Wealth and Investment Management Title Slide JUN 8 – 10, 2015 Global Market Outlook.
8- Global Management
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Transcript of 8- Global Management
©2004 by Nelson, a division of Thomson Canada Limited 1
Chapter 8
Global Management
©2004 by Nelson, a division of Thomson Canada Limited 2
What Would You Do?
Wal-Mart’s International Strategy dominant retailer in Canada and USA major global competitor is Carrefour which countries should Wal-Mart enter? what impact will free-trade agreements
have?
©2004 by Nelson, a division of Thomson Canada Limited 3
What Is Global business?After reading these next two sections, you should be able to:
1. describe the impact of global business on Canada2. discuss the trade rules and agreements that govern global trade
©2004 by Nelson, a division of Thomson Canada Limited 4
Impact of Global Business Foreign direct investment Global competition Multinational corporations
©2004 by Nelson, a division of Thomson Canada Limited 5
Regional Distribution of Inward Direct Foreign Investment
Region Percent
United States 72European Union 19Asia-Pacific 5Latin America 2All Other 2
Adapted from Exhibit 8.1
©2004 by Nelson, a division of Thomson Canada Limited 6
Regional Distribution of Outward Direct Foreign Investment
Region Percent
United States 52European Union 19Latin America 19Asia-Pacific 6All Other 5
Adapted from Exhibit 8.2
©2004 by Nelson, a division of Thomson Canada Limited 7
Multinational CorporationMultinational Corporation
corporation that owns businesses in two or more countries
Country of Manufacture country where product is made and
assembledCountry of Origin
Home country where headquarters is located
©2004 by Nelson, a division of Thomson Canada Limited 8
Trade Rules and Agreements
Trade barriers
Trade agreements
©2004 by Nelson, a division of Thomson Canada Limited 9
Trade Barriers Tariff Nontariff
quotas voluntary export restraints government standards government subsidies Customs valuation/classification
©2004 by Nelson, a division of Thomson Canada Limited 10
Trade AgreementsGeneral Agreement on Tariffs and Trade (GATT)Regional Trading Zones
Maastricht Treaty of Europe NAFTA FTAA ASEAN and APEC
©2004 by Nelson, a division of Thomson Canada Limited 11
GATT Worldwide trade agreement Designed to reduce and eliminate
tariffs and subsidies Protect intellectual property
©2004 by Nelson, a division of Thomson Canada Limited 12
Maastricht Treaty of Europe Now 15 member countries Created the European Union Facilitate trade among members The currency is the “Euro”
©2004 by Nelson, a division of Thomson Canada Limited 13
North America Free Trade Agreement (NAFTA) Canada, United
States, & Mexico Liberalizes trade
among these nations
Eliminates tariffs and barriers
©2004 by Nelson, a division of Thomson Canada Limited 14
Free Trade Area of the Americas Proposed agreement Unite 36 countries in North and
South America Negotiations to finish by 2005
©2004 by Nelson, a division of Thomson Canada Limited 15
Association of South-East Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC)
ASEAN Indonesia, Thailand, Philippines,
Malaysia, Singapore, & BruneiAPEC Canada, United States, Japan, South
Korea, Australia, New Zealand, China, Taiwan, Hong Kong, & ASEAN members
©2004 by Nelson, a division of Thomson Canada Limited 16
Learning Objectives:How to Go GlobalWhile there is no magical formula to answer these questions, after reading these next two sections, you should be able to:
3. explain why companies choose to standardize or adapt their business procedures4. explain the different ways that companies
can organize to do business globally
©2004 by Nelson, a division of Thomson Canada Limited 17
Consistency or Adaptation?Consistency A multinational corporation runs its
offices, plants, and facilities in different countries under the same rules, policies, and procedures
Adaptation Multinational corporations modify
standard operating procedures to adapt to local differences
©2004 by Nelson, a division of Thomson Canada Limited 18
Forms for Global Business Exporting Cooperative contracts Strategic alliances Wholly owned affiliates Global new ventures
©2004 by Nelson, a division of Thomson Canada Limited 19
Learning Objectives:Where to Go GlobalAfter reading these next three sections, you should be able to:
5. explain how to find a favorable business climate6. discuss the importance of identifying and adapting to cultural differences7. explain how to successfully prepare workers for international assignments
©2004 by Nelson, a division of Thomson Canada Limited 20
Finding the Best Business Climate Positioning for growing markets Choosing an office/manufacturing
location Minimizing political risk
©2004 by Nelson, a division of Thomson Canada Limited 21
Positioning for Growing Markets Purchasing power
comparison of the relative cost of a standard set of goods and services in different countries
more means greater growth potential Degree of global competition
the number and quality of companies that already compete in foreign markets
©2004 by Nelson, a division of Thomson Canada Limited 22
Choosing an Office/Manufacturing Location Qualitative factors
Work force quality Company strategy
Quantitative factors Costs and barriers
©2004 by Nelson, a division of Thomson Canada Limited 23
World’s Best Cities for BusinessUnited States1. New York City2. San Francisco3. Chicago4. Washington,
D.C.5. San Jose
Adapted from Exhibit 8.4
©2004 by Nelson, a division of Thomson Canada Limited 24
World’s Best Cities for BusinessEurope1. London2. Frankfurt3. Helsinki4. Amsterdam5. Dublin
Adapted from Exhibit 8.4
©2004 by Nelson, a division of Thomson Canada Limited 25
Minimizing Political Risk Political uncertainty
Risk of major changes in political regimes Policy uncertainty
Risk associated with changes in laws and government policies directed at businesses
Strategies avoidance control cooperation
©2004 by Nelson, a division of Thomson Canada Limited 26
Becoming Aware of Cultural Differences National culture
power distance individualism masculinity/femininity uncertainty avoidance short-term/long-term
©2004 by Nelson, a division of Thomson Canada Limited 27
Cultural Dimensions
Exhibit 8.5
©2004 by Nelson, a division of Thomson Canada Limited 28
Preparing for an International Assignment
Language and cross-cultural training
Consideration of spouse, family, and dual-career issues
©2004 by Nelson, a division of Thomson Canada Limited 29
What Really WorksCross-Cultural Training
©2004 by Nelson, a division of Thomson Canada Limited 30
What Really Works
©2004 by Nelson, a division of Thomson Canada Limited 31
What Really Happened? Wal-Mart entered Brazil, Britain,
and Germany Carrefour has been a strong
competitor Increasing focus on local
adaptation, but maintaining some global consistency