1. CHAPTER 5- GLOBAL DIMENSIONS OF MANAGEMENT
By: Linda, Janelle, UMEKA

2. INTERNATIONAL MANAGEMENT AND GLOBALIZATION
Global Economy : resources, markets, competition are worldwide in scope
economy offers great opportunities for worldwide sourcing, production, sales capabilities
Globalization: process of growing interdependence among elements of global economy
International Management: managing operations in more than one country
management challenges and opportunities of working across national & culture borders must be mastered
management practised in organizations that conduct business in more than one country
Global Manager: culturally aware and informed about international affairs

4. Europe
European union: political and economic alliance of European countries
Union expanding to 22 countries that agree to support mutual economic growth by removing barriers
Euro: common European currency
Expected regional benefits of an expending EU include higher productivity, lower inflation and steady growth

5. The Americas
NAFTA: North American Free trade agreement linking Canada, The Unites States , and Mexico in an economic alliance
NAFTA frees the flow of goods, services, workers, and investments within a region
Getting approval of NAFTA from all three governments was not easy
Calls were made to protect domestic industries from foreign competition
Maquiladoras: Manufacturing plants that operate in Mexico with special privileges
Import materials , components, and equipment duty free
Maquiladoras increase employment and prosperity and help develop skilled local workers
Regions are cutting off tariffs, updating their economic policies and welcoming foreign investors
Agreement has been reached by trade ministers to create Free Trade Area of the Americas ( FTAA)

7. Asia and the Pacific Rim
Country of 1.3 billion people is the world’s largest consumer market place
Top exporter of computers, electrical parts and components, telecommunications equipment and sporting goods
Goals are to expanding its growing presence in global markets for medical transcription and accounting services
“Opportunity” is watchword , wherever you travel/ do business in Asia
India is an example, country is in midst of economic expansion, with high literacy rates and relatively inexpensive skilled labour
It is emerging as world class base for technology development and software engineering

8. Africa
Foreign businesses tend to avoid risk of troubled spots , giving increase attention to stable countries with growing economies
Example Ghana , established growing presence in market for business process outsourcing
Many parts of Africa suffer from problems of poverty and continuing AIDS epidemic
Southern African development community (SADC) links 14 countries in Africa to trade and develop economics efforts
SADC objective include harmonizing and rationalizing strategies for sustainable development among member countries

9. http://www.ted.com/talks/simon_anholt_which_country_does_the_most_good _for_the_world#t-151961

10. INTERNATIONAL BUSINESS CHALLENGES
International Business: Conducts commercial transactions across national boundaries

11. Why DO Companies Go International ?
Profits-Global operations offer greater profit potential
Customers-Global operations offer new markets to sell products
Suppliers-Global operations offer access to needed raw materials
Capital-Global operations offer access to financial resources
Labour-Global operations offer access to lower labour costs

12. Forms of International Business
Market strategies involve the sale of goods or services to foreign markets, but do not require capital in vestments
Joint ventures & wholly owned subsidiaries are direct investment strategies
Require major capital commitments but creates rights of ownership and control over foreign countries
Direct Investment Strategies:
To establish direct investment presence in foreign country, firms enter into joint ventures
International joint ventures are strategic alliances that help partners gain thing through co- operation

13. Complications in the Global Business Environment
Global executives must master task demands operating with worldwide suppliers, distributors, customers and competitors
Organizations are expected to abide by the laws of the host country in which they are operating
Legal problems in international business involve incorporation practices and business ownership negotiating and implementing contracts with foreign parties
World trade Organization: member nations agree to negotiate disputes about tariffs and trade restrictions

14. MULTINATIONAL CORPORATIONS
Multinational Corporation: business with extensive international operations in more than one foreign country

15. Types of Multinational Corporations
Transitional corporations: MNC that operates worldwide on a borderless basis
Executives view the entire world as their domain for acquiring resources locating production facilities, marketing goods, and services and promoting its brand image
Try to operate across borders without homes-based prejudices, make major decisions from a global perspective
Distribute work among worldwide points of excellence and employ senior executives from many different countries

