16 Global Management Slide

16
Global
Management
Manajemen Bisnis Ganjil 2020/2021

Learning Objectives
PART 1. Contrast ethnocentric, polycentric, and geocentric attitudes

toward global business.
PART 2. Discuss the importance of regional trading alliances and
global trade mechanisms.
PART 3. Describe the structures and techniques organizations use as
they go international.
PART 4. Explain the relevance of the political/legal, economic, and
cultural environments to global business.

Why Companies Decide to Go Global?
• Study found that manufacturing firms operating in multiple countries had

twice the sales growth and significantly higher profitability than strictly
domestic firm
• Might because of cheaper raw materials and workforce
4-4
PART 1
What’s Your Global Perspective?
Parochialism – viewing the world solely through your own perspectives,

leading to an inability to recognize differences between people.
Ethnocentric • The parochialistic belief that the best work approaches

Attitude and practices are those of the home country.
• The view that the managers in the host country know the
Polycentric
best work approaches and practices for running their
attitude business.
Geocentric • A world-oriented view that focuses on using the best

Attitude approaches and people from around the globe.
4-5
PART 2
Global Trade
Regional Trading Global Trade

Alliances Mechanisms
EU WTO
NAFTA IMF
ASEAN World Bank
Etc. Etc.
4-6
PART 2
Understanding the Global

Environment – Trading Alliances
• European Union (EU) – a union of 28 democratic
European nations created as a unified economic and
trade entity with the Euro as a single common currency.
• North American Free Trade Agreement (NAFTA) – an
agreement among the Mexican, Canadian, and U.S.
governments in which certain barriers to trade have been
eliminated.
Manajemen Bisnis Ganjil 2020/2021 4-7

PART 2
Trading Alliances (cont.)
• Association of Southeast Asian Nations

(ASEAN) – a trading alliance of 10 Southeast
Asian nations.
• “ASEAN’s biggest problem is that individual members
haven’t been willing to sacrifice for the common
good.”
• The large differences in wealth among ASEN members
have made it difficult to create common standards
because national standards remain so far apart
4-8
PART 2
ASEAN Map
4-9
PART 2
Global Trade Mechanisms
World Trade • A global organization of 153 countries that deals with the
Organization (WTO) rules of trade among nations.
• An organization of 185 countries that promotes international

International
monetary cooperation and provides advice, loans, and
Monetary Fund (IMF)
technical assistance.
• A group of five closely associated institutions that provides

World Bank Group
financial and technical assistance to developing countries.
Organization for
Economic • an international economic organization that helps its 30
Cooperation and member countries achieve sustainable economic growth
Development and employment.
(OECD)
4-10
PART 3
Types of International Organizations
Multinational Corporation (MNC) – a broad term that refers

to any and all types of international companies that
maintain operations in multiple countries.
Multidomestic Global Company – Transnational or

Corporation – • An MNC that centralizes Borderless
• An MNC that decentralizes management and other Organization –
management and other decisions in the home
country. • An MNC in which artificial
decisions to the local geographical barriers are
country. eliminated.
4-11
PART 3
How Organizations Go Global
4-12
PART 3
How Organizations Go Global
Global Sourcing –
• Purchasing materials or labor from around the world wherever it is cheapest.
Exporting & Importing

• Exporting: Making products domestically and selling them abroad.
• Importing: Acquiring products made abroad and selling them domestically
Licensing –
• An organization gives another organization the right to make or sell its products using its technology or
product specifications.
Franchising –
• An organization gives another organization the right to use its name and operating methods.
4-13
PART 3
How Organizations Go Global (cont)
Strategic Alliance –
• A partnership between an organization and one or more foreign company
partner(s) in which both share resources and knowledge in developing
new products or building production facilities.
• Joint Venture –
• A specific type of strategic alliance in which the partners agree to form a
separate, independent organization for some business purpose.
Foreign Subsidiary –
• Directly investing in a foreign country by setting up a separate and
independent production facility or office.
4-14
PART 4
Managing in Global Environment
The Political/Legal Environment The Economic Environment

• Free Market Economy – an economic
• Managers must stay informed of the
system in which resources are primarily
specific laws in countries where they do
owned and controlled by the private
business
sector.
• Some countries have risky political • Planned Economy – an economic
climates system in which economic decisions
are planned by a central government.
• Currency exchange rates, inflation
rates, and diverse tax policies
4-15
PART 4
Managing in Global Environment
The Cultural Environment
• National Culture – the values and

attitudes shared by individuals from a
specific country that shape their
behavior and beliefs about what is
important.
• Hofstede’s framework for assessing
cultures – one of the most widely
referenced approaches to helping
managers better understand differences
between national cultures.
Hofstede’s Five Dimensions of National Culture 4-16

PART 4
Global Management in Today’s World
• The Challenge of Openness

– Economic interdependence of trading countries (domino effects)
– Intense underlying and fundamental cultural differences—differences
that encompass traditions, history, religious beliefs, and deep-seated
values.
• The Challenge of Managing A Global Workforce
– Cultural Intelligence – cultural awareness and sensitivity skills.
– Global Mind-Set – attributes that allow a leader to be effective in
cross-cultural environments.
4-18
PART 4
A Global Mind-Set
4-19
Referensi
• Robbins, Stephen P & Coulter, Mary A. (2017). Management

(14th edition). London : Pearson Education.
Manajemen Bisnis Ganjil 2020/2021 20

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16

Manajemen Bisnis Ganjil 2020/2021

PART 1. Contrast ethnocentric, polycentric, and geocentric attitudes

Manajemen Bisnis Ganjil 2020/2021

• Study found that manufacturing firms operating in multiple countries had

What’s Your Global Perspective?

Parochialism – viewing the world solely through your own perspectives,

Ethnocentric • The parochialistic belief that the best work approaches

Geocentric • A world-oriented view that focuses on using the best

Regional Trading Global Trade

Understanding the Global

Manajemen Bisnis Ganjil 2020/2021 4-7

Trading Alliances (cont.)

• Association of Southeast Asian Nations

Global Trade Mechanisms

• An organization of 185 countries that promotes international

• A group of five closely associated institutions that provides

Types of International Organizations

Multinational Corporation (MNC) – a broad term that refers

Multidomestic Global Company – Transnational or

How Organizations Go Global

How Organizations Go Global

Exporting & Importing

How Organizations Go Global (cont)

Managing in Global Environment

The Political/Legal Environment The Economic Environment

Managing in Global Environment

The Cultural Environment

• National Culture – the values and

Hofstede’s Five Dimensions of National Culture 4-16

Global Management in Today’s World

• The Challenge of Openness

• Robbins, Stephen P & Coulter, Mary A. (2017). Management

Manajemen Bisnis Ganjil 2020/2021 20

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