International management

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International management
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Purpose

• Global economy!
• How does that impact management practices?
• Go beyond the book--emphasizes planning and
  strategic issues.

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Definitions

• International management involves managing
  operations in more than one country.
• Globalization is the process of growing
  interdependence among elements of the global
  economy.

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Why is this an issue today

• GATT treaty create the WTO. Monitors trade
  disputes.
• NAFTA Regional trade alliance with Canada,
  Mexico, and the US.
• Fall of Communism and restricted economies.
  China and India (over 2 billion people).

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• How does the global economy differ from the
  protectionistic economy.
• Think about opportunities and threats.
• Basically, advantages and disadvantages to free
  trade. Is there consensus on your team that
  unlimited free trade is better than protectionism.

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Examine International Management

• Planning
• Organizing
• Leading
• Controlling

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Video of Coke

• Use this as an opportunity to examine the
  management process.

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Strategic planning

• Level of involvement with import and export. Do
  you engage in
• International business (trade)
• Become Multinational company (extensive trade)
• Transnational company--worldwide operations.

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Look at mission statements

• How is global or international mentioned?

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Strategies of involvement

• Importing and exporting
• global sourcing--procurement
• Licensing and franchising
• Joint ventures
• wholly own subsidiary

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Issues of

• Control
• Market penetration
• Local autonomy
• Legal issues in other countries
• Paying others
• Political risk assessment
• Ethics exposure (child labor, sweatshops). Nike

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Coke video
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Function of mission and resources.
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Organizing
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(No Transcript)
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Coke Video.
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How are international responsibilities delegated?

• Efficiency and effectiveness
• Production or distribution.
• Overlap of product lines.

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Leadership
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Issues of Centralization

• Ethnocentric management. Use of home country
  policies abroad.
• Decentralized--adjustments to local cultures.

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Socio-cultural differences

• Countries differ on issues such as power
  distance, masculinity and femininity,
  collectivism and individualism.
• Chinese vs Americans
• Italians vs English

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Opportunities for misunderstandings abound

• Valid instinctive feeling about other people.

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Examples from Hong Kong
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Coke?
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How to manage

• Extensive cultural workshops.
• Diversity training in the US leads to role models
  with international management.
• Rely on people who are bi-cultural.
• It is definitely challenging.

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Central issue is can expatriates manage other
national cultures

• Expatriate is someone who lives and works in a
  foreign country.

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Problems

• Culture shock--confusion and discomfort a person
  experiences in an unfamiliar culture.
• Credibility
• Adjusting to local customs.

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Controlling

• Very much a cultural norm issue. Different
  methods of control related to power distance.
  Issues of weak leadership or overbearing
  leadership. Its all relative.
• All too often absence of controls. (Berings
  Bank). DuPont and Bhopal.

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Summary

• International competition--Can not ignore.
• Companies are struggling to manage international
  issues. Varies. Franchising is excellent
  (Coke).
• No perfect solutions to issues. Everything is a
  tradeoff.
• Higher risks and higher payoffs.