INTERNATIONAL MANAGEMENT

GLOBAL Business and People Management

Professor H. Michael Boyd, Ph.D.

Professor H. Michael Boyd, Ph.D.

Brief introduction rolandxavier.com

Name: Assoc. Prof. Dr. Siri Roland Xavier, MMIM Academic Qualifications: LL.B (Hons) University of London, UK; MBA, Charles Sturt University, Australia [Valedictorian] Doctor Of Business Administration, University of Newcastle, Australia What I do: Deputy Dean of the Bank Rakyat School of Business and Entrepreneurship. Programme Director for Entrepreneurship. National Team Leader of Global Entrepreneurship Monitor. Board member, Global Entrepreneurship Research Association (GERA). Editorial Board Member, Journal of Global Entrepreneurship Research (JGER), 2012-2013. Reviewer of Emerald Emerging Markets Case Studies focusing on SEA Lead writer of the Entrepreneurship Global Report, 2012.

1-2

My International Research projects

Global Entrepreneurship Monitor (GEM), National Team Leader and Principal Researcher, since 2009-2013: The Malaysian Report. Yearly university grant RM350, 000. Successful Transgenerational Entrepreneurship Practices (STEP), Team member, since 2009-2013. Yearly grant value MYR70,000. GEM-International Development Research Centre (IDRC) South East Asia, Research Project Leader, 2013, Grant value USD700,000. United Nations Economic and Social Commission for Asia and the Pacific (ESPAC), Project member, Multinational Enabling Environment for Womens Economic Empowerment Through Entrepreneurship, 2012, Grant value MYR45,252.

Total 2013 Research Grants=MYR2,565,252

1-3

International Management
International management involves
Applying management concepts and techniques in a multinational environment and Adapting management practices to different economic, political, and cultural environments.

Multinational corporation (MNC)

Operations in more than one country International sales Nationality mix of managers and owners
1-6

The Worlds Top Nonfinancial MNCs

Ranked by Foreign Assets, 2007

1-7

The Worlds Top Nonfinancial MNCs from Developing Countries

Ranked by Foreign Assets, 2007

1-8

Globalization and Internationalization

Globalization
Process of social, political, economic, cultural, and technological integration among countries around the world.

Hastened by
Offshoring Process by which companies undertake some activities at offshore locations instead of their countries of origin. Outsourcing Subcontracting or contracting out of activities to external organizations that had previously been performed by the firm.
1-9

Map of the World

1-10

The workforce is Global

World Population 2011 The Face of Seven Billion People
On a planet of seven billion people the population in 2011 who is the most typical human? According to statistics: a 28-year-old Han Chinese male. The worlds largest age bracket is 28, the largest ethnic group is Han, and with 1.3 billion people, the most populous nation is China. (By 2030, China will lose its top population status, and the most typical human face will be Indian.) The typical human is male only by a whisker: There are 1.01 men in the world for every woman. Other top-ranking traits among the worlds population: 82% are literate 40% work in service; 38% in agriculture; 22% I Industry 51% live in urban environments 33% are Christian; 21% are Muslim; 13% are Hindu 13% speak Mandarin as their first language; 5% Spanish; 5% English 19% are Chinese; 17% are Indian; 4% are American.
National Geographic, March 2011
http://web.bentley.edu/hboyd/readings_files/Global/World%20Population %202011.pdf

Our World Changes Faster Than we Think!

The global market may become the only place to find skills needed

Globalization: Pros and Cons

Benefits of Globalization
Wealth Jobs Technology Lower prices

Criticisms of Globalization
off-shoring of business service jobs to lower-wage countries growing trade deficits slow wage growth environmental and social impacts
1-14

Global and Regional Integration

Global Agreements
World Trade Organization (WTO) General Agreement on Tariffs and Trade (GATT)

Regional Agreements
North American Free Trade Agreement (NAFTA) U.S.-Central American Free Trade Agreement (CAFTA) European Union (EU) Association of Southeast Asian Nations (ASEAN) Free Trade Agreement of the Americas (FTAA)
1-15

International Economic Power in the Global Economy

Shifting landscape due to
Economic integration Economic potential of emerging markets BRIC countries (Brazil, Russia, India, and China) could be among the four most dominant economies by 2050

1-16

The Worlds Largest Economies 2005 and 2020

(Projected) Measured by GDP at Market Exchange Rates

1-17

The Worlds Largest Economies 2005 and 2020

(Projected)
Measured by GDP at Purchasing Power Parity

1-18

Changing Demographics: Developing Countries on the Rise

(ranked by size)

1-19

Trends in Trade and International Investments

International Trade
In 2009 merchandise and commercial services exports declined

Foreign direct investment (FDI)

Investment in property, plant, or equipment in another country Growing at healthy rate Outpacing domestic growth in most countries Declined in 2009 due to the global recession

1-20

World Merchandise Trade by Region and Selected Country, 2009

(in U.S.$ billions or percent)

1-21

World Foreign Direct Investment Inflows

(in U.S.$ millions)

