The Global Environment Globalization and the

Transcript:The Global Environment Globalization and the:
The Global Environment Globalization and the International Management Environment Chapters 1 and 2, Hodgetts, Luthans and Doh, International Management: Culture, Strategy and Behavior , 6th edition (New York: McGraw-Hill Irwin, 2006) Adapted from PowerPoint slides by R. Dennis Middlemist, Professor of Management, Colorado State University Mark McKenna BUS 162 (6), International and Comparative Management San Jose State University Overview International Management and Globalization What is Globalization? Environmental Forces International Management and Globalization What is international management? “the process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural environments” (HLD, p. 6) Why is globalization important? International management is rapidly gaining in importance in tandem with the quickening pace of globalization WHAT IS GLOBALIZATION? Definitions Roots of Globalization Convergence or Divergence Globalization: Definitions Hodgetts, Luthans and Doh, Globalization is “the process of social, political, economic, cultural, and technological integration among countries around the world” (p. 7) Robertson (Globalization: Social Theory and Global Culture, 1992), Globalization in its most all-embracing form “refers to both the compression of the world and the intensification of consciousness of the world as a whole” (p. 8) The Roots of Globalization When did globalization begin? Ancient trade routes – barter trade Standard weights and measures Mercantilism – the highways of the sea Post WWII – institutions of global governance Past 1980s – ICT, globalization defined Hodgetts, Luthans, and Doh, “Contemporary globalization is a new branch of a very old tree whose roots were planted in antiquity” (p. 8) Convergence or Divergence Environmental Forces Economic environment Political environmental Legal/regulatory environment Socio-cultural environment Technological environment Economic Environment Global and regional integration International agreements (GATT, WTO) Regional agreements (EU, ASEAN, NAFTA, CAFTA, FTAA, Mercosur) World trade and investment 80% of FDI contributed by developed economies U.S. exports/imports increased by 550% from 1983 to 2003 (to $1.3 and $1.8 trillion) Trade within the EU increased sharply, to > $2 trillion annually Political Environment Rapid and uncertain change China’s transition to a market economy European expansion and integration Russia’s unstable political institutions The emergence of political Islam in the Middle East Significant differences across countries Less stable governments increase political risk Uncertain responses to democratization Change in government policies Adjusting to adjust to new perspectives and changing requirements Assessing political risks (Chapter 10) Legal/Regulatory Environment Complex and confusing MNCs must Conform to national laws and standards Abide by the laws of