Global Management

What is globalization?

Globalization is the process of developing influence or operations in other countries, interdependency

What is nationalism?

Nationalism is a focus on patriotic ideals and policies that glorify a country’s values

What is parochialism?

Parochialism is viewing the world solely through your own perspective, leading to an inability to recognize differences between people.

What are the three possible global attitudes?

Ethnocentric – belief that the home country has the best work practices

Polycentric – belief that managers in the host country know the best approaches

Geocentric – world-oriented view that seeks the best practices from around the globe.

What are the main global trade mechanisms?

World Trade Organization (WTO), International Monetary Fund (IMF), World Bank Group, General Agreement on Tariffs and Trade (GATT), and the Organization for Economic Cooperation and Development (OECD).

What is the role of the World Trade Organization (WTO)?

The WTO is a global organization of 161 countries that deals with the rules of trade among nations, essentially replacing GATT

What is the International Monetary Fund (IMF)?

The IMF is an organization of 188 countries that promotes international monetary cooperation and provides advice, loans, and technical assistance.

What is the World Bank Group?

A group of closely related institutions that provide financial and technical assistance to developing countries.

What is the OECD?

The Organization for Economic Cooperation and Development, which helps its 34 member countries achieve sustainable economic growth and employment.

What is ASEAN?

A trading alliance of 10 Southeast Asian nations.

What are examples of regional trading alliances?

The European Union (EU) and the North American Free Trade Agreement (NAFTA),

What was NAFTA and what replaced it?

NAFTA was a free trade agreement between the U.S., Canada, and Mexico. It was replaced in 2020 by the United States-Mexico-Canada Agreement (USMCA).

What are arguments for globalization?

It creates a win-win situation through comparative advantage, raises overall wealth, and benefits all trading partners.

What are arguments against globalization?

It can cause job loss in high-cost nations, wage stagnation, and increased wealth inequality

What types of international organizations exist?

Multinational corporations, multidomestic corporations, global companies, and transnational (borderless) organizations.

What are the main ways organizations go international?

Global sourcing-purchasing materials or labor from around the world wherever it is cheapest

exporting- making products domestically and selling them abroad

importing- acquiring products made abroad and selling them domestically

licensing-an organization gives another organization the right to make or sell its products using its technology or product specifications

franchising- an organization gives another organization the right to use its name and operating methods.

strategic alliances- - a partnership between an organization and one or more foreign company partner(s) in which both share resources and knowledge

joint ventures- partners agree to form a separate, independent organization for some business purpose-

foreign subsidiaries-directly investing in a foreign country by setting up a separate facility or office.

What political/legal factors affect global business?

Managers must stay informed of the specific laws in countries where they do business

What are the two main economic systems in global business?

Free market economy (resources owned by private sector, e.g., USA) and planned economy (decisions controlled by government, e.g., North Korea).

What is national culture?

The values and attitudes shared by people in a specific country that shape how they behave and their beliefs about what is important.

What is the GLOBE program?

A research project studying leadership behaviors across 62 countries, expanding on Hofstede’s work, and identifying 9 cultural dimensions.

What is cultural intelligence?

The awareness and sensitivity skills needed to work effectively across different cultures.

What is a global mind-set?

Attributes that allow leaders to succeed in cross-cultural environments. It includes intellectual capital (knowledge), psychological capital (openness), and social capital (building relationships).