business that is conducted across divergent cultures and
time zones
5

6. Management and Globalization
• International businesses
– Conducting for-profit transactions of goods and
services across national boundaries
• Reasons why businesses go global:(PSLRCC)
• Market entry strategies
– involve the sale of goods or services to foreign
markets but do not require expensive investments

7. Management and Globalization
• Types of market entry strategies: (GLIFE)
– Global sourcing
– Exporting
– Importing
– Licensing agreement
– Franchising
• Types of direct investment strategies: (JSF)
– Joint venture
– Strategic alliance
– Foreign subsidiary

8. Common forms of global business—from
market entry to direct investment strategies

9. Management and Globalization

10. Management and Globalization?
Insourcing refers to local job creation that
results from foreign direct investment

11. Management and Globalization
Types of insourcing:
Insourcing refers to local job creation that results
from foreign direct investment

12. Management and Globalization

13. Management and Globalization

14. Management and Globalization
Legal and political systems
– Differing laws and practices regarding
• Business ownership
• Foreign currency exchange
• Protection of intellectual property rights
– Counterfeit merchandise
– Political risk
• Potential loss in value of a foreign investment due to
instability and political changes in the host country
– Political risk analysis
• Forecast political disruptions that threaten the value of a
foreign investment

15. Management and Globalization
• Trade Agreements and Trade Barriers
–World Trade Organization
• Most favored nation status
• Tariffs
• Nontariff barriers
• Protectionism

16. Management and Globalization
Regional Economic Alliances
– NAFTA – North American Free Trade Agreement
– EU – European Union
– APEC – Asia Pacific Economic Cooperation
– ASEAN – Association of Southeast Asian Nations
– SADC – Southern Africa Development Community

17. Global Businesses
• Types of global businesses:
– Global Corporation
• MNE (multinational enterprise) or MNC (multinational
corporation) with extensive business operations in more
than one foreign country
– Transnational corporation
• A global corporation that operates worldwide on a
borderless basis

18. Global Businesses
• Mutual benefits for host country and global
corporation or MNC:
– Shared growth opportunities
– Shared income opportunities
– Shared learning opportunities
– Shared development opportunities

19. Global Businesses
• Host country complaints about MNCs:(LIEDHD)
– Excessive profits
– Domination of local economy
– Interference with local government
– Hiring the best local talent
– Limited technology transfer
– Disrespect for local customs

20. Global Businesses
• MNC complaints about host countries:
Profit limitations
– Overpriced resources
– Exploitative rules
– Foreign exchange restrictions
– Failure to uphold contracts

21. Global Businesses

22. Global Businesses
• Ethical issues for Global Businesses:
– Corruption – illegal practices that further one’s
business interests
– Foreign Corrupt Practices Act – makes it illegal for
U.S. firms and their representatives to engage in
corrupt practices overseas
• Bribes to foreign officials
• Excessive commissions
• Non monetary gifts

23. Global Businesses
• Child labor and Sweatshops:
– Child labor – full time employment of children for
work otherwise done by adults
– Sweatshops – employ workers at very low wages
for long hours in poor working conditions

24. Culture and Global Diversity

25. Culture and Global Diversity
Stages in adjusting to a
new culture:

26. Culture and Global Diversity
Silent
languages of
culture

27. Culture and Global Diversity
Context
– Low context cultures - emphasize communication
via spoken or written words
• United States
• Canada
• Germany

28. Culture and Global Diversity
Context
– High context cultures – rely on nonverbal and
situational cues as well as on spoken or written
words
• Thailand
• Malaysia
Space
– Proxemics – study of how people use space to
communicate
• In the U.S. people value “personal space”
• Many Latin and Asian cultures expect much less personal
space

29. Culture and Global Diversity
Time
– Monochronic cultures – people tend to do one
thing at a time
• United States, Canada, Germany
– Polychronic cultures – time is used to
accomplish many different things at once
• Egypt, Saudi Arabia, Mexico

30. Culture and Global Diversity
Tight and Loose Cultures
– Cultural tightness-looseness
• Strength of norms that govern social behavior
• Tolerance for any deviance from norms
• Tight = Japan, Korea
• Loose = Brazil, Hungary