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Management, 10/e
John R. Schermerhorn, Jr. Chapter 5: International Management
Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc.
of globalization? What are global businesses and what do they do? What is culture and how does it impact global management? How can we benefit from global management learning?
globalization:
Global economy
Resource supplies, product markets, and business competition are worldwide, rather than local
Globalization
Global management
Management in organizations with business interests in more than one country
Global manager
Informed about international developments Transnational in outlook Competent in working with multicultural people Aware of regional developments in a changing world
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Global businesses
Conduct for-profit transactions of goods and
services across national boundaries
Market entry strategies involve the sale of goods or services to foreign markets but do not require expensive investments. Types of market entry strategies: Global sourcing Exporting Importing Licensing agreement Franchising
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Global sourcing
the process of purchasing materials or services
Exporting
selling locally made products in foreign markets
Importing
buying foreign-made products and selling them
domestically
Licensing agreement
one firm pays fee for rights to make or sell another
companys products
Franchising
a fee is paid for rights to use another firms name and operating methods
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building, buying or buying part ownership of a business in another country. job creation through foreign direct investment
Insourcing
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partner:
Familiarity with your firms major business. Strong local workforce. Future expansion possibilities. Values its customers Strong local market for partners own
products.
Good profit potential. Sound financial standing.
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the potential loss in value of a foreign investment due to instability and changes in host country
Local legal systems
relationships.
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Agreement
CAFTA Central American Free Trade
Agreement
EU European Union APEC Asia Pacific Economic Cooperation SADC Southern Africa Development
Community
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Global corporation
MNC (multinational corporation) with extensive business operations in more than one foreign country MNC (multinational corporation) operates worldwide on a borderless basis
Transnational corporation
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Shared growth opportunities Shared income opportunities Shared learning opportunities Shared development opportunities
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Excessive profits Domination of local economy Interference with local government Hiring the best local talent Limited technology transfer Disrespect for local customs
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Figure 5.2 What should go right and what can go wrong in MNC-host country relationships.
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Profit limitations Overpriced resources Exploitative rules Foreign exchange restrictions Failure to uphold contracts
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Sweatshops employing workers at low wages for long hours and in poor working conditions.
Child labor full-time employment of children for work otherwise done by adults.
Culture shock
Confusion and discomfort a person experiences in an unfamiliar culture. The ability to adapt and adjust to new cultures Tendency to consider ones own culture as superior to others.
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Cultural intelligence
Ethnocentrism
culture:
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Language Low-context cultures and high-context cultures Interpersonal space proxemics Time orientation Monochronic cultures and polychronic cultures Religion Contracts and agreements
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(Hofstede):
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Study Question 3: What is culture and how does it relate to global diversity?
Researches the leadership, organizational practices, and diversity among world cultures.
Power distance Uncertainty avoidance Gender egalitarianism Future orientation
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Study Question 3: What is culture and how does it relate to global diversity?
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Study Question 3: What is culture and how does it relate to global diversity?
of leadership success
trustworthy, just, honest Showing foresight, planning Being positive, dynamic, motivating Inspiring confidence Being informed and communicative Being a coordinator and team builder
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Study Question 3: What is culture and how does it relate to global diversity?
of leadership success
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Global managers
A large team of international researchers collaborated in Project GLOBE to examine societal cultures using the nine cultural dimensions shown in the figure. When results from extensive empirical studies were analyzed for 62 countries, they were found to fall into ten culture clusters. Countries within a cluster share many societal cultural practices; countries tend to differ significantly across clusters in their cultural practices. Management 10/e - Chapter 5 31
Participation and individual performance are not emphasized as much in other cultures.
Companies can and should learn from each other. Readiness for global organizational learning varies based on managerial attitudes. Ethnocentric attitudes
Polycentric Geocentric
attitudes attitudes
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