INTERNATIONAL
MANAGEMENT
GLOBAL
Business and People
Management
Professor H. Michael Boyd, Ph.D.
Professor H. Michael Boyd, Ph.D.
International Management
Ninth Edition
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International Management
• International management involves
– Applying management concepts and techniques in
a multinational environment
– Adapting management practices to different
economic, political, and cultural contexts
• Multinational corporation (MNC)
– Operations in more than one country
– International sales
– Nationality mix among managers and owners
International Management
Ninth Edition
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The World’s Top Nonfinancial TNCs
Ranked by Foreign Assets, 2012
International Management
Ninth Edition
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The World’s Top Nonfinancial TNCs from
Developing and Transitioning Economies
Ranked by Foreign Assets, 2011
International Management
Ninth Edition
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Globalization and Internationalization
• Globalization
– Process of social, political, economic, cultural, and
technological integration among countries around the
world.
• Hastened by
– Offshoring
• Process by which companies undertake some activities at
offshore locations instead of in their countries of origin.
– Outsourcing
• Subcontracting or contracting out of activities to external
locations instead of in their countries of origin
International Management
Ninth Edition
Globalization: Pros and Cons
• Benefits of Globalization
–
–
–
–
–
Wealth
Jobs
Technology
Lower prices
Availability of goods
• Criticisms of Globalization
– Off-shoring of business service jobs to lower-wage
countries
– Growing trade deficits
– Slow wage growth
– Environmental and social impacts
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International Management
Ninth Edition
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Global and Regional Integration
• Global Agreements
– World Trade Organization (WTO)
– General Agreement on Tariffs and Trade (GATT)
• Regional Agreements
– North American Free Trade Agreement (NAFTA)
– U.S.-Central American Free Trade Agreement (CAFTA,
CAFTA-DR)
– European Union (EU)
– Association of Southeast Asian Nations (ASEAN)
– Trans-Pacific Partnership (TPP)
– Free Trade Agreement of the Americas (FTAA)
International Management
Ninth Edition
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International Economic Power
in the Global Economy
• Shifting landscape due to
– Economic integration and rapid growth of
emerging markets
– Economic potential of emerging markets
• BRIC countries (Brazil, Russia, India, and China) could be
among the four most dominant economies by 2050
• N-11 (the next wave of emerging markets): Bangladesh,
Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan,
Philippines, Turkey, South Korea, and Vietnam
• African countries may follow.
International Management
Ninth Edition
The World’s Largest Economies
2009 and 2050 (Projected)
Measured by GDP at Market Exchange Rates
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International Management
Ninth Edition
The World’s Largest Economies
2009 and 2050 (Projected)
Measured by GDP at Purchasing Power Parity
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International Management
Ninth Edition
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Changing Global Demographics: Developing
Countries on the Rise
Ranked by Size
International Management
Ninth Edition
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Trends in Trade and International
Investments
• International Trade
– In 2009 merchandise and commercial services exports
declined
– By 2014, FDI is estimated to reach $1.9 trillion,
surpassing the all-time high set in 2007
• Foreign direct investment (FDI)
– Investment in property, plant, or equipment in another
country
•
•
•
•
Growing at healthy rate
Outpacing domestic growth in most countries
Declined in 2009 due to the global recession
Recent increases in merchandise exports and foreign direct
investment
International Management
Ninth Edition
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Foreign Direct Investment Inflows, by Region
(in US$ billions)
International Management
Ninth Edition
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Foreign Direct Investment Outflows, by Region
(in US$ billions)
International Management
Ninth Edition
Global Economic Systems
• Market economy
• Command economy
• Mixed economy
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International Management
Ninth Edition
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Economic Performance by Major
World Region
• Established Economies
– North America
– European Union
– Japan
• Emerging Economies
–
–
–
–
Central and Eastern Europe
China
Other Emerging Markets of Asia
India
• Developing Economies on the Verge
– South America
– Middle East and Central Asia
– Africa
International Management
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Ninth Edition
Overview of the World Economic
Outlook: Projections
(percentage change, unless otherwise noted)
continues
International Management
Ninth Edition
Overview of the World Economic
Outlook: Projections
(percentage change, unless otherwise noted)
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International Management
Ninth Edition
World’s Most Competitive
Nations, 2013
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International Management
Ninth Edition
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Market Potential Indicators Ranking
for Emerging Markets, 2013