1. An Introduction to Global and Transnational Business
Chapter 1

2. Objectives Define key terms in study of international business
Describe changes in international business in late 20th and early 21st century
Explain the causes, nature & problems of globalisation
Discuss key issues in global and transnational business management
Discuss ‘big controversies’ in strategic management in relation to global business
Explain the management processes involved in successful global and transnational business management

3. The trend towards globalisation
World business is not simply becoming more international – it is becoming global
Internationalization: the trend for increasing trade across national boundaries and conduct of business activities in more than one country
Globalization: the trend towards global markets, production, competition and growing interdependence between national economies

4. Key terms in global business (1)
International business
operation in more than one country
trading across their national boundaries
Multinational business
conducting international business
operating in several countries
decentralisation of strategy and management decision-making to overseas subsidiaries
little co-ordination of activities and subsidiaries across national boundaries
strategies largely determined by local conditions

5. Key terms in global business (2)
conduct of business activities across the world
single global strategy - highly co-ordinated & integrated
centralised decision- making
Transnational business
varying degrees of co-ordination & integration
strategy and operations both global and locally differentiated depending upon business conditions
centralised and decentralised decision-making

6. Globalisation - definitions
Global economy - national economies are increasingly inter-related
Global markets
global customer wants
global products and services
Globally connected markets
Global industries
global location of activities
global co-ordination of activities
global competition

7. Globalisation - definitions
Global enterprises
global strategies
global products
global activities
Not all global enterprises operate in global markets or industries e.g.. IKEA
Most seemingly global markets and industries have a mix of global and local characteristics

8. Causes of globalization
Manufacturing technology
mass production
Transportation technology
movement of people, materials & finished products quickly & cheaply
Information & communications technology
globalisation of markets & global co-ordination of activities
Trade liberalisation
GATT & WTO reduce tariff & other trade barriers between countries
Rising incomes
vastly increased demand for products and services worldwide

9. Global issues These issues are discussed in detail in the book
Blessing or curse?
increased living standards vs. exploitation
increased choice vs. cultural convergence
Business strategy
integrated vs. differentiated business strategy
concentrated vs. dispersed activities

10. Transnational strategy
combines global configuration and co-ordination of business activities with local responsiveness
global core competence - access to global markets
extensive participation in major world markets
differentiated structure and organisation
Total global strategy (Yip, 1992) - is “more or less global in its different elements."

12. Issues in Transnational strategy and management
Transnational strategy - organisational learning, knowledge & competence building
Cultural factors
Market servicing - entry strategies
Transnational Leadership and Management
HR management
Financial management
Technology management
Production and logistics
Marketing management
Mergers and alliances

13. Approaches to strategy
The prescriptive approach (also called the deliberate or planned approach)
The emergent (or learning) approach
The competitive positioning approach - ‘outside-in’ (Porter)
The resource and core competence approach - ‘inside-out’ (Prahalad & Hamel)

14. Assumptions underlying transnational strategy
Strategy is inevitably planned & emergent
Competitive advantage results from:
internal competences & from changing conditions in the business environment
competitive & collaborative behaviour
knowledge and organisational learning ‘learning’ organisations
Analysis must distinguish between global industries & markets

15. Developing transnational strategy
Global mission and objectives
Analysis of global resources, competences and value adding activities
Analysis of the global business environment
Developing transnational knowledge, competences and strategies
Implementing strategy and managing transnational operations
Continuous organisational learning