Global Management Meeting the Competitive Challenge

Describe some of the challenges to U.S. managers for doing business  overseas and for accommodating foreign interests in the United States.

     One major challenge is the "triad power" developing in the post&-1992 European Community, Japan and the Pacific Rim, and North American. Giant new cooperative trading blocks are developing in each triad area. The United States, Canada, and Mexico are drawing closer together through trade alliances, the EC and EFTA nations are solidifying into a huge trading region,and Japan is the center point for increased economic activity that includes the PRC, Taiwan, South Korea, Hong Kong, and Singapore among others. Another major challenge is the emergence of Eastern Europe as global trading nations anxious to develop trade with the west. Yet another is the redefinition of economic activity in the former Soviet Union. In each instance, managers of all nations  will soon find themselves dealing with substantially different cultures, languages laws, currencies, peoples with unfamiliar social values, and uncertain political environments. At the same time, many foreign companies will be trying to establish markets in the United States and other western nations. This means substantial changes in domestic competition and the flow of international investments.

Describe different approaches to managing multinational corporations.

     Multinational corporations (MNCs) are managed in two different ways. In the first approach, called geocentric, authority is centralized in the home&-country headquarters executive staffs who control nearly all strategic and operational decisions. In the second approaches called polycentric, authority is widely delegated to managers in foreign positions. Although home&-country executives remain responsible for the corporate portfolio, operational decisions&-and often strategies for overseas subsidiaries&-are left to host&-country managers.

Describe how companies engage in export activities and expand overseas.

     The easiest way to export is through contracts with agents who act as brokers, selling and distributing products made in other countries. As a company comes more involved with trade, it may establish foreign distribution centers, staffing them with either host&-country personnel or company employees transferred overseas. A third method is to license products or technology to existing overseas companies, who then manufacture, sell, and distribute the products, returning a royalty to the parent company. Companies can expand through joint ventures, which are commercial enterprises created through investments by two or more affiliated companies. A rapidly growing sector of international commerce is transnational services, which pursue. research and professional services, or manage projects requiring home&-country expertise.

Explain the implications of international business for host countries and explore the implications of trade competition between major powers.

     Host countries benefit from international business through expanded employment opportunities, the introduction of new technology from the home country, and spending by multinationals to support personnel, facilities, and production. However, host&-country societies&-particularly those that are underdeveloped can be disrupted, even overwhelmed, by the values and high&-tech cultures MNCs bring with them. when major countries have comparable economic power and parity in technology or industrial development, there is a danger of economic conflict as they compete for the same markets. Europe 1992, the Pacific Rim, and the United States form a triad of power, each capable of comparable trade, technology, and economic sanctions.

Describe the major considerations facing managers who must adapt to the international arena.

     Culture is a system of values, beliefs, and customs held by different peoples, and often sharp cultural differences prevail between regions and even within countries. Culture influences how people behave and work. Political and legal systems also vary widely, ranging from closed autocratic systems to free enterprise open&-trade systems. Economic systems tend to mirror prevailing political and legal mandates, so managers must be keenly aware of host&-country priorities and complications. In many regions of the world, people have not developed the skills or technologies to cope with modern industries, and managers often find that they must adapt their expectations accordingly. Religious and ethic backgrounds also determine how work is accomplished, and in many societies, women's roles and opportunities seem to be unduly suppressed by Western standards. Managers in foreign posts often find themselves unable to cope with the ethical dilemmas that emanate from these circumstances.