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3-managing in global environment.pptx
- 1. Chapter#3 MANAGING IN A GLOBAL ENVIRONMENT Course Instructor: Hamza
- 2. Is it good to learn different languages?
- 3. WHATS YOUR GLOBAL PERSPECTIVE Parochialism: A narrow view of the world; an inability to recognize differences between people. People with a parochial attitude do not recognize that others have different ways of living and working. They ignore others values and customs and rigidly apply an attitude of ours is better than theirs to foreign cultures. This type of narrow, restricted attitude is one approach that managers might take, but isnt the only one. In fact, there are three possible global attitudes.
- 4. Ethnocentric Attitude: A parochialistic belief that the best work approaches and practices are those of the home country (the country in which the companys headquarters are located). Managers with an ethnocentric attitude believe that people in foreign countries dont have the needed skills, expertise, knowledge, or experience to make the best business decisions as people in the home country do. They dont trust foreign employees with key decisions or technology.
- 5. Polycentric Attitude: The view that the managers in the host country (the foreign country in which the organization is doing business) know the best work approaches and practices for running the business. Managers with this attitude view every foreign operation as different and hard to understand. Thus, theyre likely to let employees there figure out how best to do things.
- 6. Geocentric Attitude: A world oriented view that focuses on using the best approaches and people from around the globe. Managers with this type of attitude have a global view and look for the best approaches and people regardless of origin. A geocentric attitude requires eliminating parochial attitudes and developing an understanding of cross-cultural differences. Thats the type of approach successful managers will need in todays global environment.
- 7. DOING BUSINESS GLOBALLY Different types of global organizations: 1. Multinational Corporations (MNCs) A company that maintain significant operations in multiple countries but manages them from a base in the home country. (Characteristic of ethnocentric attitude) 2. Transnational Corporations (TNCs) A company that maintain significant operations in more than one country but decentralizes management to the local country. (Characteristic of polycentric attitude) 3. Borderless Organizations A global type of organization in which artificial geographical barriers are eliminated. (Characteristic of geocentric attitude)
- 8. HOW ORGANIZATIONS GO GLOBAL Stage 1 Stage 2 Stage 3
- 9. Contd.. Exporting An approach to going global that involves making products at home and selling them overseas. Importing An approach to going global that involves selling products at home that are made overseas.
- 10. Contd Licensing An approach to going global by manufacturing organizations that involves giving other organizations the right to use your brand name, technology or product specification. For example: A company may choose to license its brand(s) when they believe there is strong consumer acceptance for brand extensions or products. For example, when Apple launched the iPod there was an immediate need for accessories such as headphones, charging and syncing stations and carrying cases. Apple decided not to manufacture these products and instead chose to have a licensee make the products. By doing so, Apple could offer branded Ear bud Headphones, iPod docking stations and iPod socks. Each is made by a separate company but together offer the consumer an elegant solution. All of these accessories are sold by licenses.
- 11. Contd Franchising An approach to going global by service organizations that involves giving other organizations the right to use your brand name, technology or product specification. Franchising is a business model in which many different owners share a single brand name. A parent company allows entrepreneurs to use the company's strategies and trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues. The parent company also provides the franchisee with support, including advertising and training, as part of the franchising agreement
- 12. Contd Strategic Alliances An approach to going global that involves partnerships between an organization and a foreign company in which both share resources and knowledge in developing new products or building production facilities. In a strategic alliance, each company maintains its autonomy while gaining a new opportunity. A strategic alliance could help a company develop a more effective process, expand into a new market or develop an advantage over a competitor, among other possibilities. E.g. A clothing retailer might form a strategic alliance with a single clothing manufacturer to ensure consistent quality and sizing. A major website could form a strategic alliance with an analytics company to improve its marketing efforts
- 13. Contd Joint Venture An approach to going global that is a specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose. E.g. Sony-Ericsson is a joint venture by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. The stated reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communications sector. Both companies have stopped making their own mobile phones.
- 14. Contd Foreign Subsidiary An approach to going global that involves a direct investment in a foreign country by setting up a separate and independent production facility or office. E.g. IBM and Walmart are biggest examples of foreign subsidiary
- 15. MANAGING IN A GLOBAL ENVIRONMENT-Economic Market Economy An economic system in which resources are primarily owned and controlled by the Private Sector. E.g. An example of a market economy is the United States. A market economy is where the resources of a country are owned and controlled by the people of the country, rather than the government. Other examples of a market economy include Canada, UK, Germany, and the Netherlands
- 16. Contd Command Economy An economic system in which all economic decisions are planned by a Central Government. It is also known as planned economy. Some of the examples of a command economy are the economies of Cuba, Libya during Gaddafi's reign, North Korea, Saudi Arabia and Belarus as well as Myanmar. A command economy is also referred to as a centrally planned economy or a control economy.
- 17. Managers must stay informed of the specific laws in countries where they do business. For instance, the president of Zimbabwe is pushing ahead with plans to force foreign companies to sell majority stakes to locals Swedish retailer Ikea has halted further investment in Russia because of continual governmental red tape delays. Per Kaufmann, Ikeas Russia country manager, said the decision was due to the unpredictability of the administrative processes in some regions. Businesses in Afghanistan nowadays? MANAGING IN A GLOBAL ENVIRONMENT-Political/Legal
- 18. National Culture: The values and attitudes shared by individuals from a specific country that shape their behavior and beliefs about what is important. At Hewlett-Packard, a cross-global team of U.S. and French engineers were assigned to work together on a software project. The U.S. engineers sent long, detailed e-mails to their counterparts in France. The French engineers viewed the lengthy e-mails as patronizing and replied with quick, concise e-mails. This made the U.S. engineers think that the French were hiding something from them. The situation spiraled out of control and negatively affected output until team members went through cultural training. MANAGING IN A GLOBAL ENVIRONMENT-Culture