University:
Massachusetts Institute of Technology
Course:
15.992 | S-Lab: Laboratory for Sustainable Business
Academic year:

2023
Views:

320

Pages:

31
Author:

Carley Peters

Chapter 8 Global Management What Would You Do? Wal-Mart’s International Strategy     dominant retailer in Canada and USA major global competitor is Carrefour which countries should Wal-Mart enter? what impact will free-trade agreements have? What Is Global business? After reading these next two sections, you should be able to: 1. describe the impact of global business on Canada 2. discuss the trade rules and agreements that govern global trade Impact of Global Business    Foreign direct investment Global competition Multinational corporations Regional Distribution of Inward Direct Foreign Investment Region United States European Union Asia-Pacific Latin America All Other Percent 72 19 5 2 2 Regional Distribution of Outward Direct Foreign Investment Region United States European Union Latin America Asia-Pacific All Other Percent 52 19 19 6 5 Multinational Corporation Multinational Corporation  corporation that owns businesses in two or more countries Country of Manufacture  country where product is made and assembled Country of Origin  Home country where headquarters is located Trade Rules and Agreements  Trade barriers  Trade agreements Trade Barriers   Tariff Nontariff      quotas voluntary export restraints government standards government subsidies Customs valuation/classification Trade Agreements General Agreement on Tariffs and Trade (GATT) Regional Trading Zones     Maastricht Treaty of Europe NAFTA FTAA ASEAN and APEC GATT    Worldwide trade agreement Designed to reduce and eliminate tariffs and subsidies Protect intellectual property Maastricht Treaty of Europe     Now 15 member countries Created the European Union Facilitate trade among members The currency is the “Euro” North America Free Trade Agreement (NAFTA)    Canada, United States, & Mexico Liberalizes trade among these nations Eliminates tariffs and barriers Free Trade Area of the Americas    Proposed agreement Unite 36 countries in North and South America Negotiations to finish by 2005 Association of South-East Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC) ASEAN  Indonesia, Thailand, Philippines, Malaysia, Singapore, & Brunei APEC  Canada, United States, Japan, South Korea, Australia, New Zealand, China, Taiwan, Hong Kong, & ASEAN members Learning Objectives: How to Go Global While there is no magical formula to answer these questions, after reading these next two sections, you should be able to: 3. explain why companies choose to standardize or adapt their business procedures 4. explain the different ways that companies can organize to do business globally Consistency or Adaptation? Consistency  A multinational corporation runs its offices, plants, and facilities in different countries under the same rules, policies, and procedures Adaptation  Multinational corporations modify standard operating procedures to adapt to local differences Forms for Global Business      Exporting Cooperative contracts Strategic alliances Wholly owned affiliates Global new ventures Learning Objectives: Where to Go Global After reading these next three sections, you should be able to: 5. explain how to find a favorable business climate 6. discuss the importance of identifying and adapting to cultural differences 7. explain how to successfully prepare workers for international assignments Finding the Best Business Climate    Positioning for growing markets Choosing an office/manufacturing location Minimizing political risk Positioning for Growing Markets  Purchasing power    comparison of the relative cost of a standard set of goods and services in different countries more means greater growth potential Degree of global competition  the number and quality of companies that already compete in foreign markets Choosing an Office/Manufacturing Location  Qualitative factors    Work force quality Company strategy Quantitative factors  Costs and barriers World’s Best Cities for Business United States 1. New York City 2. San Francisco 3. Chicago 4. Washington, D.C. 5. San Jose World’s Best Cities for Business Europe 1. London 2. Frankfurt 3. Helsinki 4. Amsterdam 5. Dublin Minimizing Political Risk  Political uncertainty   Policy uncertainty   Risk of major changes in political regimes Risk associated with changes in laws and government policies directed at businesses Strategies    avoidance control cooperation Becoming Aware of Cultural Differences  National culture      power distance individualism masculinity/femininity uncertainty avoidance short-term/long-term Cultural Dimensions Preparing for an International Assignment   Language and cross-cultural training Consideration of spouse, family, and dual-career issues What Really Works Cross-Cultural Training What Really Works What Really Happened?    Wal-Mart entered Brazil, Britain, and Germany Carrefour has been a strong competitor Increasing focus on local adaptation, but maintaining some global consistency