management, by williams south-western college publishing copyright © 2000 chapter 8 global...
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Chapter 8Chapter 8
Global Management
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
What Would What Would YouYou Do? Do? McDonald’s Expanding into Eastern EuropeMcDonald’s Expanding into Eastern Europe
Relatively poor countries Poor-quality produce Will employees work hard? Which country should they enter first? Joint ventures?
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
After discussing this section, you should be able to:
Learning ObjectivesLearning ObjectivesWhat is Global Business?What is Global Business?
describe the impact of global business on the U.S.discuss the trade rules and agreements that
govern global trade.
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Impact of Global BusinessImpact of Global Business
“Foreigners” Buying up American Companies
American Companies are not Competitive in the World Market
Americans Buying American Products
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Buying AmericanBuying American
Americans say they want to “Buy American”
Country of manufacture where the product is made
Country of origin company’s home country
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Trade Rules and AgreementsTrade Rules and Agreements
Tariffs & Trade Barriers
Global & Regional Trade Agreements
Consumer Response to Trade Barriers & Agreements
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Trade BarriersTrade Barriers
Tariff Nontariff barriers
Quotas Voluntary export restraints Subsidies
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Trade AgreementsTrade Agreements
General Agreement on Tariffs & Trade (GATT)
Regional Trading Zones Maastricht Treaty of Europe NAFTA FTAA ASEAN & APEC
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
GATTGATT
Worldwide trade agreement Designed to reduce and eliminate tariffs
and subsidies Protect intellectual property
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Maastricht Treaty of EuropeMaastricht Treaty of Europe
Originally, 12 (now 15) European countries
Transform these different countries into the European Union
Open up trade among member nations Create the “Euro” currency
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
North American Free Trade North American Free Trade Agreement - NAFTAAgreement - NAFTA
Canada, United States, & Mexico Liberalizes trade among these three
nations Eliminate tariffs and barriers
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Free Trade Area of the AmericasFree Trade Area of the Americas
Proposed agreement Unite 36 countries in North & South
America
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Association of South East NationsAssociation of South East NationsAsia-Pacific Economic CooperationAsia-Pacific Economic Cooperation
ASEAN Indonesia, Thailand, Philippines,
Malaysia, Singapore, & Brunei APEC
U.S., Canada, Japan, South Korea, Australia, New Zealand, China, Hong Kong, & ASEAN members
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Consumers, Trade Barriers, & Trade Consumers, Trade Barriers, & Trade AgreementsAgreements American annual income less than many
countries Cost of living, however, is also less here Open trade gives American consumers
many choices
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
After discussing this section, you should be able to:
Learning ObjectivesLearning ObjectivesHow to Go Global?How to Go Global?
explain why companies choose to standardize or adapt their business procedures.
explain the different ways that companies can organize to do business globally.
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Consistency or Adaptation?Consistency or Adaptation?
Globalconsistency
Localadaptation
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Back to the FutureBack to the FutureA Global “Walk Down the Hallway”
Conducting global business via teleconferencing cheaper and less jet-lag can be done via the Internet
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Forms for Global BusinessForms for Global Business
ExportingCooperative Contract
•licensing•franchise
Strategic Alliances- Joint Ventures
Wholly OwnedAffiliates
Global NewVentures
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
After discussing this section, you should be able to:
Learning ObjectivesLearning ObjectivesWhere to Go Global?Where to Go Global?
explain how to find a favorable business climate.
discuss the importance of identifying and adapting to cultural differences.
explain how to successfully prepare workers for international assignments.
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Finding the Best Business ClimateFinding the Best Business Climate
Growing Markets
Choosing an Office/Manufacturing Location
Minimizing PoliticalRisk
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Growing MarketsGrowing Markets
Purchasing Power comparison of a standard set of goods
and services in different countries more means greater growth potential
Degree of Global Competition the number & quality of companies
already in the market more means less growth potential
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Choosing an Office/Manufacturing Choosing an Office/Manufacturing LocationLocation Quantity factors
work force quality company strategy
Quality factors costs and barriers
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Minimizing Political RisksMinimizing Political Risks
Political uncertainty risk of major changes in political regimes
Policy uncertainty risk associated with changes in laws and
government policies directed at businesses
Strategies avoidance control avoidance
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
Becoming Aware of Cultural Becoming Aware of Cultural Differences - Geert HofstedeDifferences - Geert Hofstede
Power distance Individualism Short-term/Long-term orientation Masculinity v. femininity Uncertainty avoidance
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Preparing for an International Preparing for an International AssignmentAssignment
Language andCross-Cultural
Training
Spouse, Family,and
Dual-CareerIssues
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What Really Works?What Really Works?
Cross-Cultural Training
Psychological Well-Being & Self-Development
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Fostering Relationships with Native Citizens
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success 79%
Probability of success 74%
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
What Really Works? (What Really Works? (Cont’d.)Cont’d.)
Accurate Cultural Perceptions
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Rapid Adjustment to Foreign Cultures & Countries
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Probability of success 74%
Probability of success 74%
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
What Really Works? (What Really Works? (Cont’d.)Cont’d.)
On-the-Job Performance
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success 71%
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Management, by WilliamsSouth-Western College PublishingCopyright © 2000
What What ReallyReally Happened? Happened?McDonald’s in Eastern Europe
Buys local produce, when available Native workers are being trained to run
the stores Hungary, Poland and the Czech Republic
are the first countries to receive stores