PowerPoint Presentation to Accompany Management, 9/e John R. Schermerhorn, Jr. Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc. Chapter 5: Global Dimensions of Management

Management 9/e - Chapter 52 Study Question 1: What are the international business challenges of globalization?  Key concepts in the challenges of globalization: Global economy Globalization International management Global manager

Management 9/e - Chapter 53 Study Question 1: What are the international business challenges of globalization? Global economy Resource supplies, product markets, and business competition are worldwide, rather than local Globalization The process of growing interdependence of these components in the global economy

Management 9/e - Chapter 54 Study Question 1: What are the international business challenges of globalization? International 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

Management 9/e - Chapter 55 Study Question 1: What are the international business challenges of globalization? International businesses Conduct for-profit transactions of goods and services across national boundaries Reasons why businesses go international: Profits Customers Suppliers Capital Labor

Management 9/e - Chapter 56 Study Question 1 What are the international business challenges of globalization?  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

Management 9/e - Chapter 57 Figure 5.1 Common forms of international business—from market entry to direct investment strategies.

Management 9/e - Chapter 58 Study Question 1 What are the international business challenges of globalization?  Direct investment strategies require major capital commitments but create rights of ownership and control over foreign operations.  Types of direct investment strategies: Joint ventures Foreign subsidiaries

Management 9/e - Chapter 59 Study Question 1 What are the international business challenges of globalization?  Criteria for choosing a joint venture partner: Familiarity with your firm’s major business. Strong local workforce. Future expansion possibilities. Strong local market for partner’s own products. Good profit potential. Sound financial standing.

Management 9/e - Chapter 510 Study Question 1 What are the international business challenges of globalization?  Complications in the global business environment : Environment is complex, dynamic, and highly competitive. Global business executives must deal with differences in the environment of business in different countries. World Trade Organization resolves trade and tariff disputes among countries. Protectionism can complicate global trading relationships.

Management 9/e - Chapter 511 Study Question 2: What are multinational corporations and what do they do?  A multinational corporation (MNC) is a business with extensive international operations in more than one foreign country.

Management 9/e - Chapter 512 Study Question 2: What are multinational corporations and what do they do?  Mutual benefits for host country and MNC: Shared growth opportunities Shared income opportunities Shared learning opportunities Shared development opportunities

Management 9/e - Chapter 513 Study Question 2: What are multinational corporations and what do they do?  Host country complaints about MNCs: Excessive profits Domination of local economy Interference with local government Hiring the best local talent Limited technology transfer Disrespect for local customs

Management 9/e - Chapter 514 Study Question 2: What are multinational corporations and what do they do?  MNC complaints about host countries: Profit limitations Overpriced resources Exploitative rules Foreign exchange restrictions Failure to uphold contracts

Management 9/e - Chapter 515 Study Question 3: What is culture and how does it relate to global diversity?  Culture The shared set of beliefs, values, and patterns of behavior common to a group of people.  Culture shock Confusion and discomfort a person experiences in an unfamiliar culture.  Cultural intelligence The ability to adapt and adjust to new cultures  Ethnocentrism Tendency to consider one’s own culture as superior to others.

Management 9/e - Chapter 516 Study Question 3: What is culture and how does it relate to global diversity?  Stages in adjusting to a new culture: Confusion Small victories The honeymoon Irritation and anger Reality

Management 9/e - Chapter 517 Study Question 3: What is culture and how does it relate to global diversity?  Popular dimensions of culture: Language  Low-context cultures and high-context cultures Interpersonal space Time orientation  Monochronic cultures and polychronic cultures Religion Contracts and agreements

Management 9/e - Chapter 518 Study Question 3: What is culture and how does it relate to global diversity?  Values and national cultures (Hofstede): Power distance Uncertainty avoidance Individualism-collectivism Masculinity-femininity Time orientation

Management 9/e - Chapter 519 Study Question 4: How do management practices transfer across cultures ?  Comparative management How management systematically differs among countries and/or cultures.  Global managers Need to successfully apply management functions across international boundaries.

Management 9/e - Chapter 520 Study Question 4: How do management practices transfer across cultures?  Are management theories universal? U.S. management theories may be ethnocentric.  Participation and individual performance are not emphasized as much in other cultures. Not all Japanese management practices can be applied successfully abroad.

Management 9/e - Chapter 521 Study Question 4: How do management practices transfer across cultures?  Global organizational learning: Companies can and should learn from each other. Readiness for global organizational learning varies based on managerial attitudes.  Ethnocentric attitudes  Polycentric attitudes  Geocentric attitudes Be alert, open, inquiring, but always cautious.