principles of management - chapter 6

outsourcing

contracting with an outside provider to produce one or more of an organization’s goods or services

offshoring

moving work to other countries

inshoring

moving work from other countries back to the headquarters country, work may be done by a domestic provider or in-house

economic environment 

foreign investment growth of developing nations rising wages in developing nations

technological environment 

internet, artificial intelligence, augmented reality, and cloud computing 

legal/ regulatory environment

free trade agreements, anticorruption laws, and environmental protection 

demographic environment

aging population in developed nations, local/ regional population shifts

social environment

changing demand for resources, including oil, water, food, and rare earth element; growing desire for sustainable products and operations; endangered species, climate change 

global strategy can work in 3 conditions 

1. universal customer needs

2. pressures to minimize costs 

3. the presence of competitors with global strategies 

international model

an organizational model that is composed of a company’s overseas subsidiaries and characterized by greater control by the parent company over local product and marketing strategies than is the case in the multinational model

multinational model 

an organizational model that consists of the subsidiaries in each country in which a company does business and provides a great deal of discretion to those subsidiaries to respond to local conditions 

global model 

an organizational model consisting of a company’s overseas subsidiaries and characterized by centralized decision making and tight control by the parent company over most aspects of worldwide operations, typically organizations that base their global competitive strategy on cost considerations

transnational model

an organizing model characterized by centralizing certain functions in locations that best achieve cost economies, basing other functions in the company’s national subsidiaries to facilitate greater local responsiveness and fostering communication among subsidiaries to permit transfer of technological expertise and skills 

patriates

parent-company nationals who are sent to work at a foreign subsidiary 

host-country nationals

natives of the country where an overseas subsidiary is located 

failure rate

the number of expatriate managers of an overseas operation who come home early 

ethnocentrism

the tendency to judge others by standards of one’s own group or culture, which are seen as superior 

culture shock

the disorientation and stress associated with being in a foreign environment

inpatriate 

a foreign national brought in to work at the parent company