GMS 200 Lecture Notes - Lecture 5: Midvale Steel, High High, Punched Card

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Published on 27 Feb 2015
School
Ryerson University
Department
Global Management Studies
Course
GMS 200
Page:
of 7
GMS 200 Global Management Lecture 5 Tuesday February 11, 2014
Mid-Term Exam
Total time: 70 mins (12:20 to 1:30)
70 Questions
Syllabus:
oChapters covered 1, 2, 3, and 13
oEverything covered in class
The Internalization Stages
Internationalization Stages *** on exam
oStage 1: Indirect exporting  rather than the manufacturer trying to find a
distributor in a foreign market, they will use a domestic agent to buy the
products from you and sell to international distributor
Manufacturer  Domestic Agent  International Distributor  sell to
retailers in that market
oStage 2: Direct exporter, via independent distributor
M  ID  R
oStage 3: Establishing foreign sales subsidiary
We don’t need an ID, we can set up a sales office
M  SO R
oStage 4: Local assembly (used to reduce tariff/ import duty costs on
finished goods, by assembling intermediary parts)
Intermediary parts are taxed less b/c a firm provides jobs
opportunities
oStage 5: Foreign production
Source raw materials, hire people, open a SO to sell it to D or R
Criticisms:
oTime consuming
oIssues of control (how it’s made)
oDon’t have to follow all these stages
oApply predominately for a manufacturing firm vs. service firms
Born Globals
GMS 200 Global Management Lecture 5 Tuesday February 11, 2014
oFirms that form the outset view of the world as one market
Typically small technology-based businesses
Ex. Twitter, Facebook
Decisions on FDI
Control
Resource commitment: how much resource you want to commit in that country
oIf you commit a lot of resources it’s harder to pull out
Flexibility: being able to pull out if things don’t work out
Risk: trade-offs, high cash firms has more resources and flexibility
Export Licensing Minority-owned ventures Wholly owned subsidiary
Control Low Not so high High Max
Resource Low Not so high High Max
Flexibilit
y
Max High Not so high Low
Risk Low Not so high High Max
Which mode-of-entry
Export Wholly-own
Low production cost X (Not dependent on
resources)
Low tariffs to international X (Can export with lower
duties)
Large distance X (D increases $)
Stagnant economy X (More flexibility to pull out)
Depreciating exchange rate X (Regions where it’s
depreciating, your $ has
higher value)
Management History
Overview
GMS 200 Global Management Lecture 5 Tuesday February 11, 2014
Scientific management era
Social man/Behavioural era
Modern era—Contingency theory (no right or wrong way of managing, depends
on the situation you’re in)
Scientific Management Era
Industrial Revolution
Substitution of machine power for human power
Steam engine: allowed transportation of products to new territory
oDemand went up significantly
The “Factory System”
Charles Babbage (1792-1871)
oDesigned first ever computer
oStorage device, arithmetic unit, and a punch card input system
Scientific Management
F.W. Taylor (1856-1915)
o‘One best way’
oThe father of management, was obsessed with finding the best way to do
something
oViewed work as a scientific process, took a stop watch and timed the
process to increase productivity
Midvale steel company
oWorkers purposely operate below their capabilities b/c there were no
incentives
Soldiering
The most universally held belief among workers that if they became more
productive, fewer of them would be needed and jobs would be eliminated
oAssumed if they produced more there would not be a demand
Non-incentive wage systems encourage low productivity

Document Summary

Mid-term exam: total time: 70 mins (12:20 to 1:30) 70 questions: syllabus, chapters covered 1, 2, 3, and 13, everything covered in class. Manufacturer domestic agent international distributor sell to retailers in that market: stage 2: direct exporter, via independent distributor. M id r: stage 3: establishing foreign sales subsidiary. We don"t need an id, we can set up a sales office. M so r: stage 4: local assembly (used to reduce tariff/ import duty costs on finished goods, by assembling intermediary parts) Intermediary parts are taxed less b/c a firm provides jobs opportunities: stage 5: foreign production. Tuesday february 11, 2014: firms that form the outset view of the world as one market. X (regions where it"s depreciating, your $ has higher value) Tuesday february 11, 2014: scientific management era, social man/behavioural era, modern era contingency theory (no right or wrong way of managing, depends on the situation you"re in)