managing in a global environment-prince dudhatra-9724949948

8/7/2019 Managing in a Global Environment-Prince Dudhatra-9724949948

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ninth editionninth edition

STEPHEN P. ROBBINSSTEPHEN P. ROBBINS

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookThe University of West AlabamaThe University of West Alabama

MARY COULTERMARY COULTER

prince dudhatraprince dudhatra--97249499489724949948

Managing in a GlobalManaging in a Global

EnvironmentEnvironment

ChapterChapter

44


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prince dudhatra-9724949948

L E A R N I N G O U T L I N EL E A R N I N G O U T L I N EFollow this Learning Outline as you read and study this chapter.Follow this Learning Outline as you read and study this chapter.

Whats Your Global Perspective?Whats Your Global Perspective?

Define parochialism.Define parochialism.

Contrast ethnocentric, polycentric, and geocentricContrast ethnocentric, polycentric, and geocentric

attitudes towards global business.attitudes towards global business.

Explain why its important for managers to be sensitive toExplain why its important for managers to be sensitive toglobal differencesglobal differences

Understanding the Global EnvironmentUnderstanding the Global Environment

Describe the current status of the European Union.Describe the current status of the European Union.

Discuss the North American Free Trade Agreement andDiscuss the North American Free Trade Agreement andother regional trade alliances in Latin America.other regional trade alliances in Latin America.

Tell about the Association of Southeast Asian Nations.Tell about the Association of Southeast Asian Nations.


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L E A R N I N G O U T L I N E (contd)L E A R N I N G O U T L I N E (contd)Follow this Learning Outline as you read and study this chapter.Follow this Learning Outline as you read and study this chapter.

Understanding the Global EnvironmentUnderstanding the Global Environment

Explain the interdependence that globalization involves.Explain the interdependence that globalization involves.

Discuss the role of the WTO.Discuss the role of the WTO.

Doing Business Globally

Doing Business Globally Contrast multinational, multidomestic, global,Contrast multinational, multidomestic, global,

transnational, and born global organizations.transnational, and born global organizations.

Describe the different ways organizations can goDescribe the different ways organizations can go

international.international.

Define global sourcing, exporting, importing, licensing,Define global sourcing, exporting, importing, licensing,and franchising.and franchising.

Describe global strategic alliances, joint ventures, andDescribe global strategic alliances, joint ventures, and

foreign subsidiaries.foreign subsidiaries.


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L E A R N I N G O U T L I N E (contd)L E A R N I N G O U T L I N E (contd)Follow this Learning Outline as you read and study this chapter.Follow this Learning Outline as you read and study this chapter.

Managing in a Global Environment (contd)Managing in a Global Environment (contd)

Explain how the global legalExplain how the global legal--political and economicpolitical and economic

environments affect managers.environments affect managers.

Discuss Hofstedes five dimensions for assessingDiscuss Hofstedes five dimensions for assessing

cultures.cultures.

Explain the nine GLOBE dimensions for assessingExplain the nine GLOBE dimensions for assessing

cultures.cultures.

Discuss the challenges of doing business globally inDiscuss the challenges of doing business globally in

todays world.todays world.


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The Global MarketplaceThe Global Marketplace

Opportunities and ChallengesOpportunities and ChallengesCoping with the sudden appearance of newCoping with the sudden appearance of new

competitorscompetitors

Acknowledging cultural, political, and economicAcknowledging cultural, political, and economic

differencesdifferencesDealing with increased uncertainty, fear, and anxietyDealing with increased uncertainty, fear, and anxiety

Adapting to changes in the global environmentAdapting to changes in the global environment

Avoiding parochialismAvoiding parochialism


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Whats Your Global Perspective?Whats Your Global Perspective?

ParochialismParochialism Is viewing the world solely through its own eyes andIs viewing the world solely through its own eyes and

perspectives.perspectives.

Is not recognizing that others have different ways ofIs not recognizing that others have different ways of

living and working.living and working. Is a significant obstacle for managers working in aIs a significant obstacle for managers working in a

global business world.global business world.

Is falling into the trap of ignoring others values andIs falling into the trap of ignoring others values and

customs and rigidly applying an attitude of ours iscustoms and rigidly applying an attitude of ours is

better than theirs to foreign cultures.better than theirs to foreign cultures.


