Global and Comparative
Management
International Management
• It is concerned with managerial issues related to
the flow of people, goods and money, with the
ultimate aim being to manage better in situations
that involve crossing national boundaries.
• Unifying effect
• Potential for conflict- Texaco
Forms of Interactions- Give examples
when you answer
• Exportation – Making products domestically and selling them
abroad
• Licensing agreement- An organization gives another organization
the right to make or sell its products using its technology or
product specifications
• Management Contracts - Foreign trade based on management
contracts refers to international business arrangements in which a
company or organization from one country provides management
services to a foreign entity in another country. These management
services typically involve the operation, supervision, and
2013- Industry
•
Joint ventures - A joint venture (JV) is a business arrangement in which two or more
independent companies or entities collaborate and combine their resources, expertise, and
capital to achieve a specific business objective or undertake a specific project. Joint ventures
are typically formed for a finite period, focusing on a particular project or business endeavor,
after which the venture may be dissolved, extended, or transformed into a more permanent
partnership.
Eg: GM- SAIC JV
•
Subsidiaries - A subsidiary, subsidiary company or daughter company is a company owned or
controlled by another company, which is called the parent company or holding company. Two
subsidiaries that belong to the same parent company are called sister companies.
Eg: Coca Cola Company
Coca-Cola India Private Limited- Thums up
Coca-Cola FEMSA (Brazil)- Guarana Antarctica, a well-known Brazilian soft drink
Transactions between Parent and Host
Country
• Transfer of
– Goods
– Services
– Technology
– Managerial knowledge
– Capital
Multinational Corporations (MNCs)
• Have head quarters in one country but
operations in many countries
• Advantages:
– Business opportunities Eg- Elxsi
– Raise money
– Establish production facilities
– Access to Natural resources and materials
– Worldwide labor pool
• Challenges
– Increasing Nationalism
– Developing Countries are acquiring skills
– Countries have become aware of the value of their
natural resources
– Difficulty in maintaining good relationship
The Managerial Functions in
International Business
• Planning
– Assessment of opportunities and threat in the
external environment
– Internal strengths and weakness
– Cultural orientation
– Economic instability
• Organising
– Geographic areas
– Product line
– Mixed organisational designs
• Staffing
– Nationals of parent Country
– Nationals of home Country
– Third Country Nationals
Ethnocentric orientation The style of the foreign
operations is based on that of the parent company.
Polycentric orientation The foreign subsidiaries are
given a great deal of managerial freedom.
Regio centric orientation The foreign operations are
staffed on a regional basis.
Geocentric orientation The entire organization is
viewed as an interdependent system operating in
many countries
• Leading
– Understanding of employees and their cultural
environment
– Communication lines
• Controlling
– Different currencies and ratios
– Accounting procedures
Comparative Management
• Comparative management means identifying,
measuring and interpreting the common things
and differences between behavior of managers,
their techniques and practices adopted in different
countries.
• It is defined as the study of management in
different nature and various environments which
show different observations in different countries
• It is the field of inquiry which focus on the
variations in management and the organizations
of the different countries.
• The ability of seeing the differences and how to behave in different
situations becomes effective and the political conflicts between various
multinational companies and their countries can be resolved and the healthy
relationship can be maintained.
• Management is the most important factor for the growth of economy and
improvement in production. Therefore, comparative management includes
analyzing and comparing of various fundamental functions for determining
environment of foreign country.
Ex:
Mc D
– Menu Adaptation
– Cultural Sensitivity
– Operational Adaptation- France Café culture
Ikea China
– Product Adaptation
– Pricing Strategy
– Store Layout and Shopping Experience- Restaurant+Extensive
showrooms
– https://www.youtube.com/watch?v=xMmbjmfD0rs
• Micro + internal( org) = 2 way interaction
• Macro+ internal ( org) = 1 way