GLOBAL MANAGEMENT

GLOBAL Management in business and organizations is the function that coordinates the
efforts of people to accomplish goals and objectives using available resources efficiently and
effectively. Management comprises planning, organizing, staffing, leading or directing, and
controlling an organization or initiative to accomplish a goal. Resourcing encompasses the
deployment and manipulation of human resources, financial resources, technological resources,
and natural resources. Management is also an academic discipline, a social science whose object
of study is the social organization.
Etymology
The verb 'manage' comes from the Italian maneggiare (to handle, especially tools), which derives
from the Latin word manus (hand). The French word mesnagement (later mnagement)
influenced the development in meaning of the English word management in the 17th and 18th
centuries.
Definitions
Views on the definition and scope of management include:
Management is defined as the organization and coordination of the activities of an
enterprise in accordance with certain policies and in achievement of clearly defined
objectives
Fredmund Malik defines as Management is the transformation of resources into
utility.
Management included as one of the factors of production - along with machines,
materials and money
Peter Drucker (19092005) saw the basic task of a management as twofold: marketing
and innovation. Nevertheless, innovation is also linked to marketing (product innovation
is a central strategic marketing issue). Peter Drucker identifies marketing as a key essence
for business success, but management and marketing are generally understood

as two
different branches of business administration knowledge.
Andreas Kaplan specifically defines European Management as a cross-cultural, societal
management approach based on interdisciplinary principles.
Directors and managers should have the authority and responsibility to make decisions to
direct an enterprise when given the authority
As a discipline, management comprises the interlocking functions of formulating
corporate policy and organizing, planning, controlling, and directing a firm's resources to
achieve a policy's objectives
The size of management can range from one person in a small firm to hundreds or
thousands of managers in multinational companies.
In large firms, the board of directors formulates the policy that the chief executive officer
implements.

What Is Global Management?
Global management refers to the way an organization manages its business internationally,
including its sales, marketing, hiring and finance practices. Many schools offer training and
degree programs in global management. Read on to learn more about responsibilities in this field
of management and education programs that can prepare you to enter this career. Schools
offering International Business degrees can also be found in these popular choices.
Overview of Global Management
As technology continues to connect the world, many organizations have taken advantage of the
opportunity to conduct business globally. Global management combines knowledge of business,
culture, history and social practices to help companies find their niches in the international
business community and successfully work with other cultures.
As a global manager, you'll not only need to understand business principles, but you'll also need
a firm grasp of the local customs, professional life and regional policies of the countries that your
company wants to partner with. Many companies also look for managers who speak multiple
languages and have experience representing more than one country, as well as those who are
willing to move from one location to another.
Job Duties and Skills
Working as a global manager, you'll be in the unique position of managing a company's business
and staff in a land that may have vastly different cultural and professional customs. In many
regions, managers are needed to help companies tailor their business to the local culture. For
example, as a global manager, you might need to learn the hiring practices of another country or
the specific way that people communicate in the workplace to avoid potentially offending or
confusing your foreign colleagues. You'll then need to train other employees in appropriate
practices, such as pitching products to foreign customers in a polite manner consistent with their
culture.
In order to carry out their jobs effectively, global managers need strong communication and
interpersonal skills. They need to be highly sensitive to and respectful of cultural differences.
Having an open mind and complex critical thinking skills is also essential.
Training Programs
If you want to receive a global management education, graduate programs are offered by a
number of accredited business schools. Some bachelor's degree programs are available, though
graduate certificate and degree programs are the most commonly offered. Global management
training can be offered as part of a Master of Business Administration (MBA) or Master of
Public Administration (MPA) program. You also can earn a Master of Science in Global
Management.
These programs can introduce you to the social customs and business practices of different
countries, teach you about international commerce and show you how to conduct business in
foreign languages. Coursework may cover international human resources management, global
supply chain management, foreign income taxes and international negotiation. Many schools can
also offer you the opportunity to study abroad or complete an internship experience overseas.
To continue researching, browse degree options below for course curriculum, prerequisites and
financial aid information. Or, learn more about the subject by reading the related articles below:


THEORETICAL SCOPE
Management involves the manipulation of the human capital of an enterprise to contribute to the
success of the enterprise. This implies effective communication: an enterprise environment (as
opposed to a physical or mechanical mechanism), implies human motivation and implies some
sort of successful progress or system outcome. As such, management is not the manipulation of a
mechanism (machine or automated program), not the herding of animals, and can occur in both a
legal as well as illegal enterprise or environment. Based on this, management must have humans,
communication, and a positive enterprise endeavor. Plans, measurements, motivational
psychological tools, goals, and economic measures (profit, etc.) may or may not be necessary
components for there to be management. At first, one views management functionally, such as
measuring quantity, adjusting plans, meeting goals. This applies even in situations where
planning does not take place. From this perspective, Henri Fayol (18411925) considers
management to consist of six functions:
1. Forecasting
2. Planning
3. Organizing
4. Commanding
5. Coordinating
6. Controlling
Henri Fayol was one of the most influential contributors to modern concepts of management.
In another way of thinking, Mary Parker Follett (18681933), defined management as "the art of
getting things done through people". She described management as philosophy.
Critics, however, find this definition useful but far too narrow. The phrase "management is what
managers do" occurs widely, suggesting the difficulty of defining management, the shifting
nature of definitions and the connection of managerial practices with the existence of a
managerial cadre or class.
One habit of thought regards management as equivalent to "business administration" and thus
excludes management in places outside commerce, as for example in charities and in the public
sector. More broadly,every organization must manage its work, people, processes, technology,
etc. to maximize effectiveness. Nonetheless, many people refer to university departments that
teach management as "business schools". Some institutions (such as the Harvard Business
School) use that name while others (such as the Yale School of Management) employ the more
inclusive term "management".
English speakers may also use the term "management" or "the management" as a collective word
describing the managers of an organization, for example of a corporation. Historically this use of
the term often contrasted with the term "Labor" - referring to those being managed.
NATURE OF MANAGERIAL WORK
In for-profit work, management has as its primary function the satisfaction of a range of
stakeholders. This typically involves making a profit (for the shareholders), creating valued
products at a reasonable cost (for customers), and providing rewarding employment
opportunities for employees. In nonprofit management, add the importance of keeping the faith
of donors. In most models of management and governance, shareholders vote for the board of
directors, and the board then hires senior management. Some organizations have experimented
with other methods (such as employee-voting models) of selecting or reviewing managers, but
this is rare.
In the public sector of countries constituted as representative democracies, voters elect
politicians to public office. Such politicians hire many managers and administrators, and in some
countries like the United States political appointees lose their jobs on the election of a new
president/governor/mayor.
HISTORICAL DEVELOPMENT
Some see management (by definition) as late-modern (in the sense of late modernity)
conceptualization. On those terms it cannot have a pre-modern history, only harbingers (such as
stewards). Others, however, detect management-like-thought back to Sumerian traders and to the
builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the
problems of exploiting/motivating a dependent but sometimes unenthusiastic or recalcitrant
workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled to
face the issues of management systematically. However, innovations such as the spread of
Hindu-Arabic numerals (5th to 15th centuries) and the codification of double-entry book-keeping
(1494) provided tools for management assessment, planning and control.
With the changing workplaces of industrial revolutions in the 18th and 19th centuries, military
theory and practice contributed approaches to managing the newly-popular factories.
[6]

