Chapter 6 - International management. After studying Chapter 6, you will be able to: Discuss what integration of the global economy means for individual companies and their managers, describe how the world economy is becoming more integrated than ever before, define the strategies organizations use to compete in the global marketplace,. | International Management Chapter Six McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives LO1 Discuss what integration of the global economy means for individual companies and their managers LO2 Describe how the world economy is becoming more integrated than ever before LO3 Define the strategies organizations use to compete in the global marketplace LO4 Compare the various entry modes organizations use to enter overseas markets 6- Learning Objectives (cont.) LO5 Explain how companies can approach the task of staffing overseas operations LO6 Summarize the skills and knowledge managers need to manage globally. LO7 Identify ways in which cultural differences across countries influence management 6- The Role of Outsourcing Outsourcing Contracting with an outside provider to produce one or more of an organization’s goods or services. Offshoring Moving work to other countries. 6- Factors to Consider for Offshoring What is the competitive advantage of the products they offer? Is the business in its early stages? Can production savings be achieved locally? Can the entire supply chain be improved? 6- The Global Economy 6- Figure European Unification Europe is integrating economically to form the biggest market in the world Certain structural issues within Europe need to be corrected for the EU to function effectively. 6- The Americas North American Free Trade Agreement (NAFTA) An economic pact that combined the economies of the United States, Canada, and Mexico into the world’s largest trading bloc 6- Organizational Models 6- Figure Entry Mode Franchising the company sells limited rights to use its brand name to franchisees in return for a lump-sum payment and a share of the franchisee’s profits. 6- Managing across Borders Expatriates Parent-company nationals who are sent to work at a foreign subsidiary 6- Understanding Cultural Issues Ethnocentrism The tendency to judge others by the standards of one’s group or culture, which are seen as superior Culture shock The disorientation and stress associated with being in a foreign environment. 6- Understanding Cultural Issues Power distance the extent to which a society accepts the fact that power in organizations is distributed unequally Individualism/ collectivism the extent to which people act on their own or as a part of a group. 6- Understanding Cultural Issues Uncertainty avoidance the extent to which people in a society feel threatened by uncertain and ambiguous situations. Masculinity/ femininity the extent to which a society values quantity of life over quality of life 6- Understanding Cultural Issues Inpatriate A foreign national brought in to work at the parent company. 6-
