Dr

Qiuping Li
MGT 3201 Global Business Strategy

 Dene mul>na>onal management Understand the characteris>cs of a mul>na>onal company Understand the nature of the global economy and the key forces that drive globalisa>on Know the basic classica>on of the worlds economies Iden>fy the characteris>cs of the next genera>on of mul>na>onal managers
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 Mul$na$onal Management: Formula>on of strategies and management systems to take advantage of interna>onal opportuni>es and respond to interna>onal threats Mul$na$onal Company (MNC): Any company that engages in business func>ons beyond its domes>c borders, including both large and small companies Foreign Direct Investment (FDI) occurs when a mul>na>onal company from one country has an ownership posi>on located in another country. Globalisa$on: the worldwide trend of the economies of the world becoming borderless and interlinked.
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Benets: Lower prices as MNCs are becoming more ecient. Emerging markets enjoy greater availability of jobs and beXer access to technology. Major reason why many new companies from Mexico, Brazil, China, India, and South Korea are the new dominant global compe>tors.

Nega$ves: Not all economies of the world are bene>ng equally or par>cipa>ng equally in the process. Terrorism, wars, and a worldwide economic stagna>on have limited or reversed some aspects of globalisa>on. Producing nega>ve eects e.g. scarcity of natural resources, environmental pollu>on, nega>ve social impacts, and increased interdependence of the worlds economies. Widening the gap between rich and poor countries.
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 Developed countries Developing countries Transi$on economies Emerging markets Less developed countries (LDCs)
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Disintegra>ng borders Growing cross-border trade and investment The rise of global products and global customers The internet and informa>on technology New compe>tors in the world market The rise of global standards of quality and produc>on Corporate social responsibility and ethics Priva>sa>ons of formerly government-owned companies
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 The World Trade Organisa>on (WTO)

In 1986, established WTO to succeed 1947s GATT. provides structure for con>nued nego>a>ons and seXling trade disputes among na>ons. Not all countries are par>cipa>ng equally in WTO.

Regional Trade Agreements (e.g. EU, NAFTA, APEC)

agreements among na>ons to reduce taris and develop similar technical and economic standards.

 World trade grew con>nually from 1990 to 2006. Latest trends show a slowdown due to eects of economic recession. FDI increased by more than 36% between 1996 and 2000. Since 2001, there has been a decline in FDI.

 Developed countries get the bulk of FDI (69%) while developing countries get around 30%. Least developed countries get minimal FDI. Emerging markets will con>nue to aXract FDI. Developing countries provide opportuni>es and risks. Implica>ons for managers - signicant opportuni>es around the world. Mul>na>onal managers should look at risk ra>ng of countries.
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 Economic risk: considers all factors of a na>ons economic climate that may aect a foreign investor. Poli$cal risk: anything a government might do or not do that might adversely aect a company.

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 War and increases in oil prices have the poten>al to slow down global trade Natural disasters Interna>onal terrorism
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 Electronic Communica>on - E-mail, World Wide Web, etc.

Allows mul>na>onals to communicate with company loca>ons throughout the world. Allows mul>na>onals to monitor worldwide opera>ons. Expands global reach of organisa>ons.

Informa>on technology
is spurring a borderless nancial market. makes available many new tools that facilitate business opera>ons, e.g. Skype, MSN Messenger and AOL, WIKIs,
Google
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 The needs of customers for many products and services are growing more similar
E.g., McDonalds, Boeing, Toyota.

Global customers search the world for their supplies without regard for na>onal boundaries.

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 Free market reforms are crea>ng a poten>al group of new compe>tors. These companies have survived brutal compe>>on in local markets. Able to deal with domes>c rivalry and compe>>on from western MNC. Develop strategies to compete with very low prices. Global trade has two important eects in developing new compe>tors

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 Companies can make one or only a few versions of a product for the world market. This is cheaper than making dierent versions for dierent countries. Drive to develop common standards to save money. Consistency in quality also an important requirement of doing business in many countries. Interna>onal organisa>on for standardisa>on (ISO) in Geneva, Switzerland developed a set of technical standards (ISO 9001:2000 series).
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 Increased pressure on MNCs to be responsible. Increased scru>ny of MNCs ac>ons and impact. Some MNCs are becoming more proac>ve in responding to social and ethical issues that arise from their overseas opera>ons. Some issues are: Climate change Environmental degrada>on and pollu>on Sweatshop condi>ons for labour Bribery

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Willingness to seek overseas assignments

Emo>onal intelligence

Global mindset Long-range perspec>ve Accomplished nego>a>on skills

Talent to mo>vate all employees to achieve excellence Understanding of na>onal cultures

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 Considers how managers formulate and implement strategies to compete successfully in the global economy. Strategies are the maneuvers or ac>vi>es used to increase and sustain organisa>onal performance. Mul>na>onal strategies must include maneuvers that deal with opera>ng in more than one country and culture. Helps posi>on yourself in evolving global economy.
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Blurring of industry boundaries Flexibility maXers more than size Focusing on niche Hyper-compe>>on Emphasis on innova>on and the learning organisa>on

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 Must be prepared to compete with rms from any country. Must be prepared to collaborate and align with rms from any country. Develop organisa>onal strategies and skills to compete in dierent na>ons in a global economy.

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