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Chapter 4 Managing in a Global Environment

Chapter 4 Managing in a Global Environment - Chapter 4...

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Chapter 4 Managing in a Global Environment ANNOTATED OUTLINE 1. WHO OWNS WHAT? Students may be astonished to discover the country of ownership origin for many products they use. In taking this quiz and discussing their scores, students may also be surprised to learn that a significant number of well-known companies derive more than half of their revenues from global operations. 2. WHAT’S YOUR GLOBAL PERSPECTIVE? Most U.S. children study only English in school. It is not unusual for Germans, Italians, and Indonesians to speak three or four languages. Americans tend to think of English as the only international business language and see little need to study other languages. A. Parochialism is viewing the world solely through your own perspectives, leading to an inability to recognize differences between people. Parochialism is an obstacle for many U.S. managers and stems from monolingualism. B. Managers might have one of three perspectives or attitudes toward international business (see Exhibit 4-1 and PowerPoint slide 4-7 ): 1. An ethnocentric attitude is the parochialistic belief that the best work approaches and practices are those of the home country (the country in which the company’s headquarters are located). 2. A polycentric attitude is the view that the managers in the host country (the foreign country where the organization is doing business) know the best work approaches and practices for running their business. 3. A geocentric attitude is a world-oriented view that focuses on using the best approaches and people from around the globe. 4. To be a successful global manager, an individual needs to be sensitive to differences in national customs and practices (see Exhibit 4-2 on cultural blunders). 3. UNDERSTANDING THE GLOBAL ENVIRONMENT Several significant forces are reshaping today’s global environment. Important features of the global environment include regional trading alliances and different types of global organizations. A.Regional Trading Alliances Regional trading alliances are reshaping global competition. Competition is no longer limited to country versus country, but region versus region.
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1. The European Union (EU) is a union of 25 European nations created as a unified economic and trade entity (see Exhibit 4-3 and PowerPoint slide 4-10 ). a. The primary motivation for the creation of the EU in February 1992 was to allow member nations to reassert their position against the industrial strength of the United States and Japan. b. All member states of the EU participate in the EMU (Economic and Monetary Union). The EMU consists of three stages for coordinating economic policy. Twelve member states of the European Union have entered the third stage of the EMU, in which participating countries share a single currency, the euro .
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