Chapter 4
Managing Globally
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
4.1
Learning Objectives
After reading this chapter, you should be able to:
 State several characteristics of the global economy
 Describe six strategies used by organizations in international
business
 Explain the impact of political-legal forces on international
business
 Discuss how three major trade agreements affect global
competition
 Describe how a country’s culture can affect an organization’s
business practices
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
4.2
Global Economic Trends
 Increased competition
 Shortened product life-cycles
 Importance of exports and imports
 Worldwide communication
 New countries emerge
 Borderless organizations
 Worldwide labor pool
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Adapted from Table 4.1
4.3
Strategies for International Operations
High
C
o
m
p
l
e
x
i
t
y
Global
Multidomestic
Franchising
Alliances
Licensing
Exporting
Low
Low
Resource Commitment
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
High
Adapted from Figure 4.1
4.4
Assessing Political Risk
Low
High
Low
High
Domestic Instability
Foreign Conflict
Stable
Unstable
Stable
Unstable
Political Climate
Economic Climate
Corruption
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Noncorrupt
Corrupt
Adapted from Figure 4.2
4.5
Goals of the World Trade
Organization (WTO)
 Administer WTO trade agreements
 Provide a forum for trade negotiations
 Handle trade disputes between nations
 Monitor national trade policies
 Provide technical assistance and training for people in
developing countries
 Cooperate with other international organizations
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
4.6
Goals of NAFTA
 Create a U.S., Canadian,
and Mexican trade zone
 Promote liberalized trade, not free trade
 Retain some protectionist elements
 Increase efficiency and customer satisfaction
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
4.7
Goals of the European Union
 Create a single market
among the 15 member countries
 Eliminate existing barriers between countries
 Implement the Euro as a common currency
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
4.8
Tendencies of Many U.S. and Japanese Organizations
Many (Not All) Major
U.S. Organizations
Many (Not All) Major
Japanese
Organizations
 Employment
Short term on average,
but varies widely;
unstable and insecure
Long-term for males (recent
decline in lifetime employment),
moderately secure and stable
 Salary and
promotion
Merit pay based on
individual contribution;
rapid promotion in career
Seniority-based early
in career; more merit pay later
 Attitude
toward work
Individual responsibilities
Collective responsibilities;
group loyalty, duty-oriented
Dimensions
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Adapted from Table 4.3
4.9
Tendencies of Many U.S. and Japanese Organizations (cont.)
Dimensions
 Decision making
 Relationship with
employees
 Competition
Many (Not All) Major
U.S. Organizations
Individual-oriented;
relatively top-down
emphasis
Depersonalized;
emphasis on
formal contacts
Relatively free and
open among individuals
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Many (Not All) Major
Japanese
Organizations
Consultation oriented;
bottom-up emphasis
Personalized; employee
treated more as a family
member; paternalism
Low among individuals
within groups; high
among groups
Adapted from Table 4.3