Introduction to management 13th schemerhorn bachrach chapter 05

5

John R. Schermerhorn, Jr.
Daniel G. Bachrach

Introduction to
Management
13th edition

Chapter 5
International Management


Planning Ahead — Key Takeaways
 What

are the management challenges of
globalization?
 What are global businesses and how do they
work?
 What is culture and how does it influence global
management?
 How can we benefit from global management
learning?

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Chapter 5 Outline
Management and Globalization

1.





Global management
Why companies go global
How companies go global
Global business environments

Global Businesses

2.




Types of global businesses
Pros and cons of global businesses
Ethics challenges for global businesses

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Chapter 5 Outline
Culture and Global Diversity

3.






Cultural intelligence
Silent languages of culture
Tight and loose cultures
Values and national cultures

Global Management Learning

4.




Are management theories universal?
Intercultural competencies
Global learning goals

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Management and Globalization
 Key






concepts in the challenges of globalization:

Global economy
Globalization
Global management
World 3.0
Global manager

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Management and Globalization
 Global


economy

Resources, markets, and competition are worldwide
in scope

 Globalization


The process of growing interdependence among
elements in the global economy

 World


3.0

Nations cooperate while respecting different national
characters and interests

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Management and Globalization
 Global


Managing business and organizations with business
interests in more than one country

 Global


management

manager

Is culturally aware and informed on international affairs


Management and Globalization
 International


businesses

Conducting for-profit transactions of goods and
services across national boundaries

 Reasons

Profits

why businesses go global:

Customers

Suppliers

Capital

Labor

Risk

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Management and Globalization
 Market


entry strategies

involve the sale of goods or services to foreign

markets but do not require expensive
investments


Management and Globalization
 Types






Global sourcing
Exporting
Importing
Licensing agreement
Franchising

 Types




of market entry strategies:

of direct investment strategies:

Joint venture
Strategic alliance
Owned subsidiary

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Figure 5.1 Common forms of global business—from market entry
to direct investment strategies

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Management and Globalization

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Management and Globalization

Insourcing refers to local job
creation that results from foreign
direct investment

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Management and Globalization
Types of insourcing:

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Management and Globalization

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Management and Globalization

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Management and Globalization
Legal and political systems


Differing laws and practices regarding
Business ownership
 Foreign currency exchange
 Protection of intellectual property rights




Counterfeit merchandise

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Management and Globalization
Legal and political systems


Political risk




Potential loss in value of a foreign investment due
to instability and political changes in the host
country

Political risk analysis


Forecast political disruptions that threaten the value
of a foreign investment

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Management and Globalization
 Trade


Agreements and Trade Barriers

World Trade Organization
Most favored nation status
 Tariffs
 Nontariff barriers
 Protectionism



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Management and Globalization
Regional Economic Alliances

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

NAFTA – North American Free Trade Agreement
EU – European Union
APEC – Asia Pacific Economic Cooperation
ASEAN – Association of Southeast Asian Nations
SADC – Southern Africa Development Community

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Global Businesses
 Types


Global corporation




of global businesses:

MNE (multinational enterprise) or MNC
(multinational corporation) with extensive business
operations in more than one foreign country

Transnational corporation


A global corporation that operates worldwide on a
borderless basis

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Global Businesses
 Mutual

benefits for host country and
global corporation or MNC:





Shared growth opportunities
Shared income opportunities
Shared learning opportunities
Shared development opportunities

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Figure 5.2 What should go right and what can
go wrong in global corporation and hostcountry relationships

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Global Businesses
 Host

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



country complaints about MNCs:

Excessive profits
Domination of local economy
Interference with local government
Hiring the best local talent
Limited technology transfer
Disrespect for local customs

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Global Businesses
 MNC






complaints about host countries:

Profit limitations
Overpriced resources
Exploitative rules
Foreign exchange restrictions
Failure to uphold contracts

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