INTERNATIONAL

MANAGEMENT
GLOBAL
Business and People
Management
Professor H. Michael Boyd, Ph.D.

Professor H. Michael Boyd, Ph.D.

International Management Ninth Edition Luthans | Doh

International Management
• International management involves
– Applying management concepts and techniques in
a multinational environment
– Adapting management practices to different
economic, political, and cultural contexts
• Multinational corporation (MNC)
– Operations in more than one country
– International sales
– Nationality mix among managers and owners
International Management Ninth Edition Luthans | Doh

The World’s Top Nonfinancial TNCs

Ranked by Foreign Assets, 2012
International Management Ninth Edition Luthans | Doh

The World’s Top Nonfinancial TNCs from

Developing and Transitioning Economies
Ranked by Foreign Assets, 2011
International Management Ninth Edition Luthans | Doh

Globalization and Internationalization

• Globalization
– Process of social, political, economic, cultural, and
technological integration among countries around the
world.
• Hastened by
– Offshoring
• Process by which companies undertake some activities at
offshore locations instead of in their countries of origin.
– Outsourcing
• Subcontracting or contracting out of activities to external
locations instead of in their countries of origin
International Management Ninth Edition Luthans | Doh

Globalization: Pros and Cons

• Benefits of Globalization
– Wealth
– Jobs
– Technology
– Lower prices
– Availability of goods
• Criticisms of Globalization
– Off-shoring of business service jobs to lower-wage
countries
– Growing trade deficits
– Slow wage growth
– Environmental and social impacts
International Management Ninth Edition Luthans | Doh

Global and Regional Integration

• Global Agreements
– World Trade Organization (WTO)
– General Agreement on Tariffs and Trade (GATT)
• Regional Agreements
– North American Free Trade Agreement (NAFTA)
– U.S.-Central American Free Trade Agreement (CAFTA,
CAFTA-DR)
– European Union (EU)
– Association of Southeast Asian Nations (ASEAN)
– Trans-Pacific Partnership (TPP)
– Free Trade Agreement of the Americas (FTAA)
International Management Ninth Edition Luthans | Doh

International Economic Power

in the Global Economy
• Shifting landscape due to
– Economic integration and rapid growth of
emerging markets
– Economic potential of emerging markets
• BRIC countries (Brazil, Russia, India, and China) could be
among the four most dominant economies by 2050
• N-11 (the next wave of emerging markets): Bangladesh,
Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan,
Philippines, Turkey, South Korea, and Vietnam
• African countries may follow.
International Management Ninth Edition Luthans | Doh

The World’s Largest Economies

2009 and 2050 (Projected)
Measured by GDP at Market Exchange Rates
International Management Ninth Edition Luthans | Doh

The World’s Largest Economies

2009 and 2050 (Projected)
Measured by GDP at Purchasing Power Parity
International Management Ninth Edition Luthans | Doh

Changing Global Demographics: Developing

Countries on the Rise
Ranked by Size
International Management Ninth Edition Luthans | Doh

Trends in Trade and International

Investments
• International Trade
– In 2009 merchandise and commercial services exports
declined
– By 2014, FDI is estimated to reach $1.9 trillion,
surpassing the all-time high set in 2007
• Foreign direct investment (FDI)
– Investment in property, plant, or equipment in another
country
• Growing at healthy rate
• Outpacing domestic growth in most countries
• Declined in 2009 due to the global recession
• Recent increases in merchandise exports and foreign direct
investment
International Management Ninth Edition Luthans | Doh

Foreign Direct Investment Inflows, by Region

(in US$ billions)
International Management Ninth Edition Luthans | Doh

Foreign Direct Investment Outflows, by Region

(in US$ billions)
International Management Ninth Edition Luthans | Doh

Global Economic Systems

• Market economy
• Command economy
• Mixed economy
International Management Ninth Edition Luthans | Doh

Economic Performance by Major

World Region
• Established Economies
– North America
– European Union
– Japan
• Emerging Economies
– Central and Eastern Europe
– China
– Other Emerging Markets of Asia
– India
• Developing Economies on the Verge
– South America
– Middle East and Central Asia
– Africa
International Management Ninth Edition Luthans | Doh

Overview of the World Economic

Outlook: Projections
(percentage change, unless otherwise noted)

continues
International Management Ninth Edition Luthans | Doh

Overview of the World Economic

Outlook: Projections
(percentage change, unless otherwise noted)
International Management Ninth Edition Luthans | Doh

World’s Most Competitive

Nations, 2013
International Management Ninth Edition Luthans | Doh

Market Potential Indicators Ranking

for Emerging Markets, 2013