Management BBA (Hons) 4th Lec 101112

8/3/2019 Management BBA (Hons) 4th Lec 101112

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Financial Analyst Meeting 2004 1/4/2012

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© Farhan Mir© Farhan Mir

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Principles of ManagementPrinciples of ManagementMBA & BBAMBA & BBALecture 4Lecture 4(Managing Global Environment)(Managing Global Environment)

By: Farhan Mir By: Farhan Mir


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TopicsTopicsIntroduction

History and Evolution of ManagementOrganizational & Environmental Constraints

Managing Global EnvironmentGlobal PerspectiveGlobal PerspectiveNeed for going GlobalNeed for going GlobalUnderstanding Global EnvironmentUnderstanding Global EnvironmentDoing Business GloballyDoing Business GloballyManaging in Global EnvironmentManaging in Global Environment


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Trends in International BusinessTrends in International BusinessWhy do companies expandinternationally?

Expand sales (Extending Markets)Expand sales (Extending Markets)Cutting costsCutting costsOffering new productsOffering new productsGlobal OpportunitiesGlobal Opportunities

(WTO allowing International companiesmore opportunities in Pakistani market &Vice Versa)

But once they enter into the global marketsBut once they enter into the global marketsthey also face global issues (Constraints of they also face global issues (Constraints of the global environment)the global environment) © Farhan Mir© Farhan Mir

20200707 IMSIMSSource: www.wal-mart.com

Trends in InternationalTrends in InternationalBusinessBusiness


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Wal-Mart USA1489 Stores1489 Stores1397 Supercenters1397 Supercenters532 Sam¶s Clubs532 Sam¶s Clubs56 Neighborhood Markets56 Neighborhood Markets

3474 Total Stores3474 Total Stores1,000,000 + associates1,000,000 + associates

Wal-Mart International11 Argentina23 Brazil214 Canada92 Germany613 Mexico (1 st int¶l store in1991)

52 Puerto Rico265 Great Britain31 China15 Korea

1317 Total International

300,000 + associates


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Ch ina: www.wal-martchina.comGermany: www.walmartgermany.deMexico: www.walmartmexico.com.mxKorea: www.walmartkorea.comUnited Kingdom: www.asda.com




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Wal-Mart¶s next market?


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Perspective towardsPerspective towardsGlobalizationGlobalization

Parochialism - narrow view of the world where you don¶t recognize differencesbetween people

Ethnocentric - best work approaches arethat of the home country (where the businessinitiated)

Polycentric - managers in the host countries know the best work practices for running their business

Geocentric - world-oriented view that focuses on using the best approaches and

people from the globe


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Degree of Degree of InternationalizationInternationalization

D omestic business All products and services within one All products and services within onecountrycountry

Almost extinct Almost extinctMostly small businessesMostly small businesses

International businessOperate primarily in one countryOperate primarily in one countrySome resources or revenues from other Some resources or revenues from other countriescountries


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Degree of InternationalizationDegree of Internationalization

Multinational businessWorldwide marketplace for inputs andWorldwide marketplace for inputs andoutputsoutputsRetain primary ³headquarters´ in oneRetain primary ³headquarters´ in onecountrycountry

Global businessNo overriding commitment to any singleNo overriding commitment to any singlecountrycountryGovernment and legal restrictions makeGovernment and legal restrictions makethis category somewhat ³hypothetical´this category somewhat ³hypothetical´


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Degree of InternationalizationDegree of InternationalizationThese are the largest export markets for this Finnish

company in 1957. Any idea what company this is?


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Degree of InternationalizationDegree of InternationalizationToday, you might recognize this company as a major provider of telecommunications, information technology, and electronics.




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Degree of InternationalizationDegree of Internationalization

AustriaBelgiumBulgariaCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyLatvia

AustraliaChinaHong KongIndiaJapanKoreaPhilippinesSingaporeTaiwan

USABrazilCanada

LithuaniaLuxembourgMaghrebNetherlandsNorwayPolandPortugalRomaniaRussiaSlovakiaSpainSwedenSwitzerlandTurkeyUK

Americas Asia-PacificEurope, Africa& Middle East

Source: Nokia.com

The company is N okia ,and here are some of the countries it operates in today.


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Degree of InternationalizationDegree of Internationalization(Some Examples)(Some Examples)

Nestlé comes close to ³g lobal´ businesshttp://www.nestle.com/Html/Id/index.asphttp://www.nestle.com/Html/Id/index.aspOperations in over 100 countriesOperations in over 100 countries


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The Structure of the GlobalThe Structure of the GlobalMarketMarket

Market Systems (Econom ic Integration)European UnionEuropean UnionNAFTANAFTA

AFTA AFTA

ASEAN ASEANOPECOPECHundreds of othersHundreds of others


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European Union (EU)European Union (EU)Established in February 1992 as a treaty uniting 12countries

O ver 374 million peopleO ver 374 million peopleSince ot h er 7 countries also i n negotiation process so t h eSince ot h er 7 countries also i n negotiation process so t h eoverall population increasesoverall population increasesBefore becoming part of EU all t h ese countries h ad t h ereBefore becoming part of EU all t h ese countries h ad t h ereown set of poli cies, tax structures and protected industriesown set of poli cies, tax structures and protected industriesN ow a single market and a common currency (Euro)N ow a single market and a common currency (Euro)

N o traveling barriersN o investment and employ ment barriers

Wh y EU?Wh y EU?Idea was to bui ld alliance against t h e strong US andJapanese EconomiesGerman automobiles now sold in EUN okia selling major telecommunication servicesth roug h out EU


20200707 IMSIMSSource: Robbins, 2002

European Union (EU)

Management BBA (Hons) 4th Lec 101112

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