Lesson 11 Global Market

BE 2601
Management Principles,
Competencies and Skills
Welcome Back!
Dr Koh Cheng Boon

1
Group Project
Dr Koh Cheng Boon

Senior Lecturer
2
LMO, NBS-NTU
Each Seminar Group will have 2 shifts
Seminar Groups Shift 1 Shift 2
2 0830 – 1000 hrs: Teams 6, 1, 2 1000 – 1130 hrs: Teams 4, 5, 3
6 0830 – 1000 hrs: Teams 2, 4, 6 1000 – 1130 hrs: Teams 5, 3, 1
7 1430 - 1600 hrs: Teams 1, 6, 5 1600 – 1730 hrs: Teams 3, 2, 4
3/9/2020
3
Project Work (Group) Report
(30% of total grade)
Learning Outcomes:
1. Evaluate and apply the relevant theoretical management concepts and principles to
the context of the question
2. Demonstrate critical thinking, reasoning and evaluative analysis skills by providing

supporting justifications and illustrations
3. Communicate, critique and present the research findings
4. Show creative thinking with the inclusion of novel ideas and recommendations with
good supporting analysis Due Dates:
1. Seminar Group 2: 01 Apr (W) 1130 hrs
2. Seminar Group 6: 02 Apr (Thu) 1130 hrs
3/9/2020 3. Seminar Group 7: 02 Apr (Thu) 1730 hrs)
4
Requirements: Project Work (Group) Report
Perform research to identify and analyze the management strategies and practices of
an organization which exemplify how it manages change, achieve sustainability and
competitiveness while achieving productivity and stability in its business operations.
You are required to perform your analysis within any 1-2 of the following scope of
elements:
• Types of Strategic Planning involving Long-Term Survival and Growth

• Organization’s Structure and/or Organisation Culture
• Competition in the Global Market
• Effectiveness and Efficiency of the Organizational Controls and Processes
• Leadership
• Quality Management
• Competitive advantage through Human Resource Management
3/9/2020 5
Requirements (Con’t)
• Please note that you are to decide on the appropriateness of the above
scope based on the problem that you have identified from the selected
organization.
• Focusing on any one (1) of the element is adequate. Alternatively, if your

discussion requires a broader scope, it is advisable to keep to a maximum of
any 2 elements of the above scope.
• The time-frame for the case should be examined from its present/current (i.e.
“real-time”) context.
3/9/2020 6
Assessment Rubric
3/9/2020 7
Possible Resources
The organization selected must have a workforce of not less than 100 employees. It may be a Singapore-based organization or any regional or global
organization. The group can elect to conduct the research through publication or official website search or an interview with the organization. The source/s of the
information and data contained in your research must be provided in your report.
Below are some possible sources for your project but you are not constrained to pick from this list:
• World’s Most Admired Companies – Hay Group partners with Fortune Magazine to pick an annual list.
• Press Releases – Singapore 1000 and Singapore SME 1000 Ranking
• Aon Hewitt’s Best Employers study – annually
• Singapore HR Award, organized annually by Singapore HR Institute
• International Enterprise Singapore, formerly known as Singapore Trade Development Board (TDB)
• Singapore Indian Chamber of Commerce & Industry

