Class Notes (839,147)
United States (325,796)
Management (35)
MGT 300 (26)
Lecture 4

MGT 300 Lecture 4: MG Chapter 4 Notes

3 Pages

Course Code
MGT 300
Daniel Bachrach

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Management Chapter 4 Notes Competition & Globalization: Who Will Be No. 1 Tomorrow? • Globalization ➢ The trend of the world economy toward becoming a more interdependent system Globalization: The Collapse of Time & Distance • Globalization ➢ The trend of the world economy toward becoming a more interdependent system ➢ The “shrinking” of time and space as air travel and the electronic media make it easier and less costly for the people to communicate and do business ➢ Offshoring and foreign direct investment in America (emerging auto industry in the south) One Big World Market: The Global Economy • Global economy ➢ The increasing tendency of the economies of the world to interact with one another as one market instead of many national markets • Positive effects ➢ More markets for American exports • Negative effects ➢ Vast surplus funds from global investments flowed into US that were invested badly in subprime mortgages The Successful International Manager • Ethnocentric managers ➢ Believe that their native country, culture, language, and behavior are superior to all others • Polycentric managers ➢ Take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone • Geocentric managers ➢ Accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective Why Companies Expand Internationally 1. Availability of supplies 2. New markets 3. Lower labor costs 4. Access to finance capital 5. Avoidance of tariffs & import quotas Five Ways of Expanding Internationally • Lowest risk & investment to highest risk & investment ➢ Global outsourcing ➢ Importing, exporting, & countertrading ➢ Licensing & franchising ➢ Joint ventures ➢ Wholly owned subsidiaries How Companies Expand Internationally • Global outsourcing ➢ Using suppliers outside the US to provide labor, goods, or services ➢ Also called offshoring • Importing ➢ A company buys goods outside the country and resells them domestically
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