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Module 7 Management in A Global Environment Notes

The document discusses globalization and management in a global environment. It outlines three attitudes towards globalization and how organizations expand globally through steps like outsourcing, exporting, licensing, franchising, strategic alliances, and establishing foreign subsidiaries. It also discusses factors like political, economic, and cultural environments that affect globalization.

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390 views2 pages

Module 7 Management in A Global Environment Notes

The document discusses globalization and management in a global environment. It outlines three attitudes towards globalization and how organizations expand globally through steps like outsourcing, exporting, licensing, franchising, strategic alliances, and establishing foreign subsidiaries. It also discusses factors like political, economic, and cultural environments that affect globalization.

Uploaded by

Kushi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Module 7 Management in a Global environment

Monolingualism (speaking only one language) is a sign that the nation suffers from
parochialism- viewing the world solely through one’s eyes and not recognising that other
people have different ways of living.
The three possible global attitudes
1. ethnocentric attitude
- best work practices are those of the home country(where the head office is)
- managers believe that people in foreign countries don’t have the necessary skillset for work
2. polycentric attitude
- the belief that the employees in the host country (countries where they carry out business)
know the best work approaches and business management skills
- allow the host country to plan what is to be done for them
3. geocentric attitude
- world oriented view
- look for best approaches and people globally
- eliminate parochial attitudes and geological and ethnic differences
- the CEO of one of the companies is an immigrant he is said to “ combine Chinese costs with
japanes quality, European design and American marketing”
- taking the best from different places

HOW THE ORGANISATIONS GO GLOBAL?


- At first managers want to get in global environments with minimal investing
- So in the beginning they start with global sourcing (outsourcing) which means
purchasing material or labour from around the world based on lowest cost.
Eg: Massachusetts General Hospital uses radiologists in India to interpret the CT
scans
- As they move forwards into a global footing the cost and investment increase
- The next step is export and import. The company exports their products (making
domestically and selling internationally) and also importing (made abroad, sell
domestic). This process of has minimal investing and thus is widely used by small
businesses to global
- Licensing and franchising is giving the other organisations the right to use its brand
name, technology or product specifications for a fee. Licensing is mainly used for
products and franchising is used for services.
Eg: subway in india, Budweiser has licensed its right to brew bears to Crown beers
India.
- When an organisation has been doing business internationally for a while and gained
experience, managers decide to make more direct investment. This is done by
strategic alliance. (partnering with a foreign company wherein both share resources
and knowledge in developing new products etc,
Eg: Honda and General electric started a joint venture for certain products
- Foreign subsidiary is a direct investment by way of setting up offices or independent
facility in another country. This subsidiary can have local or global control or both.
Eg; Orind set up by Jhunjhunwala in China which is completely export based
manufacture of brick refractory.

Factors affecting globalisation of business

1. the political/legal environment


- different countries have different laws and political stabilities
- the factor of political stability should be considered and approached cautiously
- the laws of the country where business is taking place should be known and
implemented
- the stability of laws allows for accurate predictions
- political interference should be considered
- it is necessary to recognise the political and legal differences between the home
country and the other and make necessary accomodations.

2. the economic environment


- important to understand the type of countries economy
- they can be of two types free market and planned
- Free market- resources primarily owned and controlled by the private individuals
- Planned- economic decisions primarily by state
- no economy can be purely free or planned
- the success of the company is highly dependant on the strength of its currency in the
global perspective
- inflation not only affects the day to day life of the people but the general confidence
in a company’s social and political system.
- monetary and tax policies of the country also play a crucial rule in organisational
success.

3. the cultural environment


- national culture is the values and attitudes shared by individuals from a specific
country that shape their belief and behaviour
- national culture is more influential than organisational culture
- this national culture is difficult to identify as natives will not explicitly state their
cultures and this needs to be studied from their behaviour and actions.

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