1. PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie Cook
Copyright © 2005 Prentice Hall, Inc.Copyright © 2005 Prentice Hall, Inc.
All rights reserved.All rights reserved.
8th
edition
Steven P. Robbins
Mary Coulter

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rights reserved. 4–2
L E A R N I N G O U T L I N E
Follow this Learning Outline as you read and study this chapter.
What Your Global Perspective?
• Define parochialism and explain why it can lead to
problems.
• Contrast ethnocentric, polycentric, and geocentric
attitudes towards global business.
• Describe the advantage and drawbacks of the three
attitudes towards global business
Understanding the Global Environment
• Describe the benefits from free trade.
• Tell why the European Union began
• Describe the current status of the European Union
• Discuss the North American Free Trade Agreement.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
Understanding the Global Environment (cont’d)
• Describe other regional trade alliance in Latin America.
• Tell about the Association of Southeast Asian Nations.
• Describe other regional trade alliances.
• Explain the interdependence that globalization involves.
• Describe the formation of the World Trade Organization.
• Discuss the role of the WTO.
Doing Business Globally
• Contrast MNCs, TNCs, and borderless organizations.
• Relate MNCs, TNCs, and borderless organizations to the
three attitudes towards global business.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
Doing Business Globally
• Describe the three stages organizations go through as
they go global.
• Define exporting, importing, licensing, and franchising.
• Describe global strategic alliances, joint ventures, and
foreign subsidiaries.
Managing in a Global Environment
• Explain how the global legal-political environment affects
managers.
• Describe the effect of the global economic environment
on managers.
• Discuss Hofstede’s five dimensions for assessing
cultures.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
Managing in a Global Environment (cont’d)
• Explain the nine GLOBE dimensions for assessing
cultures.
• Discuss the challenges of doing business globally in
today’s world.

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Managing in a Global Environment
• Challenges
Coping with the sudden appearance of new
competitors
Acknowledging cultural, political, and economic
differences
Dealing with increased uncertainty, fear, and anxiety
Adapting to changes in the global environment
Avoiding parochialism

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Adopting a Global Perspective
• Ethnocentric Attitude
The parochialistic 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.

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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
Economic and monetary union (Euro)
• North American Free Trade Agreement (NAFTA)
Eliminated barriers to free trade (tariffs, import
licensing requirements, and customs user fees)
 United States, Canada, and Mexico

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Regional Trading Agreements (cont’d)
• 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

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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 145 member nations.
• Monitors and promotes world trade.

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Different Types of Global Organizations
• Multinational Corporation (MNC)
A firm which maintains operations in multiple
countries but manages the operations from a base in
the home country.
• Transnational Corporation (TNC)
A firm that maintains operations in several countries
but decentralizes management to the local country.
• Borderless Organization
A firm that has eliminated structural divisions that
impose artificial geographic barriers and is organized
along business lines.

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How Organizations Go Global
• Three Stages of Globalization
Stage I
 Exporting products for sale overseas and importing
products from overseas to sell in the home country.
Stage II
 Committing to directly sell home-country products in
overseas markets or contracting for products to be
manufactured overseas and sold in the home country.
Stage III
 Licensing manufacturing and franchising services to
foreign firms to use the brand name, technology, or
product specifications developed by the firm.

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Other Forms of Globalization
• Strategic Alliances
Partnerships between and organization and a foreign
company in which both share resources and
knowledge in developing new products or building
new 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.

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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

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The Economic Environment
• Economic Systems
Market economy
 An economy in which resources are primarily owned
and controlled by the private sector.
Command 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

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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.

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Hofstede’s Framework for Assessing
Cultures
• Individualism versus Collectivism
• Power Distance
• Uncertainty Avoidance
• Quantity versus Quality of Life
• Long-term versus Short-term Orientation
Individualism: the degree to which people in a country
prefer to act as individuals.
Collectivism: a social framework in which

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The GLOBE (Global Leadership and
Organizational Behavior Effectiveness)
Framework for Assessing Cultures
• Assertiveness
• Future orientation
• Gender differentiation
• Uncertainty avoidance
• Power distance
• Individualism/collectivism
• In-group collectivism
• Performance orientation
• Humane orientation