management ch4

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookCopyright © 2005 Prentice Hall, Inc.Copyright © 2005 Prentice Hall, Inc.

All rights reserved. All rights reserved.

8th edition8th edition

Steven P. RobbinsMary Coulter

Steven P. RobbinsMary Coulter

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 4–2

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

What Your Global Perspective?• Define parochialism and explain why it can lead to

problems.

• Contrast ethnocentric, polycentric, and geocentric attitudes towards global business.

• Describe the advantage and drawbacks of the three attitudes towards global business

Understanding the Global Environment• Describe the benefits from free trade.

• Tell why the European Union began

• Describe the current status of the European Union

• Discuss the North American Free Trade Agreement.


L E A R N I N G O U T L I N E (cont’d) Follow this Learning Outline as you read and study this chapter.

Understanding the Global Environment (cont’d)• Describe other regional trade alliance in Latin America.

• Tell about the Association of Southeast Asian Nations.

• Describe other regional trade alliances.

• Explain the interdependence that globalization involves.

• Describe the formation of the World Trade Organization.

• Discuss the role of the WTO.

Doing Business Globally• Contrast MNCs, TNCs, and borderless organizations.

• Relate MNCs, TNCs, and borderless organizations to the three attitudes towards global business.



Doing Business Globally• Describe the three stages organizations go through as they

go global.

• Define exporting, importing, licensing, and franchising.

• Describe global strategic alliances, joint ventures, and foreign subsidiaries.

Managing in a Global Environment• Explain how the global legal-political environment affects

managers.

• Describe the effect of the global economic environment on managers.

• Discuss Hofstede’s five dimensions for assessing cultures.



Managing in a Global Environment (cont’d)• Explain the nine GLOBE dimensions for assessing

cultures.

• Discuss the challenges of doing business globally in today’s world.


Managing in a Global Environment

• ChallengesCoping with the sudden appearance of new

competitorsAcknowledging cultural, political, and economic

differencesDealing with increased uncertainty, fear, and anxietyAdapting to changes in the global environmentAvoiding parochialism


Adopting a Global Perspective

• Ethnocentric AttitudeThe parochialistic belief that the best work

approaches and practices are those of the home country.

• Polycentric AttitudeThe view that the managers in the host country know

the best work approaches and practices for running their business.

• Geocentric AttitudeA world-oriented view that focuses on using the best

approaches and people from around the globe.


Regional Trading Agreements

• The European Union (EU)A unified economic and trade entity

Belgium, Denmark, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom, Germany, Austria, Finland, and Sweden

Economic and monetary union (Euro)

• North American Free Trade Agreement (NAFTA)Eliminated barriers to free trade (tariffs, import

licensing requirements, and customs user fees) United States, Canada, and Mexico


Regional Trading Agreements (cont’d)

• Free Trade Area of the Americas• Southern Cone Common Market (Mercosur)• Association of Southeast Asian Nations

(ASEAN)Trading alliance of 10 Southeast Asian nations

• African Union


The World Trade Organization (WTO)

• Evolved from the General Agreement on Tariffs and Trade (GATT) in 1995.

• Functions as the only global organization dealing with the rules of trade among nations.

• Has 145 member nations.

• Monitors and promotes world trade.


Different Types of Global Organizations

• Multinational Corporation (MNC)A firm which maintains operations in multiple

countries but manages the operations from a base in the home country.

• Transnational Corporation (TNC)A firm that maintains operations in several countries

but decentralizes management to the local country.

• Borderless OrganizationA firm that has eliminated structural divisions that

impose artificial geographic barriers and is organized along business lines.


How Organizations Go Global

• Three Stages of GlobalizationStage I

Exporting products for sale overseas and importing products from overseas to sell in the home country.

Stage II Committing to directly sell home-country products in

overseas markets or contracting for products to be manufactured overseas and sold in the home country.

Stage III Licensing manufacturing and franchising services to

foreign firms to use the brand name, technology, or product specifications developed by the firm.


Other Forms of Globalization

• Strategic AlliancesPartnerships between and organization and a foreign

company in which both share resources and knowledge in developing new products or building new production facilities.

• Joint VentureA specific type of strategic alliance in which the

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


Managing in A Global Environment

• The Legal EnvironmentStability or instability of legal and political systems

Legal procedures are established and followed Fair and honest elections held on a regular basis

Differences in the laws of various nations Effects on business activities Effects on delivery of products and services


The Economic Environment

• Economic SystemsMarket economy

An economy in which resources are primarily owned and controlled by the private sector.

Command economy An economy in which all economic decisions are

planned by a central government.

• Monetary and Financial FactorsCurrency exchange rates Inflation ratesDiverse tax policies


The Cultural Environment

• National Culture Is the values and attitudes shared by individuals from

a specific country that shape their behavior and their beliefs about what is important.

May have more influence on an organization than the organization culture.


Hofstede’s Framework for Assessing Cultures

• Individualism versus Collectivism• Power Distance• Uncertainty Avoidance• Quantity versus Quality of Life• Long-term versus Short-term Orientation

Individualism: the degree to which people in a country prefer to act as individuals.

Collectivism: a social framework in which


The GLOBE (Global Leadership and Organizational Behavior Effectiveness) Framework for Assessing Cultures

• Assertiveness

• Future orientation

• Gender differentiation

• Uncertainty avoidance

• Power distance

• Individualism/collectivism

• In-group collectivism

• Performance orientation

• Humane orientation