International Management Session 2

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.

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.