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

2. 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

3. 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

4. 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

5. 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 4.2 4.4 Corruption NoncorruptCorrupt

6. 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

7. 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

8. 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

9. 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

10. 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