MGMT1001 Chapter Notes - Chapter 8: Parochialism, Monolingualism, Future Orientation
IBM
1. Parochialism
Monolingualism is one sign that a nation suffers from parochialism (Viewing the
world solely through your own perspectives leading to an inability to recognize
differences within people).
2. 3 Global Perspectives
• Ethnocentric attitude: the parochialistic belief that the best work practices are
those of the home country.
Advantages: simpler structure, tightly controlled
Disadvantages: ineffective management, inflexibility, social and political
backlash
Managers with this attitude belief that foreign people in foreign countries do
not have the skills, expertise, knowledge, or experience needed to make the
best business decisions, whereas people in their home country do.
• Polycentric host country: the view that managers in the host country know the
best work approaches and practices for running their operations.
Advantages: more support from host government, extensive knowledge of
foreign market and workplace, committed local managers with high morale.
Disadvantages: duplication of work, reduced efficiency, intense focus on local
traditions
Home country managers with a polycentric attitude view every foreign
operation as different and difficult to understand. They are likely to leave
foreign facilities alone and let foreign employees figure out how best to do
things.
• Geocentric attitude: a world-oriented view that focuses on using the best
approaches and people from around the globe
Advantages: forces understanding of global issues, balanced local and global
objectives, best people and work approaches regardless of origin
Disadvantages: difficult to achieve, managers must have global and local
knowledge
3. The Risk of Cross-cultural Blunders
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The success of managers operating and competing in this environment will be
determined by their cultural sensitivity and their ability to develop a geocentric
attitude towards managing. Adopting the more geocentric attitude will require the
elimination of parochial attitudes and the careful development of understanding
cultural differences between countries.
4. Regional Trading Alliances
• Australia-New Zealand Closer Economic Relations Agreement (CER)
Purpose: to coordinate business regulations and competition policy and
eventually remove all trade barriers
• Australian Free Trade Agreements
• ASEAN
Purpose: accelerate economic progress and increase stability in the region by
establishing a free trade area
• The European Union
• North American Free Trade Agreement (NAFTA)
• African Union
• South Asian Association for Regional Cooperation (SAARC)
5. Global Trade Mechanism
• World Trade Organisation (WTO)
This organisation deals with the rules of trade among nations. It plays an
important role in monitoring and promoting global trade and keeping it active
during global economy crisis,
• International Monetary Fund (IMF) and World Bank Group
IMF: an organisation that promotes international monetary cooperation and
provides member countries with policy advice, temporary loans, and technical
assistance to establish and maintain financial stability and to strengthen
economies.
World Bank Group: a group of five closely associated institutions, all owned
by its member countries, that provides vital financial and technical assistance
to developing countries from all over the world.
• Organisation for Economic Cooperation and Development (OECD)
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Document Summary
Disadvantages: ineffective management, inflexibility, social and political backlash. Advantages: more support from host government, extensive knowledge of foreign market and workplace, committed local managers with high morale. Disadvantages: duplication of work, reduced efficiency, intense focus on local traditions. Home country managers with a polycentric attitude view every foreign operation as different and difficult to understand. They are likely to leave foreign facilities alone and let foreign employees figure out how best to do things: geocentric attitude: a world-oriented view that focuses on using the best approaches and people from around the globe. Advantages: forces understanding of global issues, balanced local and global objectives, best people and work approaches regardless of origin. Disadvantages: difficult to achieve, managers must have global and local knowledge: the risk of cross-cultural blunders. The success of managers operating and competing in this environment will be determined by their cultural sensitivity and their ability to develop a geocentric attitude towards managing.
