Introduction to management 13th schemerhorn bachrach chapter 05

Global Businesses  Types of global businesses  Pros and cons of global businesses  Ethics challenges for global businesses Copyright ©2015 John Wiley & Sons, Inc... MANAGEMENT AND GLO

CHAPTER 5

INTERNATIONAL MANAGEMENT

5 John R Schermerhorn, Jr.Daniel G Bachrach

Introduction to Management

13th edition

PLANNING AHEAD — KEY TAKEAWAYS

CHAPTER 5 OUTLINE

1. Management and Globalization

 Global management

 Why companies go global

 How companies go global

 Global business environments

2. Global Businesses

 Types of global businesses

 Pros and cons of global businesses

 Ethics challenges for global businesses

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CHAPTER 5 OUTLINE

3. Culture and Global Diversity

 Cultural intelligence

 Silent languages of culture

 Tight and loose cultures

 Values and national cultures

4. Global Management Learning

 Are management theories universal?

 Intercultural competencies

 Global learning goals

MANAGEMENT AND GLOBALIZATION

MANAGEMENT AND GLOBALIZATION

Global economy

Resources, markets, and competition are worldwide

in scope

Globalization

The process of growing interdependence among

elements in the global economy

World 3.0

Nations cooperate while respecting different national

characters and interests

MANAGEMENT AND GLOBALIZATION

Global management

Managing business and organizations with business interests in more than one country

Global manager

Is culturally aware and informed on international affairs

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MANAGEMENT AND GLOBALIZATION

International businesses

Conducting for-profit transactions of goods and

services across national boundaries

Reasons why businesses go global:

Profits Customers Suppliers Capital Labor Risk

MANAGEMENT AND

GLOBALIZATION

Market entry strategies

markets but do not require expensive

investments

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MANAGEMENT AND GLOBALIZATION

Types of market entry strategies:

FIGURE 5.1 COMMON FORMS OF GLOBAL BUSINESS—

FROM MARKET ENTRY TO DIRECT INVESTMENT

STRATEGIES

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MANAGEMENT AND GLOBALIZATION

MANAGEMENT AND GLOBALIZATION

Insourcing refers to local job

creation that results from foreign

direct investment

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MANAGEMENT AND GLOBALIZATION

Types of insourcing:

MANAGEMENT AND GLOBALIZATION

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MANAGEMENT AND GLOBALIZATION

MANAGEMENT AND GLOBALIZATION

Legal and political systems

Business ownership

Foreign currency exchange

Protection of intellectual property rights

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MANAGEMENT AND GLOBALIZATION

Legal and political systems

Political risk

Potential loss in value of a foreign investment due

to instability and political changes in the host country

Forecast political disruptions that threaten the value

of a foreign investment

MANAGEMENT AND GLOBALIZATION

Trade Agreements and Trade Barriers

Most favored nation status

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

GLOBAL BUSINESSES

Types of global businesses:

MNE (multinational enterprise) or MNC

(multinational corporation) with extensive business operations in more than one foreign country

GLOBAL BUSINESSES

Mutual benefits for host country and

global corporation or MNC:

Shared growth opportunities

Shared income opportunities

Shared learning opportunities

Shared development opportunities

FIGURE 5.2 WHAT SHOULD GO RIGHT AND WHAT CAN GO WRONG IN GLOBAL CORPORATION AND

HOST-COUNTRY RELATIONSHIPS

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GLOBAL BUSINESSES

Host country complaints about MNCs:

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GLOBAL BUSINESSES

GLOBAL BUSINESSES

Ethical issues for Global Businesses:

one’s business interests

illegal for U.S firms and their representatives

to engage in corrupt practices overseas

Bribes to foreign officials

Excessive commissions

Non monetary gifts

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GLOBAL BUSINESSES

Child labor and Sweatshops:

for work otherwise done by adults

wages for long hours in poor working

conditions

CULTURES AND GLOBAL DIVERSITY

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CULTURES AND GLOBAL DIVERSITY

Stages in adjusting to a

new culture:

CULTURES AND GLOBAL DIVERSITY

CULTURES AND GLOBAL DIVERSITY

Context

communication via spoken or written words

United States

Canada

Germany

CULTURES AND GLOBAL DIVERSITY

Context

situational cues as well as on spoken or

CULTURES AND GLOBAL DIVERSITY

Time

one thing at a time

accomplish many different things at once

CULTURES AND GLOBAL DIVERSITY

Space

to communicate

In the U.S people value “personal space”

Many Latin and Asian cultures expect much less

personal space

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CULTURES AND GLOBAL DIVERSITY

Tight and Loose Cultures

• Strength of norms that govern social behavior

• Tolerance for any deviance from norms

• Tight = Japan, Korea, Malaysia

• Loose = Brazil, Hungary, Australia

CULTURES AND GLOBAL DIVERSITY

Values and national cultures (Hofstede):

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FIGURE 5.3 HOW COUNTRIES’ SHORT-TERM

THINKING AND LONG-TERM THINKING

COMPARE ON HOFSTEDE’S DIMENSIONS OF

NATIONAL CULTURE.

GLOBAL MANAGEMENT LEARNING

Comparative management

among countries and/or cultures

Intercultural competencies

us be successful in cross-cultural situations.

Global managers

functions across international boundaries

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GLOBAL MANAGEMENT LEARNING

Global learning goals: