International Business and Management .ppt

slides

1. 1
INTERNATIONAL
MANAGEMENT
Chapter 1
Understanding International
Business & Management

2. 2
Understanding International
Business & Management
National----------------------------International
Anysortofbusinessactivitythatcrosses
nationalboundaries-InternationalBusiness.
Activitiesrelatingtoindustryandcommerce
performedonaninternationallevel.
InternationalManagement-Processof
applyingmanagement conceptsand
techniquesinamultinationalenvironment.

3. 3
Basic Functions
Processes
Techniques
Domestic Business International Business
Same
Difference
Environmentwithin which these functions are
performed and processes are carried out.

4. 4
International Business Environment
Environment-Sumtotalofalltheforces
surrounding&influencingthelifeand
developmentofthefirm.
Why ?
Internal Environment
Strengths
Weakness of the Org.
Business Decision
External Environment
Business Opportunity
Threats to Business

5. 5
Business Dynamics to a large extent
depends on the environmental dynamics.
Environmental understanding becomes
more important in the area of international
business in which the environmental
forces of the home country interact with
the foreign environment.
International Business Environment

6. 6
Environmental Characteristics
Factors and Forces are external to the firm.
Essentially uncontrollable.
Environmental factors are dynamic-they
continuously change over time.
NEED ?
Anticipate, respond and adapt to the
complexity and rapid pace of various
environmental forces changes globally.
Being international environmental factors are
given, the firms should adapt its business
strategy to suit the environmental factors.

7. 7
Components of International Business Environment
Internal
Environment
Micro Environment
Domestic Environment
Foreign Environment
Global Environment

8. 8
Internal Environment
Represent firm’s business strategy and
decision with regard to--
Production
Finance
Marketing
Human Resources
Research Activities
Firm can change them, but within the
constraints of various environmental factors.

9. 9
Micro Environment
Actors in the firm’s immediate environment
which directly influence the firm’s decisions
and operations.
Micro Environment
Suppliers
Market
Intermediaries
Financial
Institutions
Competitors
General Public
Are Semi-Controllable-Controllable to some
extent
Customers

10. 10
Domestic Environment
Competitive Structure Economic climate
Political & Legal forces
Uncontrollable
IMPACT ?

11. 11
Domestic firms venture into
international business
Lack of domestic demand and/or
Intense Competition
Export Promotion Measures and/or
Economic Incentives

12. 12
Foreign Environment
Geographic
Economic Conditions
Social-Cultural Environment
Political & Legal forces
Technological Environment
Ecological Environment

13. 13
Differences Exist
1.Between domestic & foreign environments.
2.Among the environments prevailing in
different foreign markets.
Business Strategies that are successful in
one nation might fail miserably in another
nation.

14. 14
Global Environment
World Economic Condition
International Financial Systems
Working of WTO, IMF, WB..
International Agreements & Treaties
Regional Economic Groupings
World-wide Economic Recession
Initiatives of Regional levels
European Union (EU)
North American Free Trade Association (NAFTA)
Association of South East Asian Nations ( ASEAN)
Exerts influence over domestic as well as foreign
Countries.

15. 15
Domestic Environment
( Uncontrollables)
Competitive Structure
(Controllable)
International Business
Decision
-Production
-Finance
-Human Resource
-Marketing
Domestic Environment
( Uncontrollable)
Competitive Structure
Economic Climate
Foreign Environment ( Uncontrollable)
Geographic Environment
Political Environment
Global Environment ( Uncontrollables)
International Economic Environment

16. 16
Relevance of International Business
Environment
Central Issues in entering into
international business -
Which market (s) to select?
How to enter into those markets?
-Decisions are strategic in nature and
influenced by the environmental forces.
-Target markets should have enough
market potential.

17. 17
How to enter (Mode) of entry?
(Market Entry and Operating Forms)
Exporting
-Direct
-Indirect
Licensing/
Franchising
Strategic Alliance
Production/
Assembly Facility
-Contract Manufacturing
-Assembly operations
-Wholly-owned
manufacturing facility

18. 18
Exporting is desirable
If economical to produce in the home
country.
No legal restrictions on import of given
product in the foreign markets.
May take either the form of direct and
indirect exporting.

19. 19
In case of import bans or excessive
transportation cost
Set up manufacturing subsidiaries abroad
Assembly operations
Contract manufacturing
-Feasible,
1. If foreign governments allow FDI
2. Raw materials & labor are locally available
at competitive prices.
-In case FDI is disallowed..
-GO for either licensing/franchising
-Joint Venture

20. 20
Environmental forces & Functional &
Tactical Decisions of a Firm
What should be the scale of production?
Should the firm employ labor or capital intensive
techniques?
How to finance firm's foreign operations?
How much to repatriate?
What marketing mix should the firm use?
Should the firm hire local persons or employ
foreign nationals?
What should be their compensation package?

21. 21
Non-Economic Environment
Political Socio-Cultural Legal
Ecological Geographic

22. 22
Political
Form of Government Political Party System
Political Ideology Role of Government
Political Stability

23. 23
Socio-Cultural
Language Education
Aesthetics Religions & Superstition
Attitude & values Social groups &
Organizations

24. 24
Myths versus Reality
(Japanese Management styles and
techniques –some major findings)
All Japanese workers are not
laborious/industriousas is commonly
believed.
Company loyaltyamong many Japanese may
not be as highas is expected.
Many Japanese managers are tend to be
autocratic.
(Discussions-refer page 20).