Global & Comparative Mgmt

7/31/2019 Global & Comparative Mgmt

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GLOBAL & COMPARATIVE MGMT:

Globalisation of mgmt: is fact of life. Nowworld is flat globalisation is shrinkening

and flattening the world (ThomasFriedman), giving out opportunities,throwing out challenges & competition.


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GLOBALISATION of Business

This consists of three interrelated factors: proximity, location

& attitude. Taken together these facets emphasise the

unprecedented line up &complexity of relationships that

confront the manager.

Proximity: Managers now operate in closer proximity ie to a

greater no: of customers,competitors,suppliers,govt:regulator

proximity is a function of shrinking globe.

Location: Integration oforgns operations across severalinter- national boundaries is part of globalisation, which

requires transnational management rather than localised.

Attitude: New open attitudenothing is overseas anymore.


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GLOBALISATION

* Unimpeded flow of Capital, Labour & Technology

across national borders world has become a vastinterconnected market place in which Cos: search

for advantageous locations to buy, produce & sell.

It is like-- DAVOS Man & Manila Woman,

(as Prof. Edington, of Harvard Uvarsity put it)

* In Europe, this is giving anxieties:

40% in Germany & France say it is bad for them

& in UK about 62% feel so.(CNN Poll in 2005)

Globalisation makes poor countries become rich& it

makes rich countries poorer!(eg: France&Germany) Now Brazil, Russia, India&China (BRIC) fast growing

economies of the world ( a Goldman-Sachs Study)

By 2050 China will overtake Germany (or even US? )


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FEATURES OF GLOBAL ECONOMY & BUSINESS

Seamless Global market

Information & Knowledge are the major determinants of

competitive advantage

Business at the speed of thought Web, Internet, E-mail,& E-Commerce

Virtual Enterprises eg. Amazon.com, e-bay etc.

Customer is Co-producer of Products&Services eg. AsianPaints, Bank ATMs Consumer & Business Marketing

Boundaries withering & unifying (eg: European Union)

Distribution channels transforming Shorter channels --

less number of intermediaries


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INTERNATIONAL MANAGEMENT

Operations ofintnational Cos: in host countries

Managerial Fn Domestic Cos: IntenterprisePlanning :scan envt: National market world market

Opport: &threats

Organising: Strucure&rel: suit dom.oprs global structureStaffing:

managerial talent national labor w.w labor source

Manager-orientn: ethno-centric geo-centric

Leading: L/s & motivn: local influence diverse influenccommun: lines rel: short long dist: n/w

Controlling: Reportg sys: Multiple requir:


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NATURE OF INTERNATIONAL BUSINESS

International Business engage in transactions across national

boundaries, like transfer of goods,services,tech:,capital, mgrl:

These may be the forms of internatl: business bet: dom&host:

1. Exports: Goods&Services (in India Exim Policy;controls there)2. Licensing : Technolgy know-how & transfer for prodn: in host:

3. Joint Venture ,Strategic alliances(in India FDI norms, SEZ, EOU

4. Subsidiary Cos: Capital inv: &knowhow, running & mgmt:

5. Management contracts: for running businesses/ind :in host:Influencing factors: * Unifying effects with capital,Eqpts,k/h,mgt:

Conflict potential: national/domestic interests Vs hosts interests.


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Multi National Corpn(MNC) to Trans national to

Global Corporation

MNC has their HQ in one country & operate in many countries

( Pepsi, IBM, City bank, Nokia)

From ethno-centric ,poly-centric,regio-centric to geo-centric

Advantages to MNCs:* take advantage of bus: opps: in many countries, raise money

world-wide, establish prodn facilities at cost-adv places/cou:

access to more materials & natural resources, wide talents

Challenges to MNCs:Risks of increasing nationalism, now good managerial & tech

talents available at home; changing govt: policies, currency:


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COMPARATIVE BUSINESS & MGMT:

EUROPE : European Common Market(1957)

to coordinate econ:policies & eliminate trade barriers; butnot eff:,strong Japanese & US cos: threatened to leave Europe

so European Community (1992) was formed.

with more powers in symbolic European Parliament, toeliminate Trade barriers& customs formalities; a commonEuropean Bank & common currency(euro), which in late 90s

formed into European Union

PEOPLEs REPUBLIC OF CHINAIn early 80s China launched a series of economic reforms

under Deng Ziao Peng,parly ending state monopoly inBusiness & Industry. Special Zones were created for indl. vent


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MGMT. IN CHINA (contd.)

There was an anti-management bias, acarry over attitudefrom Mao Tse Tung days.From 80s China is on a reform path.

From this China is now in a fast-forward mode to Industrialis-

ation and competitiveness; Have very advanced but low cost

production technologies in all spheres from electronics tohuge power generation eqpts: (current Asiad & last Olympicsare testimony to their tech:skills. Huge foriegn investmenthave come to China and it has very $ reserves, with a strongCurrency.There over 300 cities open to foreigners for

busineess and >3000 enterprises authorised to do businesswith foreign countries. In short China is Factory to the WorldBut Chinese management is more or less in the tight regimenof old command economic system . So profl :mgmt: ?


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JAPANs & Koreas Management

system Japan is leading in Electronics, High tech:, auto: industries.

Their management process is different from rest of the world.

Life time employment(wa or harmony),seniority system andconsensus d/m are notable in this.

* Mgrl: D/m: Change and new ideas come from below;consen:

Theory Z: W. Ouchis theory is practised-i/p skills for groupinteraction. Informal and democratic relations based on trust.But hierarchical structure remains in tact.

* Korea: S.Korea has shown remarkable economic progress inthe recent years.It is an econ:power like Japan. Dominantpowerful conglomarates-Chaebol a collision bet: indus: & govt

Inhwa(harmony). Hierarchcal+family dominated orgns-auto:


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Pacific-rim countries & EU

France, Russia,Germany etc., Other than Korea there are Taiwan, Singapore, Malaysia, HK

which are equally powerful in industry & business like Japan.

HK is a Chinese territory now with ltd: economic autonomythe other countries are dominant mfg: bases of MNCs(US,EU)

RUSSIA, FRANCERussia is recovering from its slumber after early 90s with ltd:democracy and economic reforms and very rich natural resor:Russia is rapidly becoming an economic power.Mgmt: old stylFrance: In the EU france has has its own economic problems &labour unrest . Govt: planing (Le Plan)&relations with industry

Large no of govt servants.

Germany: Authority & co-determination there: by a 1951 law

Global & Comparative Mgmt

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