Mgt201 Chap5 Global Dimensions of Management

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PowerPoint Presentation

to AccompanyManagement, 9/e

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Chapter 5:Global Dimensions of Management

Prepared by : J im LoPres t i

Un ivers i t y o f Co lo rado , Bou lder

Pub l ished by : John W i l ey & Sons , I nc .

Planning Ahead —

Chapter 5 Study Questions

What are the international businessc a enges o g o a zat on

What are multinational corporationsand what do they do?

What is culture and how does it relateto global diversity?

Management 9/e - Chapter 5 2

How do management practicestransfer across cultures?



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Study Question 1: What are the international business

challenges of globalization?

Ke conce ts in the challen es of

globalization:

Global economy

Globalization

International management


Global manager

Study Question 1: What are the international businesschallenges of globalization?

Global econom

Resource supplies, product markets,

and business competition are

worldwide, rather than local

Globalization


The process of growinginter dependence of these components

in the global economy



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Study Question 1: What are the international business


International management

Management in organizations with business

interests in more than one country

Global manager

Informed about international developments

Transnational in outlook


Competent in working with multicultural people

Aware of regional developments in a changing

world

Study Question 1: What are the international businesschallenges of globalization?

International businesses

Conduct for-profit transactions of goods and

services across national boundaries

Reasons why businesses go international:

Profits

Customers


Suppliers Capital

Labor



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Study Question 1 What are the international businesschallenges of globalization?

Market entry strategies involve the sale of goods or services to foreign markets butdo not require expensive investments.

Types of market entry strategies:

Global sourcing

Exporting

Im ortin


Licensing agreement

Franchising

Figure 5.1 Common forms of international business—frommarket entry to direct investment strategies.




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Study Question 1 What are the international business


Direct investment strategies require

major capital commitments but

create rights of ownership and

control over foreign operations.

Types of direct investment


Joint ventures

Foreign subsidiaries



Criteria for choosing a joint venture

partner:

Familiarity with your firm’s major business.

Strong local workforce.

Future expansion possibilities.

Strong local market for partner’s own


products. Good profit potential.

Sound financial standing.



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Complications in the global business

environment:

Environment is complex, dynamic, and highly

competitive.

Global business executives must deal with

differences in the environment of business in


.

World Trade Organization resolves trade andtariff disputes among countries.

Protectionism can complicate global trading

relationships.

Study Question 2: What are multinational

corporations and what do they do?

A multinational corporation (MNC) is abusiness with extensive internationaloperations in more than one foreigncountry.




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Mutual benefits for host country and

MNC:

Shared growth opportunities

Shared income opportunities


are earn ng opportun t es

Shared development opportunities



Host countr com laints about MNCs:

Excessive profits

Domination of local economy

Interference with local government

Hiring the best local talent


Disrespect for local customs



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Figure 5.2 What should go right and what can go

wrong in MNC-host country relationships.




MNC complaints about host countries:

Profit limitations

Overpriced resources

Exploitative rules

Foreign exchange restrictions


Failure to uphold contracts



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Ethical issues for MNCs:

Corruption — illegal practices that further one’s

business interests.

Sweatshops — employing workers at low wages

for long hours and in poor working conditions.

Child labor — full-time employment of children for

work otherwise done by adults.


Sustainable development — meeting current

needs without compromising future needs.

Study Question 3: What is culture and how does it

relate to global diversity?

Culture The shared set of beliefs, values, and patterns

of behavior common to a group of people.

Culture shock Confusion and discomfort a person experiences

in an unfamiliar culture.

Cultural intelligence


Ethnocentrism Tendency to consider one’s own culture as

superior to others.



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Sta es in ad ustin to a new

culture:

Confusion

Small victories

The honeymoon


Irritation and anger

Reality



Po ular dimensions of culture:

Language

Low-context cultures and high-contextcultures

Interpersonal space

Time orientation


Monoc ronic cu tures an po yc ronic

cultures

Religion

Contracts and agreements



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Values and national cultures

(Hofstede):

Power distance

Uncertainty avoidance

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Masculinity-femininity

Time orientation

Figure 5.3 How countries compare on Hofstede’s

dimension of national culture.




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Project GLOBE (Global Leadershipand Organizational BehaviorEffectiveness)

Researches the leadership,organizational practices, and diversityamong world cultures.


ower s ance

Uncertainty avoidance Gender egalitarianism

Future orientation



Project GLOBE’s nine dimensionscontinued

Institutional collectivism

In-group collectivism

Assertiveness


Performance orientationHumane orientation



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Figure 5.4 Nine cultural dimensions used by Project

GLOBE researchers.


A large team of international researchers collaborated in Project GLOBE to examine societal cultures using the nine cultural dimensions

shown in the figure. When results from extensive empirical studies were analyzed for 62 countries, they were found to fall into ten culture

clusters. Countries within a cluster share many societal cultural practices; countries tend to differ significantly across clusters in their cultural

practices.



Understanding cultural differencesrompenaars :

Relationships with people:

Universalism versus particularism

Individualism versus collectivism

Neutral versus affective

Specific versus diffuse

Achievement versus prescription


Attitudes toward time — sequential andsynchronic views.

Attitudes toward environment — inner-directedand outer-directed cultures.



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Study Question 4: How do management practices

transfer across cultures?

Com arative mana ement

How management systematically

differs among countries and/or

cultures.

Global managers


Need to successfully applymanagement functions across

international boundaries.

Study Question 4: How do management practicestransfer across cultures?

Are management theories universal?

U.S. management theories may be

ethnocentric.

Participation and individual performance

are not emphasized as much in other


cultures.

Not all Japanese management practices

can be applied successfully abroad.



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Study Question 4: How do management practices

transfer across cultures?

Global or anizational learnin :

Companies can and should learn from each

other.

Readiness for global organizational learning

varies based on managerial attitudes.

Ethnocentric attitudes


Polycentric attitudes

Geocentric attitudes

Be alert, open, inquiring, but always cautious.

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Mgt201 Chap5 Global Dimensions of Management

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