Management 11e John Schermerhorn

1. Management11e John Schermerhorn Chapter 5: Global Management and Cultural Diversity

2. Planning Ahead — Chapter 5 study questions • What are the management challenges of globalization? • What are global businesses and what do they do? • What is culture and how does it impact global management? • How can we benefit from global management learning?

3. Study Question 1: What are the management challenges of globalization? • Key concepts in the challenges of globalization: • Global economy • Globalization • Global management • Global manager Management 11e/ Chapter 5

4. Study Question 1: What are the management challenges of globalization? • Global economy • Resource supplies, product markets, and business competition are worldwide, rather than local • Globalization • The process of growing interdependence of these components in the global economy Management 11e/ Chapter 5

5. Study Question 1: What are the management challenges of globalization? • Global management • Management in organizations with business interests in more than one country • Global manager • Aware of international developments and the effect on societies and economies • Competent in working with people from different cultures Management 11e/ Chapter 5

6. Study Question 1: What are the management challenges of globalization? • Global businesses • Conduct for-profit transactions of goods and services across national boundaries • Reasons why businesses go global: Management 11e/ Chapter 5

7. Study Question 1: What are the management challenges of globalization? • Market entry strategies • involve the sale of goods or services to foreign markets but do not require expensive investments Management 11e/ Chapter 5

8. Study Question 1: What are the management challenges of globalization? • Types of market entry strategies: • Global sourcing • Exporting • Importing • Licensing agreement • Franchising Management 11e/ Chapter 5

9. Figure 5.1 Common forms of global business—from market entry to direct investment strategies Management 11e/ Chapter 5

10. Study Question 1: What are the management challenges of globalization? Management 11e/ Chapter 5

11. Study Question 1: What are the international business challenges of globalization? • Direct investment strategies require major capital commitments but create rights of ownership and control over foreign operations Management 11e/ Chapter 5

12. Study Question 1: What are the international business challenges of globalization? • Types of direct investment strategies: Management 11e/ Chapter 5

13. Study Question 1: What are the international business challenges of globalization? Management 11e/ Chapter 5

14. Study Question 1: What are the international business challenges of globalization? Management 11e/ Chapter 5

15. Study Question 1: What are the international business challenges of globalization? • Legal and political systems • Differing laws and practices regarding • Business ownership • Foreign currency exchange • Protection of intellectual property rights • Counterfeit merchandise Management 11e/ Chapter 5

16. Study Question 1: What are the international business challenges of globalization? • Legal and political systems • Political risk • Potential loss in value of a foreign investment due to instability and political changes in the host country • Political risk analysis • Forecast political disruptions that threaten the value of a foreign investment Management 11e/ Chapter 5

17. Study Question 1: What are the international business challenges of globalization? • Trade Agreements and Trade Barrriers • World Trade Organization • Most favored nation status • Tariffs • Nontariff barriers • Protectionism Management 11e/ Chapter 5

18. Study Question 1: What are the international business challenges of globalization? • Regional Economic Alliances • NAFTA – North American Free Trade Agreement • EU – European Union • APEC – Asia Pacific Economic Cooperation • ASEAN – Association of Southeast Asian Nations • SADC – Southern Africa Development Community Management 11e/ Chapter 5

19. Study Question 2: What are global businesses and what do they do? • Types of global businesses: • Global corporation • MNC (multinational corporation) with extensive business operations in more than one foreign country • Transnational corporation • MNC (multinational corporation) operates worldwide on a borderless basis Management 11e/ Chapter 5

20. Study Question 2: What are global businesses and what do they do? • Mutual benefits for host country and global corporation or MNC: • Shared growth opportunities • Shared income opportunities • Shared learning opportunities • Shared development opportunities Management 11e/ Chapter 5

21. Figure 5.2 What should go right and what can go wrong in MNC-host country relationships Management 11e/ Chapter 5

22. Study Question 2: What are global businesses and what do they do? • Host country complaints about MNCs: • Excessive profits • Domination of local economy • Interference with local government • Hiring the best local talent • Limited technology transfer • Disrespect for local customs Management 11e/ Chapter 5

