GLOBAL & COMPARATIVE MGMT:

Globalisation of mgmt: is fact of life. Now

‘world is flat’– globalisation is shrinkening
and flattening the world (Thomas
Friedman), giving out opportunities,
throwing out challenges & competition.
 GLOBALISATION of Business
• This consists of three interrelated factors: proximity, location
& attitude. Taken together these facets emphasise the
unprecedented line up &complexity of relationships that
confront the manager.
• Proximity: Managers now operate in closer proximity ie to a
greater no: of customers,competitors,suppliers,govt:regulator
proximity is a function of ‘shrinking globe’.
• Location: Integration of orgn’s operations across several
inter- national boundaries is part of globalisation, which
requires ‘transnational management’ rather than localised.
• Attitude: New open attitude – ‘nothing is overseas anymore’.
 GLOBALISATION
* Unimpeded flow of Capital, Labour & Technology
across national borders – world has become a vast
interconnected market place in which Cos: search
for advantageous locations to buy, produce & sell.
It is like-- ‘DAVOS Man & Manila Woman’,
(as Prof. Edington, of Harvard U’varsity put it)
* In Europe, this is giving anxieties:
40% in Germany & France say it is bad for them
& in UK about 62% feel so.(CNN Poll in 2005)
• Globalisation makes poor countries become rich& it
makes rich countries poorer!(eg: France&Germany)
• Now Brazil, Russia, India&China (BRIC)– fast growing
economies of the world ( a Goldman-Sachs Study)
• By 2050 China will overtake Germany (or even US? )
 FEATURES OF ‘GLOBAL’ ECONOMY & BUSINESS

 Seamless Global market

 Information & Knowledge are the major determinants of
competitive advantage
 Business at the speed of thought – Web, Internet, E-mail,
& E-Commerce
 Virtual Enterprises – eg. Amazon.com, e-bay etc.
•Customer is Co-producer of Products&Services – eg. Asian
Paints, Bank ATMs  Consumer & Business Marketing –
Boundaries withering & unifying (eg: European Union)
 Distribution channels transforming – Shorter channels --
less number of intermediaries
 INTERNATIONAL MANAGEMENT
Operations of int’national Cos: in host countries
Managerial Fn Domestic Cos: Int’enterprise
Planning :scan envt: National market world market
Opport: &threats
Organising: Strucure&rel: suit dom.oprs global structure
Staffing:
managerial talent national labor w.w labor source
Manager-orientn: ethno-centric geo-centric
Leading: L/s & motivn: local influence diverse influenc
commun: lines rel: short long dist: n/w
Controlling: Reportg sys: “ “ Multiple requir:
 NATURE OF INTERNATIONAL BUSINESS

• International Business engage in transactions across national

boundaries, like transfer of goods,services,tech:,capital, mgrl:
• These may be the forms of internatl: business bet: dom&host:
1. Exports: Goods&Services (in India Exim Policy;controls there)
2. Licensing : Technolgy know-how & transfer for prodn: in host:
3. Joint Venture ,Strategic alliances(in India FDI norms, SEZ, EOU
4. Subsidiary Cos: Capital inv: &knowhow, running & mgmt:
5. Management contracts: for running businesses/ind :in host:
Influencing factors: * Unifying effects with capital,Eqpts,k/h,mgt:
Conflict potential: national/domestic interests Vs hosts interests.
Multi National Corpn(MNC) to Trans national to
Global Corporation
• MNC has their HQ in one country & operate in many countries
( Pepsi, IBM, City bank, Nokia)
• From ethno-centric ,poly-centric,regio-centric to geo-centric
• Advantages to MNCs:
* take advantage of bus: opps: in many countries, raise money
world-wide, establish prodn facilities at cost-adv places/cou:
access to more materials & natural resources, wide talents
• Challenges to MNCs:
Risks of increasing nationalism, now good managerial & tech
talents available at home; changing govt: policies, currency:
 COMPARATIVE BUSINESS & MGMT:
• EUROPE : European Common Market(1957)
to coordinate econ:policies & eliminate trade barriers; but
not eff:,strong Japanese & US cos: threatened to leave Europe
so European Community (1992) was formed.
with more powers in symbolic European Parliament, to
eliminate Trade barriers& customs formalities; a common
European Bank & common currency(euro), which in late 90’s
formed into European Union
• PEOPLE’s REPUBLIC OF CHINA
In early 80’s China launched a series of economic reforms
under Deng Ziao Peng,parly ending state monopoly in
Business & Industry. Special Zones were created for indl. vent
 MGMT. IN CHINA (contd.)
• There was an anti-management bias, acarry over attitude
from Mao Tse Tung days.From ‘80s China is on a reform path.
• From this China is now in a fast-forward mode to Industrialis-
ation and competitiveness; Have very advanced but low cost
production technologies in all spheres from electronics to
huge power generation eqpts: (current Asiad & last Olympics
are testimony to their tech:skills. Huge foriegn investment
have come to China and it has very $ reserves, with a strong
Currency.There over 300 cities open to foreigners for
busineess and >3000 enterprises authorised to do business
with foreign countries. In short China is “Factory to the World”
But Chinese management is more or less in the tight regimen
of old command economic system . So profl :mgmt: ?
 JAPAN’s & Korea’s Management
system
• Japan is leading in Electronics, High tech:, auto: industries.
• Their management process is different from rest of the world.
Life time employment(‘wa’ or harmony),seniority system and
consensus d/m are notable in this.
* Mgrl: D/m: Change and new ideas come from below;consen:
Theory Z: W. Ouchi’s theory is practised-i/p skills for group
interaction. Informal and democratic relations based on trust.
But hierarchical structure remains in tact.
* Korea: S.Korea has shown remarkable economic progress in
the recent years.It is an econ:power like Japan. Dominant
powerful conglomarates-Chaebol a collision bet: indus: & govt
‘Inhwa’(harmony). Hierarchcal+family dominated orgns-auto:
 Pacific-rim countries & EU
France, Russia,Germany etc.,
• Other than Korea there are Taiwan, Singapore, Malaysia, HK
which are equally powerful in industry & business like Japan.
• HK is a Chinese territory now with ltd: economic autonomy
the other countries are dominant mfg: bases of MNCs(US,EU)
• RUSSIA, FRANCE
Russia is recovering from its slumber after early 90’s with ltd:
democracy and economic reforms and very rich natural resor:
Russia is rapidly becoming an economic power.Mgmt: old styl
France: In the EU france has has its own economic problems &
labour unrest . Govt: planing (Le Plan)&relations with industry
Large no of govt servants.
Germany: Authority & co-determination there: by a 1951 law