a) SICCI-DBS Singapore Indian Entrepreneur Award
b) SICCI-DBS Singapore-India Business Award
c) SICCI-DBS Indian Enterprise Award
• Business Excellence Awards by SPRING such as Singapore Quality Award, Innovation Award, People Excellence Award 8
• HRM Awards
3/9/2020
Project Work (Group) Submission
Submission date is by 48 hours from the ending time of students’ respective seminar session in Week 11 through NTULearn
(Turnitin).
• All sources are to be cited, properly referenced and used correctly inline to Harvard or APA referencing style.
• Report is to be organized, concise, and have a clear write-up with proper paragraphing
• Refer to ‘Penalties and Academic Integrity’ of this ‘Course Assessment’ document (p. 6) for the “Student Assignment Declaration Cover
Sheet”. You are required to submit the declaration cover sheet together with coursework assignments.
• The softcopy of the Student Assignment Declaration cover sheet form will be available via NTULearn at your respective SEM sites,
under the folder ‘Course Information (Course Outline & Course Assessment Document)’
• Upload the 3,000-word essay to “Turnitin Assignment” for plagiarism check. (Note: Do not use the lecture site. Use your own seminar
group website).
• Submit the final version of your group project work report through NTULearn to “Turnitin Assignment” of the seminar you belong to. You
will work with your group and submit the report as per deadline advised above.
9
3/9/2020
Project Work (Group) Presentation
The presentation will be scheduled on week 12 during the seminar session.
The following instructions are to assist as a reference guide for the Project work report and Presentation.
Instructions/Guidelines:
Group report (30% of the total marks)
• The Project Work is based on a well analysed and argued written report (group), weighted at 30% and a formal oral presentation (group) of the
report, weighted at 15% which includes your performance on peer evaluation.
• The dates for the oral presentation are scheduled in Week 12 during the Seminar session. Further specific time slots for the groups and instructions will be
advised by the respective tutors upon term commencement.
• Format: The research report should be written in 3,000 words with Times New Roman font (size 12) for main text, double-spacing, with a tolerance level of +/-
5% of word count limit.
• There should be a cover page with all group members’ details and an executive summary included, but the word count excludes these two pages.
• The work presented must make extensive use and application of appropriate theories or concepts considered within the module and from independent reading
of the subject (both textbooks and academic journals).
• Full reference details (inline to Harvard or APA referencing style) must be included with respect to the academic literature and all other sources of information
used (reference to and use of material from the internet such as Wikipedia are not acceptable).
• The essay should be presented in an appropriate and professional style with a coherent structure, logic and connected line of analysis, evaluation and
reasoning.
• The report must be submitted in MS words format and not in PDF format.
• Word limit: 3,000 words (with a tolerance level of +/- 5%). The headings, in-text citations and footnotes are included in the word count. The title page,
diagrams, figures, tables, list of references and appendices are all excluded from the word count. However, please note that tables, diagrams, figures should
only have key pointers within them, i.e. in short phrases. If they comprise of long sentences, then this is not allowed and the word count within the tables, 10
diagrams or figures will be counted in. You should state the number of words on the front title page of your report.
3/9/2020
Project Work (Report): Assessment Rubric
3/9/2020
11
Project Work (Report): Assessment Rubric
3/9/2020
12
Group Presentation and Peer Appraisal
3/9/2020 13
Team Presentation
3/9/2020 14
Group Project:
Briefing
Dr Koh Cheng Boon

Senior Lecturer
15
LMO, NBS-NTU
Project Work (Group) Report
(30% of total grade)
Learning Outcomes:
1. Evaluate and apply the relevant theoretical management concepts and principles to
the context of the question
2. Demonstrate critical thinking, reasoning and evaluative analysis skills by providing

supporting justifications and illustrations
3. Communicate, critique and present the research findings
4. Show creative thinking with the inclusion of novel ideas and recommendations with
good supporting analysis
3/9/2020
16
Lesson 11:
Globalisation and the Manager – Managing

the Global Market
17
Why Globalisation and Management?
 Alibaba Holding Group achieved S$17.7 Billion in recording-shattering 24-hr

buying spree.
 Three times more than the Black Friday and Cyber Money put together
Chinese companies are buying businesses such as Starwood Hotel,

Smithfield Foods, and GE’s Appliance Business.
“Globalisation and the Manager” is an important topic.
Source: https://www.techinasia.com/alibaba-smashes-records-sells-billion-on-singles-day
18
Nanyang Business School Nurturing Global Leaders for a Sustainable World

