Chapter 4' International Management

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Chapter 4. International Management

• Learning Objectives
• Understand the true meaning of globalization
• Identify the changing forces in the global market
• Understand the different dimensions of national
  cultures and their implications for international
  management
• Identify the different corporate international
  strategies
• Identify the different entry modes

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Current Trends in Global Environment

• Homogenization of customer demands and tastes
  across the world
• From the Waterfall model to the simultaneous
  product development approach
• The reduction of trade barriers across nations
  and regions
• GATT
• WTO
• The increasing trend of regionalization
• NAFTA
• EC
• ASEAN
• etc
• The emergence and development of stateless
  corporations

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The Global Environment

• The political/Legal environment
• Stability of the political system
• Protectionism
• Privatization
• Bribery and corruption
• The economic environment
• Per capita income
• Inflation rate
• Restrictions imposed on imports/exports/foreign
  investments
• Availability of high-quality local labor

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The Global Environment (II)

• The cultural environment The dimensions of
  national culture
• Individualism vs. collectivism
• Power distance Extent to which less powerful
  members of organizations accept the unequal
  distribution of power
• Uncertainty avoidance Extent to which people
  feel threatened by ambiguous situations and tend
  to avoid such situations
• Masculinity vs. Femininity A situation in which
  the dominant values in society are success, money
  and things (or quantity of life), vs. caring
  for others and quality of life

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The Forces facing International Businesses

• Forces for global integration
• Economies of scale
• Globalization of tastes/needs
• Forces for local responsiveness
• Local needs/tastes
• Local regulation
• Industries vary in their needs for global
  integration and local responsiveness
• Can you decide the need for global integration
  and local responsiveness for the following
  industries?
• Cement
• Branded packaged goods
• Consumer electronics
• Automobiles

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International Corporate Strategy

• Based on the forces firms face in the
  international market, they can choose from the
  following corporate level strategies
• Multidomestic
• High local responsiveness
• Low global integration
• Examples?
• Global
• High global integration
• Low local responsiveness
• Examples?
• Transnational
• High global integration
• High local responsiveness
• Examples?

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Entry Modes into Foreign Markets

• Export
• Licensing
• Joint venture
• Wholly owned subsidiaries

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Managing in the International Business World

• Planning
• Organizing
• Global product structure
• Global geographic structure
• Matrix structure
• Leading
• Controlling

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Managing in the Global Business World (II)

• Issues in Global Staffing
• Hiring local people vs. sending expatriates
• Advantages?
• Disadvantages?
• Compensation
• Motivations across boarders

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