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Stephanie Tat

on 26 September 2015

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Transcript of Globalization

"The world will be far more interconnected, leading to better and more affordable products, as well as ever better communication among nations" (104).
is defined as
4.1-Globalization: The Collapse of Time and Distance
Why international management?
4.2 You & International Management
Why Companies Expand
4.3 Why and How Companies Expand Internationally
4.4 The World of Free Trade
Supply availability
New markets
Lower Labor Costs
Access to Financial Capital
Avoid Tariffs and import quotas
4.3 Why and How Companies Expand Internationally
the trend of the world economy toward becoming a more
How Companies Expand
Global Outsourcing
Importing, Exporting, & Counter trading
Licensing & Franchising
Joint Ventures
Wholly-Owned Subsidiaries
Barriers (116):
-Tariffs - a trade barrier in the form of a customs duty, or tax, levied mainly on imports.
-Important quotas - a trade barrier in the form of a limit on the numbers of a product that can be imported.
-Embargoes - a complete ban on the import or export of certain products.
-Trade Protectionism vs. Free Trade
Trading Blocs:
-These organizations represent the following countries (118-119):
NAFTA - United States, Canada, Mexico
The EU - 28 European countries
APEC - 21 Pacific Rim countries
ASEAN - 10 countries in Asia
Mercosur - Argentina, Brazil, Paraguay, Uruguay, and Venezuela
CAFTA-DR - United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua

Multinational corporation
(multinational enterprise)
business firm with operations in several countries

Multinational organization
nonprofit organization with operations in several countries
4.2 You & International Management
The Successful International Manager
Three Important Developments
4.4 The World of Free Trade (cont.)
global village and e-commerce
global economy
megafirms and minifirms

"We know best"
native country, culture, language, and behavior are superior to all others


"They know best"
native managers in foreign offices best understand native personnel and practices, and so home office should leave them alone


"What's best is what's effective, regardless of origin"
accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective
The World Trade Organization, The World Bank, and The International Monetary Fund all promote international trade (116-117).
One of the biggest problems between countries is exchange rates.
The U.S. dollar is strong in some countries and weak in others (120).
For example, a 2-liter of coke cost $1.74 in Chicago but cost $3.20 in London (120).
1. Global Village and E-Commerce (electrical commerce)
global village
(Marshall McLuhan):
single community linked by telecommunications.
commercial transactions through the internet.
2. The Global Economy
3. Megamergers and Minifirms
4.5 The Importance of Understanding Cultural Differences
Culture and Its Two Distinctions
Low-Context Culture
GLOBE Project and Its Nine Implications
Robert J. House, University of Pennsylvania
Global Leadership and Organizational Behavior Effectiveness
150 Scholars and 62 Societies Worldwide
High-Context Culture
shared meanings derived from written and spoken words (122)
reliant on situational cues in communication (122)
: industries (i.e., oil, telecommunications) want to become bigger and cross border
: 2 main benefits
can get started easier
maneuver faster
global economy
: positive
international spread of capitalism
companies based overseas provide jobs for U.S. workforce
economic growth
effects of the Global Economy
moving formerly well-paying jobs overseas -->job instability
more technology-->more stress
Power Distance
degree to which power should be unequally distributed among members (122)
Uncertainty Avoidance
extent to which society relies on norms and procedures to lessen uncertainty (122)
Institutional Collectivism
extent to which individuals are rewarded and encouraged for loyalty rather than indulging on individual interests (122)
In-Group Collectivism
how much people take pride of group as a member (122 - 123)
Gender Egalitarianism
how equal society should be (122)
confronting and competitiveness versus tender and modest (123)
Future Orientation
future investments (123)
Performance Orientation
encouragement and rewards for improvements and excellence achieved (123)
how much altruism, care, kindness, generosity one should put efforts for (123)
Humane Orientation
Interpersonal Space
Time Orientation -> Monochronic & Polychronic
Law and Political Stability
- Instability
- Expropriation
- Corruption and Foreign Corrupt Practices Act
- Labor Abuses
Other Cultural Variations Used to Bridge Cultural Gaps
Management Abroad
Culture Shock: feelings of discomfort and disorientation associated when in an unfamiliar culture (122)
Cultural Adaptability:
patience, flexibility, and tolerance for others' beliefs (122)
Kinicki, A., Williams, B. (2016). *
Management: A
Practical Introduction, Seventh Edition
Retrieved from http://
Full transcript