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1、Chapter 4,Managing in a Global Environment,L E A R N I N G O U T L I N E Follow this Learning Outline as you read and study this chapter.,What Your Global Perspective? Define parochialism. Contrast ethnocentric, polycentric, and geocentric attitudes towards global business. Explain why its important
2、 for managers to be sensitive to global differences Understanding the Global Environment Describe the current status of the European Union. Discuss the North American Free Trade Agreement and other regional trade alliances in Latin America. Tell about the Association of Southeast Asian Nations.,L E
3、A R N I N G O U T L I N E (contd) Follow this Learning Outline as you read and study this chapter.,Understanding the Global Environment Explain the interdependence that globalization involves. Discuss the role of the WTO. Doing Business Globally Contrast multinational, multidomestic, global, transna
4、tional, and born global organizations. Describe the different ways organizations can go international. Define global sourcing, exporting, importing, licensing, and franchising. Describe global strategic alliances, joint ventures, and foreign subsidiaries.,L E A R N I N G O U T L I N E (contd) Follow
5、 this Learning Outline as you read and study this chapter.,Managing in a Global Environment (contd) Explain how the global legal-political and economic environments affect managers. Discuss Hofstedes five dimensions for assessing cultures. Explain the nine GLOBE dimensions for assessing cultures. Di
6、scuss the challenges of doing business globally in todays world.,A managers dilemma,Zara, the European clothing retailer, has been described at various times as having more style than GAP, faster growth than Target, and logistical expertise that rivals Wal-Marts. Although the company isnt yet a hous
7、ehold name in North America, Zaras managers have positioned the company for continued global success. And that success is based on a simple rulein fashion, nothing is as important as getting products to market quickly. Using PDA technology, Zaras store managers around the world send customer feedbac
8、k and observations on cuts, fabrics, and even new products to in-house design teams. After reviewing the ideas, these teams at headquarters in La Coruna, Spain, decide what to make. Designers draw up the ideas on their computers and send them over the companys intranet to its nearby factories. Withi
9、n days, the cutting, dyeing, sewing, and assembling commence. In three weeks, the clothes will be in stores from Barcelona to Berlin to Beirut. That time frame isnt just a bit faster than rivalsits over six times faster. Zara has a twice-a-week delivery schedule that restocks old styles and brings i
10、n new designs. The companys just-in-time production(an idea borrowed from the automobile industry) gives it a competitive edge in terms of speed and flexibility. An important piece of this incredible operation is a warehouse run by Lorena Alba, Zaras managing director of logistics.,Lorena runs the 4
11、-story, 5-million-square-foot building(about the size of 90 football fields) with clockwork efficiency. To her, the warehouse isnt a place to store clothes, but a place to move them. The warehouse is connected to its factories through a maze of tunnels with rails, along which cables carry merchandis
12、e bundles addressed” with a metal bar so they end up exactly where theyre supposed to. In the warehouse, each of Zaras stores has its own “staging ” area where its specific merchandise is packed. From there, the merchandise is sent to a loading dock and packed on a truck with other shipment in order
13、 of delivery. As Zara continues to open new stores worldwide, Lorena will have to work closely with suppliers and in-store personnel from different cultures. Put yourself in her shoes. How should she deal with the cross-cultural problems that come up?,who is the owner?,1.Ben and Jerrys Ice Cream is
14、owned by a company base in: A、Mexico B、Saudi Arabia C、United Kingdom D、United States 2.Bic pens are made by a company based in: A、Japan B、 United Kingdom C、 United States D、France 3.Rajah spices are products of a company based in: A、Brazil B、Switzerland C、 United States D、India 4. RCA television set
15、s are produced by a company based in: A、 France B、 United States C、Malaysia D、China Taiwan 5. Skippy brand peanut butter is a product of a company based in: A、 United States B、Canada C、Venezuela D、 United Kingdom,6. The owner of Godiva chocolate is based in: A、 United States B、 Switzerland C、 France
16、 D、Sweden 7. The company that produces Boboli Pizza Crust is based in: A、 United States B、 Mexico C、Italy D、Spain 8. The parent company of Braun electric shavers is located in: A、 Switzerland B、Germany C、 United States D、 Japan 9. IBM personal computers are products of a company with controlling own
17、ership in: A、China B、 United States C、 Canada D、 France 10. Eckerd Drugstores are owned by a company based in: A、 United States B、 Canada C、 France D、Russia,who is the owner?(contd),11.Lean Cuisine frozen meals are products of a company based in: A、Germany B、United States C、Switzerland D、Brazil 12.
