Lecture management a pacific rim focus chapter 18 international management

CHAPTER 18
INTERNATIONAL MANAGEMENT

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Lecture outline
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Nature of international management
Assessing the international environment
Gauging strategic issues
Organising international business
Adapting to cultural differences
Social responsibility & ethical issues

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Nature of international
management
• International business

Profit related activities conducted across
international boundaries.
• International management
Process of planning, leading, organising and
controlling in organisations engaged in
international business.
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Nature of international
management

Organisations engaging in international
management:

MULTINATIONAL CORPORATION (MNC)

‘Organisations engaging in international
management vary in size and the extent
that their business activities cross
international boundaries’.
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Nature of international
management

Orientations towards international management:
• Ethnocentric
• Polycentric
• Regiocentric
• Geocentric

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Nature of international
management
Orientations towards international management:
Ethnocentric
Ethnocentric
(home-country)
(home-country)
orientation
orientation

Polycentric
Polycentric
(host-country)
(host-country)
orientation
orientation

Regiocentric
Regiocentric

(regional)
(regional)
orientation
orientation

Geocentric
Geocentric
(world)
(world)
orientation
orientation

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Assessing the international
environment

Assessing the international environment:
• Environmental elements
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Economic
Legal-political

Socio-cultural
Technological.

• Competitive advantage of nations
Concept that environmental elements within a nation can
foster innovation in certain industries, thereby increasing
prospects for the success of home-based companies
operating internationally.
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Assessing the international
environment Less developed
Developed countries

countries (LCDs)
Newly industrialised
countries (NICs)

Exchange
Rate

Balance of
Trade

Economic
Element
Infrastructure

Balance of
payments

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Assessing the international
environment
Expropriation
Political risk
Indigenisation
laws

Legal-Political
Element

Administrative
protections

Import
quotas

Tariffs

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Assessing the international
Power distance
environment
Cultural differences

Individualismcollectivism

Sociocultural
element

Technological
element
Long-term
orientation

Achievementnurturing
orientation

Short-term
orientation

Technological
transfer

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Gauging strategic issues
• Methods of international entry
Exporting, licensing, strategic alliances, wholly-owned
subsidiaries

• Multinational corporation strategies
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–
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World-wide integration
National responsiveness
Regional responsiveness
Multifocal emphasis

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Gauging strategic issues
Methods of
international
Entry

Exporting

Licensing

Strategic
alliance
Whollyowned
subsidiary

Methods of
international
entry

Globalisation

National
responsiveness

Regional
responsiveness

Multifocal
emphasis

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Organising international
business
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World-wide functional divisions
World-wide product divisions
International divisions
Geographic regions
Global matrix
Networked structure

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Adapting to cultural differences
Assignment policies

Repatriation

Managing
international
human
resources

Selection & training

Recruitment
Adjusting

Leadership
styles

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Social responsibility & ethical
issues
Questionable payment
issues

political
payments
bribes
extortion

International
Social
responsibility

sales
commissions
expediting
payments

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Lecture summary
• Nature of international management
Orientations: ethnocentric, polycentric, geocentric,
regiocentric

• Assessing the international environment
Environmental elements, competitive advantage of nations

• Gauging strategic issues
Methods of international entry, multinational strategies

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Lecture summary
• Organising international business
Divisions: functional, product, international
Global matrix, network structure

• Adapting to cultural differences
International human resources
Adjusting leadership style

• Social responsibility & ethical issues
International social responsibility
Questionable payments

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