International Management

1. International Management USAC 2013 Dr. Yvonne Stedham

2. International Management Seniors, Juniors, Majors??? Travelled to other countries? USAC? Speak other languages? Grew up in another country? 2 2

3. Today Purpose of this course What do you know? Introduction Course: Contentand Format - Syllabus Personal: Instructorand Students – Background Sheet A Theoretical Framework ISA Global Update 3 3

4. International Management Why this course? What do you expect to learn? 4 4

5. Purpose Learn management concepts and skills needed to succeed in an international business environment 5 5

6. PurposeManaging Organizations in a Global Economy Global Economy - External Environment PESTEL – Political, Economic, Social, Technological, Environmental, Legal Globalization, Democracy, Free Markets CULTURE (values and norms) 6 6

7. Purpose Managing Organizations in a Global Economy Management Define Management What do managers do? What skills do managers need to have? 7 7

8. Purpose Managing Organizations in a Global Economy Management Define Management Getting things done through people (Anglo definition) What do managers do? Managerial Activities: 1. Plan 2. Organize 3. Lead 4. Control What skills do managers need to have? Managerial Skills: 1. Technical 2. Conceptual 3. Human Relations 8 8

9. Global Economy - Current Developments National Public Radio (NPR) The Economist https://www.economistacademic.com/subscribe_single.cfm Wall Street Journal 9 9

10. Purpose Assess the feasibility of international expansion by determining the Cost, Benefits, and Risks of doing business in a specific country 10 10

11. Website Location http://www.business.unr.edu/faculty/stedham/ 11 11

12. Global EconomyWhat do you know? Population List the five largest countries based on population. What is the world population? GDP What is “GDP”? Explain. What is the current GDP/capita in the U.S.? What is a typical GDP growth rate for the U.S.? Which economic sector contributes the most to the U.S. economy? Which three countries have the highest GDP/capita? 12 12

13. Global Economy What do you know? What is the “EU”? What is the “euro zone” or the EMU? Which countries are referred to as the PIIGS countries? 4. Which countries are referred to as the BRIC countries 5. Which countries are culturally most similar to the U.S, which ones most dissimilar? 6. How many countries are there in the world? 13 13

14. What do you know? Question 1 a) Largest Countries China 1.3 Bill India 1.2 Bill U.S. 313 Mill Indonesia 240 Mill Brazil 198 Mill Pakistan 176 Mill Bangladesh 156 Nigeria 149 Mill Russia 140 Mill Mexico 111 Mill #11 Japan 127.5Mill Germany 82 Mill #16 b) World Population - 7 Bill 14 14

15. What do you know? – Question 2 GDP – Gross Domestic Product: total value of goods and services produced over a year’s time in an economy. PPP (Purchasing Power Parity) method allows comparisons across countries. b) GDP/capita in U.S.: ~ $47,000 GDP/capita in Mexico: $13,900 c) Growth rate in U.S.: 2 % (Typical growth rate ~ 3% for developed eco)2011 Taiwan, 10.8%, India 10.4%, China 10.3%, Brazil 7.5%, South Korea 6.1%, Mexico 5.5% d) GDP/sector in the U.S.: Agriculture 3.8%; Industry 35.2%; Service 61% GDP/sector in Mexico: Agriculture 1.2%; Industry 19.2%; Service 79.6% 15 15

16. What do you know? Question 2 e) Highest GDP/capita Qatar $144,00 Luxembourg $ 82,284 Singapore $ 62,100 Norway $ 54,600 U.S. $ 47,200 Switzerland $ 42,600 Netherlands $ 40,300 8. UK (Germany, France, Italy, Denmark) $ 34,800 Afghanistan $ 900 Zimbabwe $ 500 16 16

17. What do you know? Question 3 Economic Union – Trade Agreement, 27 members a) Eurozone – 17 countries using the euro or EMU – European Monetary Union: The group of the countries that use the euro b) PIIGS Countries - Portugal, Ireland, Italy, Greece, Spain

18. What do you know? Question 4 BRIC Countries – Brazil, Russia, India, China Emerging economies – growing at high GDP growth rates

19. What do you know?Question 5 Countries - culturally most similar to the U.S. Anglo Countries Canada Australia New Zealand U.K. Ireland South Africa 19 19

20. What do you know?Question 6 Number of countries in the world United Nations 192 Total number of countries: 192 -194 Vatican and Taiwan 20 20

21. Summary - Some Data 21 21

22. Course Introduction - 1. Course Content Cost-Benefit-Risk Analysis Attractiveness of a Country Benefits ?? Cost ?? Risk ??

