Global Org

8/3/2019 Global Org

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6-1

Global OrganizationsGlobal Organizations

Organizations that operate and

compete not only domestically, but also

globally

Uncertain and

unpredictable

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Organizational EnvironmentOrganizational Environment

Set of forces and conditions outside the

organization¶s boundaries that have the

potential to affect the way theorganization operates

Opportunities and threats

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Task EnvironmentTask Environment

Set of forces and conditions that

originate with suppliers, distributors,

customers, and competitors

Affect an organization¶s ability to obtain

inputs and dispose of its outputs

Most immediate and direct effect on

managers

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Forces in the Organizational

Environment

Forces in the Organizational

Environment

Figure 6.1

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Global OutsourcingGlobal Outsourcing

Purchase of inputs from foreign suppliers

or the production of inputs abroad to

lower productioncosts and improve

product quality and

design

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Barriers to Entry and CompetitionBarriers to Entry and Competition

Figure 6.2

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General EnvironmentGeneral Environment

Economic

Technological Socio-cultur al

Demogr aphic Political and Legal

For ces

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6-8

Declining Barriers to Trade and

Investment

Declining Barriers to Trade and

InvestmentTariff

A tax that government imposes on imported

or, occasionally, exported goods. Intended to protect domestic industry and jobs

from foreign competition

Other countries usually retaliate their own tariffs,

actions that eventually reduce the overall

amount of trade and impedes economic growth.

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GATT and the Rise of Free TradeGATT and the Rise of Free Trade

Free-Trade Doctrine The idea that if each country specializes in

the production of the goods and servicesthat it can produce most efficiently, this willmake the best use of global resources If India is more efficient in making textiles, and

the United States is more efficient in makingcomputer software, then each country shouldfocus on their respective strengths and trade for the other¶s goods.

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Declining Barriers of Distance and

Culture

Declining Barriers of Distance and

CultureDistance

Markets were essentially closed because of theslowness of communications over long distances.

Culture Language barriers and cultural practices made

managing overseas businesses difficult

Changes in Distance and Communication Improvement in transportation technology and fast,

secure communications have greatly reduced thebarriers of physical and cultural distances.

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The Role of National CultureThe Role of National Culture

Values

Ideas about what a society believes to be

good, desirable and beautiful. Provides conceptual support for democracy,

truth, appropriate roles for men, and women.

Usually not static but

very slow to change.

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The Role of National CultureThe Role of National Culture

Norms Unwritten rules and codes of conduct that

prescribe how people should act in particular situations. Folkways²routine social conventions of daily life (e.g.,

dress codes and social manners)

Mores²behavioral norms that are considered central tofunctioning of society and much more significant thanfolkways (e.g., theft and adultery), and they are oftenenacted into law.

Norms vary from country to country.

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Hofstede¶s Model of National CultureHofstede¶s Model of National Culture

Figure 6.4

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National Culture and Global

Management

National Culture and Global

ManagementManagement practices that are effective

in one culture often will not work as well

in another culture

Managers must be sensitive to the

value systems and norms

of an individual¶s countryand behave accordingly

Global Org

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