8th edition

Steven P. Robbins
Mary Coulter

PowerPoint Presentation by Charlie Cook

Copyright © 2005 Prentice Hall, Inc.
All rights reserved.
 Managing in a Global Environment
• Challenges
 Coping with the sudden appearance of new
competitors
 Acknowledging cultural, political, and economic
differences
 Dealing with increased uncertainty, fear, and anxiety
 Adapting to changes in the global environment
 Avoiding parochialism- viewing the world solely
through one’s own eyes and perspectives.

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 Adopting a Global Perspective
• Ethnocentric Attitude
 The parochialistic belief that the best work
approaches and practices are those of the home
country.
• Polycentric Attitude
 The view that the managers in the host country know
the best work approaches and practices for running
their business.
• Geocentric Attitude
 A world-oriented view that focuses on using the best
approaches and people from around the globe.
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 Different Types of Global Organizations
• Multinational Corporation (MNC)
 A firm which maintains operations in multiple
countries but manages the operations from a base in
the home country.
 multidomestic corporation, MNC that decentralizes
management and other decisions to the local country.
 This type of globalization reflects the polycentric
attitude.
 local employees typically are hired to manage the
business, and marketing strategies are tailored to that
country’s unique characteristics

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 global company, a MNC which centralizes its
management and other decisions in the home
country.
This approach to globalization reflects the
ethnocentric attitude.
management decisions with company-wide
implications are made from headquarters in the
home country

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 Different Types of Global Organizations
• Transnational Corporation (TNC)
 A firm that maintains operations in several countries
but decentralizes management to the local country.
• Borderless Organization
 A firm that has eliminated structural divisions that
impose artificial geographic barriers and is organized
along business lines.
 reflects a geocentric attitude.
 Managers choose this approach to increase efficiency
and effectiveness in a competitive global marketplace

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 How Organizations Go Global

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 How Organizations Go Global
• global sourcing Purchasing materials or labor
from around the world wherever it is cheapest
eg nike
• exporting Making products domestically and
selling them abroad
• importing Acquiring products made abroad and
selling them domestically
• licensing An organization gives another
organization the right to make or sell its products
using its technology or product specifications eg
coca cola,Microsoft
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 How Organizations Go Global
• franchising An organization gives another
organization the right to use its name and
operating methods eg KFC,McDonalds,Subway

• strategic alliance A partnership between an

organization and foreign company partner(s) in
which both share resources and knowledge in
developing new products or building production
facilities eg CPEC

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 Other Forms of Globalization
• Joint Venture
 A specific type of strategic alliance in which the
partners agree to form a separate, independent
organization for some business purpose.

 foreign subsidiary Directly investing in a foreign

country by setting up a separate and independent
production facility or.
 this arrangement involves the greatest commitment of
resources and poses the greatest amount of risk
office

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 Managing in A Global Environment
• The Legal/Political Environment
 Stability or instability of legal and political systems
 Legal procedures are established and followed
 Fair and honest elections held on a regular basis

 Differences in the laws of various nations

 Effects on business activities eg repatriation law
 Effects on delivery of products and services

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 The Economic Environment
• Economic Systems
 Free Market economy
 An economy in which resources are primarily owned
and controlled by the private sector.
 Planned/Command economy
 An economy in which all economic decisions are
planned by a central government.
• Monetary and Financial Factors
 Currency exchange rates
 Inflation rates
 Diverse tax policies
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 The Cultural Environment
• National Culture
 Is the values and attitudes shared by individuals from
a specific country that shape their behavior and their
beliefs about what is important.
 May have more influence on an organization than the
organization culture.
 . Getting information about cultural differences isn’t
quite that easy

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 ?????????????????????
• you were born and raised in the Pakistan, how
would you describe Pakistani culture? In other
words, what are Pakistanis like? Think about it
for a moment.

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 Hofstede’s Framework for Assessing
Cultures
• Geert Hofstede developed one of the most
widely referenced approaches to helping
managers better understand differences
between national cultures.
• His research found that countries vary on five
dimensions of national culture.

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 The GLOBE (Global Leadership and
Organizational Behavior Effectiveness)
Framework for Assessing Cultures
• program is an ongoing research program that
extended Hofstede’s work by investigating
crosscultural leadership behaviors and giving
managers additional information to help them
identify and manage cultural differences

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 • Power distance: the extent to which a society
accepts that power in institutions and organizations
is distributed unequally.
• Uncertainty avoidance: a society’s reliance on
social norms and procedures to alleviate the
unpredictability of future events.
• Assertiveness: the extent to which a society
encourages people to be tough, confrontational,
assertive, and competitive rather than modest and
tender.
• Humane orientation: the degree to which a society
encourages and rewards individuals for being fair,
altruistic, generous, caring, and kind to others

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 • Future orientation: the extent to which a
society encourages and rewards futureoriented
behaviors such as planning, investing in the
future, and delaying gratification.
• Institutional collectivism: the degree to which
individuals are encouraged by societal
institutions to be integrated into groups within
organizations and society.
• Gender differentiation: the extent to which a
society maximizes gender role differences as
measured by how much status and decision-
making responsibilities women have. (

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 • In-group collectivism: the extent to which
members of a society take pride in membership
in small groups, such as their family and circle of
close friends, and the organizations in which
they’re employed.
• Performance orientation: the degree to which
a society encourages and rewards group
members for performance improvement and
excellence

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 Global Management in Today’s Worl
• cultural intelligence : Cultural awareness and sensitivity
skills
• 1. **CQ Drive (Motivation):**
• - This dimension reflects an individual's interest, motivation, and confidence in functioning
effectively in culturally diverse settings.
• 2. **CQ Knowledge (Cognition):**
• - This dimension involves an individual's understanding of cultural similarities and
differences.
•
• 3. **CQ Strategy (Meta-Cognition):**
• - This dimension focuses on an individual's ability to plan for and adapt to multicultural
interactions.
• -
• 4. **CQ Action (Behavior):**
• - This dimension involves an individual's ability to adapt their behavior appropriately in
multicultural situations.

• -
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 global mind-set Attributes that allow a
leader to be effective in cross-cultural
environments

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