Closer to Home: Regional
19

Globalisation and the Manager
20

Managing in a Global Environment
21
Impacts on us…
22

Which one describe you?
Education is not about theories or degree BUT to educate your mind to think Going to be
different and be prepare for the real-world…..including assignments: we are here to tough world out
help you to develop your thinking, attitude (meticulous, learning attitude)… there…..
23

Set of forces or conditions outside Organization's

boundaries
Affects the way organization operates

Global
Environment
Change over time
Presents opportunities and threats
24

Global Environment
Example: Huawei
Set of forces or conditions outside
Organization's boundaries
How experience creates global
leadership
Affects the way organization
operates Building on the founder’s philosophy, Huawei has moved to an
employee performance system that measures “global
experience”, an important criterium for identifying future leaders.
As Zhengfei noted: “You need to get down and manage at the
front lines to get a true tasting of things. To qualify for greater
Change over time responsibility, you need successful experience in the field.” A
belief exists in Huawei that leaders of global (and virtual) teams
Things are going to be need to be able to diagnose and interpret potential cultural
tripwires in the group. In other words, one needs to be able to
different in VUCA understand and deal with how cultural differences might impact
Presents opportunities and threats environment….. team functioning to take up leadership within Huawei.
Are you READY?

https://www.london.edu/lbsr/lessons-from-huawei-when-chinese-companies-go-global 25

Globalisation
• Set of specific and general forces that work together to

integrate and connect economic, political and social systems
across countries, cultures or geographic regions
• Nations and people become increasingly interdependent

because the same forces affect them in similar ways
• Global organisations operate and compete both domestically

and globally
26

Forces in Global Environment
27
Forces in the Global Environment
General Environment (Macro Environment)
Economic
Technological
Task Environment (Competitive Environment)
Social
Competitors
Cultural Organization (Internal Environment)
Distributors
Demographic
Customers
Political
Suppliers
Legal
28

Key Issues of the Global Environment
29
Profile of Trading Partners in Singapore
1. Number of trading partners increased from 188 in

1985 to 239 in 2007
2. G2 countries have traditionally been important

trading merchandise export has been decreasing
over the years.
3. Trade with Emerging Asian Countries, especially

with China grew robustly.
Ref: International Enterprise Singapore
https://slideplayer.com/slide/5810251/
30

Economic
31

32
Consequences of Global Economy
• Expansion of international trade

• Foreign direct investments
• Imports penetrating deeper into world’s largest economies
• Home markets under attack from foreign competitors
• Opportunities are greater
• Environment more complex and competitive
Source: https://www.thebalance.com/globalization-and-its-impact-on-
economic-growth-1978843
33

Outsourcing and Offshoring
34
Outsourcing and Offshoring
Changi Airport
Group
• Contracting with outside provider
Outsourcing
• Achieve lower costs and improve
product quality of design
Banks offshoring more than

80,000 tech jobs
• Moving work to other countries
Offshoring
• Increases efficiency by tapping on
Specialized talents abroad.
Deutsche Bank recently said it intends to

shift 8,000 jobs to lower cost destinations, while
both Credit Suisse and UBS are accelerating
moving IT jobs away from Switzerland and
Singapore towards India and Eastern Europe.
Sources: https://news.efinancialcareers.com/ca- 35
en/134803/banks-offshore-as-many-tech-jobs-as-apple-
employs/
Factors to consider for Offshoring
What is the competitive advantage of the

products they offer?
Is the business in its early stages?
Can production savings be achieved locally?
Can the entire supply chain be improved?
36

Organizational Models
37
Pressure for Global Integration

Global Transnational
High View the world as a single Specialized facilities permit
market. local responsiveness.
Operations are controlled Complex co-ordination

Two important considerations: centrally from the corporate mechanism provide global
office. integrations
1. Pressure for Global Integration
Multinational
2. Pressure for local responsiveness Low International
Several subsidiaries operating
Uses existing capabilities to as stand-alone business units
expand into foreign markets in multiple countries
Low High
Pressure for local responsiveness
38

