What is globalization?
refers to the increasing connection and interaction of economies, businesses, people, and markets around the world.
multinational corporation (MNC)
a company that operates in more than one country.
Ethnocentric managers
"We know best"
An ethnocentric approach assumes that the manager's own country's way of doing things is best.
Polycentric managers
"They know best"
A polycentric approach assumes that people in the host country understand their own culture and environment best.
Geocentric managers
"What's best is what's effective, regardless of origin."
A geocentric approach looks for the best solution regardless of where it comes from.
Global outsourcing
A company obtains goods/services or production from another country.
Importing, exporting, & countertrading
- buying goods/services from another country.
- selling goods/services to another country.
- trading goods/services rather than relying entirely on currency.
Licensing & franchising
- allowing another company to use your intellectual property, such as a brand, technology, or product, in exchange for payment.
- allowing another party to operate a business using your company's business model and brand.
Joint ventures
A company works with another company to create or operate a business venture.
Wholly owned subsidiaries
The company completely owns the foreign business.
National culture
the shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people.
low-context cultures
shared meanings are primarily derived from written and spoken words.
high-context cultures
people rely heavily on situational and nonverbal cues for meaning when communicating with others.
Hofstede's model
helps managers understand cultural differences that can cause misunderstandings and miscommunication in international business.
GLOBE project
uses nine cultural dimensions