spe3002 entrerpeneurship - education on managing global envi

7/30/2019 SPE3002 Entrerpeneurship - Education on Managing Global Envi

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Week 6


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Managing the Global

Environment


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LEARNING OUTLINE (contd) Follow this Learning Outline as you read and study this chapter.

Understanding the Global Environment Describe the current composition and

currency situation of the European Union. Discuss the North American Free Trade

Agreement and other regional tradealliances in Latin America.

Define the Association of Southeast AsianNations.

Explain the interdependence thatglobalization involves.


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Understanding the Global Environment (contd) Discuss the role of the World Trade Organization.

Contrast multinational corporations, transnational

corporations, and borderless organizations. Describe the different ways that organizations can

go global.

Define exporting, importing, licensing, and

franchising. Describe global strategic alliances, joint ventures,

and foreign subsidiaries.


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Managing in a Global Environment Explain how the global legal-political

environment affects managers.

Explain the nine GLOBE dimensions for assessing cultures.

Discuss the challenges of doing business

globally in todays world.


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Whats Your Global

Perspective? Ethnocentric Attitude

Belief that country has the best workapproaches and practices

Polycentric Attitude View that managers in country know

the best approaches and practices

Geocentric Attitude A view that focuses on

using the best approaches and people fromaround the globe


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Global Attitudes


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Regional Trading Alliances The European Union (EU)

A unified economic and trade entity Belgium, Denmark, France, Greece, Ireland,

Italy, Luxembourg, the Netherlands, Portugal,

Spain, the United Kingdom, Germany, Austria,Finland, and Sweden Economic and monetary union (Euro)

North American Free Trade Agreement(NAFTA) Eliminated barriers to free trade (tariffs,

import licensing requirements, and customsuser fees)

United States, Canada, and Mexico


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0

0

250 500 Miles

250 500 Kilometers

Portugal

Spain

Andorra

SwitzerlandFrance

Luxembourg

Belgium

IrelandUnited

Kingdom

Netherlands

Germany

Austr ia

Iceland

Iceland

NorwaySweden

Finland

Russia

Ukraine

Belarus

Poland

RussiaLithuania

Estonia

Denmark

Czech Rep.Slov akia

Hungar yRomaniaSlovenia Croatia

Bosnia-Herzegovina Serbia

MontenegroItaly

Albania

Malta

Macedonia

Bulgaria

Greece

Cyprus

Turkey

Moldov a

Latv ia

North Atlantic

Ocean

Bla ck Sea

NorthSea

IonianSea

AegeanSea

TyrrhenianSea

Bayof

Biscay

English Channel

European UnionCountries


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Regional Trading Alliances

(contd) Free Trade Area of the Americas(FTAA)

Southern Cone Common Market(Mercosur)

Association of Southeast Asian

Nations (ASEAN) Trading alliance of 10 Southeast Asian

nations

African Union


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ASEAN MembersSource : Based on J. McClenahen and T. Clark, ASEAN at Work, IW . May 19, 1997, p. 42.

My anmar

ThailandVietnam

Laos

Brunei

Philippines

Malay sia

Indonesia

Cambodia

Singapore

Current members


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Different Types of Global

Organizations Multinational Corporation (MNC) A firm that maintains operations in multiple

countries but manages from the home

country Transnational Corporation (TNC)

A firm that maintains operations in severalcountries but decentralizes management to

the local country Borderless Organization

A firm that organizes along business lineswithout consideration to artificial

geographic barriers


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How Organizations Go Global

Hiring foreign representation

or contracting with foreign managers

Licensing/ Franchising

Strategic Alliances

Foreign Subsidiary

Exporting to or importing

from foreign countries


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How Organizations Go Global

Exporting Making products at home and selling

them overseas Importing

Selling products at home that are

made overseas


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How Organizations Go Global Internal Sales or Manufacturing

Selling or having products made inforeign factories with no physicalpresence

Licensing and Franchising Giving another organization the right to

use brand name, technology, or productspecifications

Licensing (manufacturing organizations)

Franchising (service organizations)


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How Organizations Go Global Strategic Alliance

Partnership between an organizationand a foreign company in which both

share resources and knowledge indeveloping new products or buildingnew production facilities

Joint Venture A specific type of strategic alliance in

which the partners agree to form aseparate, independent organization for

some business purpose


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Managing in a Global

Environment The Legal-Political Environment

Stability or instability of legal and politicalsystems

Legal procedures are established and followed Fair and honest elections held on a regular basis

Differences in the laws of various nations Effects on business activities Effects on delivery of products and services


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Managing in a Global

Environment (contd) The Economic Environment

Economic Systems Market economy

An economy in which resources are primarily ownedand controlled by the private sector

Command economy An economy in which all economic decisions are

planned by a central government

Monetary and Financial Factors Currency exchange rates Inflation rates Diverse tax policies


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The GLOBE* Framework

for Assessing Cultures Assertiveness Future orientation

Gender differentiation

Uncertaintyavoidance

Power distance

Individualism In-group collectivism

Performanceorientation

Humane orientation

*Global Leadership and Organizational Behavior Effectiveness


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Globe Rankings


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The Challenge of Global

Management Increased threat of terrorism Economic interdependence of

trading Dealing with increased uncertainty,

fear, and anxiety

Acknowledging cultural, political,and economic differences

Avoiding parochialism

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