management in global enviornment1
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MANAGEMENT IN GLOBAL ENVIORNMENT
PRESENTED BY:AARUSHI, AASIM, ACHINT, ADITYA, ADITI, ANA
ParochialismAn obstacle for managers in global business
world.Monolingualism should be abolished.Managers who follow “ours is better then
their’s”;its difficult for them to compete with other managers.
JAPANESE AMERICANS
THREE POSSIBLE GLOBAL ATTITUDES
POLYCENTRICGEOCENTRIC
ETHNOCENTRIC
ETHNOCENTRIC
POLYCENTRIC
GEOCENTRIC
An award winner- American marketing.
When a manager ignore foreign values and custom unfortunately cross culture blunders can happen.
“EAT YOUR FINGERS OFF”
PEPSI BRINGS YOU BACK TO LIFE
Understanding the global environmentManagers of all type of organization faced with
opportunities and challenges of Managing in a global environment. In modern time global trade is being shaped by
two forces : regional trading alliance. World Trade Organization.
Regional trading allianceFew years ago global competition meant
country against country. Such as France versus Germany and
America and Japan.Regional trading agreements reshaped global
competition which mainly involves : European union (EU) North American free trade agreements
(NAFTA) Association of southeast Asian nation(ASEAN)
Map Of European Union
The European unionIn 1992 formation of European union which include
12 members.In 1995 three other country joined the group Austria,
Finland, and Sweden.In 2004 EU added 10 new members.In 2007 there is two other countries joined thus the
union include 27 member.The main aim of nation to reassert their economic
position against the united states and Japan.
North American free agreement
NAFTA came into existence in1992 between the Mexico, Canada and U.S.A . The main aim eliminating the barriers to free trade has resulted to strengthening the economic power.
Now 34 countries in the Caribbean region, south America are negotiating a free trade of Americas agreement.
Association of southeast Asiannation
It is one of the fastest – growing economic regions of the world.
The World Trade Organization The WTO was formed in 1995.It has evolved from general agreement on Tariffs and Trade (GATT)
It deal with the rules of trade among nations and the total number of members are- 146
The function of WTO is help businesses (import and Export)their business.It play an important role in monitoring and promoting global trade
Different Type of Global Organizations
1.Multinational Company (MNC)
This type of Organization has
operation in multiple country but managed
from home country.
Characteristic of Ethnocentric
attitude
Example:-Sony , Deutsche Bank
AG ,Merrill Lynch etc.
2.Transnational Corporation
(TNC)
Operational in more than one country but
decentralizes management to local
country.
Polycentric Attitude
Nestle , Frito -lay etc.
3.Borderless Organization
A firm that has eliminated structural divisions that imposeartificial geographic barriers and is organized alongbusiness lines.
Geocentric Attitude
IBM , Telefonica etc
How Organizations Go Global
Why Globalization
Reduce dependence on home market
Build more brand and shareholder value
Add revenue sources and growth markets
Award more franchises in the home country by being
global.
How Organizations Go Global
STAGE 1
Directly or
Indirectly exporting to
or importing
from foreign countries
STAGE 2
Hiring foreign
representation
OrContracting with foreign
manufactures
STAGE 3
Foreign Subsidiary
Joint Venture
Strategic Alliance
Licensing/ Franchising
ECONOMIC ENVIRONMENTAND
CULTURAL ENVIRONMENT
Economic Systems
Free market economy:
production of goods and services is in
private ownership.
Production is dictated by supply and demand.
Command economy: decisions on what to produce, how much, done by the government.
Most command economies are
moving away from the command
economy.
Mixed economy: certain economic
sectors controlled by private business, others
are government controlled.
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
The Cultural Environment
National CultureIs the values and attitudes shared by
individuals from a specific country that shape their behavior and their beliefs about what is important.
May have more influence on an organization than the organization culture.
What Are Americans Like
Americans are very informal.Americans are direct.Americans are competitive.Americans are achievers.Americans are independent and individualistic.Americans are questioners.Americans value punctuality.Americans value cleanliness.
