McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Chapter Managing in a Global Environment McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives After reading this chapter, you should be able to: z Understand the landscape of the global market z Develop an awareness for the role of culture in international management z Recognize the major options firms face when they choose a global strategy and the conditions that make a strategic choice most appropriate z Determine the best mode of entry into foreign markets given each firm’s unique characteristics z Develop effective human resource practices for managing international subsidiaries z Become aware of ethical issues in international operations McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved The Changing Pattern of International Business zChanging world output and world trade picture ¾The U.S no longer dominates the world economy ¾Large U.S multinationals no longer dominate international business ¾The centrally planned communist economies that made up roughly half the world suddenly become accessible to Western businesses ¾The global economy has become more knowledgeintensive McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved The Changing Pattern of International Business (continued) z Lowered ¾ General trade barriers Agreement on Tariffs and Trade (GATT) ¾ World Trade Organization (WTO) z Integrated ¾ The Economic Markets European Union (EU) ¾ The North American Free Trade Act (NAFTA) ¾ The Association of Southeast Asian Nations (ASEAN) ¾ McGraw-Hill The Asia Pacific Economic Cooperation (APEC) © 2004 The McGraw-Hill Companies, Inc All rights reserved The Changing Pattern of International Business (continued) z Global ¾ Tastes consumer preferences and preferences are converging ¾ Presence of mass media, exposure to goods from various countries, and standardized products z Globalized ¾ Cost McGraw-Hill production efficiency © 2004 The McGraw-Hill Companies, Inc All rights reserved Example of Globalized Production Of the $20,000 sticker price of a General Motors Automobile LeMans: z $6,000 goes to South Korea, where the car was assembled z $3,000 goes to Japan for sophisticated high-tech parts (engines, transaxles, electronics) z $800 goes to Taiwan, Singapore, and Japan for small parts z $500 goes to Great Britain for advertising and marketing services z $1,000 goes to Ireland for data processing z $7,600 goes to GM and its external professional firms in the United States McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved The Changing Pattern of International Business (continued) z Technological innovations ¾ Advances in communications, information processing, and transportation technology ¾ Fiber optics, wireless technology, the Internet and World Wide Web, and satellite technology z Management across cultures ¾ Adaptation to business strategies, structures, operational policies, and human resource programs McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Major Factors Affecting International Business z General z Legal business environment system ¾ Common law ¾ Civil law ¾ Muslim law z Economic z Cultural ¾ Culture McGraw-Hill environment environment shock © 2004 The McGraw-Hill Companies, Inc All rights reserved Dimensions of Culture Power Distance Individualism Uncertainty Avoidance Masculinity / Femininity Long-term/ Short-term Orientation McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved .. .Chapter Managing in a Global Environment McGraw-Hill © 20 04 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives After reading this chapter, you should... Globalized ¾ Cost McGraw-Hill production efficiency © 20 04 The McGraw-Hill Companies, Inc All rights reserved Example of Globalized Production Of the $20 ,000 sticker price of a General Motors Automobile... for advertising and marketing services z $1,000 goes to Ireland for data processing z $7,600 goes to GM and its external professional firms in the United States McGraw-Hill © 20 04 The McGraw-Hill