1. MANAGEMENT
RICHARD L. DAFT

2. Managing in a Global Environment
Managing in a Global Environment
CHAPTER 4

3. Learning Outcomes
Describe the emerging borderless world and some issues of particular concern for today’s managers.
Describe market entry strategies that business use to develop foreign markets.
Define international management and explain how it differs from the management of domestic business operations.
Indicate how dissimilarities in the economic, sociocultural, and legal-political environments throughout the world can affect business operations.
Describe how regional trading alliances are reshaping the international business environment.
Describe the characteristics of a multinational corporation.
Explain cultural intelligence and why it is necessary for managers working in foreign countries.
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4. Are You Ready To Work Internationally?
Cross-cultural skills are extremely important
Every manager needs to think globally
The future of business and society is being shaped by global relationships
A global mind-set is becoming a prerequisite for managers
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5. A Borderless World
Isolation from international forces is no longer possible
Trade barriers are falling
Communication is faster and cheaper
Consumer tastes are converging
Virtual connections enable close, rapid coordination among people working in different parts of the world
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6. Four Stages of Globalization
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7. Strategies for Entering International Markets
Exporting – transfers products for sale in foreign countries
Global Outsourcing – transferring the labor of specific tasks to low cost countries
Licensing – allowing an operation in another country to produce and sale company products
Franchising – providing a foreign organization with package of materials and services
Direct Investing - a production facility in another country
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8. Getting Started Internationally
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9. China Inc. Opportunities in China are booming
Companies are engaging in all strategies
The most common practice is outsourcing
Multinationals are manufacturing a large variety of products in China
China is attractive for low-cost manufacturing
India is attractive in software design, services and engineering
An author has named the phenomenon Chindia
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10. Key Factors in The International Environment
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11. The Economic Environment
Economic development differs around the world
Countries can be categorized as developed or less-developed
Companies must be able to access the resources needed to produce their products
Volatility in exchange rates can impact a businesses bottom-line
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12. World Economic Forum Global Competitiveness
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13. The Legal-Political Environment
Government supervision
Political instability
Laws and regulations
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14. The Sociocultural Environment
Shared knowledge
Beliefs
Values
Modes of behavior
Values and behaviors from the US do not translate around the world
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15. Country Ranking and National Value Systems
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16. Hofstede’s Value Dimensions
National value systems that influence organizational and employee working relationships
Power
Distance
Uncertainty
Avoidance
Individualism
and
Collectivism
Masculinity/
Femininity
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17. GLOBE Project Value Dimensions
Global Leadership and Organizational Behavior Effectiveness (GLOBE)
Assertiveness
Future Orientation
Uncertainty Avoidance
Gender Differentiation
Power Distance
Societal Collectivism
Individual Collectivism
Performance Orientation
Humane Orientation
Extension of Hofstede’s assessment
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18. Country Rankings and GLOBE Rankings
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19. Communication Differences
Some cultures pay more attention to the social context of communication
Social Setting
Nonverbal Behavior
Social Status
High-context cultures are sensitive to social exchanges
Low-context cultures use communication to exchange facts and information
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20. High-Context and Low-Context Cultures
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21. Other Cultural Characteristics
Language
Religion
Social Organization
Education
Attitudes
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22. International Trade Alliances
General Agreement on Tariffs and Trade (GATT)
Signed in 1947 by 23 nations
Nondiscrimination, clear procedures, negotiations and disputes regarding trade
World Trade Organization (WTO)
Permanent global organization from GATT
As of July 2007: 151 Countries
European Union
Begun in 1957 to improve economic and social conditions in European Economic Community
Evolved into the 27-nation European Union
Goal is to develop single market system
North America Free Trade Agreement (NAFTA)
United States, Canada, and Mexico
Trading bloc to spur growth and investment
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23. The Nations of the European Union
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24. The Globalization Backlash
As the world becomes more global, a backlash is growing
68% of American say other countries benefit more from trade
One of the key concerns is job loss
Many argue that globalization benefits the economy
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25. Multinational Corporations
More than 25% of its total sales revenue come from outside the home country
In 2007, 42% of the global sales of US multinationals come from their foreign affiliates
An MNC is managed as an integrated business system
MNCs are controlled by a single management authority
MNC managers have a global perspective
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26. Managing In A Global Environment
Developing Cultural Intelligence
Cultural flexibility and ability to adapt
Cognitive, emotional and physical
Managing Cross-Culturally
Expatriates can be successful by focusing on:
Human Resources
Leading
Decision Making
Motivating
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