Global Management: Int'l Business Strategies & Challenges - Prof. Valarie Spiser-Albert, Study notes of Introduction to Business Management

Download Global Management: Int'l Business Strategies & Challenges - Prof. Valarie Spiser-Albert and more Study notes Introduction to Business Management in PDF only on Docsity! Chapter 4 Managing in a Global Environment Organizations and managers are not isolated from international forces: – Trade barriers have fallen – Communication is faster, cheaper – Consumer tastes converge The difficulties and risks of a borderless world are matched by benefits and opportunities A Borderless World 2Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. • Exporting – transferring products for sale to foreign countries • Outsourcing – also called off shoring, work activities are done in countries with cheap labor • Licensing – enabling a company to produce and market a product in another country – Franchising is licensing that provides a complete package of materials and services • Direct Investing – high level of involvement, company manages and controls assets – Joint venture and other types of partnerships are common International Market Strategies 5Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 4.3 Strategies for Entering the International Arena Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 6 China manufacturers many products for U.S. companies China is also a growing consumer market Regulations and government policies make doing business in China a challenge India is a service giant, growing in software design and engineering Brazil is a country that is gaining the attention of American managers China Inc. Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 7 • Economic Development - Countries are categorized as either developed or developing based on per capita income – Government Policies – Market Size – Financial Markets – Infrastructure • Resource and Product Markets – Companies must evaluate market demand The current economic crisis has highlighted how interconnected economies are around the world The Economic Environment 10Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 4.5 World Economic Forum Global Competitiveness Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 11 The United States moved from #1 to #2! 4.6 How Countries are Bearing the Economic Crisis Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 12  Power Distance  Uncertainty Avoidance  Individualism and Collectivism  Masculinity and Felinity Hofstede’s Value Dimensions 15Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. • Assertiveness • Future orientation • Uncertainty avoidance • Gender differentiation • Power distance GLOBE Project Value Dimensions 16Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. • Social collectivism • Individual collectivism • Performance orientation • Humane orientation 4.7 Country Ranking on Four GLOBE Value Dimensions Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 17 • Cultural intelligence – ability to use reasoning and observation skills – Culturally flexible – Adapt to new situations • Managers must study the language and learn • Cognitive, emotional, and physical intelligence Developing Cultural Intelligence 20Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. • General Agreement on Tariff and Trade (GATT) – 23 nations in 1947, a set of rules for fair trade • World Trade Organization (WTO) –Maturation of GATT into permanent global institute • European Union – 1957 Alliance to improve economic and social conditions among members; evolved to 27-nation European Union • North American Free Trade Agreement (NAFTA) –Merged the United States, Canada, and Mexico into trading bloc International Trade Alliances 21Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 4.10 European Union Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 22 • 68% of Americans say other countries benefit the most from free trade – 53% believe free trade has hurt U.S. • The United States’ primary concern is the loss of jobs – $136 billion in wages will shift from the U.S. • Business leaders insist that economic benefits flow back to the U.S. economy – Lower prices and expanded markets – Increased profits and funds for innovation • But American shoppers say they would pay higher prices to keep down foreign competition The Globalization Backlash 25Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.  An approach for multinationals to do good  Corporations can alleviate problems and make large profits by selling to the world’s poor  There are more than 4 billion people at the lowest level of the economic pyramid  Many companies are adopting BOP strategies Serving the Bottom of the Pyramid (BOP) Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 26