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Chapter 3

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Global Management Studies
GMS 200
Horatio Morgan

Chapter 3Global Dimensions ManagementManagementGlobalizationglobal economyresources marketscompetition are worldwide rather localnationalglobalizationprocess of growing interdependence among elements of the global economy Rosabeth Moss Kanter describes it as one of the most powerfulpervasive influences on nations businesses workplaces communities and livesGlobal Managementglobal managementinvolves managing operations in more than 1 country as companies press forward with global initiative international management challenges and opportunities of working across bordersnational and cultural must be masteredglobal managerculturally awardinformed on international affairs developments transnational in outlook competent in working with people from different cultures and always aware of regional developments in a changing world Why Companies Go Globalinternational businesses are the foundations of world trade engines for moving raw material finished products and specialized services from 1 country to another in the global economyreasons areglobal operations profitsoffer greater profit potentialcustomersoffer new markets to sell productssupplieroffer access to needed raw materialcapitaloffer access to financial resourceslabouroffer access to lower labour costsHow Companies Go Global global business conducts commercial transactions across national boundaries market entry strategiesinvolve the sale of goodsservices to foreign markets without expensive investmentsglobal sourcing exportingimportant licensingfranchisingdirect investment strategiesmajor capital commitments but also create rights of ownershipcontrol over operations in the foreign country joint ventures foreign subsidiaries wholly owned subsidiaries strategic alliancesIncreasing involvement in ownershipcontrol of foreign operations Global Sourcing global sourcingmaterialsservices are purchased around the world for local use international division of labour which activities are performed where they can be done at a low cost goal is to take advantage of international wage gaps by sourcing product in countries that can produce them at the lowest costs ExportingImportingexportinglocal products are sold abroad to foreign customers significant pathway to business growth for both individual firmseconomics business goal is to find new customers expand markets by selling ones products and services in other countries
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