1. Global Perspectives & Attitudes
A manager's effectiveness in global business is heavily influenced by their perspective. This section explores the different attitudes managers can have.
Starting Point: Parochialism
Viewing the world solely through one's own perspectives. Inability to recognize differences. "Ours is better than theirs."
Ethnocentric
"Home Country is Best"
Belief that the best work approaches and practices are those of the home country. Centralized control.
Polycentric
"Host Country Knows Best"
Belief that local employees in the host country know the best approaches. Decentralized control.
Geocentric
"World-Oriented View"
Focuses on using the best approaches and people from around the globe, regardless of origin.
2. How Organizations Go International
Progression from minimal investment to significant global investment. Click on any bar to see details.
Click a Strategy
Select a bar from the chart on the left to learn more about that specific strategy for going global.
3. Types of International Organizations
How MNCs are structured reflects their management's global attitude.
Multidomestic Corp.
Polycentric
Decentralizes management to the local country. Tailors strategies to unique local characteristics.
Global Company
Ethnocentric
Centralizes management in the home country. Focuses on global efficiency and integration.
Transnational
Geocentric
Eliminates artificial geographical barriers. Organized by industry groups (e.g., IBM).
4. The Global Trade Environment
Regional alliances and global mechanisms that define the rules of trade.
Regional Alliances
Definition
Select an alliance from the list.
Global Mechanisms
Definition
Select a mechanism from the list.
Political/Legal Env
Managers must know specific laws and assess political risks (instability, interference) in the host country.
Economic Env
Understand the system: Free Market (Private sector) vs. Planned Economy (Government).
Current Challenges
- Openness: Terrorism & Global terror networks.
- Interdependence: Economic failures in one country cause domino effects.
5. Culture & Global Mindset
Understanding National Culture is the hardest part of global management. This section covers Hofstede's Dimensions, the GLOBE framework, and the attributes of a Global Mindset.
Theory 1 Hofstede’s Cultural Dimensions
Individualism vs. Collectivism
Looking after own interests (USA) vs. expecting group protection (Mexico).
Power Distance
Accepting wide power differences (High: Singapore) vs. playing down inequality (Low: Sweden).
Uncertainty Avoidance
Threatened by ambiguity (High: Japan) vs. comfortable with risk (Low: USA).
Achievement vs. Nurturing
Valuing assertiveness/money (Achievement) vs. relationships/concern for others (Nurturing).
Long vs. Short-term
Valuing future/thrift (Long-term) vs. tradition/past (Short-term).
Theory 2 GLOBE Framework
An extension of Hofstede's work identifying 9 dimensions:
Global Mindset & Cultural Intelligence
1. Global Mindset
- Intellectual Capital: Knowledge of international business/global scale.
- Psychological Capital: Openness to new ideas and experiences.
- Social Capital: Ability to build trusting relationships with diverse people.
2. Cultural Intelligence
- Knowledge: Understanding how cultures vary.
- Mindfulness: Ability to pay attention to signals in cross-cultural situations.
- Behavioral Skills: Choosing appropriate behaviors based on knowledge/mindfulness.