18、Dr. Pepper and 7-Up are products of a company based in: A、United States B、Japan C、Canada D、United Kingdom 13. The company that markets Lipton Tea is based in: A、China B、United Kingdom C、Japan D、United States 14. Haagen-Dazs ice cream is a product of a company based in: A、Germany B、France C、United St
19、ates D、Switzerland 15. Wella hair care products are marketed by a company based in: A、 United States B、 Switzerland C、 France D、Germany,who is the owner?(contd),The Global Marketplace,Opportunities and Challenges Coping with the sudden appearance of new competitors Acknowledging cultural, political,
20、 and economic differences For example, if you have trouble collecting on some of your debts in the U.S., there are legal remedies and procedures. In some countries, however, there are no legal remedies. Dealing with increased uncertainty, fear, and anxiety Adapting to changes in the global environme
21、nt Avoiding parochialism,Trend of The Global Marketplace,BMW is German company, but builds the car manufacturing factory in southern California. Exxon is a major American oil company, and the companys profits, more than three quarters come from outside the United States. Toyota built the car manufac
22、turing plant in Kentucky. Victorian crown parts of Ford motor come from all over the world: Mexico (product seat, windscreen, combustion), Japan (product shock absorber), Spain (product electronic engine controller), Germany (product the brake system), Britain (product the key axle part),Who Owns Wh
23、at?,Global Environment National borders have become increasingly irrelevant Has potential for dramatic expansion of organizations Presents numerous challenges for managers,Revenues From Non-U.S. Operations For Selected Companies,Company,Manpower Exxon Mobil Colgate-Palmolive Texas Instruments Avon M
24、cDonalds Coca-Cola Gillette,Non-U.S. Revenues as Percent of Total,77.0% 71.8 71.6 67.8 65.8 61.6 61.2 60.1,Whats Your Global Perspective?,Parochialism Is viewing the world solely through its own eyes and perspectives. Is not recognizing that others have different ways of living and working. Is a sig
25、nificant obstacle for managers working in a global business world. Is falling into the trap of ignoring others values and customs and rigidly applying an attitude of “ours is better than theirs” to foreign cultures.,Exhibit 41Key Information About Three Global Attitudes,415,Adopting a Global Perspec
26、tive,Ethnocentric Attitude The parochialistic belief that the best work approaches and practices are those of the home country. They wouldnt trust employees with key decisions or technology. Polycentric Attitude The view that the managers in the host country know the best work approaches and practic
27、es for running their business. These managers are likely to leave their foreign facilities alone and let foreign employees figure out how best to do things. Geocentric Attitude A world-oriented view that focuses on using the best approaches and people from around the globe. They believe that its imp
28、ortant to have a global view both at the organizations headquarters in the home country and in the various foreign work facilities.,416,the CEO of Home Dcor,Thomas O. Binford, retired from Stanford University, arrived in Bangalore several years ago with a few suitcases and his retirement fund and is
29、 now about to sign the first business customer for his new company, Read-Ink Technologies. Read-Ink specializes in advanced handwriting recognition software that will read scanned forms and records. Like many entrepreneurs, Binford was drawn to Bangalore by its low labor costs and its huge pool of r
30、ecent engineering graduates with expertise in specialized new technologies.,Regional Trading Agreements,The European Union (EU) A unified economic and trade entity Belgium, Denmark, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom, Germany, Austria, Fi
31、nland, and Sweden Economic and monetary union (Euro) North American Free Trade Agreement (NAFTA) Eliminated barriers to free trade (tariffs, import licensing requirements, and customs user fees) United States, Canada, and Mexico,418,Exhibit 43European Union Countries,419,Regional Trading Agreements
32、(contd),U.S.-Central America Free Trade Agreement (CAFTA) Free Trade Area of the Americas(FTAA) Southern Cone Common Market (Mercosur) Association of Southeast Asian Nations (ASEAN) Trading alliance of 10 Southeast Asian nations African Union(AU) Members plan to create an economic development plan a
33、nd to work to achieve greater unity among Africas nations. South Asian Association for Regional Cooperation (SARRC) The aim is to allow for the free flow of goods and services.,420,Exhibit 44ASEAN Members,421,Source: Based on J. McClenahen and T. Clark, “ASEAN at Work,” IW. May 19, 1997, p. 42.,The
34、World Trade Organization (WTO),Evolved from the General Agreement on Tariffs and Trade (GATT) in 1995. Functions as the only global organization dealing with the rules of trade among nations. Has 149 member nations and 32 observer governments. Monitors and promotes world trade.,Different Types of In
35、ternational Organizations,Multinational Corporation (MNC) Maintains operations in multiple countries. Multidomestic Corporation Is an MNC that decentralizes management and other decisions to the local country. Switzerland-based Nestle Frito-Lay, a division of PepsiCo Global Company Is an MNC that ce
36、ntralizes its management and other decisions in the home country. Sony, Deutsche Bank AG, Merrill Lynch,423,Different Types of International Organizations (contd),Transnational Corporation (Borderless Organization) Is an MNC that has eliminated structural divisions that impose artificial geographic
37、barriers and is organized along business lines that reflect a geocentric attitude. IBM, Spains Telefonica Born Globals/International New Ventures (INVs) Commit resources upfront (material, people, financing) to doing business in more than one country.,424,Exhibit 45How Organizations Go Global,425,Ho
38、w Organizations Go Global,Stage I Passive Response,Stage II Initial Overt(明显的) Entry,Stage III Established International Operations,Exporting to foreign countries,Importing from foreign countries,Hiring foreign representation or contracting with foreign manufacturers,Licensing/ Franchising,Foreign S
39、ubsidiary,Joint Ventures,Strategic Alliances,Other Forms of Globalization,Strategic Alliances Partnerships between and organization and a foreign company in which both share resources and knowledge in developing new products or building new production facilities. IBM, Toshiba, and Siemens formed a p
40、artnership to develop new generations of computer chips. Joint Venture A specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose. Hewlett-Packard has had numerous joint ventures with various suppliers around the globe to
41、develop different components for its computer equipment. Foreign Subsidiary Directly investing in a foreign country by setting up a separate and independent production facility or office. United Plastics Group of Westmont, Illinois, built three injection molding facilities in Suzhou, China, and plan
42、s to build at least two more.,427,case,Fast-food giant KFC is like many big franchise firms opening more new outlets overseas. Along the way the company is making appropriate changes in its menu offerings, such as substituting juice and fruit for Coke and fries. This Shanghai promotion features new
43、egg tarts.,Managing in A Global Environment,The Legal Environment Stability or instability of legal and political systems Legal procedures are established and followed Fair and honest elections held on a regular basis Differences in the laws of various nations Effects on business activities Effects
44、on delivery of products and services,429,Case: Rio Tinto Employees in China Formally Arrested,On July 8,2009, China detained four Rio Tinto employees on suspicion of obtaining commercial secrets. On August 11, China formally arrested them on charges of obtaining commercial secrets and commercial bri
45、bery.,The Economic Environment,Economic Systems Market economy An economy in which resources are primarily owned and controlled by the private sector. United States, United Kingdom, Vietnam, North Korea, China Command economy An economy in which all economic decisions are planned by a central govern
46、ment. Monetary and Financial Factors Currency exchange ratesGM is happy about higher costs? Inflation rates Diverse tax policies,Case: US to Impose Tariff on Chinese Tires,On Sept. 11,2009, the Obama administration approved that the US will put import duties of 35%, 30% and 25% respectively in the n
