GLOBAL MANAGEMENT Globalization The Collapse of Time Distance

GLOBAL MANAGEMENT

Globalization: The Collapse of Time & Distance u Global village and E-commerce – the “shrinking” of time and space as air travel and the electronic media have made it much easier for the people of the globe to communicate with one another – Total U. S. e-commerce sales are expected to top $136 B in 2007

One Big World Market: The Global Economy u Global economy – the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets

One Big World Market: The Global Economy u Positive effects – more markets for American exports u Negative effects – vast surplus funds from global investments flowed into U. S. that were invested badly in subprime mortgages

Major Trading Blocs u Trading bloc – group of nations within a geographic region that have agreed to remove trade barriers with one another – also known as an economic community

Major Trading Blocs u NAFTA (1994) – U. S. , Canada, Mexico u European Union (1957)– 27 trading partners in Europe u APEC – group of 21 Pacific Rim countries u Mercosur – trading bloc in Latin America u CAFTA – Central America

Why Learn About International Management? u u

Why Companies Expand Internationally 1. 2. 3. 4. 5.

How Companies Expand Internationally

Approaches to International Management u Multilocal – Decentralized to HCN – Collection of independently operating organizations u Export Market – Parent company maintains centralized control – PCN u Global approach – Hybrid combination of multilocal and export – HCN, PCN, TCN u Tradeoff? – –

Why Do International Managers Fail? u u u – Ethnocentric & Parochialism – Polycentric managers – Geocentric managers u u The Key success factor? –

Cultural Variations u Language u High vs. Low Context u Interpersonal space u Time orientation – Monochronic time F – preference for doing one thing at a time Polychronic time F preference for doing more than one thing at a time u Religion u Respect/formality u Consensus seeking

HOFSTEDE’S DIMENSIONS u Individualism vs. Collectivism u Power Distance u Uncertainty Avoidance u Masculinity vs. Femininity