GLOBALIZATION AND

MANAGEMENT

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GLOBALIZATION AND MANAGEMENT
At the end of this module the learning
outcomes are:
• What is Globalization
• What factors constitute Globalization
• How Globalization and competitiveness come
together
• How to manage Globalization across different
cultures
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GLOBALIZATION AND MANAGEMENT
SUGGESTED READINGS
• Management by Koontz, Weilrich, Chapter 3,
10th edition.
• Management by Stoner, Gibert
Chapter 5

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GLOBALIZATION AND MANAGEMENT
Ford Motor Co
• Headquarters in America
• Plants in
– India
– Belgium
– U.K.
– Australia
• How do you manage ?
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GLOBALIZATION AND MANAGEMENT
Challenges for Ford
• Each Country
• Different
– Political environment
– Economic Environment
– Social environment
– Technological environment

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GLOBALIZATION AND MANAGEMENT
Challenges for Ford
• Cultures vary
• Tastes vary
• It is the globalization of business
• What does this mean ?

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 Regional Trading Alliances
• Global competition and the global economy are
shaped by regional trading agreements, including:
– European Union (EU)
– North American Free Trade Agreement (NAFTA)
– Association of Southeast Asian Nations (ASEAN)
 The European Union
• European Union (EU): a union of 28 democratic
European nations created as a unified economic and
trade entity with the Euro as a single common
currency
 Global Trade Mechanisms
• World Trade Organization (WTO)
• International Monetary Fund (IMF)
• World Bank Group
• Organization for Economic Cooperation and
Development (OECD)
 World Trade Organization
• World Trade Organization (WTO): global
organization of 161 countries that deals with the
rules of trade among nations
 Organization for Economic
Cooperation and Development
• Organization for Economic Cooperation and
Development (OECD): an international economic
organization that helps its 34 member countries
achieve sustainable economic growth and
employment
 How Organizations Go
International (1 of 2)
• Global sourcing: purchasing materials or labor
from around the world wherever it is cheapest
 How Organizations Go
International (2 of 2)
• Multinational corporation (MNC)
• Multidomestic corporation (IMF)
• Global company
• Transnational or borderless organization
 Exhibit 4-4
How Organizations Go Global

Exhibit 4-4 shows the different approaches companies can use to go global.
Copyright © 2019 Pearson India Education Services Pvt. Ltd. All Rights Reserved
GLOBALIZATION AND MANAGEMENT
GLOBALIZATION
Consists of three interrelated factors
• Proximity
• Location
• Attitude

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GLOBALIZATION AND MANAGEMENT
Proximity
• Managers closer to each other
• Better communication facilities
• Internet
• Video conferencing
• Collaborating
• Manager of Honda in America working with
manager of Honda in Japan

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GLOBALIZATION AND MANAGEMENT
LOCATION
FORD IKON
• Designed in US
• Manufactured in India
• Sold in
– India
– South Africa
– Argentina
• Organization operation in many locations

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GLOBALIZATION AND MANAGEMENT
Attitude
• Practicing management internationally
• Develop capabilities to manage people of
different background

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GLOBALIZATION AND MANAGEMENT
GLOBALIZATION AND COMPETITIVENESS
• Competitiveness
• Relative standing of one competitor against
other competitor

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GLOBALIZATION AND MANAGEMENT
Example – Competitiveness
LEATHER
• India versus U.S.
• Where it is cheap
• India
• Surplus labour

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GLOBALIZATION AND MANAGEMENT
Toys
• India versus China
• Where it is cheap
• China
• Huge volumes
• Abundant labor
• Leading to low cost

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GLOBALIZATION AND MANAGEMENT
Competitiveness
Cars
• 60’s & 70’s
– America
• 80’s
– Korea
• 90’s and 00’s
– China & India
• Low cost producers
Competitiveness shifts from one country to another
country

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GLOBALIZATION AND MANAGEMENT
Globalization across different Cultures
• Managers and prejudice
• Women in the international work force
• Applying Japanese approaches abroad

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GLOBALIZATION AND MANAGEMENT
Managers and Prejudice
• Three types of Managers
– Ethnocentric
– Polycentric
– Geocentric

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GLOBALIZATION AND MANAGEMENT
Ethnocentric Manager
• Feel home country managers are better than
local managers
LG
• All Countries
• Top people are Korean
• Feeling that Korean managers are better than
local managers.
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GLOBALIZATION AND MANAGEMENT
Polycentric Managers
• Feel local managers can do a better Job
Pepsi in India
• Top managers
• Mostly Indian
• Feel Indian managers can do a better Job than
American managers

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GLOBALIZATION AND MANAGEMENT
Geocentric Managers
• Somewhere in between Ethnocentric and Polycentric
Unilever in Saudi Arabia
• Unilever – British Company
• Operations in Saudi Arabia
• Top Management
– British managers
– Indian managers
– Australian managers
Get the best Managers irrespective of their nationality

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GLOBALIZATION AND MANAGEMENT
Women in the International work force
• Growing women managers
• Developed countries
• Not same everywhere
– Saudi Arabia, Japan, Iran
• Businessman reluctant to work with America
businesswomen in some countries
• Many countries refuse females as bosses
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GLOBALIZATION AND MANAGEMENT
Applying Japanese approaches abroad
• Success of Japanese companies in 80’s
• Study of Japanese practices
• Different from American practices
• Unlike Americans, Japanese don’t
– hire and fire
– believe in individual approach
– deliver low quality products
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 Exhibit 4-5
Characteristic
What Are Americans Like?
Americans are very informal. They tend to treat people alike even when great differences in age or social standing
are evident.
Americans are direct. They don’t talk around things. To some foreigners, this may appear as abrupt or even rude
behavior.
American are competitive. Some foreigners may find Americans assertive or overbearing.

Americans are achievers. They like to keep score, whether at work or at play. They emphasize accomplishments.

Americans are independent and individualistic. They place a high value on freedom and believe that individuals
can shape and control their own destiny.
Americans are questioners. They ask a lot of questions, even of someone they have just met. Many may seem
pointless (“How ya’ doin’?) or personal (What kind of work do you do?”)
Americans dislike silence. They would rather talk about the weather than deal with silence in a conversation.

Americans value punctuality. They keep appointment calendars and live according to schedules and clocks.

Americans value cleanliness. They often seem obsessed with bathing, eliminating body odors, and wearing clean
clothes.