Globalization and the manager (management)
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This document discusses the concepts of globalization and its implications for managers. It defines globalization as businesses operating internationally and the increasing influence of businesses across borders. Some key drivers of increased globalization are the spread of market economies, reduced barriers to trade and investment, and falling communication and transportation costs. As a result, both international trade and foreign direct investment have surged. For managers, globalization means production and markets are becoming more global in scope. Technologies help facilitate globally dispersed production and global market reach. However, national differences also present constraints to full globalization. The document outlines challenges managers face in areas like standardization vs customization, managing multinational employees, locating business activities, and choosing entry modes into foreign markets.
Globalization and the manager (management)
- 1. chapter 3 Globalization and The Manager McGraw-Hill/Irwin Principles of Management
- 2. 3 - 2 Globalization the process by which businesses or other organizations develop international influence or start operating on an international scale.
- 3. 3 - 3 Accelerated Pace of Globalization main reasons: •The spread of market based economic system •The decline of barriers to international trade & foreign direct investment •Falling costs of communication and transportation
- 4. 3 - 4 Market Economy • Most businesses are privately owned • Prices are set by the interaction of supply and demand • Government regulation is limited to ensuring that competition between individual enterprises is free and fair and that the system does not produce outcomes judged to be unacceptable
- 5. 3 - 5 Socialist Economy • Most businesses are owned by the state • Private producers were excluded from certain industrial and commercial activities • Prices were set by the state • State planners decided what was produced where, in what quantity, and by whom
- 6. 3 - 6 Falling Barriers to Trade and Investment • Tariffs – A tax on imports • Quotas – A limit on the number of items of a good that can be imported from a foreign nation • Regional trade agreements – agreements to remove barriers to trade between nations within a geographic region
- 7. 3 - 7 Communication & Transportation Costs Satellite Optical fiber Wireless technologies Internet
- 8. 3 - 8 Implications of Globalization • A massive surge in the volume of international trade and foreign direct investments • Foreign Direct Investment (FDI) has increased even more dramatically • For individual enterprises and their managers: - Globalization of production is well under way - Globalization of markets is starting to occur - Advances in technology are facilitating these trends
- 9. 3 - 9 Globalization of Production Capital Labor Land Energy Factors of Production
- 10. 3 - 10 Globalization of Markets • Merging of historically distinct and separate national markets into one huge marketplace • As firms follow each other around the world, they bring - Products - Operating strategies - Marketing strategies
- 11. 3 - 11 Technology Innovations • Allow managers to create and then manage a globally dispersed production system • Further facilitating the globalization of production • Facilitated in globalization of markets
- 12. 3 - 12 Constraints to Globalization Protectionist Countertrends National Differences in Consumer Behavior National Differences in Business Systems Differences in Social Culture
- 13. 3 - 13 Benefits of going global 1. Expand the market 2. Realize scale economies 3. Realize location economies 4. Benefit from global learning
- 14. 3 - 14 Management Challenges to Globalization Global Standardization or Local Customization Managing People in the Multinational Firm Locating Activities Entry Mode
- 15. 3 - 15 Global Standardization or Local Customization • Global standardization strategy – treating the world market as a single entity, selling the same basic product around the world • Local customization strategy – varying some aspect of product offerings or marketing messages to take country or regional differences into account
- 16. 3 - 16 Question When McDonald’s sells wine on its menu in France and Soy Burgers or Lamb Burgers in India, it is adopting which of these strategies? a. Licensing b. Franchising c. Global standardization d. Local customization
- 17. 3 - 17 Question When McDonald’s sells wine on its menu in France and Soy Burgers or Lamb Burgers in India, it is adopting which of these strategies? a. Licensing b. Franchising c. Global standardization d. Local customization
- 18. 3 - 18 Entry Mode ExportingExporting LicensingLicensing FranchisingFranchisingJoint ventureJoint venture Wholly owned subsidiary Wholly owned subsidiary Franchising x Wholly owned subsidiary Licensing x Joint venture Exporting x
- 19. 3 - 19 Locating Activities 1. Managers have to break the operations of the firm into discrete steps or activities 2. Each activity has to be located in the best place given a consideration of factors such as country differences in: • Labor costs and infrastructure • Transportation costs • Tariff barriers • Currency exchange rates • Strategic orientation
- 20. 3 - 20 Managing People Geocentric Staffing Ethnocentric Staffing Polycentric Staffing
Editor's Notes
- #2: This is a test
- #3: See Learning Objective 1: Explain what globalization is. See text page: 56
- #4: See Learning Objective 1: Explain what globalization is. See text page: 56
- #5: See Learning Objective 2: Describe the processes driving globalization. See text page: 56
- #6: See Learning Objective 2: Describe the processes driving globalization. See text page: 56
- #7: See Learning Objective 2: Describe the processes driving globalization. See text page: 58
- #8: See Learning Objective 2: Describe the processes driving globalization. See text pages: 58-59
- #9: See Learning Objective 3: Identify the implications of globalization for business enterprises. See text pages: 59 - 60
- #10: See Learning Objective 3: Identify the implications of globalization for business enterprises. See text page: 60
- #11: See Learning Objective 3: Identify the implications of globalization for business enterprises. See text page: 61
- #12: See Learning Objective 3: Identify the implications of globalization for business enterprises. See text page: 61
- #13: See Learning Objective 4: Discuss different constraints limiting the pace of globalization. See text pages: 63-66
- #14: See Learning Objective 5: Outline the benefits of going global for a business firm. See text pages: 66-69
- #15: See Learning Objective 6: Discuss some of the challenges of managing in a global enterprise. See text pages: 69 - 73
- #16: See Learning Objective 6: Discuss some of the challenges of managing in a global enterprise. See text page: 69
- #17: See Learning Objective 6: Discuss some of the challenges of managing in a global enterprise. See text page: 69 Answer: D
- #18: See Learning Objective 6: Discuss some of the challenges of managing in a global enterprise. See text page: 69 Answer: D
- #19: See Learning Objective 6: Discuss some of the challenges of managing in a global enterprise. See text page: 70
- #20: See Learning Objective 6: Discuss some of the challenges of managing in a global enterprise. See text page: 71
- #21: See Learning Objective 6: Discuss some of the challenges of managing in a global enterprise. See text page: 72