23. Data Sources www.cia.gov - Land, Population, Government, Economy www.heritage.org - Economic Freedom www.transparency.org - Corruption 23 23

24. Economic Freedom Index of Economic Freedom - www.heritage.org/research/features/index/countries What is economic freedom? the absence of government coercion or constraint on the production, distribution, or consumption of goods and services How do you measure economic freedom? 50 independent economic variables 10 broad categories: Trade policy , Fiscal burden of government, Government intervention in the economy, Monetary policy, Capital flows and foreign investment, Banking and finance, Wages and prices, Property rights, Regulation, Informal market activity. Country Ranking (1 = Most economic freedom) Implications for cost 24 24

25. Corruption www.transparency.org– Corruption Perceptions Index Country Scores and Rankings Score: 100 (not corrupt at all) to 0 (most corrupt) Rank: 1 (least corrupt) to 176 (most corrupt) Implications for risk and cost 25 25

26. Example - Nigeria and Syria

27. Africa

28. Course Format • Syllabus

29. Case Analysis • Summary – 3-4 bullets • Issues – 2-3 issues • Concepts – 2-3 management conceptsand Relationship of concepts to issues • Questions

30. CBRA Project

31. Personal Introductions Instructor – Teaching, Research, International Students – background sheets Major – expected graduation date? Traveled internationally? Where, why? Grew up in other country? Speak other language? Group? Country preference? 31 31

32. FrameworkInternational Management What is an organization? Why do organizations exist? When is an organization effective? Efficiency vs effectiveness? 32 32

33. Organizations and Organizational Effectiveness What is an organization? Why do organizations exist? Organizations = People Mission, goals, objectives When is an organization effective? Distinguish between efficiency and effectiveness. Distinguish effectiveness measures for the short, intermediate, and long run. 33 33

34. Measurement of organizational effectiveness Long run? Intermediate run? Short run? 34 34

35. Measurement of organizational effectiveness Long Survival Intermediate Adaptation Short Productivity 35 35

36. Measurement of organizational effectiveness A contingency approach to management It is management’s task to create the best possible fit between the external and internal environments of the organization and must ensure internal consistency between theorganization’s elements. 36 36

38. Organizational Effectiveness - Management Create good fit between External environment – PESTEL (Six components) Internal environment – Four components

39. Organizational Effectiveness and Management • People – Behavior • Structure • Processes and Systems • Culture Stedham

40. Management – Internal • People – Behavior • Individual Behavior • Personality • Motivation • Perception • Group Behavior • Group Composition • Group Dynamics • Leadership Stedham

41. Management • Structure • Macro – Organization Chart • Relationship among jobs • Micro – Job Design • Tasks and authority in a job Stedham

42. Management • Processes and Systems • Decision-making • Communication • Human Resource Systems Stedham

43. Management • Culture • What is organizational culture? • Norms, Values • Accepted Behaviors • Where does it come from? • Top management Stedham

45. Focus - External Environment • Globalization • Global Institutions • Micro-level business decisions

46. Best companies to work for 2013 • Google – hiring more than 50 people currently, never had layoffs, 100% of health care premium, offers paid sabbaticals; 34,311 employees • SAS – 15 years, free health care center, camps for kids, car cleaning, gym; organic farm for four Cafeterias; 6,373 employees • CHG Healthcare Services – medical staffing firm; two on-site health centers; employee activities; 1,378 employees • Boston Consulting Group – red zone report; $10,000 to volunteer for a non-profit; 2, 314 employees #31 Zappos (#11 last year) – “fun” culture , free lunches, on site laughter yoga classes; 1,243 employees • Methodology - What do you think?

47. Methodology 359 Companies Trust Survey (2/3 of score) - Random sample of employees • Management’s Credibility • Camaraderie • Job Satisfaction Culture Audit (1/3 of score) Pay and Benefits, hiring practices, internal communication, training, recognition programs, diversity

48. Trust Willingness to be vulnerable! Function of – • Perceived ability • Perceived integrity • Perceived benevolence

49. Globalization Thomas Friedman Why change? Characteristics of the global system Previous system? 49 49

50. Thomas Friedman (NY Times) The Lexus and the Olive Tree The World is Flat Hot, Flat, and Crowded 50 50