MANAGING IN A GLOBAL ENVIRONMENT

Brainyll SyDheynie Santos

Irene Marie ChuaLizette Tan

A BORDERLESS WORLD

Business is becoming a unified, global field

Companies that think globally have a competitive edge

Domestic markets are saturated for many companies

Consumers can no longer tell from which country they are buying

GLOBALIZATION the system of interaction among the

countries of the world in order to develop the global economy

refers to the integration of economics and societies all over the world

involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure

4 STAGES OF GLOBALIZATION

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4 STAGES OF GLOBALIZATION

Domestic stage: market potential is limited to the

home country production and marketing facilities

located at home

4 STAGES OF GLOBALIZATION

International stage: exports increase company usually adopts a multi-

domestic approach Multinational stage: marketing and production facilities

located in many countries more than 1/3 of its sales outside the

home country

4 STAGES OF GLOBALIZATION

Global (or stateless) stage: making sales and acquiring resources

in whatever country offers the best opportunities and lowest cost ownership, control, and top management tend to be dispersed

THE INTERNATIONAL BUSINESS ENVIRONMENT

International management The management of business

operations conducted in more than one country

INTERNATIONAL MANAGEMENT

The fundamental tasks of business management, including the financing, production, and distribution of products and services, do not change substantially when a firm is transacting business across international borders

INTERNATIONAL MANAGEMENT

The basic management functions of planning, organizing, leading, and Controlling are the same whether a company operates domestically or internationally.

KEY FACTORS IN THE INTERNATIONAL ENVIRONMENT

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ECONOMIC DEVELOPMENT

Countries categorized as “developing” or “developed”

Criterion used to classify is per capita income

Developing countries have low per capita incomes

LDCs located in Asia, Africa, and South America

Developed are North America, Europe, & Japan

Driving global growth in Asia, Eastern Europe, & Latin America

INFRASTRUCTURE

a country’s physical facilities that support economic activities

Includes: - transportation facilities - energy-producing

facilities

World Bank Web - major asset

- helping the world bank to be a leader in knowledge management

Site acts like a giant chat room with topics and data relating concepts like health care, education or urban planning.

Computer and networks are changing lives poor

people around the world.

Resource and product markets

o Company mangers must evaluate the market demand for their products.

o If the market demand is high, they may choose to export products to that country.

Exchange rates

Changes in the exchange rate can have major implications for the profitability of international operations that exchange million of dollars into other currencies every day.

o The legal-political environmentoBusinesses must deal with

unfamiliar political systems when they go international, as well as with more government supervision and regulation.

o Political risk and political instabilityoA company’s risk of loss of assets,

earning power, or managerial control due to politically based events or actions by host governments.

oEx.Government takeovers of property

Laws of regulations

o Host governments have a myriad of laws concerning libel statues, consumer protection, information and labeling, employment and safety, wages.

The sociocultural enviromento A nation’s culture includes the

shared knowledge,beliefs,and values,as well as the common modes of behavior and ways of thinking,among members of a society.Social values

o Culture is intangible, pervasive ,and difficult for outsiders to learn.

Hofstede’s value dimensions

o Research done by Geert Hofstede on 116000 IBM employees in 40 countries Identified four dimensions of national value systems that influence organizational and employee working relationships.

How countries rate on the four dimensionso Power distance

o The degree to which people accept inequality in power among institutions,organisations,and people.

o Uncertainity avoidanceo a value characterized by people’s

intolerance for uncertainity and ambiguity and resulting support for beliefs that promise certainity and conformity

o Individualismo a preference for a loosely knit social

framework in which individuals are expected to care of themselves.

o Collectivismo A preference for a tightly knit social

framework in which individuals look after one another and organizations protect their members’ interests.

o Masculinityo a cultural preference for

achievement,heroism,assertiveness,work centrality, material success

o Feminityo A cultural preference for

relationships,cooperation,group decision making and quality of life.

Market Entry Strategies-- An organizational strategy for entering a foreign market.

Global Outsourcing-- Engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country.

Exporting-- With this, the corporation maintains its production facilities within the home nation and transfers its products for sale in foreign countries.

MANAGING IN A GLOBAL ENVIRONMENT

must be sensitive to cultural subtleties must be culturally flexible can easily adapt to new situations and

ways of doing things understanding the ways to provide

proper * leadership * decision making * motivation * and control vary in different cultures

MANAGING CROSS-CULTURALLY

There are cultural differences in how people think and see the world and these differences affect working relationships.

CULTURAL DIFFERENCES CAN BE SIGNIFICANT FOR EXPATRIATE MANAGERS..

LEADING-leaders should be careful in criticizing others

DECISION MAKING -realized their culture is different , and they do not have to be like you.

CULTURAL DIFFERENCES CAN BE SIGNIFICANT FOR EXPATRIATE MANAGERS..

MOTIVATING -must fit the incentives within the

culture CONTROLLING

-in foreign cultures, managers should not control the wrong things.

*PREPARING MANAGERS TO WORK IN FOREIGN

CULTURES IS ESSENTIAL*

GLOBE PROJECT VALUE DIMENSION 1. Assertiveness

a. High assertive- society encourages toughness,

and competitiveness.

b. Low assertive- people value tenderness and

concern for others over being competitive.

2. Future orientation – refers to the extent to

which a society encourages and rewards

planning for the future over short term results

and quick gratification.

3. Uncertainty avoidance- degree of which

people feel uncomfortable with uncertainty.

4. Gender differentiation- refers to the extent to

which a society maximizes gender role

differences.

5. Power distance- refers to the degrees which

people expects and accept equality or inequality

in relationships and institutions.

6. Societal collectivism - degree to which

institutions encourage a tightly knit collectivism

society, in which people are important part of a

group, or a highly individualistic society.

7. Individual collectivism-looks at the degree to

which individual takes pride in being members of

a family, friends and organizations.

8. Performance orientation

a. High performance society orientation- high

emphasis on performance and rewards people

for performance improvement and excellence.

b. Low performance society orientation- people

pay less attention to performance and more on

9. Humane orientation- society encourages and

rewards people for being fair, altruistic,

generous, and caring. loyalty, belonging, and

background.

Ethnocentrism - natural tendency of people to regard their own culture as superior and to downgrade or dismiss other cultural values.

Market Entry Strategies-- An organizational strategy for entering a foreign market.

Global Outsourcing-- Engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country.

Exporting-- With this, the corporation maintains its production facilities within the home nation and transfers its products for sale in foreign countries.

Managing in a Global Environment- must be sensitive to cultural subtleties - must be culturally flexible- can easily adapt to new situations and ways of doing things. - understanding the ways to provide proper * leadership* decision making* motivation* and control vary in different cultures 

Managing Cross-Culturally-- There are cultural differences in how people think and see the world and these differences affect working relationships.

Cultural Differences can be significant for expatriate managers.. LEADING-- leaders should be careful in criticizing others.DECISION MAKING -- realized their culture is different , and they do not have to be like you.

MOTIVATING -- must fit the incentives within the culture.CONTROLLING -- in foreign cultures, managers should not control the wrong things.

*PREPARING MANAGERS TO WORK IN FOREIGN CULTURES IS ESSENTIAL*