Textbook Notes (368,566)
Canada (161,966)
GMS 200 (566)
Chapter 3

CHAPTER 3 GLOBAL DIMENSIONS OF MANAGEMENT.doc

7 Pages
122 Views
Unlock Document

Department
Global Management Studies
Course
GMS 200
Professor
Peter Rambert
Semester
Winter

Description
CHAPTER 3 GLOBAL DIMENSIONS OF MANAGEMENT MANAGEMENT & GLOBALIZATION • Global economy: resources, markets and competition are worldwide in scope not national or local • Globalization: growing interdependence among elements of the global economy Global Management • Involves managing operations in more than one country • Global manager: culturally aware and informed on international affairs Why Companies go Global • Profits- greater profit potential • Customers- nerw markets to sell products • Suppliers- access to needed products and services • Capital- access to financial resources • Labour- access to lower labour costs How Companies go Global • Market entry strategies: involve sale of G&S to foreign markets without expensive investments ie. Global sourcing, exporing and importing, licensing and franchising • Direct investment strategies: require major capital commitments but alos create rights of ownership and control over operations in foreign country ie. Joint ventures and foreign subsidiaries Global Sourcing • Materials or services are purchased around the world for local use Licensing and Franchising • Licensing agreement: local firm pays a fee to a foreign firm for rights to make or sell its products • Franchising: a fees paid to a foreign business for rights ot locally operate using its name, branding and methods Joint Ventures and Strategic Alliances • Foreign direct investment: building, buying all or buying part ownership of a business in another country • Insourcing: job creation from FDI • Joint venture: operates in a foreign country through co-ownership by foreign and local partners agree to pool resources, share risks • type of global strategic alliance: partnership in which foreign and domestic firms share resources and knowledge for mutual gains Foreign Subsidiaries • risks and problems with strategic alliances and joint ventures solution full ownership of foreign operation  foreign subsidiary • local operation completely owned by a foreign firm • set up by Greenfield investments: builds an entirely new operation • set up by acquisition: outside firm purchases a local operation entirely GLOBAL BUSINESS ENVIRONMENTS Legal & Political Systems • note the differences in legal and political systems • political risks: potential loss in value of a foreign investment due to instability and political changes in the host country • political risks can’t be prevented but they can be anticipated political risk analysis • Global managers should be ready to deal with difference between home country and hsot country laws and politics occupational health and safety, employement equity, sexual harassement • Common legal problems: incorporation practices and business ownership, negotiating and implementing contracts with foreign parties, handling foreign exchange, intellectual property rights Trade Agreements and Trade Barriers • When intl businesses feel they are being mistreated in foreign country or local companies feel foreiegn competitors are disadvantaging them they might take their case to WTO – World Trade Organization • WTO: organization whose member nations agree to negotiate and resolve disputes about tariffs and trade restrictions. • Promotes free trade and open markets around the world • Controversies can still develop between member countries within the WTO framework • Members supposed to give each other most favoured nation status- the most favourable treatment for imports and expors  trade barriers still exist Regional Economic Alliances • NAFTA – North American Free Trade Agreement • EU- European Union – 27 countries • APEC – Asia Pacific Economic Cooperation – promote free trade and investment in the Pacific region • ASEAN – Association of Southeast Asian Nations – 10 nations of SE Asia- promote economic growth and progress • SADC – South Africa Development Community – 14 countries of South Africa linked in trade and economic development efforts. Objectives include harmonizing and rationalizing strategies for sustainable development among member countries GLOBAL BUSINESS PG 82 • Global corporations: aka Multinational corporations (MNCs) is a multinational business with extensive operations in more than one foreign country (walmart, BMW, nestle) Types of Global Businesses • Transnational corporations: operate as borderless firms with worldwide presences and without being identified with one national home • Seek total integration of global operations • Operate across borders without home based prejudices • Make major decisions from a global perspective • Distribute work among world wide points of excellence • Employ senior executives from many different countries Pros and Cons of Global Cor
More Less

Related notes for GMS 200

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit