Transcript Organization at 21st Century

Determinants of Org. Performance
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Drivers:
Global
market
Convergence
Similar customer needs,
Global customers, Transferable marketing
Scale economies,
Sourcing efficiencies
Cost
Countries costs,
Advantages
High product development costs
Trade policies, Technical
GovernmentStandards,
host government, Global
Influence
policies
Strategies
Interdependence, Competitors global
High exports/imports,
Global
Competition
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1.
2.
3.
4.
5.
Advantages:
Foreign operations can absorb excess
production capacity, the benefits:
Allows firms to establish low-cost
production facilities.
May be less competition
Reduce tariffs
Enable firms to learn technology and
other cultures
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Disadvantages:
Firms confront with different
cultures, sometime they cannot
understand the rules of game.
2. Dealing with different monetary,
fiscal systems and regulations can
complicate international bus.
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1.
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1.
2.
3.
How to gain and maintain
exports to other international
markets.
How to defend domestic
markets against imported
goods.
Cultural challenge.
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Robert Allio mentioned guidelines for
customer loyalty and market share:
1. Get to know global markets first.
2. Counterattack at home for parent
firms (attack them at their homes).
3. Invest in new technology.
4. Consider alternative sources, e.g.,
establish in low labor cost.
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5. Install the right management at
host countries.
6. Sacrifice short-term profit for
long-term profit.
7. Join forces with competitors.
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1.
2.
3.
4.
5.
Focus on the most important 3 world
markets.
Develop new international products.
Glocalize: Think global & act local.
Train people to think internationally.
Open senior ranks to foreign
employees.
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The 20th century was the century of
great manufacturing corporation,
e.g., ford, GM, GE, CHRYSLER..
 The 21st century will be the time of
knowledge businesses. E.g.,
Google, Yahoo, Amazon..

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Demographic –An aging and Diverse
Society: Workers will have longer work
lives, and young workers have different
expectations.
2. Globalization of labor: It is expected
that 50+% of employees in
transnational companies will be from
developing countries: requires what to
know on management level?
(management across culture.).
1.
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3. The rise of new consumer: Highly educated,
high level of income and familiar of
information and communication technology:
He will be loyal to value rather than brands.
4. Torrid/extreme Technological Growth:
Technology will continue to be a major driver
of org. change and transformation.
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5. The Global Separate centers of
innovation: International networks.
(provides, ideas, capital, people, info.)
6. The new-knowledge-based economy,
will be driven by rapid innovation in
technology, process. Digital economy.
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The total volume of world trade today is
immense—around $18 trillion each year
(figures of 2014).
In early 2010, China officially passed Germany
as the world's top merchandise exporter.
In 2014 china passed USA.
Whereas in the past many nations followed
strict policies to protect domestic companies,
today more and more countries are
aggressively encouraging international trade.
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Countries
Exports
Imports
China
2.34
1.96
USA
1.6
2.4
Germany
1.5
1.2
0.880
0.820
Japan
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1.
1.
2.
NAFTA countries.
European Union (EU) and Eastern Europe.
Pacific Asia consists of Japan, China,
Thailand, Malaysia, Singapore, Indonesia,
South Korea, Taiwan, the Philippines, and
Australia (which Is technically not In Asia
but is included because of proximity).
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The Role of BRIC: Brazil, Russia, India, and China.
The status of these four nations has risen In
International trade for different reasons:
 Brazil is strong in commodities and agriculture,
 Russia Is a powerful energy supplier,
 China is a major hub of manufacturing activity.
 India has become a leading service provider at
various levels ranging from basic customer service
call centers to engineering solutions providers.
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Eastern and Central Europe will continue
to be attractive for international
investment.
The distinction between developed and
less-developed countries is unlikely to
change.
Environmental protection will be a major
force in economic growth.
Much of the growth of the global
economy will be fueled by the emerging
markets of the Asia Pacific region.
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Debt constraints and low commodity
prices impose slow growth prospects
for developing countries.
Developed nations have an incentive
to help debtor nations.
The United States is the largest debtor
nation in the world.
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Population increase will become a
national priority in the industrialized
world.
 Population stabilization continues to be
the challenge in the developing world.
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Global change results in an increase in
risk.
 International markets remain a source
of high profits.
 International executives will need to
balance the public and the private
benefits.
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Ownership of
Foreign Operations
High
Low
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Acquisiti
on
Greenfield
Venture
Joint
Venture
Franchising
Licensing
Exporting
Low Cost to Enter Foreign Operations
High

Receives >25% total sales revenues from
operations outside parent company’s home
country
 Managed as integrated worldwide
business system
 Controlled by single management
authority
 Top managers exercise global perspective
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Managers must be sensitive to cultural
restraints
 Personal challenges – culture shock
 Managing Cross-culturally
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Leading
Decision making
Motivating
Controlling
Managers must be culturally flexible and easily
adapt to new situations
Experiential Exercise: Rate your
Global Management Potential
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