Given the scale of most commercial operations and the lack of mechanized record-keeping and
recording before the industrial revolution, it made sense for most owners of enterprises in those
times to carry out management functions by and for themselves. But with growing size and
complexity of organizations, the split between owners (individuals, industrial dynasties or groups
of shareholders) and day-to-day managers (independent specialists in planning and control)
gradually became more common.
Early writing
While management (according to some definitions) has existed for millennia, several writers
have created a background of works that assisted in modern management theories.
Some ancient military texts have been cited for lessons that civilian managers can gather. For
example, Chinese general Sun Tzu in the 6th century BC, The Art of War, recommends being
aware of and acting on strengths and weaknesses of both a manager's organization and a foe's.
Various ancient and medieval civilizations have produced "mirrors for princes" books, which
aim to advise new monarchs on how to govern. Examples include the Indian Arthashastra by
Chanakya (written around 300BC), and The Prince by Italian author Niccol Machiavelli (c.
1515).
Written in 1776 by Adam Smith, a Scottish moral philosopher, The Wealth of Nations discussed
efficient organization of work through division of labour.
[8]
Smith described how changes in
processes could boost productivity in the manufacture of pins. While individuals could produce
200 pins per day, Smith analyzed the steps involved in manufacture and, with 10 specialists,
enabled production of 48,000 pins per day.
19th century
Classical economists such as Adam Smith (17231790) and John Stuart Mill (18061873)
provided a theoretical background to resource-allocation, production, and pricing issues. About
the same time, innovators like Eli Whitney (17651825), James Watt (17361819), and Matthew
Boulton (17281809) developed elements of technical production such as standardization,
quality-control procedures, cost-accounting, interchangeability of parts, and work-planning.
Many of these aspects of management existed in the pre-1861 slave-based sector of the US
economy. That environment saw 4 million people, as the contemporary usages had it, "managed"
in profitable quasi-mass production.
Salaried managers as an identifiable group first became prominent in the late 19th century

OBJECTIVES
To give a broader understanding of the Global marketing management concepts and main
issues of Global business. This unit gives students an understanding of the factors that
how the international trade system and the economic, political, legal and cultural
environments affect a company\u2019s international marketing decisions.
The main objectives of the chapter are:
1. To provide an overview of strategic concept of marketing with the major
principles of global market
2. To analyse the driving forces and various complexities of international
marketing
3. To evaluate the various entry strategies to international market
4. to identify the essentials of international market in the context of economic
development of less developed countries organization on global market
opportunities and threats.
Two decades ago, the term global marketing did not even exist. Today, global
marketing is essential not only for the realization of the full success potential of a
business, but even more critically for the survival of a business. A company which
fails to go global is in longer of losing it\u2019s domestic business to compet itors
with lower costs, greater experience, better products and in a nutshell, more value for
the customer.
The importance of going global to ensure company survival is a more powerful motive
for many companies than the attraction of opportunity abroad. I ndustries that were
entirely national in scope only a few years ago are dominated today by a handful of
global companies. This unit concentrate on the major dimensions of global marketing
namely meaning and the strategic concept of marketing, the principles of marketing,
transition from the domestic to transactional marketing, driving forces and
complexities in International Marketing, Global Marketing Imperative, Global
Marketing plan, International market orientation (EPRA) and International Market
Entry Strategies.
MEANING OF MARKETING
Marketing is essentially a creative corporate activity involving the planning and
execution of the conception, pricing, promotion, and distribution of ideas, products,
and services in an exchange that not only satisfies customers\u2019 current needs but
also anticipates and creates their future needs at a profit. Marketing is not only much
broader than selling, it also encompasses the entire company\u2019s market
orientation toward customer satisfaction in a competitive environment. In other words,
marketing strategy requires close attention to both customers and competitors.
MEANING OF GLOBAL MARKETING

Global marketing refers to marketing activities by companies that emphasize the
following:

1. Reduction of cost inefficiencies and duplication of efforts among their national
and regional subsidiaries
2. Opportunities for the transfer of products, brands, and other ideas across
subsidiaries
3. Emergence of global customers
4. Improved linkages among national marketing infrastructures leading to the development
of a global marketing infrastructure.
Although Levitt\u2019s view that global marketing does not necessarily mean
standardization of products, promotion, pricing, and di stribution worldwide, but
rather, it is a company\u2019s proactive willingness to adopt a global perspective
instead of a country-by-country or region-by-region perspective in developing a
marketing.

The Strategic Concept of Marketing
During the past three decades the concept of marketing has changed dramatically. The
marketing concept has evolved from the original concept, which focused marketing on
the product. The objective was profit, and the means to achieving the objective was
selling, or persuading the potential customer to exchange his or her money for the
company\u2019s product.

