Chapter 5 - Global Dimensions of Management

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Wednesday September 29th, 2010
Chapter 5
Global Dimensions of Management
International Management and Globalization:
-age of global economy: resources, markets and competition are worldwide in scope
-globalization: process of growing interdependence among elements of the global economy
-global economy offers great opportunities for worldwide sourcing, production and sales capabilities
-term used to describe management in organizations with business interests in more than one country is
international management
-global manager: is culturally aware and informed about international affairs
International Business Challenges:
-international business: conducts commercial transactions across national boundaries
Why Companies Go International:
-international business of all types and sizes are the foundation of world
-engines of moving raw material, finished products and specialized services from 1 country to another
-reason why business go international:
Profits
Customers
Suppliers
Capital
Labour
Forms of International Business:
-Market Entry Strategies:
1st step into international business is global sourcing: materials or services are purchased around
the world for local use
2nd form involves exporting which is selling local products in foreign markets or importing which
is a process of acquiring products abroad and selling them in domestic markets
another form of international business is licensing agreement: one firm pays a fee for rights to
make or sell another company’s products
franchising: form of licensing in which foreign firms buy the rights to use another’s name and
operating methods in its home country
-Direct Investment Strategies:
to establish a direct investment, many firms enter into joint ventures: operates in a foreign
country through co-ownership with local partners
foreign subsidiary: is a local operation completely owned by a foreign firm
Multinational Corporations:
-multi-national corporations: a business with extensive international operations in more than one
foreign country
Types of Multinational Corporations:
-examples of multinational corporations: Apple computer, Microsoft, McDonald
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