International Management Session 2

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Questions and Answers

What does the term 'globalization' refer to?

The growing interdependence of the world's economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.

What is the primary effect of advances in information technology on globalization?

Reduced communication cost, leading to more global goods.

What are three examples of the largest trade groups?

European Union (EU), North American Free Trade Agreement (NAFTA), and Asia-Pacific Economic Cooperation (APEC).

What is the function of tariffs in international trade?

Tariffs are taxes used to restrict imports by increasing the price of goods and services purchased from another country, making them less attractive to domestic consumers. Signup and view all the answers

What is protectionism in the context of international trade?

It's the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports. Signup and view all the answers

What are some changes that affect the stability of the world context of organizations?

Outsourcing, downsizing, privatization, migration, and team-based management. Signup and view all the answers

What is outsourcing?

The practice of hiring outside the organization to produce goods or perform services that were traditionally provided by the company's own employees. Signup and view all the answers

What is downsizing?

Making an organization smaller by eliminating staff positions. Signup and view all the answers

What is privatization?

The process of transferring an enterprise or industry from the public sector to the private sector. Signup and view all the answers

What is migration?

Movement by people from one place to another with the intentions of settling, permanently or temporarily, in a new location. Signup and view all the answers

In the context of the text, what is the main reason organizations form teams?

To increase productivity. Signup and view all the answers

What is the core message of the 'flat world' concept?

The competitive playing field between industrial and emerging market countries is leveling, and that individual entrepreneurs as well as companies, both large and small, are becoming part of a large, complex, global supply chain extending around the world. Signup and view all the answers

What is a transition economy?

A country that is changing from a centrally planned economy to a market economy. Signup and view all the answers

What are two main extremes of the political systems continuum?

Pure democracy and totalitarianism. Signup and view all the answers

Totalitarianism requires complete obedience to the state.

True Signup and view all the answers

What are some potential benefits of globalization?

Rising number of transactions across borders that have improved the situation of emerging economies; the formation and expansion MNO's; and the improvements in human rights. Signup and view all the answers

What are some potential negative effects of globalization?

Environmental damage caused by increased use of fossil fuels, the negative effects of global price competition, and the job insecurity caused by outsourcing. Signup and view all the answers

What is culture in the context of international management?

A set of knowledge structures consisting of systems of values, norms, attitudes, beliefs, and behavioral meanings that are shared by members of a social group (society) and embedded in institutions and learned from previous generations. Signup and view all the answers

Culture is important because it affects the goals of institutions, how they operate, and the attributions (causes assigned to why people behave) their members make for policies and behavior.

True Signup and view all the answers

The effects of culture on people's behavior are not pervasive.

False Signup and view all the answers

What is an institution in the context of international management?

A social structure formed for a common purpose that influences the behavior of people and the way they live. Signup and view all the answers

What is attribution?

The action of regarding something as being caused by a person or thing. Signup and view all the answers

Define cognitive complexity in the context of international management.

The ability to think critically, analyze complex situations, and manage multiple tasks simultaneously, involving understanding and navigating the intricacies of international business environments. Signup and view all the answers

What are the two main components of cognitive complexity?

Differentiation and integration. Signup and view all the answers

How can cognitive complexity help managers in decision-making?

By allowing them to use larger amounts of information, identify patterns, and generate several possible solutions. Signup and view all the answers

Explain the concept of cultural empathy in the context of international management.

The ability of cognitively complex individuals to set aside their habitual ways of thinking about events in order to 'get into the heads' of people operating out of different perspectives from their own. Signup and view all the answers

Why is emotional energy crucial for effective international management?

It's the motivational force derived from emotions that influences human behavior and interactions, encompassing emotional awareness, resilience, and the ability to engage with emotions constructively. Signup and view all the answers

Why is emotional self-awareness important for international managers?

Understanding one's own emotions and the emotions of others, vital for effective interpersonal interactions. Signup and view all the answers

What are the two main reasons emotional self-awareness is important in the global business environment?

Firstly, it increases the likelihood of trust between individuals. Secondly, it helps develop emotional resilience. Signup and view all the answers

Define emotional resilience in the context of international management.

The facility to open oneself emotionally and deal with uncomfortable or stressful situations without over-reacting to them. Signup and view all the answers

Why is risk acceptance important for international managers?

It involves putting oneself in potentially uncomfortable or stressful situations, especially when taken in interpersonal situations. Signup and view all the answers

What are some key elements that emotionally resilient international managers develop when facing risks?

Familiarization with the levels of discomfort associated with risks, emotional self-awareness and resilience, managing and survival techniques, and deriving learning from the outcomes. Signup and view all the answers

What is the emotional support of the family for international managers?

A retreat to the emotional warmth of the family provides managers with an ideal coping strategy, especially during times of need. Signup and view all the answers

Define psychological maturity in the context of international management.

The development of a unifying philosophy of life characterized by a clear value system and a consistent way of seeing meaning in one's life. Signup and view all the answers

What are the three core values that constitute the essential features of a successful international manager's psychological maturity?

Curiosity to learn, orientation to time, and personal morality. Signup and view all the answers

Explain the value of curiosity to learn for international managers.

The attitude of openness to new experiences and situations. Signup and view all the answers

Explain the value of orientation to time for international managers.

The ability to focus on and make the most of the present moment, while also being mindful of the past and future. Signup and view all the answers

Explain the value of personal morality for international managers.

The process of developing a strong moral compass and a capacity for ethical decision-making. Signup and view all the answers

What is a global mindset in the context of international management?

A way of thinking and operating that recognizes and values the interconnectedness of the world and the importance of cultural diversity and global perspectives. Signup and view all the answers

What are some key elements of a global mindset?

