1. Managing the Global Arena5
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2. Objectives
1. An understanding of international management and its importance to modern managers 2. An understanding of what constitutes a multinational corporation 3. Insights concerning the risk involved in investing in international operations 4. Insights into those who work in multinational corporations 5. Knowledge about managing multinational corporations 6. Knowledge about managing multinational organizations versus transnational organizations 7. An understanding of how ethics and the preparation of expatriates relate to managing internationally
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3. Managing Across the Globe
Global Management Skill: The ability to manage global factors as components of organizational operations.
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4. Managing Across the Globe: Why?
- Great opportunities in the international marketplace today
- U.S. population growth slow but steady
- Other countries having population explosions (China, India, Indonesia – 2 billion by 1990)
- Strong profit potential has serious risk
Some challenges are:
Cultural differences
Different technology levels
Laws and political systems
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5. Fundamentals of International Management
International Management: The performance of management activities accross national borders. It entails reaching of organizational objectives by extending management activities to include an emphasis on organisations in foreign countries.
Q?: for most firms is not whether to globalize?
BUT HOW and HOW FAST to do so and
HOW to measure it?
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6. Fundamentals of International Management
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7. Categorizing Organizations by International Involvement
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8. Categorizing Organizations by International Involvement
Domestic Organizations: operate within a single country. Both acquire and sell their goods/services within that same country. Majority of their operations are where they are based. Most are small organizations.
International Organizations: Based primarily within a single country but have continuing, meaningful international transactions. E.g. Making sales, purchasing materials…
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9. Categorizing Organizations by International Involvement
Multinational Organizations/ The Multinational Corporation (MNC): Company that has significant operations in more than one country. Essentially, MNC is and organization that is involved in doing business at the international level. It carries out its activities on an international scale that disregard national boundaries, and it is guided by common strategy from corporation center.
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10. Categorizing Organizations by International Involvement
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11. It takes 25 years to build the management team with requisite skills, experiences and abilities to mold and organization into a highly developed MNC. (Dupont, GE, Lockheed)
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12. Categorizing Organization by International Involvement
Complexities of Managing the Multinational Corporation (it differs from domestic management because;)
1. Within different national sovereignties
2. Under widely disparate economic conditions
3. Among people living within different value systems and institutions
4. In places experiencing the industrial revolution at different times
5. Often over greater geographical distance
6. In national markets varying greatly in population and area
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13. Categorizing Organization by International Involvement
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14. Categorizing Organizations by International Involvement
Risk and the Multinational Corporation (as it requires substantial investments)
1. Reduce or eliminate high transportation costs
2. Allow participation in the rapid expansion of a market abroad
3. Provide foreign technical, design, and marketing skills
4. Earn higher profits
But sometimes they may not see/calculate risks correctly,
contracts are very important to eliminate some of the
risks.
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15. Categorizing Organizations by International Involvement
The Workforce of Multinational Corporations
As organisations becomes more global, they become more diverse. Managers have continual challenges of
Building a competitive business team made up of people of different races who speak different languages and come different parts of the world.
Types of Organization Members Found in Multinational Corporations
Expatriates
Host-Country Nationals
Third-Country Nationals
Workforce Adjustments
Adjusting to a New Culture
Repatriation
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16. Categorizing Organizations by International Involvement
Workforce Adjustments (below adjustments are the most difficult challenges for MNC workforce)
Adjusting to a New Culture
- Experience confusion, anxiety and stress related to the need to make cultural adjustments. (food, weather, language, driving, traffic, etc.)
Difficult attitudes and perceptions:
Japanese are renowned for their hard-driving work ethics,
Americans take a slightly more relaxed attitude toward work,
America: working past quitting time is exemplary,
Japan: working past quitting time is critized.
Repatriation: Bringing individuals back to their home country and reintegrating them into the organisation’s home-country operations. It has its own adjustment problems, (disaapointment, getting used to lifestyles at overseas)
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