trends and challenges of management in global scenario-6 in class

8/3/2019 Trends and Challenges of Management in Global Scenario-6 in Class

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Subject: Principles ofManagement

Subject code: MG2351b

Edna Elizabeth.NAssociate Professor

ECE department


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Whats Your Global

Perspective? Parochialism

Is viewing the world solely throughones own eyes and perspectives.

Is not recognizing that others have

eren ways o v ng an wor ng. Is a significant obstacle for managers

working in a global business world.

Is falling into the trap of ignoringothers values and customs and rigidlyapplying an attitude of ours is better

than theirs to foreign cultures.


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The Global Marketplace Opportunities and Challenges

Coping with the sudden appearance ofnew competitors

Acknowledging cultural, political, and

economic differencesDealing with increased uncertainty,

fear, and anxiety

Adapting to changes in the globalenvironment

Avoiding parochialism


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Adopting a Global Perspective Ethnocentric Attitude

The parochialistic belief that the best work

approaches and practices are those of thehome country.

Polycentric Attitude

e v ew a e managers n eos

country know the best work approaches andpractices for running their business.

Geocentric Attitude

A world-oriented view that focuses on usingthe best approaches and people from around

the globe.


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Regional Trading Agreements The European Union (EU)

A unified economic and trade entity

Belgium, Denmark, France, Greece, Ireland,Italy, Luxembourg, the Netherlands,Portu al S ain the United Kin dom

Germany, Austria, Finland, and Sweden

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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Exhibit 41 European Union


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Regional Trading Agreements U.S.-Central America Free Trade Agreement

(CAFTA)

Free Trade Area of the Americas

Southern Cone Common Market (Mercosur)

Trading alliance of 10 Southeast Asiannations

African Union

South Asian Association for RegionalCooperation (SARRC)


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Exhibit 42 ASEAN Members

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


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The World Trade Organization

(WTO) Evolved from the General

Agreement on Tariffs and Trade(GATT) in 1995.

organization dealing with the rulesof trade among nations.

Has 149 member nations and 32observer governments.

Monitors and promotes world trade.


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Different Types of

International Organizations Multinational Corporation (MNC)

Maintains operations in multiple countries. Multidomestic Corporation

Is an MNC that decentralizes management

and other decisions to the local country. Global Company

Is an MNC that centralizes its management

and other decisions in the home country.


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Different Types of

International Organizations(contd)

Transnational Corporation(Borderless Organization)

Is an MNC that has eliminatedstructural divisions that impose artificialgeographic barriers and is organized

along business lines that reflect ageocentric attitude.


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Exhibit 43 How Organizations Go Global


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Other Forms of Globalization Strategic Alliances

Partnerships between and organization and a

foreign company in which both share resourcesand knowledge in developing new products orbuilding new production facilities.

Joint Venture

A specific type of strategic alliance in which thepartners agree to form a separate,independent organization for some businesspurpose.

Foreign Subsidiary Directly investing in a foreign country by

setting up a separate and independentproduction facility or office.


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Managing in A Global

Environment The Legal Environment

Stability or instability of legal andpolitical systems

Legal procedures are established andw

Fair and honest elections held on a regularbasis

Differences in the laws of variousnations

Effects on business activities

Effects on delivery of products and services


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The Cultural Environment

National Culture

Is the values and attitudes shared byindividuals from a specific country that

about what is important.

May have more influence on an

organization than the organizationculture.


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Exhibit 44 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 dislike silence.

Americans value punctuality.

Americans value cleanliness.Sources:Based on M. Ernest (ed.), Predeparture Orientation Handbook: For Foreign Students and Scholars Planning to Study in theUnited States(Washington, DC: U.S. Information Agency, Bureau of Cultural Affairs, 1984), pp. 10305; A. Bennett, American Culture IsOften a Puzzle for Foreign Managers in the U.S., Wall Street Journal, February 12, 1986, p. 29; Dont Think Our Ways the Only Way,The Pryor Report, February 1988, p. 9; and B.J. Wattenberg, The Attitudes behind American Exceptionalism, U.S. News & WorldReport, August 7, 1989, p. 25.


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Hofstedes Framework for

Assessing CulturesIndividualism

versusCollectivism

PowerDistance

Long-Termversus

Short-Term

UncertaintyAvoidance

Achievement

versusNurturing

Orientation

Culture


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Exhibit 45 Hofstedes Five Dimensions ofNational Culture

(1) Individualistic people look after their own and family interestsCollectivistic people expect group to look after and protect

them

IndividualisticCollectivistic

United States, Canada JapanMexico, Thailand

Australia

(2) High power distanceAccepts wide differences in power, greatdeal of respect for those in authority

Low power distancePlays down inequalities: employees arenot afraid to approach nor are in awe of the

boss

High power distance Low powerdistance

Mexico, Singapore, Italy, Japan United

States, Sweden


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Exhibit 45 Hofstedes Five Dimensions of

National Culture(3) High uncertainty avoidanceThreatened with ambiguity and

experience high levels of anxietyLow uncertainty avoidance Comfortable with risks; tolerant of

different behavior and opinions

High uncertainty avoidance Low uncertaintyavoidanceItaly, Mexico, France United Kingdom Canada, United

States,ngapore

(4) AchievementValues such as assertiveness, acquiring money and goods,and competition prevail

NurturingValues such as relationships and concern for others prevail

Achievement NurturingUnited States, Japan, Canada, Greece France,SwedenMexico


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Exhibit 45 Hofstedes Five Dimensions of

National Culture

(5) Long-term orientationPeople look to the future and

value thrift and

persistenceShort-term orientation People value tradition and the

past

Short-term thinking Long-term

thinking

Germany, Australia, China,

Taiwan, JapanUnited States, Canada


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Exhibit 46 GLOBE Highlights

Source:M. Javidan and R. J. House, Cultural Acumen for the Global Manager: Lessons from Project GLOBE, Organizational Dynamics,Spring 2001, pp. 289305. Copyright 2001. Reprinted with permission from Elsevier.


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Global Management in Todays

World ChallengesOpenness associated with globalization

Significant cultural differences (e.g.,Americanization)

management approaches

Risks

Loss of investments in unstablecountries

Increased terrorism

Economic interdependence

trends and challenges of management in global scenario-6 in class

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