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Exhibit 4Exhibit 411 Key Information About Three Global AttitudesKey Information About Three Global Attitudes


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Adopting a Global PerspectiveAdopting a Global Perspective

Ethnocentric AttitudeEthnocentric AttitudeThe parochialistic belief that the best workThe parochialistic belief that the best work

approaches and practices are those of theapproaches and practices are those of the homehome

country.country.

Polycentric AttitudePolycentric AttitudeThe view that the managers in theThe view that the managers in the hosthostcountry knowcountry know

the best work approaches and practices for runningthe best work approaches and practices for running

their business.their business.

Geocentric AttitudeGeocentric AttitudeAA worldworld--orientedorientedview that focuses on using the bestview that focuses on using the best

approaches and people from around the globe.approaches and people from around the globe.


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Exhibit 4Exhibit 433 European Union CountriesEuropean Union Countries


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Exhibit 4Exhibit 444 ASEAN MembersASEAN Members

Source: Based on J. McClenahen and T. Clark,

ASEAN at Work, IW. May 19, 1997, p. 42.


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The World Trade Organization (WTO)The World Trade Organization (WTO)

Evolved from the General Agreement on TariffsEvolved from the General Agreement on Tariffsand Trade (GATT) in 1995.and Trade (GATT) in 1995.

Functions as the only global organizationFunctions as the only global organization

dealing with the rules of trade among nations.dealing with the rules of trade among nations.

Has 149 member nations and 32 observerHas 149 member nations and 32 observer

governments.governments.

Monitors and promotes world trade.Monitors and promotes world trade.


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Different Types of InternationalDifferent Types of International

OrganizationsOrganizations

Multinational Corporation (MNC)Multinational Corporation (MNC)

Maintains operations in multiple countries.Maintains operations in multiple countries.

Multidomestic CorporationMultidomestic Corporation

Is an MNC that decentralizes management and otherIs an MNC that decentralizes management and other

decisions to the local country.decisions to the local country.

Global CompanyGlobal Company

Is an MNC that centralizes its management and otherIs an MNC that centralizes its management and other

decisions in the home country.decisions in the home country.


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Different Types of InternationalDifferent Types of International

Organizations (contd)Organizations (contd)

Transnational Corporation (BorderlessTransnational Corporation (Borderless

Organization)Organization)

Is an MNC that has eliminated structural divisions thatIs an MNC that has eliminated structural divisions that

impose artificial geographic barriers and is organizedimpose artificial geographic barriers and is organizedalong business lines that reflect a geocentric attitude.along business lines that reflect a geocentric attitude.

Born Globals/International New Ventures (INVs)Born Globals/International New Ventures (INVs)

Commit resources upfront (material, people,Commit resources upfront (material, people,

financing) to doing business in more than onefinancing) to doing business in more than onecountry.country.


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Exhibit 4Exhibit 455 How Organizations Go GlobalHow Organizations Go Global


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Other Forms of GlobalizationOther Forms of Globalization

Strategic AlliancesStrategic AlliancesPartnerships between and organization and a foreignPartnerships between and organization and a foreign

company in which both share resources andcompany in which both share resources andknowledge in developing new products or buildingknowledge in developing new products or buildingnew production facilities.new production facilities.

Joint VentureJoint VentureA specific type of strategic alliance in which theA specific type of strategic alliance in which the

partners agree to form a separate, independentpartners agree to form a separate, independentorganization for some business purpose.organization for some business purpose.

Foreign SubsidiaryForeign SubsidiaryDirectly investing in a foreign country by setting up aDirectly investing in a foreign country by setting up a

separate and independent production facility or office.separate and independent production facility or office.


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Managing in A Global EnvironmentManaging in A Global Environment

The Legal EnvironmentThe Legal EnvironmentStability or instability of legal and political systemsStability or instability of legal and political systems

Legal procedures are established and followedLegal procedures are established and followed

Fair and honest elections held on a regular basisFair and honest elections held on a regular basis

Differences in the laws of various nationsDifferences in the laws of various nations

Effects on business activitiesEffects on business activities

Effects on delivery of products and servicesEffects on delivery of products and services


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The Economic EnvironmentThe Economic Environment

Economic SystemsEconomic SystemsMarket economyMarket economy

An economy in which resources are primarily owned andAn economy in which resources are primarily owned and

controlled by the private sector.controlled by the private sector.

