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Chapter
Welcome to MGT 480
International Management
Tonight:
Syllabus & Course Overview
Definition of International Management
Refresher on Global Business Environment
Globalization & Economic Trends
Political/Regulatory/Technological Environment
Ethics & Corporate Social Responsibility
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International Management
International management
The process of applying management concepts and
techniques in a multinational environment and adapting
management practices to different economic, political, and
cultural environments
Multinational corporations (MNC)
Operations in more than one country
International sales,
Nationality mix of managers and owners
Chapter
Chapter 1
Globalization & Economic Trends
4
Profits
Billions of U.S. Dollars Share-Price Gain
1. ExxonMobil 1. Mizuho Financial 636%
20.96 2. Research in Motion 550
2. Citigroup 3. UFJ Holdings 420
17.85 4. SK 383
3. General Electric 5. Rakuten 381
15.00 6. Sumitomo Mitsui Fin. 331
4. HSBC Holdings 7. Elan 311
11.65 8. Bharti Tele-Ventures 276
5. Royal Dutch/Shell 9. Yahoo! Japan 241
11.41 10. Mitsui Trust Hldgs. 229
6. Bodafone Group
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
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Globalization
Process of integration among countries around the world
Social
Political
Economic
Cultural
Technological
Benefits of growing global trade and investment
Wealth
Jobs
Technology
Lower prices
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Globalization
Criticisms of globalization
Offshoring of business services jobs to lower-wage countries
Growing trade deficits
Slow wage growth
Environmental and social impacts
8
Trends in International
Investment and Trade
International investments
80 percent from developed countries
Foreign direct investment (FDI)
Economic growth potential (esp. China and Asia in general)
Trade growing faster than most domestic economies
Over one-half of world trade is accounted for by
United States
European Union
Japan
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Trade Flows Among World Regions, 2005 (in billions of dollars or percent)
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World’s Most
Competitive Nations, 2006
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Economic Performance
Developing and Emerging Countries
India
Low per capita GDP
Recent trend of locating software and high value-added
services to this country
Attractive to U.S. and British investors (well educated,
English speaking, technologically sophisticated workers)
Middle East and Central Asia
Large oil reserves
Highly unstable geopolitical and religious forces
Plagued by continuing economic problems
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Economic Performance
Developing and Emerging Countries
Africa
Considerable natural resources
African nations remain very poor and undeveloped
International trade is not a major source of income
Populace divided into 3,000 tribes that speak 1,000
languages and dialects
Major political instability
Poverty, starvation, illiteracy, corruption, overcrowding
among many social problems negatively affecting economic
sector
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Chapter
Chapter 2
Political,
Regulatory,
Technological,
Dimensions
23
Political Environment:
Ideologies (ideas reflecting beliefs and values
influencing behavior/culture of nations and political
systems) underlie the actions of governments.
Evaluate a political system along two dimensions: (1)
rights of citizens based on a system of government (range
democratic to totalitarian); (2) Focus of political system
on individualism vs. collectivism.
No pure form of government (how is the US collectivist?)
Democratic tend to emphasize individualism and
totalitarian tends to emphasize collectivism.
What challenges are involved in different political
environments?
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Regulation of Trade
and Investment
Individual countries use legal and regulatory policies to
affect the international management environment
If a country is perceived to engage in unfair trade
practices (WTO and similar agreements)
Government support (subsidies)
Require MNCs to accept local partners
Response may be
Retaliatory tariffs
Restrictive trade regulations
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Business-to-business (B2B)
Business to consumer (B2C) transactions
e-tailing
Financial services (e-cash)
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Expected Winners/Losers
in Selected Occupations
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Ethics:
Study of morality and standards of conduct
Dilemmas arising from conflicts between ethical standards
between countries most evident in employment practices
Inferring right vs. wrong in legal sense
1
Chapter
Chapter 3
Ethics & Social Responsibility
32
Ethics:
Study of morality and standards of conduct
Dilemmas arising from conflicts between ethical standards
between countries most evident in employment practices
Inferring right vs. wrong in legal sense
33
Corruption Index:
Least and Most Corrupt Countries
38
Trust in Leaders
NGO leaders 52
Spiritual/religious leaders 41
0 10 20 30 40 50 60
Average Across All 15 Countries Surveyed
Adapted from Figure 3-1: Trust in Leaders: Percentage Saying “A Lot” and “Some Trust”
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http://www.unglobalcompact.org/AboutTheGC/faq.html
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