Chapter 6 International Management

Chapter 6 International Management - Chapter 6International...

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Chapter 6—International Management h 1. “What implications does globalization have for my job - what can I do to keep my job from being outsourced?” 2. “How does a manager know when to take a business global?” A recent article in Business Week outlines the skills that programmers need to find a job in the United States. 1 It seems that technical skills aren’t enough anymore. In order to be successful, programmers also have to show that they can lead and manage teams, think strategically, and become software architects, not just the implementers of someone else’s vision. Most managers today don’t really have the choice of whether or not to take a business global - as soon as they post their first corporate website, they are doing global marketing. What companies do have, however, is a choice about whether or not to target global markets over domestic ones. James F. Foley has written a book entitled The Global Entrepreneur , which discusses some of the reasons why companies decide to go global, including: o accessing markets beyond their domestic territory o avoiding a changing domestic environment, especially decreasing customer bases or when selling seasonal items o lowering costs o a strategic plan to increase global brand awareness, achieve worldwide distribution and manufacturing capacity, and exploit extranational economies of scale and experience effects. 2 CLASS ROADMAP I. OBJECTIVE 1. WHY THE WORLD ECONOMY IS BECOMING MORE INTEGRATED THAN EVER BEFORE. (Table 6.1)(Figure 6.1) A. European unification 1. European Union (EU) will allow goods, services, capital, and human resources to flow freely across national borders. 2. Unification will create a more competitive Europe. 1 Baker, S. and Kripalani, M. “Software:Will Outsourcing Hurt America’s Economy?” Business Week, March 1, 2004, Online at http://www.businessweek.com/magazine/content/04_09/b3872001_mz001.htm 2 Foley, J. The Global Entrepreneur . Dearborn Trade, 1999. This material has been taken and in some cases adapted from the instructor’s manual that accompanies the book. The McGraw-Hill Companies, Inc.
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3. The United States must remain vigilant to ensure that a Fortress Europe does not close itself to U.S. goods and services. B. China and the Pacific Rim 1. Japan dominated world attention during the last decade. 2. China has now surpassed Japan as America’s third largest trading partner, and will soon pass Mexico (becoming the second largest trading partner) as well. (Figure 6.2) 3. Trade imbalance is a concern with China - U.S. exports to China were about $50 billion in 2004, but imports were four times as high. Example : The U.S. quota system for Asian clothing imports ended at the end of 2004. As noted in the book, China is importing huge numbers of goods to the United States (and Chinese imports increased by 85.9% in the first five months of 2005.) Some people feared that other garment- producing Asian countries could not keep up with competition from China. However, we are seeing an increase in imports from many Asian countries in 2005, including Bangladesh (25%), Sri Lanka (20%), and Cambodia (16.8%.) In addition, Asian countries are
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