Management Ch. 5
Global Management and Cultural Diversity
Key concepts in the challenges of globalization
- Global economy
- Globalization
- World 3.0
- Global management
- Global manager
Global Economy
- Resources, markets, and competition are worldwide in scope
Globalization
- The growing interdependence among elements in the global economy
World 3.0
- Balancing cooperation in the global economy with national identities and interests
Global Management:
- Managing business and organizations with interests in more than one country
Global Manager
- Is culturally aware and informed on international affairs
International Businesses
- Conducting for-profit transactions of goods and services across national boundaries
Reasons why Businesses go Global
- Customers
- Suppliers
- Capital
- Labour
- Risk
Market Entry Strategies
- Involve the sale of goods or services to foreign markets but do not require expensive
investments
Types of Market Entry Strategies
- Global sourcing
- Exporting
- Importing
- Licensing agreement
- Franchising
Types of Direct Investment Strategies
- Joint venture
- Strategic alliance
- Owned subsidiary
How Companies go Global
- Global sourcing
- The process of purchasing materials or services around the world for local use
- Exporting
- Selling locally made products in foreign markets
- Importing
- Buying foreign-made products and selling them domestically
, - Licensing Agreement
- One firm pays fee for rights to male or sell another company’s products
- Franchising
- A fee is paid for rights to use another firm’s name, branding, and methods
Insourcing
- Local job creation that results from foreign direct investment
Types of Insourcing
- Joint Ventures
- Operates in a foreign country through co-ownership by foreign and local partners
- Strategic Alliances
- A partnership in which foreign and domestic firms share resources and knowledge for
mutual gains
- Foreign Subsidiaries
- Local operation completely owned by a foreign firm
Criteria for Choosing a Joint Venture Partner
- Familiarity with your firm’s major business
- Strong local workforce
- Values its customers
- Future expansion possibilities
- Strong local market partner’s own products
- Good profit potential
- Sound financial standing
Global Business Environments
- Legal and political systems
- Trade agreements and trade barriers
- Regional economic alliances
Legal and Political Systems
- Differing laws and practices regarding
- Business ownership
- Negotiation and implementation of contracts
- Foreign currency exchange
- Protection of intellectual property rights
- Counterfeit merchandise
- Political Risk
- Potential loss in value of a foreign investment due to instability and political changes
in the host country
- Political Risk Analysis
- Forecast political disruptions that threaten the value of a foreign investment
Trade Agreements and Trade Barriers
- World Trade Organization
- Most favored nation status
- Tariffs
- Non Tariff barriers
- Protectionism
Regional Economic Alliances
- NAFTA
- North american free trade agreement
- EU
Global Management and Cultural Diversity
Key concepts in the challenges of globalization
- Global economy
- Globalization
- World 3.0
- Global management
- Global manager
Global Economy
- Resources, markets, and competition are worldwide in scope
Globalization
- The growing interdependence among elements in the global economy
World 3.0
- Balancing cooperation in the global economy with national identities and interests
Global Management:
- Managing business and organizations with interests in more than one country
Global Manager
- Is culturally aware and informed on international affairs
International Businesses
- Conducting for-profit transactions of goods and services across national boundaries
Reasons why Businesses go Global
- Customers
- Suppliers
- Capital
- Labour
- Risk
Market Entry Strategies
- Involve the sale of goods or services to foreign markets but do not require expensive
investments
Types of Market Entry Strategies
- Global sourcing
- Exporting
- Importing
- Licensing agreement
- Franchising
Types of Direct Investment Strategies
- Joint venture
- Strategic alliance
- Owned subsidiary
How Companies go Global
- Global sourcing
- The process of purchasing materials or services around the world for local use
- Exporting
- Selling locally made products in foreign markets
- Importing
- Buying foreign-made products and selling them domestically
, - Licensing Agreement
- One firm pays fee for rights to male or sell another company’s products
- Franchising
- A fee is paid for rights to use another firm’s name, branding, and methods
Insourcing
- Local job creation that results from foreign direct investment
Types of Insourcing
- Joint Ventures
- Operates in a foreign country through co-ownership by foreign and local partners
- Strategic Alliances
- A partnership in which foreign and domestic firms share resources and knowledge for
mutual gains
- Foreign Subsidiaries
- Local operation completely owned by a foreign firm
Criteria for Choosing a Joint Venture Partner
- Familiarity with your firm’s major business
- Strong local workforce
- Values its customers
- Future expansion possibilities
- Strong local market partner’s own products
- Good profit potential
- Sound financial standing
Global Business Environments
- Legal and political systems
- Trade agreements and trade barriers
- Regional economic alliances
Legal and Political Systems
- Differing laws and practices regarding
- Business ownership
- Negotiation and implementation of contracts
- Foreign currency exchange
- Protection of intellectual property rights
- Counterfeit merchandise
- Political Risk
- Potential loss in value of a foreign investment due to instability and political changes
in the host country
- Political Risk Analysis
- Forecast political disruptions that threaten the value of a foreign investment
Trade Agreements and Trade Barriers
- World Trade Organization
- Most favored nation status
- Tariffs
- Non Tariff barriers
- Protectionism
Regional Economic Alliances
- NAFTA
- North american free trade agreement
- EU
