ninth edition

STEPHEN P. ROBBINS

MARY COULTER

Chapter

4
2007 Prentice Hall, Inc. All rights reserved.

Managing in a Global Environment

Instructor: Zhengxin

Lingnan College, Sun Yat-Sen University

PowerPoint Presentation by Charlie Cook The University of West Alabama

Agenda for today

I. II. III. IV.

Review of last session Four key questions in this Chapter:

Global Perspectives Different Types of International Organizations How organizations go global (Important) Managing in a global environment

Homework for international corporation case study Wrap up for this session

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Three global attitudes

Ethnocentric Attitude
The best work approaches and practices are those of the home country.

Polycentric Attitude
The host country know the best work approaches and practices for running their business.

Geocentric Attitude
A world-oriented view that focuses on using the best approaches and people from around the globe.
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Reasons for engaging in international business:

Profits Customers

Suppliers
Capital Labor

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 Q2: What are different Types of International Organizations ?

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Different Types of International Organizations

Multinational Corporation (MNC)
Maintains operations in multiple countries

Whats the difference? Multidomestic Corporation Global Company Transnational Corporation (Borderless Organization) Born Globals/International New Ventures (INVs)
413

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Different Types of International Organizations

Multidomestic Corporation
Decentralizes management and other decisions to the local country.
Gives foreign operations more freedom to operate as separate entities

Global Company
Centralizes its management and other decisions in the home country. Seeks total integration of global operations
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Different Types of International Organizations (contd)

Transnational Corporation (Borderless Organization)
Eliminated structural divisions that impose artificial geographic barriers and is organized along business lines that reflect a geocentric attitude.

Born Globals/International New Ventures (INVs)

Commit resources upfront (material, people, financing) to doing business in more than one country.

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Schermerhorn/Management, 7e Chapter 5, Figure 05-05

Alternative multinational structures for global operations.

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 Q3: How organizations go global?

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Schermerhorn/Management, 7e Chapter 5, Figure 05-02

Common forms of international businessfrom market entry to direct investment strategies.

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Market entry strategies involve the sale of goods or

services to foreign markets but do not require expensive investments.

Types of market entry strategies:
Global sourcing

Exporting Importing Licensing agreement Franchising

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Direct investment strategies require major

capital commitments but create rights of ownership and control over foreign operations.
Types of direct investment strategies:
Joint ventures

Wholly owned subsidiaries

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 Q4: How to Manage in A Global Environment?

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Managing in A Global Environment

The Legal Environment
Stability or instability of legal and political systems

Legal procedures are established and followed

Fair and honest elections held on a regular basis

Differences in the laws of various nations

Effects on business activities

Effects on delivery of products and services

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The Economic Environment

Economic Systems
Market economy

An economy in which resources are primarily owned and controlled by the private sector.
An economy in which all economic decisions are planned by a central government.

Command economy

Monetary and Financial Factors

Currency exchange rates Inflation rates Diverse tax policies

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The Cultural Environment

National Culture
Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important. May have more influence on an organization than the organization culture.

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Hofstedes Framework for Assessing Cultures

Individualism versus Collectivism Long-Term versus Short-Term Orientation

Power Distance

Culture

Achievement versus Nurturing

Uncertainty Avoidance

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 Based on the content of this chapter, do you think management concepts are universal? That is, do they apply worldwide?

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Are management theories universal?

The need for management is universal, but the way management is practiced is not.
U.S. management theories may be ethnocentric.

Participation and individual performance are not emphasized as much in other cultures.

Not all Japanese management practices can be applied

successfully abroad.

Lifetime employment, job rotation and broad career experience, shared information, collective decision-making, and quality emphasis.

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 Wrap up and takeaways

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LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.

Whats Your Global Perspective?

Contrast ethnocentric, polycentric, and geocentric attitudes towards global business. Explain why its important for managers to be sensitive to global differences

Understanding the Global Environment

Describe the current status of the European Union. Discuss the North American Free Trade Agreement and other regional trade alliances in Latin America. Tell about the Association of Southeast Asian Nations.

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L E A R N I N G O U T L I N E (contd)
Follow this Learning Outline as you read and study this chapter.

Doing Business Globally

Contrast multinational, multidomestic, global, transnational, and born global organizations. Describe the different ways organizations can go international. Define global sourcing, exporting, importing, licensing, and franchising. Describe global strategic alliances, joint ventures, and foreign subsidiaries.
2007 Prentice Hall, Inc. All rights reserved. 454

L E A R N I N G O U T L I N E (contd)
Follow this Learning Outline as you read and study this chapter.

Managing in a Global Environment (contd)

Explain how the global legal-political and economic environments affect managers. Discuss Hofstedes five dimensions for assessing cultures. Explain the nine GLOBE dimensions for assessing cultures. Discuss the challenges of doing business globally in todays world.

2007 Prentice Hall, Inc. All rights reserved.

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Terms to Know
parochialism ethnocentric attitude polycentric attitude geocentric attitude global sourcing exporting importing licensing franchising strategic alliances joint venture foreign subsidiary market economy command economy national culture GLOBE wikis blogs
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European Union (EU) Euro North American Free Trade Agreement (NAFTA) Association of Southeast Asian Nations (ASEAN) World Trade Organization (WTO) multinational corporations (MNCs) multidomestic corporation global company transnational or borderless organization born globals
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Homework
6-7 members in each group

Search for a realistic management problem around you, give some suggestions /recommendations to solve this problem
Next class: Each group presents 5 mins, 5 ppts What will you research? (target). Find out its management problem(s).
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