SLO #2. p.82. Assigned to: Lisa Davey. (open in prayer).
International Management

For Mid-Term on May 1: Ch: 1- 4. Study Guide given out next class. 4/24 Thurs.

Chapter 3: Managing in a Global Environment:

A. State of the World Test. (p.110).

B. What is the emerging Borderless World? This is the world you will be living and working and doing your ministry as an officer. The borderless world has emerged as a result of changes in at least 3 areas:

1. Business: Unified global field as trade barriers fall. Rise of the International Trade Alliances:
GATT: General Agreement on Tariffs and Trade. Set of rules for GATT members designed to encourage international trade and limit the level of tariffs imposed on imports.
WTO: World Trade Organization. Goal is to guide the nations of the world toward free trade and open markets. Membership: 148 countries as of 2005.
EU: European Union. 15-nation alliance formed to improve economic and social conditions among its members. The Euro, a single European currency, replaced 11 European currencies in 2002. United Kingdom does not accept the euro. The euro unified a huge marketplace economy second only to the U.S.
NAFTA: North America Free Trade Agreement. Alliance between U.S., Canada and Mexiso to spur growth and investment, increase exports and jobs in all three nations. Does it work?

A 2nd area in which change has occurred to develop the borderless world is . . .
2. Communication: Faster and cheaper, not limited by countries.
12 years ago Iqbal Quadir tried to get investors for a cell phone network in poverty stricken, 3rd world Bangladesh. One NY cell phone executive said to him, “Forget it, we’re not the Salvation Army (actually he said Red Cross). Harvard lecturer Quadir said, “This is precisely the kind of thinking that keeps poor countries poor. Companies do not see a margin of profit in underdeveloped areas.” 12 years later his cell phone network posted profits of 27 million dollars. His next venture: setting up a cell phone company in Afghanistan, a country with no visible banks or telecommunications.

The 3rd area in which change has occurred to develop the borderless world is. . .
3. Consumer Tastes: Converging. Becoming similar from jeans to cellular phones to laptops. No longer tell from which country they are buying. Who owns Volvo? (Ford). Chrysler? (DaimlerChrylser: Germany). Where did Toyota build 10 million cars? N. America. There are no German or American companies, there are only successful and unsuccessful companies. Consumers have given rise to the MNCs. What are MNCs?

C. MNC: Multi-National Corporation. International firms whose total sales revenues from outside home country is 25% or higher. p.106.

Largest Companies in the World (All MNCs) (2003)
1. Wal-Mart                  USA
2. BP                           UK
3. Exxon Mobil              USA
4. Shell/Royal Dutch      Netherlands
5. General Motors          USA
6. Ford Motor Co.          USA
7. Daimler Chrysler       Germany
8. Toyota Motor Corp.    Japan
9. General Electric         USA
10. Total                      Japan

Toyota: Ranked 8th largest company has a GNI equal to Iran.
General Electric: Ranked 9th largest company has a GNI equal to South Africa.
Philip Morris: Unranked. GNI equal to that of the country of Malaysia.

D. Differences in Social Values between Cultures in a Borderless World.

Hofstede’s Four Value Dimensions of a National Value System that influence organizations and employee working relationships. Study done by Geert Hofstede of 116,000 employees of IBM in 40 countries.

1. Power Distance. Value of Equality. What countries value:
High Power Distance. People accept inequality in power in organizations and people.
Countries: Malaysia, Philippines, Panama.
Low Power Distance: People expect equality in power in organizations and people.
Countries: Denmark, Austria, Israel.

2. Uncertainty Avoidance: Value of Certainty. What countries value:
High Uncertainty Avoidance: Value beliefs that promise certainty and conformity.
Countries: Geece, Portugal, Uruguay.
Low Uncertainty Avoidance: Tolerance for unstructured, unclear; unpredictable. Countries: Singapore and Jamaica.

3. Individualism and Collectivism. What countries value:
Individualism: Value loosely knit social framework where individuals take care of themselves. Countries: U. S., Canada, Great Britain, Australia.
Collectivism: Value tightly knit social framework where individuals look after each other. Countries: Guatemala, Ecuador, China.

4. Masculinity and Femininity. What countries value:
Masculinity: Value: Achievement, Value heroism, assertiveness, material success.
Countries: Japan, Austria, Mexico, Germany.
Femininty: Value: relationships, cooperation, group decision.
Countries: Sweden, Norway, Denmark, France.

E. The Culture Game. Pg. 100. Cross-cultural exercise. 10 situations. Who would like to read the question then select the appropriate answer. The book states answers appear at the end, but I have not found it. Let me know if you find it.

F. DVD: Lonely Planet Travels the World. (9 min).

1. Identify three ways Lonely Planet can benefit from technology around the world.
2. Why is a global presence particularly important for Lonely Planet?
3. Describe at least two personal challenges that Howard Ralley faces as a manager.