1 3.1 Globalization: The Collapse Of Time & Distance
WHAT IS GLOBALIZATION?
Globalization is the trend of the world economy
toward becoming a more interdependent system
Today, we are witnessing a shrinking of time and
space as air travel and the electronic media have made it easier for people around the world to communicate with each other We call this the global village
2 3.1 Globalization: The Collapse Of Time & Distance
IS GLOBALIZATION A GOOD THING?
The global economy refers to the increasing tendency of the
economies of the world to interact with one another as one market instead of many national markets Growth in jobs and income in one country means growth in jobs and income in other countries—a win-win situation However, global interdependency can be negative when negative events in one country generate negative events in other countries Outsourcing jobs also brings negative effects to the country that loses the jobs
3 3.1 Globalization: The Collapse Of Time & Distance
WHY SHOULD YOU LEARN ABOUT
INTERNATIONAL MANAGEMENT?
You need to learn about international management because
you may find yourself in any of the following situations: dealing with customers or partners from different cultures buying components, raw materials, or services from foreign suppliers working for a superior from a foreign country working in a foreign subsidiary or for a foreign firm located in another country
There are three primary attitudes among international
managers: managers who believe that their native country, culture, language, and behavior are superior to all others are ethnocentric managers managers who believe native managers in foreign offices best understand native personnel and practices, and so the home office should leave them alone are polycentric managers Geocentric managers accept that there are differences and similarities between home and foreign personnel and practices, and that they should use whatever techniques are most effective
7 3.5 The World Of Free Trade: Regional Economic Cooperation
There are three main types of trade barriers:
1. Trade barriers in the form of a customs duty, or tax, levied mainly on imports are called tariffs 2. Trade barriers that limit the numbers of a product that can be imported are import quotas 3. Embargoes are complete bans on the import or export of certain products
Groups of nations within a geographic region that have
agreed to remove trade barriers with one another are called trading blocs or economic communities
13 3.6 The Importance Of Understanding Cultural Differences
WHY SHOULD MANAGERS UNDERSTAND
CULTURAL DIFFERENCES BETWEEN COUNTRIES?
Culture is the shared set of beliefs, values, knowledge, and
patterns of behavior common to a group of people Misunderstandings and miscommunications in international business often occur because of cultural misunderstandings In low-context cultures like Germany and the U.S., shared meanings are primarily derived from written and spoken words In high-context cultures like Japan and China, people rely heavily on situational cues for meaning when communicating with others
16 3.6 The Importance Of Understanding Cultural Differences
Geert Hofstede identified four dimensions along which
national cultures vary 1. individualism/collectivism describes how loosely or tightly people are socially bonded 2. power distance refers to how much people accept inequality in power 3. uncertainty avoidance describes how strongly people desire uncertainty 4. masculinity/femininity refers to how much people embrace stereotypical male or female traits
understanding basic cultural across four areas 1. Language - more than 3,000 different languages are spoken in the world 2. Interpersonal space - how close people should be when communicating varies by culture 3. Time orientation - time orientation varies by culture 4. Religion - Christianity has the largest following with 2.1 billion adherents, Islam is next with 1.3 billion followers, then Hinduism, Buddhism, and Judaism