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The global context

The global context. Revision J anuary 2011 D r V esselin B lagoev. ASSESSMENT STRATEGY & SCHEDULE. Examination (70%) 1.5 hour end of unit examination to test all LO’s. Examination paper will be pre-released 24hrs prior to the scheduled time . Closed book

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The global context

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  1. The global context Revision January 2011 DrVesselinBlagoev

  2. ASSESSMENT STRATEGY & SCHEDULE • Examination (70%) • 1.5 hour end of unit examination to test all LO’s. • Examination paper will be pre-released 24hrs prior to the scheduled time. • Closed book • Essay type ( 2 out of 3 questions) • Group Presentation (30%)

  3. Introduction to The International Business Environments

  4. GLOBALIZATION - Defined 5 Broad Definitions (Scholte, 2000) • Globalization as Internationalization • Globalization as Liberalization • Globalization as Universalization • Globalization as Westernization or Modernization • Globalization as Deterritorialization

  5. Globalization as Internationalization • Simply another adjective to describe cross-border relations between countries. • Describes the growth in international exchange and interdependence

  6. Globalization as Liberalization • A process of removing government imposed restrictions on movements between countries in order to create an ‘open’, ‘borderless’ world economy

  7. Globalization as Universalization • The process of spreading various products and/or services to people across all corners of the world

  8. Globalization as Westernization or Modernization • Understood as a dynamic, whereby the social structures of modernity (capitalism, rationalism, industrialism, bureaucratism etc) are spread the world over, normally destroying pre-existent cultures and local self-determination in the process. • Sometimes called ‘Americanization’!

  9. Globalization as Deterriorialization • The intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa

  10. Globalization Defined? Held et al (1999,p16) define globalisation as: ‘the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life, from the cultural to the criminal, the financial to the spiritual.“ Thus, they see globalisation as pervading all areas of society.

  11. Domestic The way we go Export International Multi-national Multi-domestic Global Born Global

  12. A Model of International Business

  13. Issues Impinging on International Business • Trade & InternationalCompetitiveness • Cultural Change • Technological Transformation • Political Flux • Population Dynamics • Resource Demands • Changing Work Roles • The Role of the Nation State

  14. Global Integration

  15. WHY DO COUNTRIES TRADE • Mercantilism • Absolute advantage • Comparative advantage • Hecksher Ohlin • Leontief paradox • Vernon • Linder

  16. Culture Defined “That complex whole which includes knowledge, belief, art, morals, law, customs, and any other capabilities and habits acquired by man as a member of society.” E.B. Taylor (1871)

  17. Culture Defined “Culture consists of patterns, explicit and implicit, of and for behaviour acquired and transmitted by symbols, constituting the distinctive achievement of human groups, including their embodiement in artefacts; the essential core culture consists of traditional (ie historically derived and selected) ideas and especially their attached values; culture systems, may on one hand, be considered as products of action, on the other as conditioning elements of further action.” Kroeber & Kluckholn (1952, p181)

  18. Lecture Objectives • Appreciate the importance of International Orientation • Gain an understanding of the dimensions of Culture

  19. The ‘mind set’ of a firm’s managers will determine the extent to which they Internationalize. Perlmutter (1969) International Orientation

  20. EPRG Framework Ethnocentrism Polycentrism Regiocentrism Geocentrism International Orientation

  21. ETHNOCENTRISIM (home-country orientation) the foreign market is seen as a place to dispose of excess output the foreign environment and its opportunities are seen as no different from those of the domestic market International Orientation

  22. POLYCENTRISIM (host-country orientation) every market where it operates is treated as if it were unique the product is modified to suit the local market every market will have its own marketing strategy International Orientation

  23. REGIOCENTRISIM (regional orientation) management views regions as unique and seeks to develop an integrated regional strategy sees similarities and differences in a world of regions is ethnocentric or polycentric in its view of the rest of the world International Orientation

  24. GEOCENTRISIM(world orientation) the firm will attempt to develop uniform global strategies the firm identifies homogeneous international demand segments that can be targeted with a standard product International Orientation

  25. Hofstede’s 5 Dimensions Model • Power Distance (PDI) The extent to which the less powerful members of society accept that power is distributed unequally

  26. Hofstede’s 5 Dimensions Model • Individualism(IDV) Individualism: people look after themselves and their immediate family only. Collectivism :people belong to in-groups (families, clans, organizations) who look after them in exchange for loyalty.

  27. Hofstede’s 5 Dimensions Model • Uncertainty Avoidance (UAI) The extent to which people feel threatened by uncertainty and ambiguity and try to avoid these situations.

  28. Hofstede’s 5 Dimensions Model • Masculinity (MAS) Masculinity : the dominant values in society are achievement and success. Femininity: the dominant values in society are caring for others and quality of life.

  29. Hofstede’s 5 Dimensions Model • Confucian Dynamism (CDI) The extent to which a society exhibits a pragmatic future-orientated perspective rather than a conventional historic or short-term point of view.

  30. Country Comparisons

  31. Why People/Organizations Fail Ethnocentric Orientation Ignorance Arrogance Time Factor Cultural Diversity

  32. Success Factors Geocentric Orientation Respect Learning Language Personal Attitude : Humility & Pride Personal Qualities : Adaptability & Flexibility Cultural Diversity

  33. How to be Successful Study and Preparation Awareness of Cultural Differences Commitment to Learn Do the Work Cultural Diversity

  34. Relevance of Culture • To Communicate • To Anticipate • To Distinguish • To Identify

  35. Elements of the Cultural Environment

  36. Language & Communication • Translation and/or reverse translation • Problems faced when conveying a message in another language, or even the same language!

  37. Attitudes to Time • Monochronic - Time is Money • Germany • Polychronic - Time is an endless rolling cycle • Italy

  38. Education • 5 Major functions • Instrumental Education • Affiliative Education • Political Education • Mythopoetic Education • Religious Education

  39. Religion

  40. Attitudes to Authority Attitudes to Others Attitudes to Managing Oneself Attitudes to Nature Attitudes to Business Practices Attitudes to Material Culture and Technology Social Institutions

  41. The five forces framework

  42. Pass cultural web – description of “traditional FC culture”

  43. Future cultural web – description of “new culture to which FC aspired”

  44. References Hemilton, L. & Webster, P. (2009). The International Business Environmrnt, Oxford Keegan, W.J. & Green, M.C. (2011). Global Marketing, Sixth ed., Pearson Hofstede, G., Hofstede, G.J. and Minkov, M. (2010). Cultures and Organizations – Software of the Mind, 3rd ed, McGraw Hill Blagoev, V. (2010). Culture: Values, Beliefs, perceptions, Norms and Behaviors, in Lundby, K.& Jolton, J. (ed) Going Global, Jossey-Bass

  45. References Held, D., McGrew, A., Goldblatt, D. & Parraton, J. (1999) Global Transformations – politics, economies and culture, Cambridge, Polity Press Mulgan, G. (1998) Connexity: Responsibility, freedom, business and power in the new century (revised edition) London, Viking Scholte, J.A. (2000) Globalization. A Critical Introduction, London, Palgrave

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