Solutions Manual Management 12th Edition chapter 3 Stephen P. Robbins, Mary Coulter

Chapter 3 Managing in a Global Environment Every organization is affected in some way by the global environment. In this chapter, will learn what managers need to know about managing globally, including regional trading alliances, how organizations go international, and cross-cultural differences. Focus on the following learning outcomes as you read and study this chapter. 3.1 Contrast ethnocentric, polycentric, and geocentric attitudes toward global business. 3.2 Discuss the importance of regional trading alliances and global trade mechanisms. 3.3 Describe the structures and techniques organizations use as they go international. 3.4 Explain the relevance of the political/legal, economic, and cultural environments to global business. In Chapter 3, students will explore the opportunities and challenges managers encountered in today’s global business environment. Managers in all types and sizes of organizations must constantly monitor changes and consider the particular characteristics of their own location as they plan, organize, lead, and control in this dynamic environment. In this chapter’s opening illustration, students read about Alan Mulally’s, CEO of Ford Motor Company, ONE FORD concept. Competing on an international scale is difficult and Ford has decided to adopt a global vision where cars and trucks produced in the United States and abroad are more competitive in international markets. The idea behind the ONE FORD plan is to leverage the resources of Ford to achieve profitable growth. This means manufacturing cars, like the Focus, in a way that as many parts as possible are shared with other models in the US and abroad. The ONE FORD plan also means expanding into untapped markets, like China, by expanding overseas production. Ask your students to put themselves in Mulally’s shoes. How would they prepare to manage the challenges presented by the continued international growth while at the same time paying attention to domestic markets in the United States? WHO OWNS WHAT? Students may be astonished to discover the country of ownership origin for many products they use. In taking this quiz and discussing their scores, students may also be surprised to learn that a significant number of well-known companies derive more than half of their revenues from global operations. 3.1 WHAT’S YOUR GLOBAL PERSPECTIVE? Most U.S. children study only English in school. It is not unusual for Germans, Italians, and Indonesians to speak three or four languages. Americans tend to think of English as the only international business language and see little need to study other languages. How does the US’s monolingualism affect our view of culture? A. Parochialism is viewing the world solely through your own perspectives, leading to an inability to recognize differences between people. Parochialism is an obstacle for many U.S. managers and stems from monolingualism. B. Managers might have one of three perspectives or attitudes toward international business: 1. An ethnocentric attitude is the parochialistic belief that the best work approaches and practices are those of the home country (the country in which the company’s headquarters are located). 2. A polycentric attitude is the view that the managers in the host country (the foreign country where the organization is doing business) know the best work approaches and practices for running their business. 3. A geocentric attitude is a world-oriented view that focuses on using the best approaches and people from around the globe. 4. To be a successful global manager, an individual needs to be sensitive to differences in national customs and practices. LEADER WHO MADE A DIFFERENCE Indra Nooyi, CEO of PepsiCo, was recently named for the fourth straight year the Most Powerful Woman in Business by Fortune magazine and was named one of the 100 most powerful women in the world by Forbes magazine. Born in India, Ms. Nooyi recognizes how important her company’s global business operations are. On a recent trip to China, she spent 10 days immersing herself in China. She says, “I wanted to look at how people live, how they eat, what the growth possibilities are.” 3.2 UNDERSTANDING THE GLOBAL ENVIRONMENT Several significant forces are reshaping today’s global environment. Important features of the global environment include regional trading alliances and different types of global organizations. A. Regional Trading Alliances Regional trading alliances are reshaping global competition. Competition is no longer limited to country versus country, but region versus region. 1. The European Union (EU) is a union of 27 European nations created as a unified economic and trade entity (see Exhibit 3-1). Three more countries (will be gaining membership soon). a. The primary motivation for the creation of the EU in February 1992 was to allow member nations to reassert their position