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International

Management

Chapter Six

McGraw-Hill/Irwin Copyri ght 2013 by The McGraw-H il l Companies, Inc. All ri ghts reserved.

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Learning Objectives

LO1Discuss what integration of the global

economy means for individual companies and

their managers

LO2Describe how the world economy is becomingmore integrated than ever before

LO3Define the strategies organizations use to

compete in the global marketplace

LO4Compare the various entry modes

organizations use to enter overseas markets

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Learning Objectives (cont.)

LO5Explain how companies can approach

the task of staffing overseas operations

LO6Summarize the skills and knowledge

managers need to manage globally.

LO7Identify ways in which cultural

differences across countries influence

management

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The Role of Outsourcing

Outsourcing

Contracting with an

outside provider to

produce one or moreof an organizations

goods or services.

Offshoring

Moving work to other

countries.

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Factors to Consider for Offshoring

What is the competitive advantage of the

products they offer?

Is the business in its early stages?

Can production savingsbe achieved

locally?

Can the entire supply chain be improved?

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The Global Economy

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Figure 6.4

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European Unification

Europe is

integrating

economicallyto

form the biggestmarket in the world

Certain structural

issues within

Europe need to be

corrected for theEUto function

effectively.

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The Americas

North American Free Trade Agreement

(NAFTA)

An economic pact that combined the

economies of the United States, Canada,

and Mexico into the worlds largest trading

bloc

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Organizational Models

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Figure 6.6

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Entry Mode

Franchising

the company sells limited rights to use its

brand name to franchisees in return for a

lump-sum payment and a share of thefranchisees profits.

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Managing across Borders

Expatriates

Parent-company

nationals who are

sent to work at aforeign subsidiary

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Understanding Cultural Issues

Ethnocentrism

The tendency to judge

others by the

standards of onesgroup or culture,

which are seen as

superior

Culture shock

The disorientation and

stress associated with

being in a foreignenvironment.

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Understanding Cultural Issues

Uncertainty

avoidance

the extent to which

people in a society feelthreatened by

uncertain and

ambiguous situations.

Masculinity/

femininity

the extent to which a

society values quantityof life over quality of

life

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Understanding Cultural Issues

Inpatriate

A foreign national

brought in to work at

the parent company.

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