Global Marketing Management


The new concept of marketing, which appeared about 1960, shifted the focus of
marketing from the product to the customer. The objective was still profit, but the
means of achieving the objective expanded to include the entire marketing mix, or the
four Ps as they became known: product, price, promotion, and place (channels of
distribution).
By 1990 it was clear that the consumer concept of marketing was updated and that the
times demanded a strategic concept. The strategic concept of marketing, a major
evolution in the history of marketing thought, shifted the focus of marketing from the
customer or the product to the customer in the context of the broader external
environment. Knowing everything there is to know about the customer is not enough.
To succeed, marketers must know the customer in a context including the competition,
government policy and regulation, and broader economic, social, and political macro
forces that shape the evolution of markets. In global marketing this may mean
working closely with home-country government trade negotiators and other officials
and industry competitors to gain access to a target country market.
Another revolutionary change in the shift to the strategic concept of marketing is in the
marketing objective-from profit to stakeholder benefits. Stakeholders are individuals or
groups who have an interest in the activity of a company. They include the employees and
management, customers, society, and government, to mention only the most prominent.
There is a growing recognition that profits are a reward for performance (defined as
satisfying customers in a socially responsible or acceptable way). To compete in todays
market, it is necessary to have an employee team committed to continuing.
THE THREE PRINCIPLES OF MARKETING

MBA-IB
Global Marketing Management
innovation and to producing quality products. In other words, marketing must focus on the
customer in context and deliver value by creating stakeholder benefits for both customers
and employees.
Profitability is not forgotten in the strategic concept. Indeed, it is a critical means to
the end of creating stakeholder benefits. The means of the strategic marketing concept
is strategic management, which integrates marketing with the other management
functions. One of the tasks of strategic management is to make a profit, which can be
a source of funds for investing in the business and for rewarding shareholders and
management. Thus, profit is still a critical objective and measure of marketing
success, but it is not an end in itself. The aim of marketing is to create value for
stakeholders, and the key stakeholder is the customer.
Finally, the strategic concept of marketing has shifted the focus of
marketing from a microeconomic maximization paradigm to a focus of managing
strategic partnerships and positioning the firm between vendors and customers in the
value chain with the aim and purpose of creating value for customers. This expanded
concept of marketing was termed boundaryless marketing. The notion of boundaryless
marketing is shown in Figure 1-1.
Figure 1.1 Value Chain Boundaryless Marketing
1.4 THE THREE PRINCIPLES OF MARKETING
The essence of marketing can be summarized in three great principles. The first is
customer value, the second is competitive advantage and the third principle is
concentration of customer need.
1. The Principle of Customer Value
The essence of marketing is creating customer value that is greater than the value
created by competitors. Value for the customer can be increased by expanding or
improving product and or service benefits, by reducing the price, or by a combination of these
elements. Companies that use price as a competitive weapon must have a strategic cost
advantage in order to create a sustainable competitive advantage. This might come from cheap
labor or access to cheap raw materials, or it might come from manufacturing scale or efficiency
or more efficient management. Knowledge of the customer combined with innovation and
creativity can lead to product improvements and service that matter to customers. If the benefits
are strong enough and valued enough by customers, a company does not need to be the low-price
competitor in order to win customers
3. The Principle of Competitive advantage
The second great principle of marketing is competitive advantage. A competitive
advantage is a total offer, vis-z-vis relevant competition, that is more attractive to
customers. The advantage could exist in any element of the companys offer: the
product, the price, the advertising and point -of-sale promotion, and the distribution of
the products. The total offer must be more attractive than that of the competition in
order to create a competitive advantage. A company might have a product that is
equivalent in quality to that of the competition but no better. If it offers this product
at a significantly lower price, and if it can get customers to believe that the quality of
the companys product is equal to that of the competition, the price advantage will
give the company a competitive advantage. The competitive advantage must exist
relative to relevant competitors. If the company is in a local industry, these
competitors will be local. In national industry, they will be national, and in a global
industry, they will be global.
The Principle of Concentration of customer need:
The third marketing principle is focus, or the concentration of attention. Focus is
required to succeed in the task of creating customer value at a competitive advantage.
All great enterprises, large and small, are successful because they have understood
and applied this great principle. IBM succeeded because it was more clearly focused
on customer needs and wants than any other company in the emerging data processing
industry. One of the reasons that IBM found itself in crisis in the early 1990s was
because its competitors had become much more clearly focused on customer needs and
wants. Dell and Compaq were giving customers computing power and low prices IBM
was offering the same computing power with higher prices. In earlier days, the IBM
name was worth the difference today, in the maturing computer market, the value of
the IBM name is simply not worth much as compared to a name like Compaq or Dell.
A clear focus on customer needs and wants and on the competitive offer is needed to
mobilize the effort needed to maintain a differential advantage. This can be
accomplished only by focusing or concentrating resources and efforts on customer needs and
wants and on how to deliver a product that will meet those needs and wants.
1.5. TRANSITION FROM DOMESTIC TO TRANSNATIONAL MARKET
This section outlines the differences between domestic, export, international,
multinational, global, and transnational marketing.

