ESSENTIALS OF MANAGEMENT:

An International Perspective
Sixth Edition
Weihrich and Koontz

Chapter 3. International Management

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After studying this chapter, you should understand:

1. The nature and purpose of international business and

multinational corporations (MNC).
2. The differences in managing in selected countries.
3. The managerial practices in Japan and Theory Z.
4. The factors that influence the competitive advantages
of nations, according to Michael Porter

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 International Management and
Multinational Corporations

International management focuses on the

operation of international firms in host
countries

International businesses engage in

transactions across national boundaries

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Forms of
International
Business

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 Multinational Corporations
Multinational corporations (MNCs) have their
headquarters in one country but operate in many
countries
Ethnocentric orientation: Style of the foreign
operations is based on that of the parent company
Polycentric orientation: Foreign subsidiaries are
given a great deal of managerial freedom
Regiocentric orientation: Favors the staffing of
foreign operations on a regional basis
Geocentric orientation: Entire organization is viewed
as an interdependent system operating in many
countries

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 From MNC to Global Corporation

MNCs have headquarters in one country but

their operations in many countries
Just operating is not enough. The shift is
toward the global or transnational corporation,
which views the whole world as one market

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 INTERNATIONAL MANAGEMENT

France: "Le Plan" and the "Cadre"

Germany: Authority and Codetermination
Korean Management
Chaebol is characterized by a tight collusion
between government and industrial conglomerates
Korean concept of inhwa translates into harmony

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 Japanese Management and Theory Z

Lifetime Employment
Decision Making in Japan
Theory Z
In Theory Z, selected Japanese
managerial practices are adapted to the
environment of the United States

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 Porter's Competitive Advantage of Nations
Factor conditions such as a nation's resources, its
labor costs, and the skills and education of its
people.
Demand conditions of a nation, such as the market
size, the way products may be advertised, and the
degree of consumer sophistication.
The suppliers. A company prospers when
supporting companies are located in the same area.
The firm's strategy and structure as well as rivalry
among the competitors.

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