47、ext 3 years on Chinese passenger and light truck tires.,The Cultural Environment,National Culture Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important. May have more influence on an organization than the organiz
48、ation culture. For example, is an IBM facility in Germany more likely to reflect German culture or IBMs corporate culture?,433,Exhibit 46What Are Americans Like,434,Americans are very informal. Americans are direct. Americans are competitive. Americans are achievers. Americans are independent and in
49、dividualistic. Americans are questioners. Americans dislike silence. Americans value punctuality. Americans value cleanliness.,Sources: Based on M. Ernest (ed.), Predeparture Orientation Handbook: For Foreign Students and Scholars Planning to Study in the United States (Washington, DC: U.S. Informat
50、ion Agency, Bureau of Cultural Affairs, 1984), pp. 10305; A. Bennett, “American Culture Is Often a Puzzle for Foreign Managers in the U.S.,” Wall Street Journal, February 12, 1986, p. 29; “Dont Think Our Ways the Only Way,” The Pryor Report, February 1988, p. 9; and B.J. Wattenberg, “The Attitudes b
51、ehind American Exceptionalism,” U.S. News & World Report, August 7, 1989, p. 25.,Hofstadters Framework for Assessing Cultures,435,Exhibit 47Examples of Hofstedes Cultural Dimensions,436,Source: Based on G. Hofstede, “Motivation, Leadership, and Organization: Do American Theories Apply Abroad?” Organ
52、izational Dynamics, Summer 1980, pp. 4263.,Criteria for Making Global Employee Selection Decisions,Exhibit 48GLOBE Highlights,438,Source: M. Javidan and R. J. House, “Cultural Acumen for the Global Manager: Lessons from Project GLOBE,” Organizational Dynamics, Spring 2001, pp. 289305. Copyright 2001
53、. Reprinted with permission from Elsevier.,Practical applications of the theory,International communication cross-cultural communication requires being aware of cultural differences because what may be considered perfectly acceptable and natural in one country, can be confusing or even offensive in
54、another. International negotiation communication style, expectation, issue ranking and goals will change according to the negotiators countries of origin. If applied properly, the understanding of cultural dimensions should increase success in negotiations and reduce frustration and conflicts. a neg
55、otiation between Chinese and Canadian International management ITAP International Inc. Itim international When working in international companies, managers may provide training to their employees in order to make them sensitive to cultural differences, develop nuanced business practices, with protoc
56、ols across countries. International marketing Cell phone marketing As companies try to adapt their products and services to local habits and preferences they have to understand the specificity of their market.,Global Management in Todays World,Challenges Openness associated with globalization Signif
57、icant cultural differences (e.g., Americanization) Adjusting leadership styles and management approaches Risks Loss of investments in unstable countries Increased terrorism Economic interdependence,440,Success Factors in the Global Environment,Think globally, and act locally Have an international vi
58、sion Combine global scale with deep roots in local markets. Adapt a product to local customers tastes.,Case: Haiers strategy of globalization & localization,Haiers “globalization”: three 1/3s. Haiers “localization”: Appeal to local customers tastes and habits, Incorporate local resources of R&D, man
59、ufacture and distribution.,When in Rome, do as the Romans do. Be familiar with local business concepts, laws and customs. Some cultural mistakes to avoid: Conducting significant business in France during August. Not giving small gifts to Japanese when conducting business. Expecting the Spanish business partner to come to an appointment punctually.,Recruit talented nationals Haiers overseas strategy: incorporate local talents, resources and culture, and make Haier a localized international brand. Haier employs over 3000 overseas managers globally.,Case application:
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