1. Domestic Marketing
Marketing that is targeted exclusively on the homes-country market is called domestic
marketing. A company engaged in domestic marketing may be doing this consciously
as a strategic choice or it may be unconsciously focusing on the domestic market in
order to avoid the challenge of learning how to market outside the home country.
2. Export Marketing
Export marketing is the first stage of addressing market opportunities outside the
home country. The export marketer targets markets outside the home country and
relies upon home-country production to supply product for these markets. The focus in
this stage is upon leveraging home-country products and experience. A export
marketer will study target markets and adapt products to meet the specific needs of
customers in each country.
3. International Marketing
The international marketer goes beyond the export marketer and becomes more
involved in the marketing environment in the countries in which it is doing business.
For example, the international marketer is prepared to source product outside the
home country in order to gain greater competitive advantage. The international
marketer is less likely to rely upon intermediaries and is more likely to establish
direct representation to coordinate the marketing effort in target markets.
4. Multinational Marketing
The international marketing organization begins by focusing on leveraging a
companys experience and products. As it focuses upon this task, it becomes aware of
the differences and unique circumstances in the country, and establishes a new role
for itself adapting the companys marketing to the unique needs and wants of
customers in the country. The multinational marketing organization would develop a
unique communication program for its market.
5. Global/Transnational Marketing
Global/transnational marketing focuses upon leveragi ng a companys assets,
experience, and products globally and upon adapting to what is truly unique and
different in each country. It recognizes cultural universals and unique market
differences. Instead of an international company approach of applying the
National Controls/Barriers to Entry
Every country protects local enterprise and interests by maintaining control over
market access and entry. Today, tariff barriers have been largely removed in the high-
income countries. The significant barriers are the so-called nontraiff barriers that
make it difficult for foreign companies to gain access to a domestic market. The
worldwide movement toward deregulation and privatization, by breaking the link
between government and enterprise, is an initiative that will lead to a significant
opening up of formerly closed markets.
SIGNIFICANCE OF INTERNATIONAL MARKETING AND ECONOMIC
DEVELOPMENT
The role of foreign trade in economic development is considerable. The classical and
neo-classical economists attached so much importance to international trade in a
countrys development that they regarded it as an engine of growth. We shall discuss
how international trade helps economic development towards the progress of less
developed countries. (LDCs)
This section focus on direct and indirect benefits on foreign trade to LDCs
International trade possesses great importance for LDCs.
It provides the urge to develop the knowledge and experience that make development
possible, and the means to accomplish it. Herberlier opines, My overall conclusion is
that international trade has made a tremendous contribution to the development of less
developed countries in the 19t h and 20t h centuries and can be expected to make an
equally big contribution in the future. And that substantial free trade with marginal,
insubstantial correction and deviations, is the best policy from the point of view of
economic development.
When a country specializes in the production of a few goods due to international trade and
division of labour, it exports those commodities which it produces cheaper in exchange for
what others can produce at a lower cost. It gains from trade and there is increase in national
income which, in turn, raises the level of output and the growth rate of economy. Thus the
higher level of output through trade tends to break the vicious circle of poverty and
promotes economic development.
An LDC is hampered by the small size of its domestic market which fails to absorb
sufficient volume of output. This leads to low inducement to i nvestment. The size of
the market is also small because of low per capita income and of purchasing power.
International trade widens the market and increases the inducement to invest income
and saving through more efficient resource allocation.