Management

Stephen P. Robbins Mary Coulter

Chapter
Managing in a
4 Global
Environment
4–1
What’s Your Global Perspective?
• Parochialism
➢Is viewing the world exclusively through one’s own
eyes and perspectives. Do not recognize that others
have different ways of living and working. Ignoring
others’ values and customs and strictly applying an
attitude of “ours is better than theirs” to foreign
cultures.
• Monolingualism
 is one sign that a nation suffers from parochialism—
viewing the world solely through one’s own eyes and
perspectives. Do not recognize that others have
different ways of living and working. Ignore others’
values and customs and rigidly apply an attitude of
“ours is better than theirs” to foreign cultures. 4–2
Adopting a Global Perspective
• Ethnocentric Attitude
➢The parochalistic belief that the best work approaches and
practices are those of the home country.
• Polycentric Attitude
➢The view that the managers in the host country know the
best work approaches and practices for running their
business.
• Geocentric Attitude
➢A world-oriented view that focuses on using the best
approaches and people from around the globe.

4–3
Regional Trading Agreements
• The European Union (EU)
➢A unified economic and trade entity
❖ Belgium,Denmark, France, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, the United
Kingdom, Germany, Austria, Finland, and Sweden

• North American Free Trade Agreement (NAFTA)

➢Eliminated barriers to free trade (tariffs, import
licensing requirements, and customs user fees)
❖ United States, Canada, and Mexico

4–4
Regional Trading Agreements
• U.S.-Central America Free Trade Agreement (CAFTA)
• Free Trade Area of the Americas
• Southern Cone Common Market (Mercosur)
• Association of Southeast Asian Nations (ASEAN)
➢Trading alliance of 10 Southeast Asian nations
• African Union
• South Asian Association for Regional Cooperation
(SARRC)

4–5
The World Trade Organization
(WTO)
• Evolved from the General Agreement on Tariffs
and Trade (GATT) in 1995.
• Functions as the only global organization dealing
with the rules of trade among nations.
• Has 149 member nations and 32 observer
governments.
• Monitors and promotes world trade.

4–6
How Organization Go International
 Global sourcing: When organizations do go international, they
often use different approaches. Managers who want to get into
a global market with minimal investment may start with global
sourcing (also called global outsourcing), which is purchasing
materials or labor from around the world wherever it is
cheapest. The goal takes advantage of lower costs in order to
be more competitive.
Different Types of International Organizations
• Multinational Corporation (MNC)
➢Maintains operations in multiple countries.
• Multidomestic Corporation
➢Is an MNC that decentralizes management and other decisions
to the local country.
• Global Company
➢Is an MNC that centralizes its management and other decisions
in the home country.
• Transnational Corporation (Borderless Organization)
➢Is an MNC that has eliminated structural divisions that impose
artificial geographic barriers and is organized along business
lines that reflect a geocentric attitude.
4–9
Going Global: Exporting and Importing
 Exporting: making products domestically and selling
them abroad
 Importing: acquiring products made abroad and selling
them domestically

Both usually entail minimal investment and risk, which is

why many small businesses often use these approaches to
doing business globally.
Going Global: Licensing and Franchising
 Licensing: an organization gives another organization the right to
make or sell its products using its technology or product
specifications
 Franchising: an organization gives another organization the right
to use its name and operating methods

 Both are similar approaches involving one organization giving

another organization the right to use its brand name, technology,
or product specifications. The only difference is that licensing is
primarily used by manufacturing organizations and franchising is
primarily used by service organizations.
Going Global: Strategic Alliances and Joint
Ventures
 Strategic Alliance: partnership between an organization and
foreign company partner(s) in which both share resources and
knowledge in developing new products or building production
facilities
 Joint Venture: A specific type of strategic alliance in which the
partners agree to form a separate, independent organization for
some business purpose

 Strategic alliance focused on share resources and knowledge in developing new

products or building production facilities: Honda Motor and General Electric teamed
up to produce a new jet engine. Joint venture is a specific type of strategic alliance in
which the partners form a separate, independent organization for some business
purpose: Land Rover and Chery created a joint combine the experience of Britain’s
luxury vehicle manufacturer with Chery’s deep understanding of the Chinese markets
and customer preferences.
Going Global: Foreign Subsidiary

 Foreign Subsidiary: directly investing in a foreign country by

setting up a separate and independent production facility or
office

 Managers may choose to directly invest in a foreign country by

setting up a foreign subsidiary as a separate and independent
facility or office. This subsidiary can be managed as a
multidomestic organization (local control) or as a global
organization (centralized control). This arrangement involves
the greatest commitment of resources and poses the greatest
amount of risk.
Managing in A Global
Environment
• The Legal Environment
➢Stability or instability of legal and political systems
❖ Legal procedures are established and followed
❖ Fair and honest elections held on a regular basis
➢Differences in the laws of various nations
❖ Effects on business activities
❖ Effects on delivery of products and services

4–14
The Economic Environment
• Economic Systems
➢Free market economy
❖ An economy in which resources are primarily owned and
controlled by the private sector.
➢Planned economy
❖ An economy in which all economic decisions are planned by a
central government.
• Monetary and Financial Factors
➢Currency exchange rates
➢Inflation rates
➢Diverse tax policies

4–15
The Cultural Environment
• National Culture
➢Is the values and attitudes shared by individuals from a
specific country that shape their behavior and their beliefs
about what is important.
➢May have more influence on an organization than the
organization culture.

