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Ch04 Management Intro

Chapter 4 discusses managing in a global environment, outlining the international business environment, including economic, legal-political, and socio-political factors. It highlights the importance of globalization and various strategies for entering international markets, such as exporting, outsourcing, licensing, and direct investing. The chapter emphasizes the need for cultural intelligence and understanding local market conditions to succeed in global operations.

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Sabrina Gajai
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10 views16 pages

Ch04 Management Intro

Chapter 4 discusses managing in a global environment, outlining the international business environment, including economic, legal-political, and socio-political factors. It highlights the importance of globalization and various strategies for entering international markets, such as exporting, outsourcing, licensing, and direct investing. The chapter emphasizes the need for cultural intelligence and understanding local market conditions to succeed in global operations.

Uploaded by

Sabrina Gajai
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 PDF, TXT or read online on Scribd
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Chapter 4

Managing in a Global Environment


Chapter Outline

 Getting Started Internationally

 The International Business Environment

 The Economic Environment

 The Legal-Political Environment

 The Socio-Political Environment

2
A Borderless World

Organizations and managers are not isolated from international forces:


 Trade barriers have fallen
 Communication is faster, cheaper
 Consumer tastes converge

GLOBALIZATION!

THE INTERNATIONAL DIMENSION OF A COMPANY’S ENVIRONMENT

3
Four Stages of Globalization

4
Strategies for Entering the
International Arena

5
Moving through the Stages: Using
International Market Strategies

 Exporting – transferring products for sale to foreign countries

 Outsourcing – also called off shoring, work activities are done in countries
with cheap labor

 Licensing – enabling a company to produce and market a product in another


country

 Franchising is licensing that provides a complete package of materials and services

 Direct Investing – high level of involvement, company manages and controls


assets

 Joint ventures, wholly-owned foreign affiliate, greenfield venture

6
Critical Thinking

 Compare the advantages associated with the


foreign-market entry strategies of exporting,
franchising, and wholly owned subsidiaries.

 What information would you need to collect and


what factors would you consider when selecting
a strategy?

7
4.4 Key Factors in
International Environment

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights


reserved. 8
The Economic Environment

 Economic Development - Countries are categorized as either developed or


developing based on per capita income

 Government Policies

 Market Size

 Financial Markets

 Infrastructure

 Resource and Product Markets

 Companies must evaluate market demand

The current economic crisis has highlighted how interconnected economies


are around the world

9
The Legal-Political Environment

 Political risk is defined as the risk of lost assets, earning power, or managerial
control

 Managers must be concerned with the political instability of global markets

10
The Sociocultural Environment

The values and behaviors that govern U.S. business do not always translate

– Other Cultural Characteristics


→ Language
→ Religion
→ Attitudes
→ Social values
– Communication Differences

11
The International Business
Environment

 Planning, organizing, leading, and controlling in multiple


countries can be challenging
 Ittook McDonalds a year to figure out that Hindus in
India do not eat beef

 In Africa, the baby food includes pictures to aid


illiterate consumers

 Managers must be mindful in the global marketplace of


economic, legal and cultural differences.

12
Communication Differences:
High-Context and
Low-Context Cultures

13
Hofstede’s Value Dimensions

✓ Power Distance
✓ Uncertainty Avoidance
✓ Individualism and Collectivism
✓ Masculinity and Femininity
✓ Long term Orientations vs Short term
Orientation
14
Developing Cultural Intelligence

 Cultural intelligence – ability to use reasoning


and observation skills
 Culturally flexible
 Adapt to new situations

 Managers must study the language and learn

 Cognitive, emotional, and physical intelligence

15
Critical Thinking

 IfCarib Brewery was thinking about


expanding into other international markets,
what do you think are some factors that
they should consider? Explain using
examples.

16

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