This document provides an overview of global management topics including:
1) It defines global management and discusses different global attitudes like ethnocentric, polycentric, and geocentric perspectives.
2) It explores ways companies can internationalize like exporting, importing, licensing, franchising, strategic alliances, and foreign subsidiaries.
3) It discusses challenges of global management like differing legal, economic, cultural environments and managing a diverse workforce, emphasizing the need for cultural awareness and a global mindset.
This document provides an overview of global management topics including:
1) It defines global management and discusses different global attitudes like ethnocentric, polycentric, and geocentric perspectives.
2) It explores ways companies can internationalize like exporting, importing, licensing, franchising, strategic alliances, and foreign subsidiaries.
3) It discusses challenges of global management like differing legal, economic, cultural environments and managing a diverse workforce, emphasizing the need for cultural awareness and a global mindset.
This document provides an overview of global management topics including:
1) It defines global management and discusses different global attitudes like ethnocentric, polycentric, and geocentric perspectives.
2) It explores ways companies can internationalize like exporting, importing, licensing, franchising, strategic alliances, and foreign subsidiaries.
3) It discusses challenges of global management like differing legal, economic, cultural environments and managing a diverse workforce, emphasizing the need for cultural awareness and a global mindset.
This document provides an overview of global management topics including:
1) It defines global management and discusses different global attitudes like ethnocentric, polycentric, and geocentric perspectives.
2) It explores ways companies can internationalize like exporting, importing, licensing, franchising, strategic alliances, and foreign subsidiaries.
3) It discusses challenges of global management like differing legal, economic, cultural environments and managing a diverse workforce, emphasizing the need for cultural awareness and a global mindset.
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MGT 212: Organizational
Management Chapter 3- Global Management
MD Asif Hossain Today’s Topic
Global Management Global Attitudes/Prospective Different ways companies can go for globalization Different kind of organization related to global trading The challenge of operating in the global market How to overcome those challenges. Global Management
Definition 1: Global management refers to the
way an organization manages its business internationally, including its sales, marketing, hiring, and finance practices. What’s Your Global Perspective? Ethnocentric Attitude The belief that home country has the best work approaches and practices Polycentric Attitude The view that the managers in host country know the best approaches and practices Geocentric Attitude A world-oriented view that focuses on using the best approaches and people from around the globe HSBC opens a new branch in Bangladesh
Home Country Host Country
Global Attitudes Regional Trading Alliances European Union (EU)- To Increase Partnership between 28 countries in Europe. Economic Growth Follows unified currency (Euros) Visa Free travel Trade between them without much restriction. North American Free Trade Agreement (NAFTA)- An agreement among the Mexican, Canadian, and U.S. governments in which barriers to trade have been eliminated Eliminating the barriers to free trade (tariffs, import licensing requirements, customs user fees) has strengthened the economic power of all three countries. Association of Southeast Asian Nations (ASEAN) Leaders from other countries attend the meeting/annual summit to discuss further possibilities for growth and economic development. Global Trade Mechanism
When issues arise in global trading, global trade
system/organization ensures the continuation of trade efficiently and effectively. World Trade Organization- World Trade Organization- Global organization of 164 countries The intergovernmental organization that regulates international trade. Monitors and promote world trade.
International Monetary Fund and the World Bank
Group- An organization of 188 countries that promotes international monetary cooperation and provides advice, loans, and technical assistance Bangladesh Export Processing Zone Authority (BEPZA)
Objective: Manage the various Export Processing Zones
(EPZs) in Bangladesh. Bangladesh has 8 EPZ at the moment with plans to open 9th one in near future. Export processing zones (EPZs) are areas within developing countries that offer incentives and a barrier-free environment to promote economic growth by attracting foreign investment for export-oriented production. Bangladesh Garments Manufacturers and Exporters Association (BGMEA) An association of readymade garments manufacturers and exporters of Bangladesh. It promotes and protects the greater interest of the garment sector of Bangladesh and its members. BGMEA is dedicated to establishing and promoting contacts with foreign buyers, business and trade associations, chambers and research organizations to develop the export base of apparels. Types of International Organizations- Multinational Corporation (MNC)
Multinational Corporation- Any type of international
company that maintains operation in multiple countries Multidomestic Organization- MNC : Decentralizes management and other decisions to the local country. (Polycentric Attitude) Global Organization- (MNC) Centralizes management and other decisions in the home country (Ethnocentric Attitude). Different Types of International Organizations (Cont.) Transnational Corporation/Borderless- MNCs - [Geo-Centric Attitude] Usesthe approach of recruiting the best resources from wherever they can find. A firm that organizes along business lines without considering artificial geographical barriers Managers choose this approach to increase efficiency and effectiveness in a competitive global marketplace Adaption to Local Culture (Multi Domestic) How Organizations Go Global Global Sourcing- Accruing materials/labors from around the world wherever its cheapest. Exporting – Making products at home and selling abroad. Importing – Purchasing from abroad and selling at home. Licensing - An organization gives another organization the right to make or sell its products using its technology or product specifications Franchising- An organization gives another organization the right to use its name and operating methods. Licensing examples How Organizations Go Global (Cont.)
Strategic alliance- A partnership between an organization
and a foreign company partner or partners in which both share resources and knowledge in developing new products or building production facilities. Joint Venture- A specific type of strategic alliance in A+B=C which the partners agree to form a separate, independent organization for some business purpose Foreign Subsidiary- Directly investing in a foreign country by setting up a separate and independent production facility or office How Organizations Go Global (Cont.) Managing in Global Environment The Legal-Political Environment The complexity of political & Legal issues is one of the most important trend affecting global business.
Differences in the laws of various nations
Effects on business activities Effects on the delivery of products and services
If the legal/political environment remains stable/fair/legal,
it is easier to grow in the global environment. Managing in Global Environment (Cont.) The Economic Environment (2 types of economies) Free market economy An economic system in which resources are primarily owned and controlled by the private sector Planned Economy is one in which economic decisions are planned by a central government Monetary and Financial Factors Currency exchange rates Inflation Rates Diver tax policies An example of the issue that can arise due to different tax policies/culture Managing in Global Environment (Cont.)
The Cultural Environment-
National culture- Every country has a different culture. Their organization might have different values/attitudes shared by individuals. Challenges of Managing a Global Workforce Working in cross-culture environment may have benefits, they also may have conflicts. This may arise due to pay level, language barriers, work methods. Etc
Solutions - Cultural Intelligence- Have Cultural awareness. How cultures vary, how behaviors vary. - Global Mind-Set- Attributes that allow a leader to be effective in cross-culture environment. Manager/leader who can be open-minded and can adapt to changes. A failure example A Failure Example Globalization is important if businesses want to expand. There are various ways with different degrees of risk/investment how a company can go global. Itis important for managers to have an open mind and be aware of the culture in order to achieve success in the global market. ANY QUESTIONS ? Further Reading
ChapterManaging in a Global Environment-
Management 14th Edition- Stephen P. Robbins, Mary Coulter
