Professional Documents
Culture Documents
1 STUDY GUIDE
Introducti 1 • Fayol in the early 20th century professes
on management to be a profession. A manager thus
according to Fayol is one who should plan, organise,
command, co-ordinate and control. This is the
normative approach to management.
• Since then many writers have put forth on what a
manager does and not what a manager should do ( as
postulated by Fayol). Notably Mintzberg’s ( 2009)
work on the role of a manager divides the work of a
manger into 10 roles under three categories:
Interpersonal, informational and decisional
roles. Mintzberg’s work is more descriptive rather than
normative. Mintzberg summarises the work of a
manager as brevity, fragmentation and verbal
communication best characterises the work of a
manager
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• 3 - Types of companies
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A multinational company/Multidomestic
Company has a home base in one country (referred to
as the home-country), but has then established
operations in a number of other countries, (referred to
as host-country). So it trades from a number of bases –
Retailers
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CRITICS SUPPORTER
MNCs will have incentive Critics would argue that
to move the production as the country
to pollution haven progresses the host
countries where lax government is likely
regulations on to impose stricter
pollution and labour regulations on
laws will reduce their pollutions and protect
cost of operation and add the environment
more to their profits the e.g. of China.
the government has
waken up to the fact that
their cities are polluted
and thus have then
measures to curb
pollution and protect
their workers from
unscrupulous and
exploitionist MNCs.
CRTICS SUPPORTER
Governments of Supporter would say that
countries will lose their this is not true as
power to manage, in policies are
other words introduced to promote
governments will lose the collective interest
their sovereignty to of member countries and
supranational will aid their
organizations such as development rather than
WTO, IMF, European retard it.
commission in the case
of the EU.
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Wealth distribution.
Critics Supporter
Globalisation enrich the Supporter would say that
pockets of countries the inequality in
which have strong income is the creation
global brands and that of domestic
the income equality governments who are
between the haves and NOT able to curb
have nots will widen population growth,
usually to the detriment corruption and poor
of developing countries economic
who are usually devoid of management. For
global brands example some
totalitarian governments
may pursue their own
self interest rather than
the interest of the
people. And also
economic growth in the
developing countries is
due to loan debt rather
than productivity growth.
These are not the faults
of globalization
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multitemporal, multiform
and multicausal processes’.
In his article
Matters, Ghemawat
complements this view by
suggesting that companies
often overestimate the ease
with which their
business can move abroad. The
cultural, administrative, and
geographical distance
between nations presents a
fundamental challenge to
firms facing the
globalization of the world
economy today.
uses the example of
Murdoch’s
Star Television
network, which assumed that
the Asian audiences would be
enthusiastic about
English language programmes
and films.
Furthermore, Murdoch’s
underestimating of the
administrative differences
between Asia and the USA led
him into political
calamity as he claimed live on
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television that
watch what one wanted
was a threat to Asian
‘totalitarian regimes
everywhere’. This led to the
blocking of Star TV from
Chinese television, which is a
huge market for Murdoch.
Coca-Cola
also had problems in the
Peruvian market
when they attempted to replace
Inca Kola,
the national beverage, with
their own US branded Cola. The
Peruvian people held
mass demonstrations against
Coco-Cola
until their Inca Cola was
returned to the shelves. Being
sensitive to national
differences is not just a
consideration;
international business it
may well be an imperative
to survival
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SHORT Q & A
QUESTION 1: Describe the shifts in the world economy over the last
30 years. What are the implications of these shifts for international
businesses based in Britain, North America, and Hong Kong?
ANSWER 2: Persons who believe in this view, and the firms that
they work for, may find that they do not achieve their full potential
(at best) and may ultimately fail because of their myopia. As
barriers to trade decrease and state of the art technological
developments take place throughout the world, new opportunities
and threats exist on a worldwide basis. The rise of the mini-
multinationals suggests there are global opportunities for even small
firms. But staying attuned to international markets isn't only
important from the perspective of seeking profitable opportunities
for small firms; it can also be critical for long-term competitive
survival. Firms from other countries may be developing products
that, if sold internationally, may wipe out small domestic
competitors. Scanning international markets for the best suppliers
is also important for small firms, for if a domestic competitor is able
to tap into a superior supplier from a foreign country, it may be able
to seriously erode a small firm's competitive position before the
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QUESTION 5: How might the Internet and the associated World Wide
Web affect international business activity and the globalization of
the world economy?
Sample Questions
1 What is globalisation?
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Example of Toyota
Advantages to a firm Disadvantages
• Bigger market – global market • Formal and Informal rules –
adjustments ( Distant still
matters – Ghemewat )
• outsourcing – cut costs - China • Contagion effect – financial
crisis – interconnected -
• Technology enables • global company affected by
( Friedman ) – sharing of uncertainty – e.g. Tsunami in
knowledge / lower transportation Japan – production held up for
costs months
Tutorial Questions
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