Managing In a Global Environment
International management: the management of business operations
conducted in more than one country.
Fundamental Management tasks: Planning, Organizing, leading, controlling.
Globalization: The extent to which trade and investments, information, social
and cultural ideas, and political cooperation flow between countries. Result is
that countries, businesses, and people become increasingly interdependent.
Global mindset: ability of managers to appreciate and influence individuals,
groups, organizations, and systems that represent different social, cultural,
political, institutional, intellectual, and psychological characteristics.
Able to perceive and respond to many different perspectives at the same time
rather than being stuck in a domestic mindset that only sees everything from
his/her own cultural perspectives.
Three dimensions of Global Mindset: Cognitive, Psychological, Social
Multinational Corporations: a company that has business operations in at least
one country other than its home country.
The characteristics of MNCs:
1. Managed as integrated worldwide business systems where foreign
affiliates act in close alliance and cooperation.
2. Controlled by a single management authority to make key strategic
decisions.
3. Top managers are presumed to exercise a global perspective. Regard the
entire world as one market.
Bottom of the pyramid (BOP): proposes that corporations can alleviate poverty
and other social ills as well as make significant profits by selling to the world’s
poorest people. Pyramid is defined by per-capita income.
Exporting: strategy in which the corporation maintains its production facilities
within the home nation and transfers its products for sale to foreign countries.
Global Outsourcing: engaging in the international division of labour so that
work activities can be done in countries with the cheapest sources of labour
and supplies. also called offshoring.
Partnerships: Represent a higher level of involvement in international trade.
Often the fastest, cheapest, and least risky way to get into global business.
Joint Venture: a company shares costs and risks with another firm, typically in
the host country, to develop new products, build a manufacturing facility, or set
up a sales and distribution network.
Political Challenges
Political risk: the risk of loss of assets, earning power, or managerial control
due to political events or actions by host governments. Includes government
takeovers of property and acts of violence directed against a firm’s properties
or employees.
Political instability: events such as riots, revolutions, civil disorders, and
frequent changes in government.
Global Project Value Dimensions
Assertiveness: extent to which a society encourages toughness, assertiveness,
and competitiveness.
Future orientation: extent to which a society encourages planning for the
future over short-term results.
Gender differentiation: extent to which a society maximizes gender role
differences.
Performance orientation: extent to which a society places emphasis on
performance and rewards people for improvement.
Human orientation: degree to which a society encourages and rewards people
for being fair, altruistic, generous, and caring.
Communication Challenges
Implicit communication:
people send and receive unspoken cues, such as tone of voice or body
language, in addition to the explicit spoken words when talking with others.
Cultural intelligence (CQ):
a person’s ability to use reasoning and observation skills to interpret unfamiliar
gestures and situations and devise appropriate behavioural responses.
High-context culture:
people are sensitive to circumstances surrounding social exchanges.
Low-context culture:
people use communication primarily to exchange facts and information;
meaning is derived primarily from words.
International Trade Alliances
GATT (General Agreement on Tariffs and Trade): Started as a set of rules to
ensure non-discrimination, provide clear procedures, settle disputes, and
encourage participation of lesser-developed countries in international trade.
World Trade Organization (WTO): Maturation of GATT into permanent global
institute. 162 member countries by February 2016
European Union: Alliance to improve economic and social conditions among
members. Goal is to create a powerful single-market system for Europe’s
millions of consumers, allowing people, goods, and services to move freely.
NAFTA (North American Free Trade Agreement): Agreement that merged the
United States, Canada, and Mexico into a single market.
Trans-Pacific Partnership (TPP): A proposed trade agreement among 12
countries. Supporters believe it will help the economy, others say that it
doesn’t enforce labour and environmental standards.
