ESSENTIALS OF MANAGEMENT: An International Perspective

Sixth Edition Weihrich and Koontz

Chapter 3. International Management

© 2004 H. Weihrich

Chapter 3. International Management

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After studying this chapter, you should understand:
1. The nature and purpose of international business and multinational corporations (MNC). 2. The differences in managing in selected countries. 3. The managerial practices in Japan and Theory Z. 4. The factors that influence the competitive advantages of nations, according to Michael Porter

© 2004 H. Weihrich

Chapter 3. International Management

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International Management and Multinational Corporations
• International management focuses on the operation of international firms in host countries • International businesses engage in transactions across national boundaries

© 2004 H. Weihrich

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Forms of International Business

© 2004 H. Weihrich

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Multinational Corporations
• Multinational corporations (MNCs) have their headquarters in one country but operate in many countries • Ethnocentric orientation: Style of the foreign operations is based on that of the parent company • Polycentric orientation: Foreign subsidiaries are given a great deal of managerial freedom • Regiocentric orientation: Favors the staffing of foreign operations on a regional basis • Geocentric orientation: Entire organization is viewed as an interdependent system operating in many countries

© 2004 H. Weihrich

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From MNC to Global Corporation
• MNCs have headquarters in one country but their operations in many countries • Just operating is not enough. The shift is toward the global or transnational corporation, which views the whole world as one market

© 2004 H. Weihrich

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INTERNATIONAL MANAGEMENT
• France: "Le Plan" and the "Cadre" • Germany: Authority and Codetermination • Korean Management
– Chaebol is characterized by a tight collusion between government and industrial conglomerates – Korean concept of inhwa translates into harmony

© 2004 H. Weihrich

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Japanese Management and Theory Z

• Lifetime Employment • Decision Making in Japan • Theory Z
– In Theory Z, selected Japanese managerial practices are adapted to the environment of the United States

© 2004 H. Weihrich

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Porter's Competitive Advantage of Nations
• Factor conditions such as a nation's resources, its labor costs, and the skills and education of its people. Demand conditions of a nation, such as the market size, the way products may be advertised, and the degree of consumer sophistication. The suppliers. A company prospers when supporting companies are located in the same area. The firm's strategy and structure as well as rivalry among the competitors.

• •

© 2004 H. Weihrich

Chapter 3. International Management

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