International Business

Front 1

Describe Globalisation?

Back 1

Globalisation has been described,as ‘the concrete structuration of the world as a whole’: that is, a growing awareness at a global level that ‘the world’ is a continuously constructed environment.

However most of the thoughts on globalisation is associated with a convergence in politics, economics and cultures.

Skeptics suggest there is no real globalisation. Observable elements such as international trade has been there ever since and it is inappropriate to term them as globalisation.

Another group suggests that globalisation is a relatively new phenomenon and we are experiencing it now.

Hyperglobalists suggest that the world is now integrated, borderless and nation state isn’t relevant anymore.

Front 2

What are the Impacts of Globalisation?

Back 2

1. Internal Environment.
a. Recruitment.
b. Motivation..
c. Training .
d. Skills required.
e. Structure.
f. Outsourcing.

2. External Environment.
a. Competition .
b. Changes in consumer taste.

Front 3

What are the Benefits of Outsourcing?

Back 3

1. Low production cost.
2. Efficient production.
3. Enables to focus more on the other key areas of the business (e.g. –branding for Nike, Marketing for VS).

Front 4

What are the Drawbacks of Outsourcing?

Back 4

1. Difficulties in controlling quality
2. Motivating staff
3. Legal issues
4. Vision of the organisation is not communicated
5. Limited learning
6. Sustainability of the model

Front 5

whats are the Effects of globalisation on contemporary capitalism?

Back 5

1. Expanded commodification.
this results from increased consumerism, expansion of finance capital and the emergence of information and communications capital.

2. Reorganization.
owing to the creation of offshore arrangements which increase profit, corporate networks are also developed which extend across borders, company mergers and acquisitions are commonplace and a small number of competitors dominate the market, creating oligopolies.

Front 6

What are the Business forms in a globalised environment?

Back 6

1. International Company:
Has HQ in one country and trades overseas.

2. Multinational Company:
Has a home base and has bases in other parts of the world and hence trades from multiple locations.

3. Transnational Company:
TNC’s are MNC’s which are trying to disassociate itself from a home base but who are not yet successful in doing so.

4. Global Company:
This is an organisation that has no national identity.

Front 7

what are the Changes in the purpose for the emergence of Multinational Companies?

Back 7

1. Knowledge:
MNC’s operate with the idea of deriving knowledge from various parts of the world.

2.Competition:
MNC’s enter to variety of markets in order to be competitive not only from cheap production cost but also from quality of manufacturing.

3. Markets:
The developing nations actually offer a market for products themselves now, rather than only providing the opportunity for manufacturing.

4. Development of IT.

5. Governance.
No international police to manage corporate governance.

6. Nation State:
Reduction in the power of nation states which according to many is a result of the increase in power of MNC’s.

7. Mitigating risks in a single market.

8. Emergence of virtual economy.

Front 8

Describe the Internal Environment of Multinational Companies?

Back 8

1. Structure:
Structure for MNC’s should suit its size mostly.

2. Strategy :
Strategy should suit all the markets it has a presence in.

3. Staff:
a. Ethnocentric approach.
This is where the approaches used in the home country is used elsewhere as well.

b. Polycentric approach.
This is where each subsidiary develops its own HRM practices.

c. Regiocentric approach.
This is similar to the polycentric approach but the differences lie at the regional level as opposed to local countries.

d. Geocentric or Global approach
This is where HRM is practiced at a global level. HRM practices are therefore generally consistent across subsidiaries.

Front 9

What are the Factors that need to be considered for decision making in MNC’s?

Back 9

- More frequent decision making.

- More delegation.

- Need for a clear structure and lines of communication and control.

Front 10

What are the External Environmental Influences for MNC’s?

Back 10

MNC’s are affected by the following external factors:
1. Political.
2. Economical.
3. Technological.
4. Cultural .

Front 11

Discuss: Tranferability of Practices.

Back 11

Many have commented on a global convergence of management and organizational practices.

As a result some have attempted to replicated certain management practices in more than one country.

According to a study conducted by Lowe et al Japanese production systems have been implemented successfully in Mexico compared to Britain.

Therefore it cannot therefore be assumed that a best practice or the practices of the home country can be seen as more efficient and then transplanted to operations overseas, because conditions would have to be similar.

Front 12

Discuss Market Entry Strategies for MNC’s:

Back 12

- Green Field Investment.
- Acquisition.
- Licensing.
- Franchising.

Front 13

What are the Advantages of Small Business Organisation?

Back 13

1. Flatter organisation structure which facilitates swift communication.

2. Easier to communicate the vision and the leadership of the organisation.

3. Adaptability is fast for market changes and hence can be more responsive.

4. Staff alienation becomes limited and hence motivation is easy.

5. Limited conflicts on the organisation culture.

Front 14

What are the Disadvantages of Small Business Organisations ?

Back 14

1. Limited management capabilities.
2. Limited financial resources,
3. Creating a learning culture will be difficult.

4. Organizational Development (OD) aspects solely depends on the attitude of the top management.