16. Pros and cons
When consumer demand, resource supplies , product flow, and labour markets increasingly span national boundaries, actions of MNC’s are increasingly influential in the global economy
Host-Country Issues:
Potential host-country benefits include larger tax bases, increased employment opportunities, technology transfers, introduction of new industries & development of local resources
Home-Country Issues:
When MNC outsources cut back or close domestic operation to shift work to lower-cost international destinations, loss of local jobs is controversial

17. Ethical Issues for Multinational Corporations
Corruption: involves illegal practices to further ones business interests
The Canadian Corruption of Foreign Public Officials Act makes it illegal for firms and managers to engage in corrupt practices overseas
Sweatshops: employ workers at very low wages , for long hours and in poor working conditions
Outsourcing of contracts are now common as manufacturers follow the worlds low cost labour supplies
Child Labour: full-time employment of children for work otherwise done by adults
Sustainable development: meets the needs of the present without hurting future generations
MNC’s are increasingly expected to uphold high standards in dealing with sustainable development and protection of the natural environment

18. CULTURE AND GLOBAL DIVERSITY
Culture: shared set of beliefs, values and patterns of behaviour common to a group of people

19. Popular Dimensions of Culture
Language:
provides access to the cultural understanding needed to conduct business and develop personal relationships
Use of Space:
The use of interpersonal space is one of the important ‘silent languages’ of culture
Time Orientation:
another silent languages which controls the way people approach and deal with time tends to vary widely
Religion:
major influence that impacts the way people dress, eat, and interpersonal behaviour
Contracts and Agreements:
cultures vary in their use of contracts and agreements

20. Values and National Cultures
Framework helps to better understand how cultural differences can influence management and organizational practices
Dutch Scholar, Geert Hofstede published his book Culture’s Consequences: International Differences in Work –Related Values which demonstrates broad differences in national cultures
Hofstede’s five dimensions for selected countries to be ranked:

21. Understanding Cultural Diversity
Relationships with people:
Universalism vs. particularism, individualism vs. collectivism. Neutral vs. affective, specific vs. diffuse, achievement vs. prescription
Attitudes toward time:
Time may be considered as a continuous series of events or a greater sense of urgency
Attitudes Toward the Environment:
Inner- directed cultures view themselves separated from nature while outer- directed cultures view themselves as a part of nature

22. MANAGEMENT ACROSS CULTURES
Management process is as relevant to international operations as to domestic ones
This process must be applied appropriately from one country and culture to the next

23. Planning and Controlling
Planning must link the home office and foreign affiliates, while thinking about other countries
Computer based global networks allow home and field office to share database, transfer document, have group meetings virtually
Planning factors into the risks of doing business across political and economic borders
The potential loss of an investment or managerial control over a foreign asset due to instability and political changes in the host country will become a political risk.

24. Organizing and Leading
Common organizing approach is to appoint a vice-president or other senior managers to oversee all foreign operations
The global area structure arranges production and sales functions into separate geographical units
The global product structure gives worldwide responsibilities to product group managers, who are assisted by area specialists on the corporate staff

25. Are Management Theories Universal?
Geert Hofsted answers No, He claims that many theories are ethnocentric and fail to take into account cultural differences
He argues that the North American emphasis on participating in leadership reflects the culture’s moderate score of power distance, national cultures with lower scores are characterized by more democratic leadership initiatives
The motivation of American scholars value individual performances
Elsewhere, where values are more collectivist, the theories are less applicable

26. Global Organizational Learning
Global organizational learning is when managers around the world realize they have much to share and learn from one another
It must be learned with full appreciation of the constraints and opportunities of different cultures and country environments
However, not everyone/organization is ready to learn about other cultures
Some organizations still have ethnocentric attitudes, while others have polycentric attitudes, and in global businesses geocentric attitudes create a rich global environment
The approach to learning should be an alert, open, inquiring, and cautious one