jones global mgt ch06.ppt

8/10/2019 jones global mgt ch06.ppt

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Learning Objectives

1. Explain why the ability to perceive, interpret, andrespond appropriately to the global environment iscrucial for managerial success

2. Differentiate between the global task and globalgeneral environments

3. Identify the main forces in both the global task andgeneral environments, and describe the challenges

that each force presents to managers

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Learning Objectives (cont.)

4. Explain why the global environment is becoming

more open and competitive and identify the forces

behind the process of globalization that increases

the opportunities, complexities, challenges, andthreats that managers face

5. Discuss why national cultures differ and why it is

important that managers be sensitive to the effects

of falling trade barriers and regional trade

associations on the political and social systems of

nations around the world

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Global Organizations

Global Organizations

Organizations that operate and compete not only

domestically, but also globally

Uncertain and

unpredictable

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What Is the Global Environment?

Global Environment

Set of forces and conditions in the world outside

the organizations boundaries that affect the way

it operates and shape its behavior

Changes over time

Presents managers with opportunities and

threats

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Forces in the Global Environment

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Figure 6.1


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Task Environment

Set of forces and conditions that originate with

suppliers, distributors, customers, and

competitors

Affects an organizations ability to obtain inputs

and dispose of its outputs

Most immediateand directeffect on managers

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General environment

The wide-ranging global, economic,

technological, sociocultural, demographic,

political, and legal forces that affect anorganization and its task environment.

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The Task Environment

Suppliers

Individuals and organizations that provide an

organization with the input resources that it

needs to produce goods and services Raw materials, component parts, labor (employees)

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Global Outsourcing

Global Outsourcing

The purchase or production of inputs or final

products from overseas suppliers to lower costs

and improve product quality or design.

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Distributors

Organizations that help other organizations sell

their goods or services to customers

If distributors become so large and powerful that

they can control customers access to a particular

organizations goods and services, they can threaten

the organization by demanding that it reduce the

prices of its goods and services.

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Customers

Individuals and groups

that buy goods and

services that anorganization produces

Identifying an

organizations main

customers and

producing the goodsand services they want

is crucial to

organizational and

managerial success.

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Competitors

Organizations that produce goods and services

that are similar to a particular organizations

goods and services Rivalry between competitors is potentially the most

threatening force that managers deal with

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Barriers to Entry

Factors that make it difficult and costly for the

organization to enter a particular task

environment or industry

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Barriers to Entry and Competition

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Figure 6.2


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The General Environment

Economic Forces

Interest rates, inflation, unemployment,

economic growth, and other factors that affect

the general health and well-being of a nation orthe regional economy of an organization.

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Technology

The combination of skills and equipment that

managers use in designing, producing, and

distributing goods and services.

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Technological Forces

Outcomes of changes in the technology that

managers use to design, produce, or distribute

goods and services

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Sociocultural Forces

Pressures emanating from the social structure of

a country or society or from the national culture

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Sociocultural Forces

Social structure

the traditional system

of relationships

established betweenpeople and groups in

society

National culture

the set of values that a

society considers

important and thenorms of behavior

that are approved or

sanctioned in that

society.

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Demographic Forces

Outcomes of change in, or changing attitudes

toward, the characteristics of a population, such

as age, gender, ethnic origin, race, sexualorientation, and social class

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Political and Legal Forces

Outcomes of changes in laws and regulations,

such as deregulation of industries, privatization of

organizations, and increased emphasis onenvironmental protection.

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The Global Environment

Figure 6.3

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Process of Globalization

Globalization

The set of specific and general forces that work

together to integrate and connect economic,

political, and social systems across countries,cultures, or geographical regions so that nations

become increasingly interdependent and similar.

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Principal Forms of Capital that Flow

Between Countries

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Human capitalFinancial

capital

Resourcecapital

Politicalcapital

l d d


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Declining Barriers to Trade and

Investment

Tariff

A tax that government imposes on imported or,

occasionally, exported goods.

Intended to protect domestic industry and jobs

from foreign competition

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Example - WTO

The World Trade Organization (WTO) is the only

global international organization dealing with the

rules of trade between nations.

At its heart are the WTO agreements, negotiated andsigned by the bulk of the worlds trading nations and

ratified in their parliaments.

The goal is to help producers of goods and services,

exporters, and importers conduct their business.

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http://www.wto.org/index.htm


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GATT and the Rise of Free Trade

Free-Trade Doctrine

The idea that if each country specializes in the

production of the goods and services that it can

produce most efficiently, this will make the bestuse of global resources and will result in lower

prices

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D li i B i f Di d


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Declining Barriers of Distance and

Culture - Unilever

Distance

Markets were essentially closed because of the

slowness of communications over long distances.

Culture Language barriers and cultural practices made

managing overseas businesses difficult

Changes in Distance and Communication

Improvement in transportation technology and fast,

secure communications have greatly reduced the

barriers of physical and cultural distances.

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Effects of Free Trade on Managers

Declining Trade Barriers

Opened enormous opportunities for managers to

expand the market for their goods and services.

Allowed managers to now both buy and sellgoods and services globally.

Increased intensity of global competition such

that managers now have a more dynamic andexciting job of managing.

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The Role of National Culture

Values

Ideas about what a society believes to be good,

right, desirable and beautiful.

Provide the basic underpinnings for notions ofindividual freedom, democracy, truth, justice,

honesty, loyalty,

love, sex, marriage, etc.

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The Role of National Culture

Norms

Unwritten rules and codes of conduct that

prescribe how people should act in particular

situations.

Folkways, mores

Many differences in mores from one society to

another

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Hofstedes Model of National

Culture

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Figure 6.4

H f t d M d l f N ti l


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Culture

Individualism

A worldview that values individual freedom and self-

expression and adherence to the principle that

people should be judged by their individualachievements rather their social background.

Collectivism

A worldview that values subordination of the

individual to the goals of the group and adherence to

the principle that people should be judged by their

contribution to the group

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Culture

Power Distance

Degree to which societies accept the idea that

inequalities in the power and well-being of their

citizens are due to differences in individualsphysical and intellectual capabilities and heritage

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Culture

Achievement orientation

A worldview that values assertiveness,

performance, success, and competition

Nurturing orientation

Aworldview that values the quality of life, warm

personal friendships, and services and care for

the weak.

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Culture

Uncertainty Avoidance

The degree to which societies are willing to

tolerate uncertainty and risk.

Low uncertainty avoidance cultures valuediversity and tolerate a wide range of opinions

and beliefs.

High uncertainty avoidance societies are morerigid and expect high conformity in their citizens

beliefs and norms of behavior.

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Culture

Long-term orientation

Aworldview that values thrift and persistence in

achieving goals.

Short-term orientation

Aworldview that values personal stability or

happiness and living for the present.

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jones global mgt ch06.ppt

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