An understanding of global markets and trends, the ability to work effectively with people from diverse backgrounds, and the willingness to embrace cultural differences. Signup and view all the answers

Why is international experience essential for developing a global mindset?

It strengthens interpersonal skills and flexibility, enhances understanding of different cultural contexts, and provides opportunities to develop international networks. Signup and view all the answers

What are some of the key roles and responsibilities of global managers?

They act as the link between the company's capabilities and the global market requirements, they must understand their own culture and be open to foreign cultures, and they are sensitive to global issues like cultural diversity. Signup and view all the answers

What are some key skills that global managers need to master?

Determining if foreign trading is feasible, planning for market expansion, establishing successful market entrance tactics, adapting products and services, and considering worldwide marketing and sales. Signup and view all the answers

What are some key considerations for international managers in terms of cultural sensitivity and legal compliance?

Being aware of multicultural differences and their effects on global trade, adhering to all local and foreign legal standards, and knowing fundamental legal concepts of worldwide business. Signup and view all the answers

Study Notes

Session 2: The International Manager

Globalization describes the growing interconnectedness of the world's economies, cultures, and populations, driven by cross-border trade, technology, investment, and information flows.
Globalization impacts all business activities, influenced by international transactions and events in other countries.
International managers and employees are increasingly affected by far-reaching economic and political events.
Globalization is a process involving worldwide interconnections, which are continually growing.

Increased Use and Sophistication of Information Technology

Technological advancements reduce communication costs, leading to increased globalization of trade and goods.
Advances in computing technology have provided smaller organizations and entrepreneurs with capabilities previously accessible only to large multinational corporations.
Globalization significantly impacts the availability of information, resources, products, and markets.
Small and Medium-Sized Enterprises (SMEs) can now effectively compete globally due to technology.

Growing Economic and Organizational Interconnectedness

Rapid growth in free trade (1990s) led to heightened economic interconnections among countries such as the European Union (EU), North American Free Trade Agreement (NAFTA), and Asia-Pacific Economic Cooperation (APEC).
Tariffs, taxes on imported goods, are used to restrict international trade, driving prices up for foreign goods.
Outsourcing, downsizing, globalization, and team-based management contribute to a more complex work environment
Outsourcing is the practice of hiring external entities for goods or services traditionally performed by a company's employees.

More Complex and Dynamic Work Context

Increased globalization has produced global changes in economics, politics, and technology.
Globalization is associated with trends such as outsourcing, downsizing, privatization, migration, and team-based management, which are transforming the world of work.

Totalitarianism

Centralized and dictatorial government systems require complete subservience to the state.
Religious leaders hold political power in theocratic totalitarianism, while ideological concepts are dominant in secular totalitarianism.

Positives and Negatives of Globalization

Positive effects include rising global trade, formation of multinational businesses, and improved human rights.
Negative effects include environmental damage due to increased fossil fuel use, global price competition, and job insecurity linked to outsourcing.

The Contexts of International Management

Culture: Shared knowledge structures, values, norms, attitudes, beliefs, meanings within a society. Culture affects societal goals, operational approaches, and attributions for behaviors.
Institutions: Social structures formed by individuals for common purposes, shaping behavior. Examples include government, education, religion, and law.
Attribution: Explanation of cause-and-effect linking person or thing to event.

Being an International Manager

International managers need cognitive complexity, emotional energy, and psychological maturity to effectively navigate diverse international business contexts.
Cognitive complexity is the capacity to consider diverse viewpoints and analyze intricate situations.
Emotional energy involves emotional intelligence, resilience, and constructive emotional engagement.
Psychological maturity is developing a unified life philosophy centered around a coherent set of values.

Emotional Energy

Influential behavior in international interactions stems from emotions. Emotional awareness, resilience, and constructive engagement in emotions form the core of emotional energy.
International managers need emotional intelligence for building relationships, fostering trust, and improving communication.

Emotional Energy: Emotional Self-Awareness

Understanding one's own emotions and the emotions of others is crucial for successful interpersonal interaction in international contexts.

Emotional Resilience

An ability to cope with challenging and stressful situations without overreacting is emotional resilience.
Many consider suppressed emotions as a form of emotional resilience, which may not necessarily be true.
Suppressed emotions can be detrimental in certain situations.

Risk Acceptance

Managers who do not possess emotional 'muscle' may withdraw from stress or risk everything to relieve stress.
This behavior can lead to a risk-avoidance pattern in the long run.
Emotionally resilient international managers see risks as integral parts of complex global interactions.

Psychological Maturity

A coherent life philosophy, characterized by consistent values and self-awareness.
Understanding and relating to others and their experiences.
Ability to formulate meaningful goals and effectively navigate interpersonal relationships.
Psychological maturity evolves from a coherent, consistent, and systematic worldview.

Global Mindset

A global mindset involves a comprehensive, global perspective, adaptable to various cultures and contexts.
Global managers thrive on cultural differences and global perspectives while maintaining a strong awareness of their home culture.
Managers should display adaptability and respect for both the company's culture and the culture of different countries.
Global managers act as a crucial link between the company and global markets.

International Experience

An understanding and experience of international matters enhance interpersonal skills, adaptability, and handling of complex situations effectively.
Interactions with other cultures and international experiences broaden one's skills and comprehension.
Overseas assignments provide firsthand exposure to diverse systems, cultures, and political landscapes.

How Can I Become a Global Manager?

It is important for developing a global perspective to consider ethical, political, and legal ramifications of international work.
Managers need to develop skills in market analysis and planning, cultural sensitivity and international trade laws.

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Description

Explore the impacts of globalization on international management. This session discusses how interconnected economies and technological advancements shape business practices and the roles of managers in a global context. Understand the significance of cross-border trade and its implications for organizations of all sizes.