Chapter 4 Managing Globally Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002

Learning Objectives After reading this chapter, you should be able to:  State several characteristics of the global economy  Describe six strategies used by organizations in international business  Explain the impact of political-legal forces on international business  Discuss how three major trade agreements affect global competition  Describe how a country’s culture can affect an organization’s business practices 4.1

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Global Economic Trends  Increased competition  Shortened product life-cycles  Importance of exports and imports  Worldwide communication  New countries emerge  Borderless organizations  Worldwide labor pool 4.2 Adapted from Table 4.1

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Strategies for International Operations High Low Resource Commitment ComplexityComplexityComplexityComplexity Adapted from Figure 4.1 Exporting Licensing Franchising Alliances Multidomestic Global 4.3

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Assessing Political Risk Domestic Instability Low High Foreign Conflict Low High Political Climate Stable Unstable Economic Climate Stable Unstable Adapted from Figure Corruption NoncorruptCorrupt

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Goals of the World Trade Organization (WTO)  Administer WTO trade agreements  Provide a forum for trade negotiations  Handle trade disputes between nations  Monitor national trade policies  Provide technical assistance and training for people in developing countries  Cooperate with other international organizations 4.5

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Goals of NAFTA  Create a U.S., Canadian, and Mexican trade zone  Promote liberalized trade, not free trade  Retain some protectionist elements  Increase efficiency and customer satisfaction 4.6

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Goals of the European Union  Create a single market among the 15 member countries  Eliminate existing barriers between countries  Implement the Euro as a common currency 4.7

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Tendencies of Many U.S. and Japanese Organizations  Employment  Salary and promotion  Attitude toward work Short term on average, but varies widely; unstable and insecure Merit pay based on individual contribution; rapid promotion in career Individual responsibilities Many (Not All) Major U.S. Organizations Many (Not All) Major Japanese Organizations Adapted from Table 4.3 Dimensions Long-term for males (recent decline in lifetime employment), moderately secure and stable Seniority-based early in career; more merit pay later Collective responsibilities; group loyalty, duty-oriented 4.8

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Tendencies of Many U.S. and Japanese Organizations (cont.)  Decision making  Relationship with employees  Competition Individual-oriented; relatively top-down emphasis Depersonalized; emphasis on formal contacts Relatively free and open among individuals Consultation oriented; bottom-up emphasis Personalized; employee treated more as a family member; paternalism Low among individuals within groups; high among groups Adapted from Table 4.3 Many (Not All) Major U.S. Organizations Many (Not All) Major Japanese Organizations Dimensions 4.9