PowerPoint Presentation
to Accompany
Management, 9/e
John R. Schermerhorn, Jr.
Chapter 5:
Global Dimensions of Management
Prepared by: Jim LoPresti
University of Colorado, Boulder
Published by: John Wiley & Sons, Inc.
Study Question 1: What are the international business
challenges of globalization?
 Key concepts in the challenges of
globalization:

Global economy

Globalization

International management

Global manager
Management 9/e - Chapter 5
2
Study Question 1: What are the international business
challenges of globalization?

Global economy


Resource supplies, product markets,
and business competition are
worldwide, rather than local
Globalization

The process of growing
interdependence of these components
in the global economy
Management 9/e - Chapter 5
3
Study Question 1: What are the international business
challenges of globalization?

International management


Management in organizations with business
interests in more than one country
Global manager

Informed about international developments

Transnational in outlook

Competent in working with multicultural people

Aware of regional developments in a changing
world
Management 9/e - Chapter 5
4
Study Question 1: What are the international business
challenges of globalization?

International businesses


Conduct for-profit transactions of goods and
services across national boundaries
Reasons why businesses go international:

Profits

Customers

Suppliers

Capital

Labor
Management 9/e - Chapter 5
5
Study Question 1 What are the international business
challenges of globalization?
 Market entry strategies involve the sale of
goods or services to foreign markets but
do not require expensive investments.
 Types of market entry strategies:
 Global sourcing




Exporting
Importing
Licensing agreement
Franchising
Management 9/e - Chapter 5
6
Figure 5.1 Common forms of international business—from
market entry to direct investment strategies.
Management 9/e - Chapter 5
7
Study Question 1 What are the international business
challenges of globalization?
 Direct investment strategies require
major capital commitments but
create rights of ownership and
control over foreign operations.
 Types of direct investment
strategies:
 Joint ventures

Foreign subsidiaries
Management 9/e - Chapter 5
8
Study Question 1 What are the international business
challenges of globalization?
 Criteria for choosing a joint venture
partner:
 Familiarity with your firm’s major business.
 Strong local workforce.
 Future expansion possibilities.
 Strong local market for partner’s own
products.
 Good profit potential.
 Sound financial standing.
Management 9/e - Chapter 5
9
Study Question 1 What are the international business
challenges of globalization?
 Complications in the global business
environment:
 Environment is complex, dynamic, and highly
competitive.
 Global business executives must deal with
differences in the environment of business in
different countries.
 World Trade Organization resolves trade and
tariff disputes among countries.
 Protectionism can complicate global trading
relationships.
Management 9/e - Chapter 5
10
Study Question 2: What are multinational
corporations and what do they do?
 A multinational corporation (MNC) is a
business with extensive international
operations in more than one foreign
country.
Management 9/e - Chapter 5
11
Study Question 2: What are multinational
corporations and what do they do?
 Mutual benefits for host country and
MNC:

Shared growth opportunities

Shared income opportunities

Shared learning opportunities

Shared development opportunities
Management 9/e - Chapter 5
12
Study Question 2: What are multinational
corporations and what do they do?
 Host country complaints about MNCs:

Excessive profits

Domination of local economy

Interference with local government

Hiring the best local talent

Limited technology transfer

Disrespect for local customs
Management 9/e - Chapter 5
13
Study Question 2: What are multinational
corporations and what do they do?
 MNC complaints about host countries:

Profit limitations

Overpriced resources

Exploitative rules

Foreign exchange restrictions

Failure to uphold contracts
Management 9/e - Chapter 5
14
Study Question 3: What is culture and how does it
relate to global diversity?
 Culture
 The shared set of beliefs, values, and patterns
of behavior common to a group of people.
 Culture shock


Cultural intelligence


Confusion and discomfort a person experiences
in an unfamiliar culture.
The ability to adapt and adjust to new cultures
Ethnocentrism

Tendency to consider one’s own culture as
superior to others.
Management 9/e - Chapter 5
15
Study Question 3: What is culture and how does it
relate to global diversity?
 Stages in adjusting to a new
culture:

Confusion

Small victories

The honeymoon

Irritation and anger

Reality
Management 9/e - Chapter 5
16
Study Question 3: What is culture and how does it
relate to global diversity?
 Popular dimensions of culture:
 Language



Interpersonal space
Time orientation



Low-context cultures and high-context
cultures
Monochronic cultures and polychronic
cultures
Religion
Contracts and agreements
Management 9/e - Chapter 5
17
Study Question 3: What is culture and how does it
relate to global diversity?
 Values and national cultures
(Hofstede):

Power distance

Uncertainty avoidance

Individualism-collectivism

Masculinity-femininity

Time orientation
Management 9/e - Chapter 5
18
Study Question 4: How do management practices
transfer across cultures?
 Comparative management

How management systematically
differs among countries and/or
cultures.

Global managers

Need to successfully apply
management functions across
international boundaries.
Management 9/e - Chapter 5
19
Study Question 4: How do management practices
transfer across cultures?
 Are management theories universal?

U.S. management theories may be
ethnocentric.

Participation and individual performance
are not emphasized as much in other
cultures.
 Not all Japanese management practices
can be applied successfully abroad.
Management 9/e - Chapter 5
20
Study Question 4: How do management practices
transfer across cultures?
 Global organizational learning:

Companies can and should learn from each
other.

Readiness for global organizational learning
varies based on managerial attitudes.


Ethnocentric attitudes

Polycentric attitudes

Geocentric attitudes
Be alert, open, inquiring, but always cautious.
Management 9/e - Chapter 5
21