Transcript Chapter 04 Managing in a Global Environment

Understanding
Management
First Canadian Edition
Slides prepared by
Janice Edwards
College of the Rockies
Copyright © 2009 Nelson Education Ltd.
Chapter 3
Managing in a Global
Environment
Copyright © 2009 Nelson Education Ltd..
Learning Objectives
1.
2.
3.
4.
5.
6.
Describe the emerging borderless world.
Define international management and explain how it differs
from the management of domestic business operations.
Indicate how dissimilarities in the economic, sociocultural,
and legal-political environments throughout the world can
affect business operations.
Describe market entry strategies that businesses use to
develop foreign markets.
Describe the characteristics of a multinational corporation.
Explain the challenges of managing in a global
environment.
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3-3
Four Stages of Globalization
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Domestic stage
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International stage
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Multinational stage
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Global stage
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3-4
Ex. 3.2
Key Factors in the International Environment
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3-5
The Economic Environment
Includes such factors as:
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Economic development
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Infrastructure
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Resource and product markets
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Exchange rates
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3-6
Legal-Political Environment
Political Risk and Political Instability
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Risk of loss of assets, earning power, or managerial
control.
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Includes government takeovers, civil disorders.
Laws and Regulations
•
Laws and regulations differ from country to country.
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3-7
Sociocultural Environment
Includes shared:
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Knowledge
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Beliefs
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Values
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Common modes of behaviour
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Common ways of thinking
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3-8
Dimensions of Social Value Systems
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Power distance.
Uncertainty avoidance.
Individualism & collectivism.
Masculinity/femininity.
Long term versus short term orientation.
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3-9
GLOBE Project Value Dimensions
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Assertiveness
Future orientation
Uncertainty avoidance
Gender differentiation
Power distance
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Societal collectivism
Individual collectivism
Performance
orientation
Humane orientation
3-10
Additional Cultural Influences for
International Organizations’ Consideration
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Language
Religion
Attitudes
Social organization
Education
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3-11
GATT and the WTO
General Agreement on Tariffs and Trade (GATT)
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Set of rules signed by 23 nations in 1947.
Ensured nondiscrimination, clear procedures,
negotiation of disputes, and participation of
lesser developed countries (LDCs) in
international trade.
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3-12
GATT and the WTO (Cont’d)
Primary tools of GATT successor, World Trade Organization
(WTO):
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Tariff concessions, countries agree to limit level of tariffs
on imports from other members.
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Most favoured nation clause.
WTO overall goal:
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Guide world nations toward free trade and open markets.
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3-13
European Union (EU)
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Formed in 1957 to improve economic and social
conditions.
Has 25-nation alliance.
EU’s monetary revolution, introduction of the Euro (€)
in 2002.
Euro is the single European currency that replaced 12
national currencies; unified a huge marketplace.
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3-14
North American
Free Trade Agreement (NAFTA)
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Went into effect in 1994.
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Merged the United States, Canada, and Mexico into a
megamarket with more than 421 million consumers.
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Breaks down tariffs and trade restrictions on most
agricultural and manufactured products.
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3-15
Globalization Backlash
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Protests against globalization at WTO meeting in
Seattle, 1999.
WTO, World Bank and IMF (International Monetary
Fund) referred to as The Iron Triangle of
globalization.
Primary concern is loss of jobs to countries with lower
wages.
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3-16
Getting Started Internationally
Outsourcing
• Seeks cheaper sources of labour
supply regardless of country.
Exporting
• Produces goods in home nation and transfers
its products for sale in foreign countries.
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3-17
Ex. 3.6
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Strategies for Entering
International Markets
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Personal Challenges for Global Managers*
Need for:
• Personal learning and growth
• Cultural flexibility
• Sensitivity to cultural differences and other ways of
thinking
* May experience culture shock: feelings of confusion,
disorientation and anxiety.
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3-19
Managing Cross Culturally
Managers must be sensitive to cultural subtleties in:
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Leadership
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Decision making
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Motivation
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Control
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