International Management

Topics: Culture, World Trade Organization, Geert Hofstede Pages: 17 (2912 words) Published: February 27, 2014
CHAPTER 1 – GLOBALIZATION AND INTERNATIONAL LINKAGES

A.INTRODUCTION

1.International Management
Defined as: the process of applying management concepts and techniques in a multinational environment and adapting management to different economic, political and cultural environments

2.Multinational Corporation (MNC)
i.Has operations in more than one country
ii.Has int’l sales
iii.Has managers and owners of various nationalities

B.GLOBALIZATION AND INTERNATIONALIZATION

1.Globalization
i.Defined as: The process of social, political, economic, cultural and technological integration among countries.

ii.Made easier due to advances in
a.Technology (especially communications)
b.Transportation methods
c.Travel

iii.Is facing increasing criticism from various groups
e.g. protests at summits for WTO, FTAA, IMF, etc.

iv.Benefits of Globalization include
a.Lower prices
b.Access to wider variety of goods and services
c.Access to better technology
d.Access to better jobs

v.Drawbacks to Globalization include
a.Loss of jobs to overseas markets (due to offshoring – companies moving their operations overseas)
b.Increased trade deficits
c.Increased impact on the environment
d.Potential adverse changes in culture

2.Global and Regional Integration

i.World Trade Organization
a.Finalized in 1994 as a result of the URUGUAY ROUND
NOTE: Uruguay Round was a series of trade negotiations of the General Agreements on Tariffs and Trade (GATT)

b.Developed to oversee and regulate world trade

c.Rounds of talks were plagued by protests
ii.Examples of Regional Trading Blocs
Many trading blocs exist in global economies. Many others are being formed. Some of the more important ones include,

a.North American Free Trade Agreement (NAFTA)
A free trade area (U.S., Canada, Mexico)

b.Central American Dominican Republic Free Trade Agreement (CAFTA-DR) A free trade area between the US and several Central American countries

c.Free Trade Area of the Americas (FTAA)
A free trade area being developed by 34 democratic countries of the western hemisphere – talks have been stalled for a few years.

d.The European Union (EU)
A common market involving a total of 27 European countries including several Eastern European nations

e.Association of Southeast Asian Nations (ASEAN)
A free trade area involving several Southeast Asian countries

f.MERCOSUR
A South American common market (Argentina, Brazil, Paraguay, Uruguay)

OMIT from “SHIFTING BALANCE OF ECONOMIC POWER IN THE GLOBAL ECONOMY” p. 12 to the end of the chapter.

CHAPTER 2 – THE POLITICAL, LEGAL, AND TECHNOLOGICAL ENVIRONMENT

A.THE POLITICAL ENVIRONMENT

1.POLITICAL IDEOLOGIES

i.INDIVIDUALISM

a.Belief that people should be free to pursue political and economic activities without constraint

b.More aligned with capitalism and free-market systems

ii.COLLECTIVISM

a.Needs and goals of society more important than individual desires.

b.Originated in Germany and Italy (National Socialism/Fascism)

iii.SOCIALISM

a.Government ownership of property and institutions

b.Profit is not the objective

c.Forms include

COMMUNISM – extreme form of socialism achieved through violent means

SOCIAL DEMOCRACY – socialism achieved through non-violent means. Significant use of nationalization, taxation.

2.POLITICAL SYSTEMS

i.DEMOCRACY

a.Citizens’ control of government through use of elections.

b.Two-party system is necessary

ii.TOTALITARIANISM

a.One group or party controls political, legal and economic systems.

b.Opposition not tolerated

c.Often sustained using violence

Continued

B.THE LEGAL AND REGULATORY ENVIRONMENT

1.FOUR BASIC FOUNDATIONS OF...
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