What Your Global Perspective?
• Define parochialism.
• Contrast ethnocentric, polycentric, and geocentric attitudes towards global business.
• Explain why it’s important for managers to be sensitive to global differences
Understanding the Global Environment
• Describe the current status of the European Union.
• Discuss the North American Free Trade Agreement and other regional trade alliances in Latin America.
• Tell about the Association of Southeast Asian Nations.
Understanding the Global Environment
• Explain the interdependence that globalization involves.
• Discuss the role of the WTO.
Doing Business Globally
• Contrast multinational, multidomestic, global, transnational, and born global organizations.
• Describe the different ways organizations can go international.
• Define global sourcing, exporting, importing, licensing, and franchising.
• Describe global strategic alliances, joint ventures, and foreign subsidiaries.
Managing in a Global Environment (cont’d)
• Explain how the global legal-political and economic environments affect managers.
• Discuss Hofstede’s five dimensions for assessing cultures.
• Explain the nine GLOBE dimensions for assessing cultures.
• Discuss the challenges of doing business globally in today’s world.
In this lecture we shall explore the nature of the global marketplace, including the challenges and opportunities it offers. Hong Kong is a major trading port, it is a meeting point for China and the world both in business and cultural exchanges.
The Global Marketplace can be Opportunities and Challenges
Ø Coping with the sudden appearance of new competitors
Ø Acknowledging cultural, political, and economic differences
Ø Dealing with increased uncertainty, fear, and anxiety
Ø Adapting to changes in the global environment
Ø Avoiding parochialism
What is your global Perspective?
Ø Is viewing the world solely through its own eyes and perspectives.
Ø Is not recognizing that others have different ways of living and working.
Ø Is a significant obstacle for managers working in a global business world.
Ø Is falling into the trap of ignoring others’ values and customs and rigidly applying an attitude of “ours is better than theirs” to foreign cultures.
Three global attitudes (R&C p. 121 ~ 123)
• Ethnocentric Attitude
Ø The parochialistic belief that the best work approaches and practices are those of the home country.
• Polycentric Attitude
Ø The view that the managers in the host country know the best work approaches and practices for running their business.
• Geocentric Attitude
Ø A world-oriented view that focuses on using the best approaches and people from around the globe.
The Changing Global Environment (R&C p. 124 ~ 126)
Now you can talk:
What is WTO? How would the WTO (World Trade Organization) affect the business environment in China? How would these changes affect Hong Kong?
Note the definitions are different from those of R&C 8th ed.
How organizations go global (R&C p.128 ~ 130) See Exhibit 4-5
Managing in a Global Environment (R&C p. 131 ~ 134)
· Legal-political environment: each country may be different in the speed and scope of changes in its political environment. The degree and extent of legal constraints are also very important.
· Economic environment: Market economy and Command economy
§ Monetary and Financial Factors: fluctuating exchange rates, inflation rates and diverse tax policies
· Cultural environment: how national culture varies?
How to analyze the difference in national culture
(R&C p.134 ~ 134)
· Individualism/collectivism: degree of freedom a society allows individuals (Individualism: dimension that measure the extent to which a culture expects people to take care of themselves and/or individuals believe that they are masters of their own destiny)
· Power Distance: the extent to which a society accepts the unequal distribution of power in institutions and organisations
· Uncertainty avoidance: degree to which people tolerate risk and unconventional behaviour
· Achievement versus nuturing: assertiveness, the acquisition of money and material goods, and competition Vs relationships and concern for others
· Long-term and short-term orientation: long-term orientation cultures emphasize future, value thrift and persistence; short-term orientation cultures emphasize the past and present, respect for tradition and fulfilling social obligations.
(a) Describe Hofstede’s four dimensions of national culture. (10 marks)
(b) Explain how people in a society with high uncertainty avoidance (like Japan) would tend to behave. (4 marks)
(c) Propose three characteristic of a typical company operating in a society that is high in uncertainty avoidance. (6 marks)
(a) Individualism/collectivism, Power Distance, Uncertainty avoidance, Quantity/quality of life
(b) People in such society have a high level of anxiety which manifests itself in nervousness, high stress, and aggressiveness.
(c) Because people in such cultures feel threatened by uncertainty and ambiguity, mechanisms are created to provide security and to reduce risk. Organizations in these cultures are likely to
· have formal rules,
· little tolerance for unusual ideas and behaviours,
members will strive to believe in absolute truths.
(a) Version 2000: Have you heard of the story on how the market value of China Mobile (Hong Kong) 0941 dropped by $200 Billion in one week? Try reviewing all the related report in various news media around 2000/12/11.
(b) Version 2003: For a similar story with BYD company limited (1211), read news report around 2003/01/24.
3. For an interesting discussion on how globalization affect universities, read “全球化下的大學”, 2006-08-31, 滇池晨報, 07, 教育, 葉文麒
4. For an interview on how the Chairman of a Chinese company looks at international competition, see “萬向集團董事局主席魯冠球：企業絕不能怨天尤人” http://big5.chinataiwan.org/web/webportal/W5266253/Ulij/A31570.html
Last modified: 2007/Mar/06