Pressures for global integration

Competitors
Cost reduction
Universal needs
Examples: Semiconductor chips, certain basic food,

appliances
40

Pressures for local responsiveness

Difference in traditional practices
Distribution channels
Sales practices
 Economic and political demands of host countries
41

Global Transnational
High Specialized facilities permit local
Pressure for Global
View the world as a single market.
Integration responsiveness.
Operations are controlled centrally from
the corporate office. Complex co-ordination mechanism
provide global integrations
Multinational
Low International
Several subsidiaries operating as
Uses existing capabilities to expand into stand-alone business units in multiple
foreign markets countries
Low High
Pressure for local responsiveness

42

Organizational Models: WHY?
Managers need to know and able to

determine the best strategy to compete
in Global marketplace.
Change is the only constant.
Remember to embrace it especially when

you are older….Remember what I said
today!
43

Organizational Models: International
International:
 Existing Core Capabilities to
expand into foreign markets
 Few pressures for economies of

scale or local responsiveness.
44

Subsidiaries under Greater control by

parent company
Parent Company has control over:
 Research function
 Local Product
 Marketing Strategies
45

High Integration and

Low Responsiveness
Level for pressure for Global Integration
High Advantages:
Low Integration and
Low Responsiveness  Facilitates the transfer of skills and know-how from the
parent company to global subsidiaries
Disadvantages:
Low  Does not provide latitude to respond to local

conditions
 Does not provide opportunity to achieve low-cost

Low High
position via scale of economies
Level for local responsiveness
46

Organizational Models: Multinational
Multinational
Global efficiency is not required, but
need to cater for local responsiveness
Multinational
 Manufacturing
Several subsidiaries operating as stand-
alone business units in multiple countries  Marketing
to meet the demands for local  Research
responsiveness
 Human Resources
47

Multinational
Global efficiency is not required, but
need to cater for local
responsiveness, examples such as
Heineken – Netherland-based
brewing company
With THREE Major global brands:  Adapt products to local attitudes and taste while maintaining its
high quality.
Heineken, Amstel, Affligem
 The company produces more than 250 brands around the world
48

Disadvantages:
 Higher manufacturing costs and duplication of efforts because
each subsidiary has their own functional departments
Advantages (manufacturing, marketing, research, HR)
 Transfer core skills among its  Cannot realise the economies of scale
international operation
 No standardized product to the global marketplace
 Launching coordinated global attacks against competitors is

difficult – great disadvantage if competitors have the ability to
do so.
49

Organizational Models: Transnational
Competitive advantages through: pursue local

responsiveness, transfer of know-how, and cost
economies
Decision Decision
Making Making
 Specialized facilities permit local Decision Centralised Decision

responsiveness. Making Functions Making
 Complex co-ordination mechanism

provide global integrations
Decision Decision
Making Making
51

Advantages
 Experiences of local subsidiaries are shared
worldwide to improve firm’s overall knowledge and Disadvantages:
capabilities
 Complex co-ordination
 Low cost of manufacturing: Optimal balance
between skills and costs.
 Ability to integrate the efforts of subsidiaries, deploy

talents/managers
52

Think Global Act Local
53

Organizational Models: Global
 View the world as a single market.
 Operations are controlled centrally

from the corporate office.
55

Disadvantages Advantages
 May be less responsive to  Centralised manufacturing – realise the
consumer tastes and demands in scale economies by spreading the fixed
different countries costs of investments in new product
development, plants and equipment and
 Needs a great deal of the like all over the world.
coordination with significant
amount of management and  Push down unit costs through centralised
paperwork costs manufacturing.
 Subsidiaries focused on marketing and

service functions
56

• Example: Sony
• Reasons: Cut cost, Skill, Market share
• Similar Customers’ tastes and product

preferences in different countries
57

Entry Modes
Entry Modes
 Exporting
 Franchising
 Joint Venture
 Licensing
 Wholly-
owned
subsidiaries
58
Entry Modes
Entry Modes: Export
 Exporting
 Franchising
 Joint Venture
 Licensing
Advantages of  Wholly-
Disadvantages of owned
Exporting: Exporting: subsidiaries
 Avoid costs of  High transporting cost
manufacturing abroad
 Cost of manufacturing
 Consistent global might be lower in
strategy other countries
 Tariff barriers
59

