Marketing manager course chapter 2

Chapter Managing in a Global Environment Managing in a Global Environment... z Develop an awareness for the role of culture in international management.. z Develop effective human resour

Chapter

Managing in a Global Environment

Managing in a Global Environment

Learning Objectives

After reading this chapter, you should be able to:

z Understand the landscape of the global market.

z Develop an awareness for the role of culture in international management.

z Recognize the major options firms face when they choose a

global strategy and the conditions that make a strategic

choice most appropriate.

z Determine the best mode of entry into foreign markets given each firm’s unique characteristics.

z Develop effective human resource practices for managing

international subsidiaries.

z Become aware of ethical issues in international operations.

The Changing Pattern of International Business

z Changing world output and world trade

picture

¾ The U.S no longer dominates the world economy

¾ Large U.S multinationals no longer dominate

international business

¾ The centrally planned communist economies that

made up roughly half the world suddenly become accessible to Western businesses

¾ The global economy has become more

knowledge-intensive

The Changing Pattern of International Business

(continued)

z Lowered trade barriers

¾ General Agreement on Tariffs and Trade

(GATT)

¾ World Trade Organization (WTO)

z Integrated Economic Markets

¾ The European Union (EU)

¾ The North American Free Trade Act

(NAFTA)

¾ The Association of Southeast Asian Nations

(ASEAN)

¾ The Asia Pacific Economic Cooperation

The Changing Pattern of International Business

(continued)

z Global consumer preferences

¾ Tastes and preferences are converging

¾ Presence of mass media, exposure to

goods from various countries, and standardized products

z Globalized production

¾ Cost efficiency

Example of Globalized Production

Of the $20,000 sticker price of a General Motors

Automobile LeMans:

z $6,000 goes to South Korea, where the car was assembled

z $3,000 goes to Japan for sophisticated high-tech parts

(engines, transaxles, electronics)

z $800 goes to Taiwan, Singapore, and Japan for small

parts

z $500 goes to Great Britain for advertising and marketing

services

z $1,000 goes to Ireland for data processing

z $7,600 goes to GM and its external professional firms in

the United States

The Changing Pattern of International Business

(continued)

z Technological innovations

¾ Advances in communications, information

processing, and transportation technology

¾ Fiber optics, wireless technology, the Internet

and World Wide Web, and satellite technology

z Management across cultures

¾ Adaptation to business strategies, structures,

operational policies, and human resource programs

Major Factors Affecting International Business

z General business environment

z Legal system

¾ Common law

¾ Civil law

¾ Muslim law

z Economic environment

z Cultural environment

¾ Culture shock

Dimensions of Culture

Power Distance

Individualism

Uncertainty Avoidance

Masculinity / Femininity

Long-term/ Short-term

Orientation