1-22

World Foreign Direct Investment Inflows

(in U.S.$ millions)

1-23

Global Economic Systems

Market Economy Command Economy Mixed Economy

1-24

Economic Performance by Major World Region

Established Economies
North America European Union Japan

Emerging Economies
Central and Eastern Europe China Other Emerging Markets of Asia India

Developing Economies on the Verge

South America Middle East and Central Asia Africa

1-25

Map of the Americas

Copyright Houghton Mifflin Company. All

1-26

1-26

Economic Performance Established Economies

North America
One of the four largest trading blocs in the world Combined purchasing power of U.S., Canada and Mexico approaches $12 trillion Free-market-based economy is attractive to private firms

United States
Foreign MNCs find U.S. a lucrative expansion market Foreign firms welcomed as investors in U.S. market U.S. firms hold market dominance in many European markets; gaining market share in Asia
1-27

Economic Performance Established Economies

Canada
U.S.s largest trading partner Most of the largest foreign-owned Canadian companies are totally or heavily U.S.-owned Legal and business environment in Canada is similar to that in U.S.

Mexico
Strongest Latin American economy Very strong maquiladora industry Trade with both Europe and Asia has increased Now competitive with Asia for the U.S. market
1-28

Economic Performance Developing Economies on the Verge

South America
Hampered by foreign debt and severe inflation But, intercountry trade is increasing
Countries looking to do business with U.S.

Brazil
Economy is now flourishing and attracting investment from MNCs
Privatization and stable government

1-29

Economic Performance Developing Economies on the Verge

Chile
Uncertain future, but helped by trade agreements

Argentina
Abundant natural resources Economic problems persist

1-30

Map of Europe

Copyright Houghton Mifflin Company. All

1-31

1-31

Economic Performance Established Economies

European Union
Ultimate objective
Eliminate all trade barriers among member countries Emergence of the EU as an operational economic union
A unified Europe could become the largest economic market in terms of purchasing power in the world

Foreign MNCs trying to gain foothold in EU

Acquisitions, alliances, cooperative R&D efforts

Economic linkages between the EU and newly emerging Central and Eastern European countries
Challenge is to absorb former communist bloc countries

Financial crises in Greece and Ireland putting pressure on the euro

1-32

Economic Performance

Established Economies
Japan
Huge economic success in 1970s and 1980s Ministry of International Trade and Industry (MITI) Keiretsus
Vertically integrated industries Holdings provide assistance needed in providing goods and services to end users

Decade long recession in 1990s

More competition from emerging economies Poor management decisions

Remains a formidable competitor in the Pacific Rim, 1-33 North America, and Europe

Economic Performance Emerging Economies

Central and Eastern Europe Russia
Dismantling of price controls and privatization Membership in International Monetary Fund (IMF) controlling inflation Crime and political uncertainty

Czech Republic, Hungary, Poland

Privatization Inflation
Political uncertainty
1-34

Map of Asia-Pacific

1-35

Economic Performance Emerging Economies

China
Real economic growth of 12 percent in 2007, 9 percent in 2008, and 11.5 percent in 2009 Savings glut in corporate sector Vast developmental needs Unemployment concerns Attractive to investors despite political risk Product pirating is a major problem Currency value Government policies favor domestic firms
1-36

Economic Performance Emerging Economies

South Korea
Chaebols Very large family-held conglomerates Solid economy, moderate growth and inflation, low unemployment

Hong Kong
Part of Peoples Republic of China Uncertainty about the role the Chinese government

1-37

Economic Performance Emerging Economies

Singapore
Success story Leader and financial center for region

Taiwan
Progressed from labor-intensive economy to one dominated by technologically sophisticated industries
banking, electricity generation, petroleum refining and computers

1-38

Economic Performance Emerging Economies

Thailand, Malaysia, Indonesia
Large population base Inexpensive labor Considerable natural resources Attractive to outside investors

1-39

Economic Performance Emerging Economies

India
Large population Recent trend of locating software and high valueadded services to this country boosting middle- and upper-class market for goods and services Attractive to U.S. and British investors
well educated, English speaking, technologically sophisticated workers

1-40

Map of the Middle East

Copyright Houghton Mifflin Company. All

1-41

1-41

Economic Performance Developing Economies on the Verge

Middle East and Central Asia
Large oil reserves Highly unstable geopolitical and religious forces Plagued by continuing economic problems

1-42

Map of Africa

1-43

Economic Performance Developing Economies on the Verge

Africa Considerable natural resources African nations remain very poor and undeveloped International trade is not a major sources of income Populace divided into 3,000 tribes that speak 1,000 languages and dialects Major political instability Poverty, starvation, illiteracy, corruption, overcrowding among many social problems negatively affecting economic sector
1-44

Worlds Most Competitive Nations, 2010

1-45

Market Potential Indicators Ranking for Emerging Markets, 2009

1-46

Culture
Operating system of the mind Distinguishes one group from another Impacts attitudes, beliefs, and behaviors Often unconscious Understand to predict behavior Danger of generalizations

1-48