ASSIGNMENT NO 1

Principles of Management
Section MGT-201(D)

Submitted to:
Ma’am Aisha Rehman

Submitted by:
Rabia bibi
201360268

Submitted on Wednesday
Submitted on 7 July 2021
Question No 1
Write three examples for each global perspective that you studied. E.g.,
Parochialistic Attitude 1- Example 01 2- Example 02 3- Example 03 and so on
for others.
Answer

Global Perspective

Speaking only one language is one sign that the nation is suffering from depression,
looking at the world only through the human eye and his vision.

 Parochialism Attitude
 Ethnocentric Attitude
 Polycentric Attitude
 Geocentric Attitude
 Parochialism Attitude

Speaking only one language is one sign that the nation is plagued by parochialism. Watching the
world is only in the eyes and man's imagination. People with parochial status don't see that others
have different ways of living and working.
They disregard the values ​and traditions of others and exploit the attitude that "ours is better than
theirs" in foreign cultures. This is a kind of diminished situation, determined by the one-way
managers can do it take, but not alone. There are three possible world attitudes. Let's take a look
at each close.
Parochialism is a significant obstacle for managers working around the world of business. It is
not uncommon for Germans, Italians to speak three or four languages. Probably a factor as to
why they're doing so poorly. As a general knowledge of languages, ​it is essential for effective
management.
An obstacle for managers in the global business world. Monolingualism should be abolished.
Managers who follow “ours is better than theirs” are complex for competing with other
managers.
Do you view the world only through your own eyes and visions? You do not know that others
have different ways of stay and work. Is it a big problem for managers working on the file the
world of global business. Falling into the trap of ignoring the values ​of others too culture and
firmly use the term “ours is better than theirs” in foreign cultures

Example of Parochialism

 Americans
 Japanese
 Germans
 Italians
 Types of Global Attitude

There are three types of global attitude are as follows:

 Ethnocentric Attitude
 Polycentric Attitude
 Ethnocentric Attitude:

First, an ethnocentric condition believes that better work is approaching and practices are those
of the home country (the country where the company's headquarters are located). Managers with
an ethnocentric attitude believe that people abroad have the necessary skills, technology,
knowledge, or experience to make their best business decisions, as do people in the home
country.
They do not trust foreign workers on essential findings or technologies. Ethnocentric
approach Company markets its home country product with little or no adaptation in host
countries under the assumption that consumers’ wants and ‘market conditions are the same in
every country, called ethnocentric approach.
The example of such change in “NISSAN,” which in the first year of its existence on
international arena was following an ethnocentric approach by selling its cars abroad precisely as
they were sold in their domestic market in Japan after several years of its global trading the
company realized that ethnocentric international marketing orientation is no longer relevant for
industries including automobile industry in which they were operating and changed its approach
to polycentric Vasudeva concludes that in today global business world ethnocentric approach
appears to be one of the biggest threats for international organizations.

Examples of Ethnocentric Attitude

 Philips filled significant vacancies by dutch nationals before the 1990s as it was a
Dutch company
 Procter & Gamble
 Philips
 Samsung
 NISSAN
 Polycentric Attitude:

Next, the state of polycentric perception that workers in the host country (foreign country where
the organization does business) know the best ways to work habits of running their business.
Managers with this attitude view all external activities as unique and difficult to understand.
Therefore, they may let their staff see it as the best way to do things.
The view that the managers in the host country know the best work approaches and practices
for running their business. Polycentric Approach -- Company recognizes that the ‘wants’ of
customers vary from nation to nation, so it develops and produces to suit the host country's wants
and marketing conditions called the polycentric approach. For example, Mc. Donald’s serves
customized products in nations like hamburgers in U. S., Mc. Alutikki in India, Kiwiburger in
New Zealand, Mc. Arabia burgers in Arab countries to satisfy customers; thereby achieve higher
market share and profitability.

These executives formulate the strategies based on the mission and vision of the subsidiary,
design products based on the host country's environment.

Examples of Polycentric Attitude

 Mc. Donald’s serves customized products in nations like hamburgers in U. S.

