Reflective logs

International business vs Domestic Business:

· Boundaries

· Currencies

· Cultures

· Legal systems

· Availability of resources

· Skills & knowledge

Phases of development:

· Domestic Phase (product focus)

· multidomestic Phase (expanding focus)

· Multinational Phase (saving cost focus)

· Global phase (competitive strategy focus)

Globalization: Refers to the shift toward a more integrated and interdependent world economy. Globalization has several different facets, including

· Globalization of markets (global markets)

· Globalization of production (sourcing of goods and services)

· Globalization of consumers (merging of separate markets to one marketplace)

Global management: Getting things done through other people (in the global economy) who can often be expected to differ economically, socially and culturally.

Drivers of globalization:

1. Decline in barriers to the free flow of goods, services, and capital, since the end of World War II

2. Technological change in communication, information processing, an transportation

Globalization: Good or bad?

Arguments For Globalization:

1. Increases economic growth rate, prosperity and opportunity for all participants

2. Technical innovation

3. Increases civil liberties and reduces inequalities

4. Leads to lower prices, higher employment in developing countries and better standards of living

5. Facilitates the transfer of technology, capital, intellectual property and skilled labour

6. Rising standard of living in developing countries

7. Limits on international behaviour

Arguments Against Globalization:

1. Increases the wealth of giant corporations and leaves developing countries poorer

2. Harms the environment

3. Neuters government’s ability to govern and results in conspiracies between corporations and governments

4. Increases unemployment in developed countries

5. Reduces standards (manufacturing, health, quality, environmental)

6. Periodic financial crises are caused, disrupting the economies of many countries

7. Intellectual property is not respected

8. Homogenizes cultures

9. Fuels income inequality between nations ; Increases the gap between haves and have-nots

10. Globalization institutions run by developed countries

Global challenges: Managing security

Provocative perspectives:

1. Cultural Homogenization:

· Resulting from increased communication, technical convergence

· The transformation of regions, cultures, nations and societies by the culture of the economically dominant west. (mcdonaldisation)

2. Polarization

· Cultural, regional or national distinctiveness that flies in the face of homogeneity

· A people's defence of their traditions and way of life

· Technology can facilitate polarization

3. Hybridization & dialectics

· Hybridization – (a ‘state’ of being) : globalization has not created a world represented by the mutually exclusive precepts of homogeneity or polarization, but rather some mixture of the two

· Dialectics – (the process that achieves a hybridized equilibrium): the ongoing interaction of thesis (“cloistered” culture) with the anti-thesis (new cultural traditions introduced) that results in the reconciliation of the two extremes that in turn, results in a new “thesis” that then interacts with an anti-thesis, etc.

Multiple management perspectives:

Parochial managers: (IGNORANCE)

· Management practices and the world is viewed from the point of view of their OWN cultural perspective only

Ethnocentric managers: (SENSE OF SUPERIORITY)

· Acknowledge cultural differences, but believe that their culture, value system, and ways of doing things is best. Diversity is resisted.

Geocentric Managers: (DIVERSITY OFFERS VALUE)

· Best fit or contingency approach will be adopted by

Global markets keys to success:

· Communicate effectively

· Know the customer

· Emphasize global awareness

· Market effectively

· Monitor business environment

International managers:

· Parent country nationals (PCNs) (residents of international businesses home country)

· Host country nationals (HCNs) (Reside in host country/ country that is being operated in)

· Third-country nationals (TCNs) (Reside in a country that is not parent of host country)

ERPG: Ethnocentric, Polycentric, Regiocentric, and Geocentric