Managing in a Global Environment

• Global Perspective
• Understanding the Global Environment
• Doing Business Globally
• Managing in a Global Environment
 Global Perspective

Monolingualism is one sign that a nation

suffers from parochialism, which is viewing the
world solely through one’s own eye and perspective.
Parochialism is a significant obstacle for
managers working in a global business world. Its not
unusual for Germans, Italians to speak three or four
languages. May be that is the reason of their best
management. As wide knowledge of languages is
important for successful management.
 Global Perspective

There are three types of global attitude…

1. Ethnocentric attitude
2. Polycentric attitude
3. Geocentric attitude
 Global Perspective
Ethnocentric Polycentric Geocentric
Orientation Home country Host country World
Advantages •Simpler structure •Extensive •Forces
•More tightly knowledge of foreign understanding of
controlled market global issues
•More support from •Balanced local and
host government global objectives
•Committed local
managers with high
morale
Draw backs •More ineffective • Duplication of work •Difficult to
management • Reduced efficiency achieve
•Inflexibility •managers must
•Social and political have local and
black lash global knowledge
 Understanding the global environment
Managers in all sizes and types of organizations
are faced with the opportunities and challenges of
managing in a global environment, so it is important
for a manager to understand the global environment.

 Regional trading
1. The Europeans Union:
A union of 25 Europeans nations created as a unified
economic and trade entity.
 Understanding the global environment

For example:

• Unilever PLC of the

united kingdom is a
powerful force in
consumer products.

• Nokia of Finland is a
dominant player in cell
phones.
 Understanding the global environment

2. North American Free Trade agreement:

An agreement among the Mexican, Canadian
and U.S government in which barriers to trade have
been eliminated.
3. Association of South East Asian nation (ASEAN):
A trading alliance of 10 South East Asian nations.
 Understanding the global environment

 The World Trade Organization

A global organization of 149 countries
that deals with the rules of trade among nations.
The WTO was formed in 1995 and
evolved from the General Agreement on Tariffs and
Trade. Today WTO is the only global organization
dealing with the rules of trade among nations.
 Doing Business Globally
 Different types of national organizations

1. Multinational Corporations:
A broad team term that refers to any and all types of international companies
that maintain operations.
2. Multidomestic Corporation:
An international company that decentralized management and other decisions
to the local country.
3. Global Company:
An MNC that centralize management and other decision in the home country.
4. Transnational:
An MNC that eliminates artificial geographical barriers.
5. Born Global:
Businesses that choose to go global from inception.
 Doing Business Globally

 How organization go
international?
When organization go
internationally, they often
use different approaches
depending on whether they
are just starting or whether
they have been doing
business internationally for
a while.
 Doing Business Globally
Minimal Investment:
• Global sourcing
Medium Investment:
• Exporting - Importing
• Licensing
• Franchising
Significant Investment:
• Strategic alliance
• Joint venture
• Foreign subsidiary
 Doing Business Globally
For example:
Fast food giant KFC is like many big franchise
firms opening more new outlets overseas. Along the
way company is making appropriate changes in its
menu offerings such as substituting juices and fruits
for coke and fries.
Managing In a Global Environment

Any manager who finds himself in a foreign

country faces a lot of new challenges. It is very
difficult to manage an organization in a global
environment.

 Challenges
1. The legal political environment:
Managers in a global organization must stay
informed of the specific laws in countries where
they run business.
Managing In a Global Environment
For example:
Many large businesses have postponed doing
business in China because the government controls
what organization do and how they do it. As Chinese
consumers gain more power, however, that attitude is
likely to change.
 Managing In a Global Environment
2. The Economical Environment:
The global managers must be aware of economic issues
when doing business in other countries.
Basically there are two types of economic
environment…
i. Market Economy:
An economic system in which resources are primarily
owned and controlled by the private sector.
ii. Command Economy:
An economic system in which all economic decisions are
planned by a central government.
Managing In a Global Environment

3. Cultural Environment:
Every country has its own culture so it is very
necessary to get knowledge about culture of that
specific country.
• National Culture
The value and attribute shared by individuals
from a specific country that shape their behavior and
beliefs about what is important.