23. Study Question 2: What are global businesses and what do they do? • MNC complaints about host countries: • Profit limitations • Overpriced resources • Exploitative rules • Foreign exchange restrictions • Failure to uphold contracts Management 11e/ Chapter 5

24. Study Question 2: What are global businesses and what do they do? Management 11e/ Chapter 5

25. Study Question 2: What are global businesses and what do they do? • Ethical issues for Global Businesses: • Corruption – illegal practices that further one’s business interests • Foreign Corrupt Practices Act – makes it illegal for U.S. firms and their representatives to engage in corrupt practices overseas • Bribes to foreign officials • Excessive commissions • Non monetary gifts Management 11e/ Chapter 5

26. Study Question 2: What are global businesses and what do they do? • Child labor and Sweatshops: • Child labor – full time employment of children for work otherwise done by adults • Sweatshops – employ workers at very low wages for long hours in poor working conditions Management 11e/ Chapter 5

27. Study Question 3: What is culture and how does it impact global management? Management 11e/ Chapter 5

28. Study Question 3: What is culture and how does it impact global management? • Stages in adjusting to a new culture: Management 11e/ Chapter 5

29. Study Question 3: What is culture and how does it impact global management? Silent languages of culture Management 11e/ Chapter 5

30. Study Question 3: What is culture and how does it impact global management? • Context • Low context cultures - emphasize communication via spoken or written words • United States • Canada • Germany Management 11e/ Chapter 5

31. Study Question 3: What is culture and how does it impact global management? • Context • High context cultures – rely on nonverbal and situational cues as well as on spoken or written words • Thailand • Malaysia Management 11e/ Chapter 5

32. Study Question 3: What is culture and how does it impact global management? • Time • Monochronic cultures – people tend to do one thing at a time • United States, Canada, Germany • Polychronic cultures – time is used to accomplish many different things at once • Egypt, Saudi Arabia, Mexico Management 11e/ Chapter 5

33. Study Question 3: What is culture and how does it impact global management? • Space • Proxemics – study of how people use space to communicate • In the U.S. people value “personal space” • Many Latin and Asian cultures expect much less personal space Management 11e/ Chapter 5

34. Study Question 3: What is culture and how does it impact global management? • Values and national cultures (Hofstede): Management 11e/ Chapter 5

35. Figure 5.3 How countries compare on Hofstede’s dimension of national culture Management 11e/ Chapter 5

36. Study Question 4: How can we benefit from global management learning? • Project GLOBE (Global Leadership and Organizational Behavior Effectiveness) • Researches the leadership, organizational practices, and diversity among world cultures • Power distance • Uncertainty avoidance • Gender egalitarianism • Future orientation Management 11e/ Chapter 5

37. Study Question 4: How can we benefit from global management learning? • Project GLOBE’s nine dimensions continued • Institutional collectivism • In-group collectivism • Assertiveness • Performance orientation • Humane orientation Management 11e/ Chapter 5

38. Study Question 4: How can we benefit from global management learning? • Project GLOBE’s research on leadership practices across cultures • Facilitators of leadership success • Acting trustworthy, just, honest • Showing foresight, planning • Being positive, dynamic, motivating • Inspiring confidence • Being informed and communicative • Being a coordinator and team builder Management 11e/ Chapter 5

39. Study Question 4: How can we benefit from global management learning? • Project GLOBE’s research on leadership practices across cultures • Inhibitors of leadership success • Being a loner • Acting uncooperative • Being irritable • Acting autocratic Management 11e/ Chapter 5

40. Figure 5.4 Nine cultural dimensions used by Project GLOBE researchers Management 11e/ Chapter 5

41. Study Question 4: How can we benefit from global management learning? • Comparative management • How management systematically differs among countries and/or cultures • Global managers • Need to successfully apply management functions across international boundaries Management 11e/ Chapter 5

42. Study Question 4: How can we benefit from global management learning? • Global management learning: • Companies can and should learn from each other • GLOBE dimensions • Power distance • Uncertainty avoidance • Future orientation • Etc. • Be alert, open, inquiring, but always cautious Management 11e/ Chapter 5

43. Management 11e/ Chapter 5 Case • Harley-Davidson: Style and strategy have global reach

44. For activities and assessments, please visit… • www.wiley.com/college/schermerhorn