 Mc. Alutikki in India
 Kiwiburger in New Zealand
 Mc. Arabia burgers in Arab nations to satisfy customers
 Geocentric Attitude

A world-oriented view that focuses on using the best approaches and people from around the globe.
Geocentric Approach Company studies similarity in consumption pattern around nations, develop and
produce for universal marketing.
For example, ‘Walkman sets by Sony’; ‘Heavy-duty earthmoving types of equipment by Caterpillar,’
‘Harley-Davidson’ Motorcycles, ' produced in one country but consumed worldwide. Geocentric products
yield more significant benefits of ‘economy of scale’ through coordination of marketing mix elements.
But the geocentric approach calls for precise coordination in manufacturing and marketing to be
successful.
The final type of global attitude managers might have a geocentric attitude, a world-oriented view that
focuses on using the best approaches and people from around the globe. Managers with this attitude have
a global perspective and look for the best practices and people regardless of origin.
For instance, Carlos Ghosn, CEO of Nissan and Renault, was born in Brazil to Lebanese parents,
educated in France, and speaks four languages fluently. He could very well be the “model of the modern
major corporate leader in a globalized world bestraddled by multinational companies.”8 Ghosn’s
background and perspective have given him a much broader understanding of what it takes to manage in a
global environment, which is characteristic of the geocentric attitude.
A geocentric attitude requires eliminating parochial attitudes and developing an understanding of cross-
cultural differences. That’s the type of successful approach managers will need in today’s global
environment.

For Example of Geocentric Attitude

 Walkman sets by Sony
 Heavy-duty earthmoving types of equipment by Caterpillar
 Harley-Davidson’ Motorcycles
Question No 2
Make notes for "International Trade Alliances" where Pakistan is a member.
You can write about top three (3) alliances.
Answer

International Trade Alliances

Global competition once was considered country against country the United States ver- sus
Japan, France versus Germany, Mexico versus Canada, and so on. Now, global compe- tition is
shaped by regional trading agreements including the European Union (EU), North American
Free Trade Agreement (NAFTA), the Association of Southeast Asian Nations (ASEAN), and
others.
The most significant free “Trade zones are the European Union” (EU), the “North American”
Free “Trade Agreement (NAFTA)”, and the Association of “Southeast Asian Nations”
(ASEAN).

International Trade Alliances" where Pakistan is a Member

European Union (EU)

European Union (EU) a union of 28 European nations created as a unified economic and trade
Entity. The Euro (sign: €; code: EUR) is the official currency of 19 of the 28 member states of
the European Union.
This group of states is known as the Eurozone or euro area, and counts about 343 million citizens
as of 2019. The euro, which is divided into 100 cents, is the second-largest and second-most
traded currency in the foreign exchange market after the United States dollar.

AS SOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN):

Nations (ASEAN) is a trading alliance of 10 Southeast Asian nations. The Association of

Southeast Asian Nations (ASEAN) is a trading alliance of 10 Southeast Asian nations.
The ASEAN region has a population over 591 million with a combined GDP of US$1.5
trillion.25 In addition to these 10 nations, leaders from a group dubbed ASEAN+3, which
include China, Japan, and South Korea, have met to discuss trade issues. Also, leaders from
India, Australia, and New Zealand have participated in trade talks with ASEAN+3 as well. The
main issue with creating a trade bloc of all 16 nations has been the lack of any push toward
regional integration.
Despite the Asian culture’s emphasis on consensus building, “ASEAN’s biggest problem is
that individual members haven’t been willing to sacrifice for the common good.”
26 Although Southeast Asian leaders agree that closer regional
integration would help economic growth, the large differ-ences in wealth among ASEAN
members have made it “difficult to create common stan-dards because national standards remain
so far apart.”27 However, the challenges brought on by the recent worldwide recession, which
adversely affected many countries in this region, triggered greater interest in pushing for
integration.
In fact, on January 1, 2010, China and ASEAN launched an ambitious free trade agreement,
making it the world’s third largest trade bloc.28 In addition to these free trade alliances, it’s
hoped that by 2015, an established ASEAN economic community will allow goods, skilled
workers, and capital to move freely among member countries.

North American Free Trade Agreement:

“NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) AND OTHER LATIN

AMERICAN AGREEMENTS”.
When agreements in key issues covered by the North American Free
Trade Agreement (NAFTA) were reached by the Mexican, Canadian, and U.S. govern-
ments in 1992, a vast economic bloc was created.
The North American Free Trade Agreement (NAFTA) is an agreement among the Mexican,
Canadian, and U.S. governments in which barriers to trade have been eliminated.
“NAFTA” went into effect on January 1, 1994 and today is the world’s largest trading
block in terms of GDP. Canada is currently the US’s top trading partner with Mexico being
number three (China is number two).
As of 2010, it remains the largest trading bloc in terms of combined GDP of its members.
Eliminating barriers to free trade (tariffs, import licensing requirements, customs user fees) has
resulted in a strengthening of the economic power of all three countries.
Colombia, Mexico, and Venezuela signed an economic pact eliminating import duties and
tariffs in 1994.
The dream of a richer and more prosperous Mexico has not been realized.21 and the recent
worldwide recession has not helped the situation either. However, despite the criticisms and the
challenges, “The North American” trading bloc remains a powerful force in today’s global
economy.
 An agreement among the Mexican, Canadian, and U.S. Governments in which certain
barriers to trade have been eliminated.
“The Central American Free Trade Agreement (CAFTA)” is
agreement between the US and five Central American countries:
“Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua”.
Currently, only Costa Rica and El Salvador have signed onto this agreement. Thirty-four
countries in the “Western Hemisphere” continue to negotiate a “Free Trade Area of the
Americas (FTAA)” agreement. “FTAA” was to have been in effect no later than 2005, but has
not yet become operational; its future is still undetermined.
Question No 3
Make your notes for IMF, World Bank, and WTO. Dedicate one page to each international
organization.
Answer
 International Monetary Fund (IMF)
 World Bank
 The World Trade Organization (WTO)
 Organization for Economic Cooperation and Development (OECD)

International Monetary Fund (IMF)

An organization of 185 countries that promotes international monetary cooperation and

provides advice, loans, and technical assistance.
The international Mandatory Fund, or IMF, promotes international financial stability and
monetary corporation. It also facilitates International trade, promotes employment and
sustainable economic growth, and helps to reduce global poverty. The IMF is governed by
accountable to its 190 member countries.

Founding and mission IMF

The IMF was established in July 1944 at the United Nations Bretton Woods
Conference in New Hampshire, United States. The 44 nations in participation tried to assemble a
system for worldwide financial collaboration and try not to repeating the competitive money
devaluations that added to the Great Depression of the 1930s.
The IMF's essential mission is to maintain the global financial framework. The arrangement
of trade rates and worldwide installments that empowers nations and their residents to execute
with one another.

Essential points of IMF

 Advance global money related participation
 Work with the development and adjusted development of global exchange Make assets
accessible (with satisfactory shields) to individuals encountering balance-of-installments
troubles.
 Advance trade security
 Aid the foundation of a multilateral arrangement of installments
 World Bank

The World Bank Group is a group of five closely associated institutions, all owned by its
member countries, that provides vital financial and technical assistance to developing countries
around the world.
The World Bank was created in 1944. There founders are John Maynard and Harry Dexter
White.

Members and Staff:

With 189 member countries, staff from more than 170 countries, and offices in over 130
locations, the World Bank Group is a unique global partnership: five institutions working for
sustainable solutions that reduces poverty and build shared prosperity in developing countries

World Bank Group work:

The World Bank Group works in each significant space of advancement. It give a
wide exhibit of monetary items and specialized help, and it help nations share and apply
imaginative information and answers for the difficulties they face.
The World Bank Group works in excess of 170 nations, working with accomplices in
general society and private areas in their endeavors to end neediness and tackle probably the
most squeezing advancement challenges.

First Country Benefited By World Bank:

The first country that receive a loan from world bank was France. The Bank’s
president at the time, John McCloy, chose France over two other applicant countries, Poland
and Chile.

World Bank Support to Pakistan:

Pakistan has been a member of the World Bank since 1950. The World Bank Group’s
support to Pakistan is organized around four strategic pillars.
Pakistan is organized around four strategic pillars:
 Transforming the energy sector
 Supporting private sector development
 Reaching out to the underserved, neglected and poor
 Accelerating improvements in public service delivery
 World Bank Missions:
By lessening the portion of the worldwide population that lives in outrageous neediness
to 3 percent by 2030. To expanding the wages of the most unfortunate 40% of individuals in
each country.

The World Trade Organization (WTO)

A global organization of 153 countries that deals with the rules of trade among nations. Formed
in 1995 and evolving from GATT, the WTO is the only globa organization dealing with the
rules of trade among nations. a. Membership consists of 153 countries and 30 observer
governments as of 2008. The WTO appears to play an important role even though critics are
vocal and highly visible.
The World Trade Organization (WTO) is the only worldwide global association managing the
standards of exchange between countries. At its heart are the WTO arrangements, arranged and
endorsed by the majority of the world's exchanging countries and confirmed in their parliaments.
The objective is to guarantee that exchange flows as easily, typically and uninhibitedly as could
be expected.

