Exploring management 3rd ch17
Bạn đang xem bản rút gọn của tài liệu. Xem và tải ngay bản đầy đủ của tài liệu tại đây (515.35 KB, 21 trang )
Exploring Management
Chapter 17
Globalization and International
Business
Chapter 17
•
•
How does globalization affect international business?
What are global corporations and how do they work?
17.1
Globalization
•
•
•
•
•
Globalization involves the growing interdependence of the world’s
economies
Globalization creates a variety of international business opportunities
International business is done by global sourcing, import/export, licensing
and franchising
Internal business is done by joint ventures and wholly owned subsidiaries
International business is complicated by different legal and political
systems
GLOBALIZATION
World Economies
•
Global economy
– Resources, markets and competition are worldwide in scope
•
Globalization
– Process of growing
interdependence of
global economies
GLOBALIZATION
World Economies
•
Insourcing
– Domestic jobs are created by foreign employers
•
Outsourcing
– Jobs are shifted to foreign locations to take advantage of lower wages,
infrastructure, educated workforce or government support
GLOBALIZATION
International Opportunities
•
International Business
– Conducts transaction across international boundaries
•
Reasons to “go international”
Profits
Customers
Suppliers
Capital
Labor
Risk
GLOBALIZATION
International Opportunities
Market Entry Strategies
Global Sourcing
Exporting
materials, components or
selling locally made
services are purchased
products in foreign
worldwide
markets
Importing
Licensing
Franchising
buying foreign-made
foreign firm pays for
foreign firm buys rights to
products and selling
rights to make or sell
another’s name and
them in domestic
another company’s
operating method in its
markets
products
home country
GLOBALIZATION
International Opportunities
Direct Investment Strategies
Joint Venture
co-ownership arrangement in
which the foreign and local
business jointly operate the
new business
Global Strategic Alliance
Cooperative partnership to
achieve task that would be
difficult for partners alone
Foreign Subsidiary
Greenfield Venture
operation completely owned
subsidiary established after firm
and controlled by a foreign firm
has experience in joint ventures
GLOBALIZATION
Legal and Political Issues
•
International business is complicated by different legal and political
systems
– Health and safety
– Equal employment
– Sexual harassment
– Incorporation and ownership
– Foreign currency exchange
– Intellectual property
GLOBALIZATION
Legal and Political Issues
•
Tariffs
– Taxes placed on imports
•
Protectionism
– Tariffs, subsidies and other tactics that give advantages to domestic producers
GLOBALIZATION
Legal and Political Issues
•
World Trade Organization
– Global institution to promote free trade and open markets around the world
– Membership of around 153 countries
– Most Favored Nation status
– www.wto.org
17.2
Global Corporations
•
•
Global corporations or MNCs do substantial business in many countries
The actions of global corporations can be controversial at home and
abroad
•
Managers of global corporations face a variety of ethical challenges
17.2 CONTINUED
Global Corporations
•
•
•
Planning and controlling are complicated in global corporations
Organizing can be difficult in global corporations
Leading is challenging in global corporations
GLOBAL CORPORATIONS
Global Corporations
•
Global corporations and also known as Multinational corporations (MNC)
– Extensive foreign operations in more than one country
•
Transnational corporations
– Operate without one national home
GLOBAL CORPORATIONS
Issues
GLOBAL CORPORATIONS
Ethical Challenges
•
Corruption
– Illegal practices
•
Foreign Corrupt Practices Act
– U.S. legal standards apply to companies when operating in foreign countries
– Prevents
•
Bribes, gifts to foreign officials in return for business favors
GLOBAL CORPORATIONS
Ethical Challenges
•
Sweatshops
– Employees work long hours in poor or unsafe conditions
•
Child labor
– Full-time employment of children
GLOBAL CORPORATIONS
Planning and Controlling Challenges
•
Currency Risk
Scenario 1: Weak dollar
Scenario 2: Strong dollar
•
.75 Euros = 1 $US
•
1.25 Euros = 1 $US
•
Take home revenue = $133,00
•
Take home revenue = $80,000
GLOBAL CORPORATIONS
Planning and Controlling Challenges
•
Political risk
•
Political risk analysis
•
Currency risk
– Risk of loss because of political instability in foreign country
– Forecasts how political events may impact foreign investments
– Possible loss because of
fluctuating exchange rates
GLOBAL CORPORATIONS
Organizing Challenges
GLOBAL CORPORATIONS
Leading Challenges
•
Global managers
– Competent in working in different cultures