HOFSTEDE’S FRAMEWORK FOR ASSESSING CULTURESINTRODUCTIONDutch Psychologist named Dr Geert Hofstede Worked for IBMUndertook research survey from 1967-1973Data collected and analyzed from more than 100,000 people in more than 50 countriesHe scored each country using a scale of roughly 0 to 100 for each dimension
Dimensions of National culture
INDIVIDUALISM VERSUS
COLLECTIVISM
POWER DISTANC
E
UNCERTAINTY
AVOIDANCE
QUANTITY VERSUS QUALITY
OF LIFE
LONG TERM AND SHORT TERM ORIENTATIONS
INDIVIDUALISM VERSUS COLLECTIVISM
INDIVIDUALISM PEOPLE PEFER TO ACT AS INDIVIDUALSLOOK AFTER THEIR OWN INTERESTS AND THOSE OF THEIR IMMEDIATE FAMILYCOLLECTIVISMA social framework in which people prefer to
act as members of a group and protect other members of the group
personal needs are less important than the group's needs. This dimension influences the role government is expected to play in markets
POWER DISTANCE A measure of the extent to which a society accepts
the fact that power in institutions and organizations is distributed unequally.
A high power distance society accepts wide differences in power in organizations.
Employees show a great deal of respect for those in authority. Titles, rank, and status carry a lot of weight.
In contrast, a low power distance society plays down inequalities as much as possible
Superiors still have authority, but employees are not afraid off or in awe of the boss
UNCERTAINTY AVOIDANCE A low uncertainty culture allows
individuals to cope better with risk and innovation.
They're also relatively tolerant of behavior and opinions that differ from their own because they don't feel threatened by them.
On the other hand, people in a society that's high in uncertainty avoidance feel threatened by uncertainty and ambiguity and experience high levels of anxiety, which manifests itself in nervousness, high stress, and aggressiveness.
QUANTITY VERSUS QUALITY OF LIFE
Quantity of life-degree to which values such as assertiveness, the acquisition of money and material goods, and competition prevails.
Quality of life is a national cultural attribute that emphasizes relationships and concerns for others
Again like Individualism and collectivism.
LONG TERM AND SHORT TERM ORIENTATIONS
It looks at country’s orientation towards life and work.
People in long term orientation culture looks to the future and value thrift and persistence.
A short term orientation values the past and present and emphasizes respect for tradition and fulfilling social obligations.
THE GLOBE …. The GLOBE (Global Leadership &
Organizational Behavior Effectiveness) is a multi-phase, multi-method research project in which investigators around the world examine the inter-relationships between societal culture, organizational culture & organizational leadership.
The idea was conceived by Robert J. House in 1991 but the project fomally began in 1993.
THE GLOBE FRAMEWORK FOR ASSESSING CULTURES
1) Assertiveness
2) Future orientation
3) Gender differentiation
4) Uncertainty avoidance
5) Power distance
6) Individualism/ collectivism
7) In-group collectivism
8) Performance orientation
9) Humane orientation
GLOBAL RANKING OF SELECTED COUNTRIES
GLOBAL MANAGEMENT IN TODAY’S WORLD
“arguing against GLOBALIZATION is like arguing against THE LAW OF GRAVITY”- Kofi Annan
Doing business globally today isn’t easy.
Managers face serious challenges like: 1) Increased threat of terrorism
2) Economic interdependence of trading countries
3) Loss of investments in unstable countries
4) Americanization
CONCLUSION
Successfully managing in today’s global environment will require incredible sensitivity & understanding. Managers need to be aware of how their decisions & actions will be viewed, not only by those who agree, but especially, by those who disagree.
They’ll need to adjust their leadership styles & management approaches according to these diversities.
QUESTIONS What is Global Perspective? How do organizations do business
globally? Short notes (choose any two):
1) WTO 2) NAFTA 3) ASEAN MCQs :
1) Monolingualism is one of the key indicators of parochialism prevalence in a culture:
a) true b) false
2) Which one of the following regional alliances was formed after the signing of the Masstricht Treaty?
a) European Union
b) ASEAN
c) NAFTA
3) According to the GLOBE which country/countries rank the highest in Uncertainty Avoidance?
a) Sweden b) Greece c) Kuwait d) Mexico
4) National culture is more influential than an organizational culture- is justified by:
a) Legal-political environment b) Social environment
c) Cultural environment d) Economic environment
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