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they need to be sure that they are not using outdated assumptions about a country's culture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