Managing in a Global Environment The LegalPolitical Environment

Managing in a Global Environment • The Legal-Political Environment – Stability or instability of legal and political systems • 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 Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 18

Managing in a Global Environment • The Economic Environment – Economic Systems • Market economy – An economy in which resources are primarily owned and 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 Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 19

Managing in a Global Environment • The Cultural Environment – National Culture • Values and attitudes shared by individuals from a specific country that shape their behaviour and their beliefs about what is important • May have more influence on an organization than the organization culture Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 20

Managing in a Global Environment • Hofstede’s Framework for Assessing Cultures (Exhibit 3 -5) – – – Individualism vs. Collectivism Power Distance Uncertainty Avoidance Achievement vs. Nurturing Long-Term vs. Short-Term Orientation Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 21

The GLOBE* Framework for Assessing Cultures • • • Assertiveness Future orientation Gender differentiation Uncertainty avoidance Power distance • • Individualism/collectivism In-group collectivism Performance orientation Humane orientation *Global Leadership and Organizational Behaviour Effectiveness Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 22

Exhibit 3. 6 Globe Rankings Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy

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 Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 24

Summary and Implications • What are the different ways of viewing global differences? – Ethnocentric attitude, polycentric attitude, geocentric attitude • What kinds of alliances affect trade relations among countries in the world? – Regional trading alliances and the agreements negotiated through the WTO – Regional trading alliances include the EU, NAFTA, and ASEAN Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 25

Summary and Implications • How do organizations do business globally? – Multinational corporations, multi-domestic corporations, global companies, transnational or borderless organizations • What are the challenges of doing business globally? – Global legal-political and economic environments of other countries Chapter 3, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 26