Membership of WTO

The WTO has over 160 members representing 98 per cent of world trade. Over
20 countries are seeking to join the WTO.

Organization for Economic Cooperation and Development (OECD)

An international economic organization that helps its 30 member countries achieve sustainable
economic growth and employment.
The Organization for European Economic Cooperation, formed 194, is a Paris-based
international economic organization whose mission is to help its 30 member countries achieve
sustainable economic growth and employment and raise the standard of living in member
countries while maintaining financial stability in order to contribute to the development of the
world economy.
Question No 4
studied about MNCs and their types. Write three examples for each type,
preferable from Pakistani context.
Answer

Multinational Corporation (MNC)

A multinational corporation (MNC) has facilities and other assets in at least one country other
than its home country. A multinational company generally has offices and/or factories in
different countries and a centralized head office where they coordinate global management.
These companies, also known as international, stateless, or transnational corporate organizations
tend to have budgets that exceed those of many small countries.

Multinational Corporation Works

A multinational corporation, or multinational enterprise, is an international corporation that

derives at least a quarter of its revenues outside its home country. Many multinational enterprises
are based in developed nations. Multinational advocates say they create high-paying jobs and
technologically advanced goods in countries that otherwise would not have access to such
opportunities or goods.

However, critics of these enterprises believe these corporations have undue political influence
over governments, exploit developing nations, and create job losses in their own home countries.

Types of MNCs

 MULTINATIONAL DECENTRALIZED CORPORATION

 GLOBAL CENTRALIZED CORPORATION
 INTERNATIONAL COMPANY
 TRANSNATIONAL OR BORDERLESS ENTERPRISE

MULTINATIONAL DECENTRALIZED CORPORATION

A decentralized multinational corporation maintains a prominent presence in its home country.
With decentralization, the corporation’s organizational structure doesn’t have management or
administrative centers. Instead, each office or asset hosts a unique management structure.

Global Corporation

The organizational structure of a centralized global corporation has a chief administrative and
management office or head office. The corporation may outsource production to developing
economies to lower costs. For example, These businesses may also develop production
infrastructure in these countries to optimize affordable resources and acquire cost advantages.

A centralized international organization facilitates proximity to its international target

markets. The main advantage of affiliates and subsidiaries in target markets is distribution cost
reduction. It also makes potential consumers and their information more accessible.

Examples of Global Corporation

 Hilton Hotels, information technology leaders Cisco and Adobe,

 manufactures Monsanto and 3M and financial services company American
Express,
 Oh and an internet search company you may have heard of called Google.

TRANSNATIONAL OR BORDERLESS ENTERPRISE

An MNC in which artificial geographical barriers are eliminated. NAFTA The North
American Free Trade agreement is an agreement among the Mexican, Canadian, and U.S.
governments in which barriers to trade have been eliminated.
Examples of Transnational Or Borderless Enterprise:
 A transnational corporation (TNC), sometimes called a borderless organization, is a
type of international company in which artificial geographical barriers are
eliminated.
Question No 5
Write two examples for each of these terms. Strategic Alliance, Joint Venture
and Foreign Subsidiary
Answer

Strategic Alliance:

strategic alliance is an arrangement between two companies to undertake a mutually beneficial

project while each retains its independence. The agreement is less complex and less binding than
a joint venture, in which two businesses pool resources to create a separate business entity.

Examples of Strategitic Alliance:

 The deal between Starbucks and Barnes&Noble is a classic example of a strategic
alliance. Starbucks brews the coffee. Barnes&Noble stocks the books. Both companies do
what they do best while sharing the costs of space to the benefit of both companies.
 FBL, Honda Atlas enter into strategic alliance.

Joint Venture

A joint venture (JV) is a business arrangement in which two or more parties agree to pool
their resources for the purpose of accomplishing a specific task. This task can be a new project or
any other business activity.

Examples of Joint Venture

 Kapoor industries and Raaz trade industries are examples of joint venture.
 Hulu

Foreign Subsidiary

A foreign subsidiary is a company operating overseas that is part of a larger corporation

with headquarters in another country, often known as a parent company or a holding company.
Companies primarily open foreign subsidiaries to establish a corporate foothold in a specific
overseas economy, primarily to boost revenues, generate tax benefits and diversify company
assets to better manage risk.

Examples of Foreign Subsidiary

 Attock Cement and attock petroleum limited
 Al-Baraka Bank Pakistan and Al Haj Faw Motors also the examples of Foreign
Subsidiary
 Reason of Late Assignment Submission

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