4–16
Global Management in Today’s
World
• Challenges
➢Openness associated with globalization
➢Significant cultural differences (e.g., Americanization)
➢Adjusting leadership styles and management
approaches
• Risks
➢Loss of investments in unstable countries
➢Increased terrorism
➢Economic interdependence

4–17
Management
Stephen P. Robbins Mary Coulter

Chapter
Managing
5 Diversity

4–18
Workplace Diversity
 Workforce diversity: the ways in which people in an organization
are different from and similar to one another

Robbins and Coutler defining it as the ways in which people in an

organization are different from and similar to one another. Notice that
our definition not only focuses on the differences, but the similarities,
of employees. This reinforces our belief that managers and
organizations should view employees as having qualities in common
as well as differences that separate them.
Types of Diversity
 Surface-level diversity: Easily perceived differences that may
trigger certain stereotypes, but that do not necessarily reflect the
ways people think or feel
 Deep-level diversity: Differences in values, personality, and work
preferences

 The demographic characteristics that we tend to think of when we

think of diversity—age, race, gender, ethnicity, and so on—
surface-level diversity.
 As people get to know one another,deep-level diversity—
differences in values, personality, and work preferences—
becomes more important. These deep-level differences can affect
the way people view organizational work rewards, communicate,
react to leaders, negotiate, and generally behave at work.
Why is Managing Workplace Diversity So
Important?
1. People management
2. Organizational performance
3. Strategic

 Performance benefits that organizations get from workforce

diversity include cost savings and improvements in organizational
functioning. Benefit strategically from a diverse workforce as the
key to extracting the best talent, performance, market share, and
suppliers from a diverse country and world. Diverse workforce,
organizations can better anticipate and respond to changing
consumer needs.
What About Global Workforce Changes?
1. Total world population
2. Aging population

 Decline in birthrates as nations advance economically. However, in

developing countries in Africa, Asia, Latin America, the Caribbean,
and Oceania, birthrates remain high.
 When we say the world’s population is aging, some of the realities
of this trend are hard to even fathom. For instance, people age 65
and older will soon outnumber children under age 5 for the first
time in history. Also, the world’s population age 80 and over is
projected to increase 233 percent by The implications of these
trends for societies and businesses are profound
Workplace Diversity
Workforce Diversity: Race and
Ethnicity
 Race: the biological heritage (including skin color and
associated traits) that people use to identify themselves
 Ethnicity: social traits (such as cultural background or
allegiance) that are shared by a human population
Most people identify themselves as part of a racial group. Ethnicity is
related to race, but it refers to social traits—such as one’s cultural
background or allegiance—that are shared by a human population --
hiring decisions, performance evaluations, pay, and workplace
discrimination.
Workforce Diversity:
Disability/Abilities and Religion
 Disability/abilities: managers still have fears about
employing disabled workers. A survey by the U.S.
Department of Labor looked at these unfounded fears.
 Religion: Anti-Islam in US
Challenges in Managing Diversity:
Personal Bias
1. Bias: a tendency or preference toward a particular perspective or
ideology
2. Prejudice: a preconceived belief, opinion, or judgment toward a
person or a group of people
3. Stereotyping: judging a person based on a perception of a group to
which that person belongs
4. Discrimination: when someone acts out their prejudicial attitudes
toward people who are the targets of their prejudice

Our prejudice can be based on all the types of diversity we discussed:

race, gender, ethnicity, age, disability, religion, sexual orientation,
or even other personal characteristics.
Glass Ceiling
Glass ceiling: the invisible barrier that separates women and
minorities from top management positions

Research on the glass ceiling has looked at identifying the

organizational practices and interpersonal biases that have
blocked women’s advancement. Findings from those studies
have ranged from lack of mentoring to sex stereotyping,
views that associate masculine traits with leader
effectiveness, and bosses’ perceptions of family–work
conflict.
Mentoring
 Mentoring: a process whereby an experienced organizational
member (a mentor) provides advice and guidance to a less
experienced member (a protégé)

Mentors usually provide two unique forms of mentoring functions:

career development and social support.
A good mentoring program would be aimed at all employees with
high potential to move up the organization’s career ladder.
QUIZ