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Chp. 8 Global Management

Global business requires a balance between

global consistency and local adaptation

Global consistency means

using the same rules, guidelines, policies, and procedures in each location

Managers at company headquarters like global consistency

because it simplifies decisions

Local adaptation means

adapting standard procedures to differences in markets

Local managers prefer a policy of local adaptation because

it gives them more control

The phase model of globalization

says that as companies move from a domestic to a global orientation, they use these organizational forms in sequence: exporting, cooperative contracts (licensing and franchising), strategic alliances, and wholly owned affiliates. Yet not all companies follow the phase model. For example, global new ventures are global from their inception.

The first step in deciding where to take your company global

is finding an attractive business climate. Be sure to look for a growing market where consumers have strong purchasing power and foreign competitors are weak

When locating an office or manufacturing facility

consider both qualitative and quantitative factors

In assessing political risk

be sure to examine political uncertainty and policy uncertainty. If the location you choose has considerable political risk, you can avoid it, try to control the risk, or use a cooperation strategy.

National culture

is the set of shared values and beliefs that affects the perceptions, decisions, and behavior of the people from a particular country

The first step in dealing with culture

is to recognize meaningful differences, such as power distance, individualism, masculinity, uncertainty avoidance, and short-term/long-term orientation

Cultural differences

should be carefully interpreted because they are based on averages, not individuals

Adapting managerial practices to cultural differences is difficult

because policies and practices can be perceived differently in different cultures. Another difficulty is that cultural values may be changing in many parts of the world

when companies try to adapt management practices to cultural differences

they need to be sure that they are not using outdated assumptions about a country's culture

Many expatriates return prematurely from international assignments because

of poor performance

However, this is much less likely to happen if

employees receive language and cross-cultural training, such as documentary training, cultural simulations, or field experiences, before going on assignment

Adjustment of expatriates' spouses and families, which is the most important determinant of success in international assignments, can be improved through

adaptability screening and intercultural training

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