Chapter 3 International Management Study Guide
Chapter 3 International Management Study Guide Management 301
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This 5 page Study Guide was uploaded by Stephanie Marie on Wednesday January 21, 2015. The Study Guide belongs to Management 301 at a university taught by Professor Mangaliso in Fall. Since its upload, it has received 687 views.
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Date Created: 01/21/15
Chapter 3 International Management and Globalization Globalization 0 The ow of goods and services capital and knowledge across country borders Enhances economic interdepence Third step countries collaborating and competing on a global basis Thomas Friedman Reduces the in uence an individual government can have on its economy Dramatically changed the competitive landscape for everyone 0 Example small rms now have access to resources that can cause them to compete with larger rms 0 Even individuals are collaborating on a global basis 0 Thomas Friedman all of us are competititors and neighbors Manufacturing in china and india because workers do work for a low cost 0 Technology can help people in small tiny countries Understanding a Country s Environment Walmart world s largest company 0 The Country s Institutional Environment 0 The country s rules policies and enforcement processes that in uence individuals and organizations behaviors that operate within country boundaries 0 Every country has its own unique institutional environment and they are usually complex 0 In uences individuals companies behaviors in that country 0 The Economic Development Institution Countries vary in this Could be classi ed as developing developed or emerging Developed economies tend to be larger 0 More effective capital markets Emerging economies are rapidly growing and capital markets tend to be young and underdeveloped o The Political Legal Institution 0 Political risks regulations laws and their enforcement 0 Can have a major in uence on the economy 0 Examples of laws include imposing taxes and tariffs or how employees are treated O O Sarbanes Oxley Act SOX designed to curtail scandals Laws regarding intellectual property rights such as patents o The Physical Infrastructure Institution 0 Amount and quality of roads and high ways number of O O telephones per capita and the number of airports Helps in uence decisions to enter a new international market because it is hard to deal with underdeveloped infrastructure Without good physical infrastructure it is hard for companies to distribute their good 0 Importance of the Institutional Environment 0 Contributes to the standards of living health and welfare of their citizens 0 Greater economic growth means greater market opportunities for all rms 0 Culture 0 A learned set of assumptions values beliefs that members of a group have accepted and that affect human behavior 0 has a powerful in uence on human behavior 0 whether people see opportunities or threats 0 affects consumer s view on the right kind of managerial behavior 0 Cultural Dimensions GLOBE four main dimensions of national culture 0 Power distance the extent to which people accept power and authority differences among people Uncertainty avoidance when cultures differ in the extent to which they need things to be clear or ambiguous Individualism the extent to which people s identities are self oriented and people are expected to take care of themselves and their immediate families high individualism exists in the united states and great Britain 0 Collectivism the extent to which identity is the function of the group 5 an individual belongs to and the extent to which group members are expected to look after each other China Pakistan 0 Gender Focus the extent to which people in a country value masculine and feminine traits o Feminine caring o Masculine activities that lead to success and money International Market Entry Strategies 0 Entry Ways 0 Exporting Manufacturing products in a rm s home country ahd shipping them to a foreign market Most common way especially true for small rms and rms just entering foreign markets Lower risk Firms avoid making large capital investment because it does not require establishing operations in the country Unlikely to provide big returns because of costs 0 Licensing Arrangements establishing how to allow a local rm in the new market to manufacture and distribute its product Licensor has low costs and little risks Licensee assumes major risks 0 Unlikely to produce big returns for the licensor unless the potential sales in the market are large 0 Licensing rms have little control over its product and use of its brand in the new market 0 Creating Strategic Alliances A cooperative alliance between two rms in which they agree to share resources to accomplish a mutually desirable goal Share costs and risks of entering a new market Allows rms to access resources they do not normally have 0 Acquisitions Cross border acquisition acquisitions of local rms made by foreign rms to enter a new international market 0 Common in European countries Problems integrating two previously independent countnes Overcoming differences in corporate and cultural differences Costly 0 Establishing New Wholly Owned Subsidaries Wholly owned subsidiary a direct investment to establish a business in a foreign market in which the local rm owns and controls 100 percent of the business Green eld Venture Afford a rm maximum control Starbucks Complex and expensive to launch Convince new customers or attract customers from existing competitors Risky and not always successful Managing International Operations 0 Taking a Global Focus 0 O O O O Globally focused organization an organization that invests the primary authority for major strategic decisions in the home of ce Relatively standardized product across markets Economies of scale and manages costs and enhances pro ts May be unable to take advantage of market opportunities when they occur Vulnerable to competitors trying to steal market share 0 Taking a Region country focus 0 O O 0 Region country focus a situation in which primary authority for determining competitive strategy rests with the management of the international subsidiary based in a region of the world or a speci c country Customize products for local customers Flexible and allows a subsidiary to react quickly to changes in the marketplace Expensive because it does not produce economies of scale 0 Taking a Transnational Focus 0 O O O Transnational organization an organization that strives to be simultaneously centralized and decentralized Obtain global ef ciency while maintaining local market responsiveness Strategic decisions are decentralized Example Nissan Managing Across Cultures Cultural context 0 The degree to which a situation in uences behavior or perception of appropriateness of behaviors 0 High context culture a culture in which pay close attention to the situation and its various elements 0 Low context culture a culture in which contextual variables have much less impact on the determination Managing Multicultural Teams 0 Virtual team a team that relies on electronically mediated communication Messages could be misinterpreted 0 Swift trust the rapid development of trust in teams with positive and reciprocal communications about the team s task activities 0 Developing a Global Mindset 0 Global mindset a set of cognitive attributes that allows individuals groups and organizations from diverse sociocultural and institutional environments
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