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McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
International International ManagementManagement
Chapter SixChapter Six
The Global EnvironmentThe Global Environment
The global economy is dominated by countries in three regions: North America, Western Europe, and Asia.
Other developing countries and regions represent important areas for economic growth
6-2
The Global EconomyThe Global Economy
6-3Figure 6.1
European UnificationEuropean Unification
Europe is integrating economically to form the biggest market in the world
Certain structural issues within Europe need to be corrected for the EU to function effectively.
6-4
U.S. Trading PartnersU.S. Trading PartnersBased on Total Imports and ExportsBased on Total Imports and Exports
Figure 6.26-5
Consequences of a Global EconomyConsequences of a Global Economy
1. Expansion of international trade2. Foreign direct investment (FDI) is playing an
ever-increasing role in the global economy3. Imports are penetrating deeper into the
world’s largest economies4. Companies are finding their home markets
under attack from foreign competitors
6-6
Factors to Consider for OffshoringFactors to Consider for Offshoring
What 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?
6-7
Organizational ModelsOrganizational Models
6-8Figure 6.5
Comparison of Entry ModesComparison of Entry Modes
6-9Table 6.2
Managing across BordersManaging across Borders
Expatriates Parent-company
nationals who are sent to work at a foreign subsidiary
6-10
Identifying International ExecutivesIdentifying International Executives
6-11Table 6.4
How to Prevent Failed Global AssignmentsHow to Prevent Failed Global Assignments
6-12
Table 6.5
Understanding Cultural IssuesUnderstanding Cultural Issues
Ethnocentrism The tendency to judge
others by the standards of one’s group or culture, which are seen as superior
Culture shock The disorientation and
stress associated with being in a foreign environment.
6-13
Understanding Cultural IssuesUnderstanding Cultural Issues
Power distance the extent to which a
society accepts the fact that power in organizations is distributed unequally
Individualism/collectivism the extent to which people
act on their own or as a part of a group.
6-14
Understanding Cultural IssuesUnderstanding Cultural Issues
Uncertainty avoidance the extent to which
people in a society feel threatened by uncertain and ambiguous situations.
Masculinity/femininity the extent to which a
society values quantity of life over quality of life
6-15