Entry Modes
Entry Modes: Franchise Business
 Exporting
 Franchising
 Joint Venture
 Licensing
Limited rights to use brand name
 Wholly-
owned
subsidiaries
60

Entry Modes
Entry Modes: Franchise Business
 Exporting
 Franchising
 Joint Venture
Advantages of  Licensing
Franchising:  Wholly-
owned
 Share risks subsidiaries
 Capital investments Disadvantages of

Franchising:
 Licenses its
technologies expertise  Quality Control
to overseas companies
61

Entry Modes
Entry Modes: Joint Venture
 Exporting
 Franchising
 Joint Venture
 Licensing
 Wholly-
owned
subsidiaries
62

Entry Modes
 Exporting
 Franchising
 Joint Venture
 Licensing
Manufacturing  Wholly-
owned
Rights subsidiaries
63

Entry Modes
 Exporting
 Franchising
 Joint Venture
 Licensing
 Wholly-
Advantages of Joint owned
Venture: subsidiaries
Disadvantages of Joint
 Need not bear costs Venture:
and risk of opening up
an overseas market  Licensing its technological
expertise to overseas
companies
64

Parent Corporation
Wholly owned Wholly owned Wholly owned

subsidiary subsidiary Subsidiary
65

Preferred modes of entry in the following industries:
 Semiconductor
 Electronics
 Pharmaceutical
66

Pros and Cons of Different Entry Modes
Exporting Licensing Franchising Joint Ventures Wholly Owned

Subsidiary
 Scale economies  Lower development  Lower development  Local knowledge  Maintain control
Pros costs costs over technology
 Consistent global  Shared costs and
strategy  Lower political risk  Lower political risk risk  Maintain control
over operations
 May be the only
option
 No low-cost sites  Loss of control over  Loss of control over  Loss of control  High cost
Cons technology technology over technology
 High transportation  High risk
costs  Conflict between
partners
 Tariff barriers
67

Managing Across Borders
68
Managing Across Borders
Host country Third-country

Expatriates
nationals nationals
• Individuals from • Natives of host- • Natives who are

parent company country where not from home
sent to work at overseas country or host-
foreign subsidiary subsidiary is country
located
69

Cultural Issues
70

Examples of cultural differences
• Americans tend to have specific views about the purpose of meetings and how much
time can be spent.
• International workers may have different preconceptions about the nature and
length of meetings and managers should make sure that foreign nationals are
comfortable with the American approach.
• Workers from other countries can work long hours but countries with strong labour
organisations often get more weeks of vacation than American workers.
• Europeans may balk at working on weekends.

71

Questions?
72

Class Activities
73
The Planet Starbucks
74
World Café: The Planet Starbucks
Question1
Discuss with supporting reasons the benefits to Starbucks from
expanding internationally?
Question 2
Explain the reasons why do you think Starbucks has been so successful
internationally?
Question 3
Identify Starbucks’ primary approach in entering the international
market. What are the benefits of this entry strategy?
Question 4
(a) What are the advantages of a joint venture entry mode for Starbucks
over entering through wholly owned subsidiaries?
(b) On occasion, though, Starbucks has chosen a wholly owned
subsidiary to control its foreign expansion. Why?
75
Case study: The Planet Starbucks
 Coffee bean in 1987 in Seattle’s famed Pike Place Market

 Today 8000 outlets in more than 30 countries, revenue in
excess of $3.3 Billion.
 Chairman and Chief Strategist: Howard Schultz

 Started in 1994 with first acquisition – The Coffee Connection
Inc., a 23-store Boston rival.
 Expansion from 400 in 1994 to 8000
 First Overseas Foreign partner in 1996 – Tokyo
 How: Starbucks purchases only speciality coffee at prices

higher than others
 Three strategies for international operations: Joint Venture,

