Chapter Managing in a Global Environment © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part A Borderless World Organizations and managers are not isolated from international forces Trade barriers have fallen Communication is faster, cheaper Consumer tastes converge Organizations address the needs and desires that transcend national boundries © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.1 Ranking of Six Countries on the Globalization Index © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Global Mindset Ability of managers to appreciate and influence individuals, groups, organizations, and systems that represent: Different social, cultural, political, institutional, intellectual, and psychological characteristics Develop by engaging with people from different cultures © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.2 The Dimensions of a Global Mindset © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Changing International Landscape China Inc China manufactures many products for U.S companies China is also a growing consumer market Regulations and government policies make doing business in China a challenge © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Changing International Landscape India is a service giant, growing in software design and engineering Brazil is a country that is gaining the attention of American managers © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part The Impact of Multinational Corporations (MNC) The size and volume of international business is LARGE MNC is managed as an integrated whole Companies have revenue = GDP of small country Move assets from country to country 25% or more of its profit comes from outside parent country © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part The Impact of Multinational Corporations (MNC) Controlled by one management authority Geocentric companies – world oriented and favor no specific country MNC managers must have a global perspective Ethnocentric companies – place emphasis on their home countries Polycentric companies – oriented toward the markets of individual foreign host countries © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part The Globalization Backlash 68% of Americans say other countries benefit the most from free trade The United States’ primary concern is the loss of jobs Another trouble spot is how overseas contractors and suppliers treat employees 53% believe free trade has hurt U.S 10 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.4 Key Factors in International Environment 17 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part The Economic Environment Economic development – Countries are categorized as either developed or developing based on per capita income Government policies Market size Financial markets Infrastructure 18 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.4 Country Competitiveness Comparison 2011–2012 19 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Economic Environment Economic interdependence The current economic crisis has highlighted how interconnected economies are around the world 20 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.6 How Countries are Bearing the Economic Crisis 21 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part The Legal-Political Environment Political risk is defined as the risk of lost assets, earning power, or managerial control Political instability includes riots, revolutions, civil disorders, and frequent changes in government 22 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part The Sociocultural Environment The values and behaviors that govern U.S business not always translate Social values Communication differences 23 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Hofstede’s Value Dimensions Power distance Uncertainty avoidance Individualism and collectivism Masculinity and femininity 24 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.7 Rank Orderings of Ten Countries Along Four Dimensions of National Value Systems 25 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part GLOBE Project Value Dimensions Assertiveness Future orientation Gender differentiation Performance orientation Humane orientation 26 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.8 Examples of Country Rankings on Selected GLOBE Value Dimensions 27 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.9 High-Context and Low-Context Cultures 28 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part International Trade Alliances General Agreement on Tariff and Trade (GATT) 23 nations in 1947, a set of rules for fair trade World Trade Organization (WTO) Maturation of GATT into permanent global institute 29 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part International Trade Alliances European Union 1957 alliance to improve economic and social conditions among members; evolved to 28-nation European Union North American Free Trade Agreement (NAFTA) Merged the United States, Canada, and Mexico into a single market 30 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4.10 The Nations of the European Union 31 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part ... website, in whole or in part The Impact of Multinational Corporations (MNC) Controlled by one management authority Geocentric companies – world oriented and favor no specific country MNC managers