Kinicki_2024R_Ch_4_FINAL (1)

Chapter 4: Global Management

• Managing across Borders

Learning Objectives

• LO 4-1: Identify three influential effects on globalization.

• LO 4-2: Describe the characteristics of a successful international manager.

• LO 4-3: Outline the ways in which companies can expand internationally.

• LO 4-4: Discuss barriers to free trade and strategies to overcome them.

• LO 4-5: Explain the importance of understanding cultural differences for managers.

• LO 4-6: Describe how to develop diversity, equity, and inclusion competency.

Working Successfully Abroad: Developing Cultural Awareness

• Do Your Research: Understand local customs, business practices, and etiquette before arriving.

• Check Your Attitude: Approach new cultures with an open and respectful mindset.

• Learn Appropriate Behavior: Familiarize yourself with social and professional norms.

• Become Minimally Skilled in the Language: Learn key phrases to facilitate communication.

• Pack Wisely: Prepare essentials that reflect the culture you are entering.

• Be Prepared: Anticipate cultural challenges and plan for them.

LO 4-1: Globalization Overview

• The Collapse of Time and Distance: Globalization minimizes the barriers that previously defined international boundaries.

• Competition and Globalization: The world is increasingly competitive, driven by technological advancements and interconnected markets.

• Electronic Commerce: E-commerce is booming, creating a global marketplace wherein even small businesses can reach international customers.

• Global Village Concept: The 'global village' reflects our interconnected world where distance and time are diminished due to advances in communication technologies.

The Impact of Global Economy

• Positive Effects:

  • Innovations have reduced the friction of distance.

  • Enhanced communication and information sharing.

  • Improved access to capital via electronic transfers.

  • Foreign investments in industries within the U.S.

• Negative Effects:

  • Job losses in various sectors due to global competition.

  • Information security risks due to increased data sharing.

  • Vulnerability of economies that rely heavily on others.

LO 4-2: Understanding International Management

• Why Learn About International Management?

  • Interaction with foreign customers and partners.

  • Collaborating with international employees and suppliers.

  • Employment with foreign firms domestically.

Characteristics of Successful International Managers

• Geocentric vs. Ethnocentric vs. Polycentric:

  • Ethnocentric Managers: Believe their way is the best.

  • Polycentric Managers: Rely on local practices.

  • Geocentric Managers: Seek effective strategies regardless of origin.

LO 4-3: International Expansion

• Reasons for International Expansion:

  • Access to new markets and resources.

  • Cost benefits like lower labor costs.

  • Financing opportunities and avoidance of tariffs.

• Methods of Expansion: Varying from exportation to joint ventures and direct investment.

Current Exporting Landscape (2021)

• Top Exporting Countries:

  1. China

  2. United States

  3. Germany

  4. Netherlands

  5. Japan

  6. Hong Kong

  7. South Korea

  8. Italy

  9. France

  10. Belgium

LO 4-4: Barriers to International Trade

• Types of Trade Barriers:

  • Tariffs: Taxes on imports.

  • Import Quotas: Limits on quantity that can be imported.

  • Sanctions and Embargoes: Restrictions based on political reasons.

• Organizations Promoting International Trade:

  1. World Trade Organization (WTO)

  2. World Bank

  3. International Monetary Fund (IMF)

• Major Trading Blocs: USMCA, the European Union (EU).

• Most Favored Nation (MFN) Status: Grants favorable trade treatment to partner countries.

LO 4-5: Understanding Cultural Differences

• National Culture Importance: Shapes beliefs, values, and behaviors.

  • Low-context Cultures: Rely heavily on verbal communication.

  • High-context Cultures: Use non-verbal cues and context in communication.

• Cultural Dimensions Models:

  • Hofstede's dimensions including individualism/collectivism, power distance, masculinity/femininity.

  • GLOBE project dimensions such as performance orientation and assertiveness.

U.S. Managers on Foreign Assignments: Challenges and Failures

• Expatriate Issues:

  • Selection of suitable personnel.

  • Adjustments to new cultures and environments.

  • Repatriation difficulties upon return.

LO 4-6: Career Readiness in an International Context

• Competency Model:

  • Emphasis on critical thinking, communication, teamwork, and inclusivity.

• Career Management Tips:

  • Observe and adapt to local customs.

  • Learn key phrases in the local language.

  • Develop soft skills like emotional intelligence and networking.