4 Global Management - BA 310 Global Management 1 Roadmap...

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1 BA 310: Global Management
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2 Roadmap – Questions we’ll address today What are key trends in global trade? What are three major approaches to global management? How does national culture affect organizations? How can national culture trip business ventures up? How do companies “go global”? What are keys to success for new global managers?
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3 Many large “U.S” companies sell more outside the U.S. than inside. Company Manpower Exxon Mobil Colgate-Palmolive Texas Instruments Avon McDonald’s Coca-Cola Gillette What’s the range of non-US revenues? A – 60%-80% B – 50%-75% C – 40%-70% D – 30%-65% E – Can’t Say
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4 Brand names and ownership don’t necessarily match. Bic Pens RCA Television Braun electric shavers And the winner is …
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5 Drivers of Globalization __Free trade____ Doctrine: Everyone is better off if each country specializes in what it can produce most efficiently Global trends to democracy and free-market policies Barriers of distance and culture diminishing Improving transportation and communications technologies Tariffs declining (GATT, regional trading alliances) National borders are increasingly ___irrelevant_____ as barriers to trade
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6 Regional Trading Alliances are ascendant Regional trading alliances are agreements among groups of partner countries to facilitate inter-partner trade Increase market size Reduce trade barriers Major examples: The European Union - created 1992 An expanding single market without barriers to travel, employment, investment, and trade North American Free Trade Agreement (NAFTA) Eliminated barriers to free trade such as tariffs, import licensing requirements, customs user fees between U.S., Mexico, Canada Mercosur (South America) Association of Southeast Asian Nations (ASEAN)
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7 Implications of Firms and Managers must be able to compete globally Declining trade barriers = huge opportunities: Larger markets Global sourcing Declining trade barriers = huge challenges: Intense competition Managing and operating in foreign countries Global legal-political environments differ (e.g., stability) Global economic environments differ (e.g., inflation) Employment dislocation
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8 Approaches to Global Management (3 attitudes ) There are fundamentally different attitudes about the right way to manage global enterprises: Ethnocentric Attitude: Managers believe home country knows best; centralize , hold key decisions / technology close/structure, global company Link to Parochialism : Managers view the world solely through its own eyes and perspectives, do not recognize differences Polycentric Attitude: Managers believe host-country managers know best; decentralize , let each country manage own unit, multidomestic Geocentric Attitude : Managers try to transcend barriers and use the best from around the globe, regardless of location borderless
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This note was uploaded on 05/18/2011 for the course BADM 310 taught by Professor G. love during the Spring '08 term at University of Illinois at Urbana–Champaign.

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4 Global Management - BA 310 Global Management 1 Roadmap...

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