Learning Objectives
LO1 Discuss what integration of the global economy means for individual companies and their managers
LO2 Describe how the world economy is becoming more integrated than ever before
LO3 Define the strategies organizations use to compete in the global marketplace
LO4 Compare the various entry modes organizations use to enter overseas markets
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International ManagementChapter SixMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Learning ObjectivesLO1 Discuss what integration of the global economy means for individual companies and their managers LO2 Describe how the world economy is becoming more integrated than ever beforeLO3 Define the strategies organizations use to compete in the global marketplaceLO4 Compare the various entry modes organizations use to enter overseas markets6-*Learning Objectives (cont.)LO5 Explain how companies can approach the task of staffing overseas operationsLO6 Summarize the skills and knowledge managers need to manage globally.LO7 Identify ways in which cultural differences across countries influence management6-*The Role of OutsourcingOutsourcingContracting with an outside provider to produce one or more of an organization’s goods or services.OffshoringMoving work to other countries.6-*Factors to Consider for OffshoringWhat is the competitive advantage of the products they offer?Is the business in its early stages?Can production savings be achieved locally?Can the entire supply chain be improved?6-*The Global Economy6-*Figure 6.4European UnificationEurope is integrating economically to form the biggest market in the worldCertain structural issues within Europe need to be corrected for the EU to function effectively.6-*The AmericasNorth American Free Trade Agreement (NAFTA)An economic pact that combined the economies of the United States, Canada, and Mexico into the world’s largest trading bloc6-*Organizational Models6-*Figure 6.6Entry ModeFranchisingthe company sells limited rights to use its brand name to franchisees in return for a lump-sum payment and a share of the franchisee’s profits.6-*Managing across BordersExpatriatesParent-company nationals who are sent to work at a foreign subsidiary6-*Understanding Cultural IssuesEthnocentrismThe tendency to judge others by the standards of one’s group or culture, which are seen as superiorCulture shockThe disorientation and stress associated with being in a foreign environment.6-*Understanding Cultural IssuesPower distancethe extent to which a society accepts the fact that power in organizations is distributed unequallyIndividualism/collectivismthe extent to which people act on their own or as a part of a group.6-*Understanding Cultural IssuesUncertainty avoidancethe extent to which people in a society feel threatened by uncertain and ambiguous situations.Masculinity/femininitythe extent to which a society values quantity of life over quality of life6-*Understanding Cultural IssuesInpatriateA foreign national brought in to work at the parent company.6-*