BNAD 302, Human Side of Organizations Lecture 5, Chapter 4Outline of Last LectureChapter 3, The Environment of Management-Ethical responsibilities (ethical dilemma, ethics, values, etc.)-How do people learn ethics (3 levels: pre-conventional, conventional, and post-conventional)-Social Responsibilities Chapter 4, Global ManagementI. Globalization: the trend of the economy toward becoming a more interdependent systemA. Global village: the “shrinking” of time and space as air travel and the electronic media have made it much easier for the people of the globe to communicate with one anotherB. E-commerce: the buying and selling of products and services through computer networks- US retail e-commerce sales were estimated at $48.2 billion in the third quarter of 2011C. Global economy: the increasing tendency of the economics of the world to interact with one another as one market instead of many national markets - Positive effects: more markets for American exports- Negative effects: vast surplus funds from global investments flowed into US that were invested badly in subprime mortgages II. Minifirms: operating worldwideA. Small companies can get started more easilyB. Small companies can maneuver fasterIII. Multinational Corporation vs. organization:.A. Multinational corporation: business firm with operations in several countriesB. Multinational organization: nonprofit organization with operations in several countries IV> Successful International Manager:These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.A. Ethnocentric managers: believe that their native country, culture, language, and behavior are superior to all othersB. Parochialism: narrow view which people see things solely through their own viewC. Geocentric managers: accept that there are differences and similarities between home and foreign personnel and practices and they should use whatever techniques are most effective D. Polycentric managers: take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them aloneBeing an effective Road Warrior:1. Frequent travel may be needed because personal encounters are essential2. Travel may be global, but understanding must be local3. Frequent travel requires frequent adjustments VI. See continuum in book for risk and investment: -Lowest risk and investment: global outsourcing-Then importing exporting and counterbalancing-Then licensing and franchising-Then joint ventures-Highest risk and investment: wholly-owned subsidiaries VII. Terms and DefinitionsA. Counterbalancing: bartering for goodsB. Licensing: a firm allows a foreign company to pay a fee to make or distribute the firm’s product or serviceC. Wholly-owned subsidiary: foreign subsidiary that is totally owned and controlled by an organizationD. Greenfield venture: a foreign subsidiary that the owning organization has built from scratch E. Franchising: When a company allows a foreign company to pay it a few and share the profit in return for using the 1st company’s brand name and package materials and servicesF. World Trade Organization monitor and enforce trade agreementsG. World Bank: Provide low-interest loans to developing nations for improving transportation, education,health, and transportationH. International Monetary Fund: Assist in smoothing the flow of money between nationsI. Expatriates: People living or working in a foreign countryJ. Barriers to international trade:-Tariff: tax levied on goods entering a country- Quota: limit on the amount of a product entering a country- Boycott: exclusion of products from a country- Exchange control: foreign exchange must be sold to a control agency- Market grouping: common trade alliance- Trade agreement: an agreement to stimulate international trade VIII. Cultural InfluencesA. Low-text culture: Shared meanings are primarily derived from written and spoken words B. High-text culture: people rely heavily on situational cues for meaning when communicating with