Management Notes - Management Notes Chapter Summaries CH.4...

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Management Notes Chapter Summaries… CH.4 Global Management Globalization is the trend of the world economy toward becoming a more interdependent system Time and distance no longer matter in the business world Global Village (a term used by Marshall McLuhan) refers to the shrinking of time and space as air travel and the electronic media have made it easier for people around the world to communicate with one another. Ecommerce - (electronic commerce)- the buying and selling of products and services though computer networks Global economy - refers to the increasing tendency of world economies to interact with one another and to act as one market instead of many markets. Three events have made the world increasingly global. . 1. The fall of the Berlin Wall 2. The opening of the Pacific Rim countries economies to international investment 3. A trend of government deregulation Positive effects of globalization Jobs and income in the US will rise as other countries grow and spend money on US goods. Negative effects Economic catastrophes can spread throughout the world rapidly o Asian Tiger currency was devalued, sending a neg economic shock to the world o US credit crisis and housing bust Increased globalization means that companies will outsource jobs overseas to enjoy lower labor costs. Globalization = rise of megamergers and small minifirms Megamergers- firms merge to take advantage of the economies of scale inherent in larger firms Minifirms- the internet allows any firm to go global. Multinational corporations- are business firms with operations in several countries. Wal-mart, GM, GE Multinational organizations- nonprofit organizations with operations in several countries Red Cross An expatriate manager - one who lives or works in a foreign country. An ethnocentric manager - believes that his or her native country, culture, language, and behavior are superior to all. Also can be call parochialism - a narrow view in which people see solely from their own perspective. Polycentric managers - believe that native managers in the foreign office best understand native and practices and that the home office should be left alone. Geocentric managers - accept the fact that there are differences and similarities between home and foreign personnel and practices Companies go abroad b/c… 1. Availability of supplies
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2. New markets 3. Low labor costs- maquiladoras- manufacturing plants allowed to operate in Mexico that receive special privileges in return for employing Mexican citizens 4. Access to financial capital 5. Avoidance of tariffs and import quotas The five techniques for international expansion, from the least amount of risk and investment to the greatest amount of risk and investment……… 1. Global outsourcing- outsourcing -using suppliers outside the company to provide goods and services. Global outsourcing- suppliers outside the US to provide labor, goods, or services. 2.
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Management Notes - Management Notes Chapter Summaries CH.4...

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