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International Business (International dimensions of mmt - global economy…
International Business
International dimensions of mmt - global economy with resource supplies, product markets and business competition are worldwide. Influenced by globalisation the process of growing interdependence among these components in the global economy.
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International management - business interests in more than one country
global manager - skilled internation dev, transnational outlook, competent with people from diff cultures, aware regional dev etc
APEC FORUM - strengthen regional economic integration and regional links and encourage pursuit of common trade goals P 94
- 2.7 billion consumers
60% of global economy
70% oz trade is via APEC
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AFRICA - SADC Southern Africa Development Community 14 countries linked in trade and economic development efforts
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European Union - framework for united Europe 27 members and 5 candidate countries 500 million people (compare with 300 m in USA and 120 m in Japan)
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Forms of INTERNATIONAL BUSINESS Starting or market entry strategies - global sourcing, exporting and importing, licensing and franchising.
Direct investment strategies are joint ventures (co-ownership) and wholly owned subsidiaries (local operation owned and controlled by a foreign firm eg investing in start ups or existing firms.
Mutlinationals MNC - extensive business operations in more than one foreign country. eg Telstra Newscorp NAB As global economy grows more MNCs are acting like transnational corporations ie operate world wide without being identified with one home. eg BHP Billiton Price Waterhouse Virtual borderless companies Microsoft Facebook Twitter Google Ebay Born global are designed to be international from the start eg Skype and Logitech. MNCs hold 30% of world assets and control 70% of world trade with 90% based in the northern hemisphere Table 4.4 P 104 What can go right and wrong with MNCs
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International business conducts business across national boundaries as they search for profits, customers, suppliers, capital and labour. Env is complex, dynamic and highly competitive esp wrt economic, legal-political and educational systems and business infrastructure P99
World Trade Organisation WTO organised around an international accord setting up a mechanism for monitoring international trade and settling disputes between countries. Protectionism - political calls for tariffs and favourable treatment to help protect domestic business. Legal env - companies expected to comply with laws of the land with problem areas of incorporation practices and business ownership, negotiating and implementing contracts with foreign parties, protecting patents, trademarks and copyright and foreign exchange restrictions. In Oz antitrust rules and special laws OHS, discrimination etc P100
ETHICAL issues for international business P105
1 Corruption (illegal practices to further business) APEC principles with zero tolerance Same with Council of Europe and EU 2 Sweatshops (workers paid low wages, work long hours in poor conditions)
3 child labour 4 Sustainable development - Development that meets the needs of the present without compromising the ability of future generations to meet their needs 5 respect natural env, pollution, safe industrial practices, depletion of resources, hazardous wastes etc
ISO 14000 - certification standards developed by the International Organisation for Standardisation
Central planning economies (Russia Poland Soviet Union) Free market economics operate under laws of capitalism and laws of market supply and demand.Transferring from Central to free market is privatisation can lead to rising prices, unemployment, business competition. Selling state owned enterprises is controversial. Requires foreign investment to be successful.
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Trompenaars framework P110
RELATIONSHIPS WITH PEOPLE
1 Universalism vs particularism ie degree of rules and consistency in relationship vs flexibility and bending rules to fit situation
2 Individualism vs collectivism ie degree f individual freedom and responsibility vs group interests and consensus
3 Neutral vs Effective - ie how culture emphasises objectivity and reserved detachment in relationships or allows more emotion and expressed feeling
4 Specific vs diffused ie emphasis on focused and in-depth relationships or broader more superficial ones
5 Achievement vs prescription -ie earned or performance based stauts or focu on social standing and non performance factors
ATTITUDES TOWARD TIME
Sequential vies - ie time is a continuous and passing series of events. Causal view with time recycling eg moment passed will return
Synchronic - more linear with an interrelated past, present and future. More urgent with pressure to resolve problems so as not to lose time.
ATTITUDES TOWARD ENVIRONMENT
Inner directed - separate from nature and env to be controlled or used for personal advantage
Outer directed - part of nature so blend with nature rather than try to control it
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CULTURE & GLOBAL DIVERSITY P106
CULTURE is the shared set of beliefs, values and patterns of behaviour common to a group of people Culture shock is discomfort in an unfamiliar culture Ethnocentrism is tendency to view own culture as superior to others
Popular dimensions of culture
1 language - low context cultures most communication is via written or spoken word - high context culture has non verbal and situational cues in addition to text and spoken word
2 interpersonal space - silent language of culture
3.time orientation - how time is dealt with eg early or late alloted individual or shared time appts
4 religion - may impact on dress food and interpersonal behaviour. Source of ethical and moral teaching
5 role of contracts - cultures vary in use of contracts Some are final others are starting points p 108
Geert Hofstede International Differences in Work Related Cultures
1 power distance (accept/reject unequal distribution of power)
2 uncertainty avoidance (tolerance of risk and situational uncertainties)
3 individualism - collectisvism (self interest of good of group)
4 masculinity - femininity (assertiveness and material success vs feelings and relationships)
5 time orientation (short term vs future)