MGT 212: Organizational

Management 
Chapter 3- Global Management

MD Asif Hossain 
Today’s Topic

 Global Management
 Global Attitudes/Prospective
 Different ways companies can go for globalization
 Different kind of organization related to global
trading
 The challenge of operating in the global market
 How to overcome those challenges.
Global Management

 Definition 1: Global management refers to the

way an organization manages its business
internationally, including its sales, marketing,
hiring, and finance practices.
What’s Your Global Perspective?
 Ethnocentric Attitude
 The belief that home country has the best work
approaches and practices
 Polycentric Attitude
 The view that the managers in host country know the
best approaches and practices
 Geocentric Attitude
A world-oriented view that focuses on using the best
approaches and people from around the globe
HSBC opens a new branch in Bangladesh

Home Country Host Country

Global Attitudes
Regional Trading Alliances
 European Union (EU)-
To Increase
 Partnership between 28 countries in Europe.  Economic Growth
 Follows unified currency (Euros)
 Visa Free travel
 Trade between them without much restriction.
 North American Free Trade Agreement (NAFTA)-
 An agreement among the Mexican, Canadian, and U.S.
governments in which barriers to trade have been
eliminated
 Eliminating the barriers to free trade (tariffs, import
licensing requirements, customs user fees) has strengthened
the economic power of all three countries.
 Association of
Southeast Asian
Nations (ASEAN)
 Leaders from other
countries attend the
meeting/annual summit
to discuss further
possibilities for growth
and economic
development.
Global Trade Mechanism

 When issues arise in global trading, global trade

system/organization ensures the continuation of trade
efficiently and effectively.
World Trade Organization-
 World Trade Organization-
 Global organization of 164 countries
 The intergovernmental organization that regulates international
trade.
 Monitors and promote world trade.

 International Monetary Fund and the World Bank

Group-
 An organization of 188 countries that promotes
international monetary cooperation and provides advice,
loans, and technical assistance
Bangladesh Export Processing Zone Authority
(BEPZA)

 Objective: Manage the various Export Processing Zones

(EPZs) in Bangladesh.
 Bangladesh has 8 EPZ at the moment with plans to open 9th
one in near future. 
 Export processing zones (EPZs) are areas within developing
countries that offer incentives and a barrier-free
environment to promote economic growth by attracting
foreign investment for export-oriented production.
Bangladesh Garments Manufacturers and
Exporters Association (BGMEA)
 An association of readymade garments manufacturers and
exporters of Bangladesh.
 It promotes and protects the greater interest of the
garment sector of Bangladesh and its members.
 BGMEA is dedicated to establishing and promoting
contacts with foreign buyers, business and trade
associations, chambers and research organizations to
develop the export base of apparels.
Types of International Organizations- Multinational
Corporation (MNC)

 Multinational Corporation- Any type of international

company that maintains operation in multiple
countries
 Multidomestic Organization- MNC :
 Decentralizes management and other decisions to the local
country. (Polycentric Attitude)
 Global Organization- (MNC)
 Centralizes management and other decisions in the home country
(Ethnocentric Attitude).
Different Types of International
Organizations (Cont.)
 Transnational Corporation/Borderless- MNCs -
[Geo-Centric Attitude]
 Usesthe approach of recruiting the best resources
from wherever they can find.
A firm that organizes along business lines without
considering artificial geographical barriers
 Managers choose this approach to increase efficiency
and effectiveness in a competitive global
marketplace
Adaption to Local Culture (Multi
Domestic) 
How Organizations Go Global
 Global Sourcing- Accruing materials/labors from around
the world wherever its cheapest.
 Exporting – Making products at home and selling abroad.
 Importing – Purchasing from abroad and selling at home.
 Licensing - An organization gives another organization the
right to make or sell its products using its technology or
product specifications
 Franchising- An organization gives another organization
the right to use its name and operating methods.
Licensing examples
How Organizations Go Global (Cont.)

 Strategic alliance- A partnership between an organization

and a foreign company partner or partners in which both
share resources and knowledge in developing new
products or building production facilities.
 Joint Venture- A specific type of strategic alliance in A+B=C
which the partners agree to form a separate,
independent organization for some business purpose
 Foreign Subsidiary- Directly investing in a foreign
country by setting up a separate and independent
production facility or office
How Organizations Go Global (Cont.)
Managing in Global Environment
 The Legal-Political Environment
 The complexity of political & Legal issues is one of the most
important trend affecting global business.

 Differences in the laws of various nations

 Effects on business activities
 Effects on the delivery of products and services

 If the legal/political environment remains stable/fair/legal,

it is easier to grow in the global environment.
Managing in Global Environment (Cont.)
 The Economic Environment (2 types of economies)
 Free market economy An economic system in which resources are
primarily owned and controlled by the private sector
 Planned Economy is one in which economic decisions are planned by a
central government
 Monetary and Financial Factors
 Currency exchange rates
 Inflation Rates
 Diver tax policies
An example of the
issue that can arise
due to different tax
policies/culture
Managing in Global Environment (Cont.)

 The Cultural Environment-

 National culture- Every country has a different culture.
Their organization might have different values/attitudes
shared by individuals.
Challenges of Managing a Global Workforce
 Working in cross-culture environment may have benefits,
they also may have conflicts. This may arise due to pay
level, language barriers, work methods. Etc

 Solutions
- Cultural Intelligence- Have Cultural awareness. How
cultures vary, how behaviors vary.
- Global Mind-Set- Attributes that allow a leader to be
effective in cross-culture environment. Manager/leader
who can be open-minded and can adapt to changes.
A failure example
A Failure Example
 Globalization is important if businesses want to
expand.
 There are various ways with different degrees of
risk/investment how a company can go global.
 Itis important for managers to have an open mind
and be aware of the culture in order to achieve
success in the global market.
ANY QUESTIONS ?
Further Reading

 ChapterManaging in a Global Environment-

Management 14th Edition- Stephen P. Robbins,
Mary Coulter