Command economyCommand economy

An economy in which all economic decisions are planned byAn economy in which all economic decisions are planned by

a central government.a central government.

Monetary and Financial FactorsMonetary and Financial Factors

Currency exchange ratesCurrency exchange rates

Inflation ratesInflation rates

Diverse tax policiesDiverse tax policies


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The Cultural EnvironmentThe Cultural Environment

National CultureNational Culture Is the values and attitudes shared by individuals fromIs the values and attitudes shared by individuals from

a specific country that shape their behavior and theira specific country that shape their behavior and their

beliefs about what is important.beliefs about what is important.

May have more influence on an organization than theMay have more influence on an organization than theorganization culture.organization culture.


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Exhibit 4Exhibit 466 What Are Americans LikeWhat Are Americans Like

Americans are very informal.

Americans are direct.

Americans are competitive.

Americans are achievers.

Americans are independentand individualistic.

Americans are questioners.

Americans dislike silence.

Americans value punctuality.Americans value cleanliness.

Sources: Based on M. Ernest (ed.), Predeparture Orientation Handbook: For Foreign Students and Scholars Planning to Study in the

United States (Washington, DC: U.S. Information Agency, Bureau of Cultural Affairs, 1984), pp. 10305; A. Bennett, American Culture Is

Often a Puzzle for Foreign Managers in the U.S., Wall Street Journal, February 12, 1986, p. 29; Dont Think Our Ways the Only Way,

The Pryor Report, February 1988, p. 9; and B.J. Wattenberg, The Attitudes behind American Exceptionalism, U.S. News & World

Report, August 7, 1989, p. 25.


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Hofstedes Framework for Assessing CulturesHofstedes Framework for Assessing Cultures

Individualism

versus

Collectivism

PowerDistance

Uncertainty

Avoidance

Achievementversus

Nurturing

Long-Term

versusShort-Term

OrientationCulture


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Exhibit 4Exhibit 477 Examples of Hofstedes Cultural DimensionsExamples of Hofstedes Cultural Dimensions

Source: Based on G. Hofstede, Motivation, Leadership, and Organization: Do American

Theories Apply Abroad? Organizational Dynamics, Summer 1980, pp. 4263.


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Exhibit 4Exhibit 488 GLOBE HighlightsGLOBE Highlights

Source: M. Javidan and R. J. House, Cultural Acumen for the Global Manager: Lessons from Project GLOBE,

Organizational Dynamics, Spring 2001, pp. 289305. Copyright 2001. Reprinted with permission from Elsevier.


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Global Management in Todays WorldGlobal Management in Todays World

ChallengesChallengesOpenness associated with globalizationOpenness associated with globalization

Significant cultural differences (e.g., Americanization)Significant cultural differences (e.g., Americanization)

Adjusting leadership styles and managementAdjusting leadership styles and management

approachesapproaches RisksRisks

Loss of investments in unstable countriesLoss of investments in unstable countries

Increased terrorismIncreased terrorism

Economic interdependenceEconomic interdependence


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Terms to KnowTerms to Know

parochialismparochialism

ethnocentric attitudeethnocentric attitude

polycentric attitudepolycentric attitude

geocentric attitudegeocentric attitude

European Union (EU)European Union (EU)

EuroEuro

North American Free TradeNorth American Free Trade

Agreement (NAFTA)Agreement (NAFTA)

Association of Southeast AsianAssociation of Southeast Asian

Nations (ASEAN)Nations (ASEAN)

World Trade Organization (WTO)World Trade Organization (WTO)

multinational corporations (MNCs)multinational corporations (MNCs) multidomestic corporationmultidomestic corporation

global companyglobal company

transnational or borderlesstransnational or borderless

organizationorganization

born globalsborn globals

global sourcingglobal sourcing

exportingexporting

importingimporting

licensinglicensing

franchisingfranchising

strategic alliancesstrategic alliances

joint venturejoint venture

foreign subsidiaryforeign subsidiary

market economymarket economy

command economycommand economy

national culturenational culture

GLOBEGLOBE

wikiswikis

blogsblogs

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