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Week 4 Online Lecture Notes

by: Linsey Moen

Week 4 Online Lecture Notes MGT 300

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Linsey Moen

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Global Business
Organization and Management Leadership iCourse
Dr. David Kim McKinnon
Class Notes
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This 5 page Class Notes was uploaded by Linsey Moen on Saturday September 17, 2016. The Class Notes belongs to MGT 300 at Arizona State University taught by Dr. David Kim McKinnon in Fall 2016. Since its upload, it has received 4 views.


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Date Created: 09/17/16
I. Week 4: Lecture 1 – Growth of Global Business a. Globalization i. The trend of the world economy toward becoming a more interdependent system b. What is Causing this “Trend?” i. Demographics ii. Access to Information c. Demographics i. “If the World were 100 People*” - Erickson, Vonk & Meadows, 2012 1. 50 would be female 50 would be male 2. 60 Asians 15 Africans 14 people from the Americas 11 Europeans 3. 12 would speak Chinese 5 would speak Spanish 5 would speak English 3 would speak Arabic 3 would speak Hindi 3 would speak Bengali 3 would speak Portuguese 2 would speak Russian 2 would speak Japanese 62 would speak other languages 4. 33 Christians 22 Muslims 14 Hindus 7 Buddhists 12 people who practice other religions 12 people who would not be aligned with a religion 5. 1 would be dying of starvation 15 would be undernourished 21 would be overweight 87 would have access to safe drinking water 13 people would have no clean, safe water to drink 6. 83 would be able to read and write; 17 would not 7 would have a college degree 22 would own or share a computer 7. 83 would be able to read and write; 17 would not 7 would have a college degree 22 would own or share a computer d. Access to Information i. Thomas Friedman – “The World is Flat” 1. The Global Village a. The “shrinking” of time and space as air travel and the electronic media have made it much easier for the people of the globe to communicate with one another 2. E-commerce a. The buying and selling of products and services through computer networks b. U.S. retail e-commerce sales were estimated at $48.2 billion in the third quarter of 2011 3. The Global Economy a. The increasing tendency of the economies of the world to interact with one another as one market instead of many national markets e. BRIC Countries i. Brazil Russia India China ii. Fastest growing/ largest emerging market economies iii. Account for almost 3 billion people ~ half population iv. 2050 – world’s most important economies (US 5th) v. China – manufactured goods vi. India – services vii. Russia & Brazil – raw material supplies f. Why Companies Expand Internationally – 5 Reasons i. Availability of supplies ii. New markets iii. Lower labor costs iv. Access to finance capital v. Avoidance of tariffs & import quotas g. XYZ Corporation builds a manufacturing plant in Mexico, employs Mexican citizens and receives favorable tax treatment by the Mexican government. XYZ is: i. Using a maquiladora h. How Companies Expand Internationally – 5 Ways i. i. Organizations Promoting World Trade i. World Trade Organization (WTO) 1. Designed to monitor and enforce trade agreements 2. Agreements based on General Agreement on Tariffs and Trade (GATT) 3. 153 countries involved ii. World Bank 1. Provides low-interest loans to developing nations for improving transportation, education, health, and telecommunications iii. International Money Fund (IMF) 1. Designed to assist in smoothing the flow of money between nations j. Trading Blocs i. A group of nations within a geographic region that have agreed to remove trade barriers with one another ii. Also known as an “economic community” k. Major Trading Blocs i. NAFTA – U.S., Canada, Mexico ii. European Union – 28 trading partners in Europe iii. APEC – group of 21 Pacific Rim countries iv. ASEAN - trading bloc of 11 countries in Asia v. Mercosur – trading bloc in Latin America vi. CAFTA – Central America l. The U.S. does not allow the import of Cuban sugar and cigars. This is an example of a(n): i. Emargo m. Barriers to International Trade i. Tariffs – customs duty, or tax, levied mainly on imports ii. Import quotas – limits on the numbers of a product that can be imported iii. Embargoes – complete ban on the import or export of certain products II. Week 4: Lecture 2: Global Business and You a. Why Learn about Global Business? i. You may deal with foreign customers or partners ii. You may deal with foreign employees or suppliers iii. You may work for a foreign firm in the United States iv. You may work for an American firm outside the United States – or for a foreign one b. Foreign Owned Companies in the US i. Budweiser ii. 7-Eleven iii. Firestone iv. Holiday Inn v. John Hancock Life Insurance vi. Gerber c. Alvin accepts that differences and similarities exist between home and foreign personnel and practices, and that the company should use whatever techniques are most effective. Alvin can be described as: i. Geocentric d. Successful International Managers i. Ethnocentric managers 1. believe that their native country, culture, language, and behavior are superior to all others 2. also known as (Parochialism) a. narrow view in which people see things solely through their own perspective ii. Polycentric managers 1. take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone iii. Geocentric managers 1. accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective approach e. The Importance of National Culture i. Culture 1. shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people ii. The Ugly American 1. The stereotypical view of an American tourist whose behavior is considered brash, arrogant, loud, thoughtless and ignorant f. Cultural Dimensions i. Low-context culture 1. shared meanings are primarily derived from written and spoken words ii. High-context culture 1. people rely heavily on situational cues for meaning when communicating with others g. Globe Project – 9 Cultural Dimensions i. Power distance ii. Uncertainty avoidance 1. Avoiding risk taking iii. Institutional collectivism 1. How loyal you should be to the group or to yourself iv. In-group collectivism 1. How much pride it’s okay to have v. Gender egalitarianism 1. How does the culture treat men and women? vi. Assertiveness 1. How confrontational or competitive you can be vii. Future orientation 1. The importance to plan and prepare for the future viii. Performance orientation 1. The extent to which society honors high performance ix. Humane orientation 1. How important it is to be a good person h. Other Cultural Variations i. Language ii. Interpersonal space 1. How close you are to people when you interact iii. Communication iv. Time orientation 1. monochromic a. One thing at a time 2. polychronic a. Multi-tasking v. Religion i. Expatriates i. people living or working in a foreign country ii. 10%–20% of all U.S. managers sent abroad returned early because of job dissatisfaction or adjustment difficulties iii. “Spousal adjustment” is one of the strongest predictors of expatriate success iv. When the assignment is over, it’s hard for people to re adjust to their home country


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