Licensing, and wholly-owned operations

Case study: The Planet Starbucks (Con’t)
 United States : Two-thirds wholly owned , other joint-venture with vendors servicing
bookstores, hotels, college, campuses and airports. Other joint venture agreements
include Peps, Dreyer’s Grand Ice Cream, United and Canadian Airlines and hotel chains
such as Host Marriot International and Hyatt Hotel Corp
 Outside United States: One-third – company –owned, the rest partnerships.
 Asia: Licensing as “winning Formula” – generally worked well but became disenchanted
with some of the arrangements and converted several to joint-venture arrangements.
 Korea: ESCO Korea Ltd in 1999, 10 stores in double quick time
 Switzerland: Joint Venture

Are your ready?
For

World Café
Question1
Discuss with supporting reasons the benefits to Starbucks from expanding internationally?
Question 2
Explain the reasons why do you think Starbucks has been so successful internationally?
Question 3
Identify Starbucks’ primary approach in entering the international market. What are the benefits of this entry strategy?
Question 4
(a) What are the advantages of a joint venture entry mode for Starbucks over entering through wholly owned subsidiaries?
(b) On occasion, though, Starbucks has chosen a wholly owned subsidiary to control its foreign expansion. Why?
79

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BE 2601

Dr Koh Cheng Boon

Dr Koh Cheng Boon

Seminar Groups Shift 1 Shift 2

2 0830 – 1000 hrs: Teams 6, 1, 2 1000 – 1130 hrs: Teams 4, 5, 3

6 0830 – 1000 hrs: Teams 2, 4, 6 1000 – 1130 hrs: Teams 5, 3, 1

7 1430 - 1600 hrs: Teams 1, 6, 5 1600 – 1730 hrs: Teams 3, 2, 4

2. Demonstrate critical thinking, reasoning and evaluative analysis skills by providing

3. Communicate, critique and present the research findings

• Types of Strategic Planning involving Long-Term Survival and Growth

• Focusing on any one (1) of the element is adequate. Alternatively, if your

• Press Releases – Singapore 1000 and Singapore SME 1000 Ranking

• Aon Hewitt’s Best Employers study – annually

• Singapore HR Award, organized annually by Singapore HR Institute

• Singapore Indian Chamber of Commerce & Industry

Group report (30% of the total marks)

Dr Koh Cheng Boon

2. Demonstrate critical thinking, reasoning and evaluative analysis skills by providing

3. Communicate, critique and present the research findings

Globalisation and the Manager – Managing

 Alibaba Holding Group achieved S$17.7 Billion in recording-shattering 24-hr

Chinese companies are buying businesses such as Starwood Hotel,

“Globalisation and the Manager” is an important topic.

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Set of forces or conditions outside Organization's

Affects the way organization operates

Presents opportunities and threats

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Are you READY?

Nanyang Business School Nurturing Global Leaders for a Sustainable World

• Set of specific and general forces that work together to

• Nations and people become increasingly interdependent

• Global organisations operate and compete both domestically

Nanyang Business School Nurturing Global Leaders for a Sustainable World

General Environment (Macro Environment)

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Profile of Trading Partners in Singapore

1. Number of trading partners increased from 188 in

2. G2 countries have traditionally been important

3. Trade with Emerging Asian Countries, especially

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Nanyang Business School Nurturing Global Leaders for a Sustainable World

• Expansion of international trade

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Banks offshoring more than

Deutsche Bank recently said it intends to

What is the competitive advantage of the

Is the business in its early stages?

Can production savings be achieved locally?

Can the entire supply chain be improved?

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Pressure for Global Integration

Operations are controlled Complex co-ordination

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Pressures for global integration

Examples: Semiconductor chips, certain basic food,

Nanyang Business School Nurturing Global Leaders for a Sustainable World

Pressures for local responsiveness

 Economic and political demands of host countries