module 1 ib 2nd sem
TRANSCRIPT
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The International Business
Environment
Module 1
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International Business
Operations of the firms with Interests
in Several countries
All commercial transactions (Pvt. &Govt.) between two or more countries
may or may not be for profit
Sales, Investment & Transportation
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Scope
To Attain
Competitiveness
Successful Global Presence
Growth & Stability in Global Market
Why International Business ?
To Expand Sales To Acquire Resources
To Minimize Risks
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Reasons for Recent Growth
Rapid Increase in the Expansion ofTechnology
Liberalization of Cross-bordermovements
Development of Supporting Services
Consumer Pressures Increase in Competition (Local &
Global)
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External Influences on IB
Objectives
Strategy
Means
Physical & Socialfactors
Countervailing
Forces
CompetitiveEnvironment
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Module Coverage
Culture
Cultural Awareness
Dynamics of culture
Behavioural Practices affecting
business
Strategies dealing with cultural
differences
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The cultural Environment
Culture The specific learned norms
based on attitudes, beliefs and values
that exist in every nation as an integralpart of external environments for any
business.
Cultural awareness
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The cultural Environment
Coty Beauty
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The cultural Environment
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Dynamics of Culture
The Nation as a Point of Reference
We They
Group Similarity
Country A
Managers
Workers
Rural
Urban
Rich
Poor
Country B
Managers
Workers
Rural
Urban
Rich
Poor
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Dynamics of Culture ..
Contd.
Culture formation & dynamics
Language as a cultural stabilizer
Religion as a cultural stabilizer
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Behavioural Practices affecting
the business
Social Stratification System
Ascribed & Acquired Group memberships
Performance Orientation
Gender Based Groups Age Based Groups
Family Based Groups
Occupation
Motivation
Materialism & Leisure Max Weber
Expectation of success & reward
Need Hierarchy
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Behavioural Practices affecting
the business Contd.
Hofstedes Model
Relationship References Power Distance
Ind iv idual ism V/s Col lect iv ism
Risk Taking Behaviour Uncertainty Avoidance
Assert iveness
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Evaluating Hofstedes Model
CountryPower
Distance
Uncertainty
Avoidance
Individualis
m
Masculinit
y
Australia 36 51 90 61
France 68 86 71 43
England 35 35 89 66
India 77 40 48 56
Japan 54 92 46 95
Thailand 64 64 20 34
USA 40 46 91 62
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Evaluating Hofstedes Model
0
10
20
30
40
50
60
70
80
90
100
Australia France England India Japan Thailand USA
Pow er Distance
Uncertainty Avoidance
Individualism
Masculinity
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Strategies for dealing with
cultural differences
Making little or No Adjustments
Communications
Spoken & Written language
Silent language
Culture Shock
Company & Management orientation
Polycentrism, Ethnocentrism,
Geocentrism
Institute the change
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Spoken & Written Language France: Please leave your values here
Mexico: The manager has personally passed all thewater served here ( Assuring the quality of drinkingwater served)
Japan: You are invited to take advantage of thechamber-maid
Norway: Ladies are requested not to have children inthe bar
Switzerland: Because of the impropriety of
entertaining guests of the opposite sex in thebedroom, it is suggested that the lobby be used forthis purpose
Greece: We will execute customers in strict rotation(Only people in the queue will be checked in)
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The Political Environment Political Approaches
Capitalism
Socialism
Political Systems Democracy
Representative Democracy
Totalitarianism
Communist Theocratic
Tribal
Right-Wing
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The Legal Environment
Legal Systems
Common Law
Civil Law
Theocratic Law
Contract Law Protection of Intellectual Property
Product safety & liability
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Color Legal System
Civil law
Common law
Custom
Theocratic law
Common & Civil
law
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The Economic Environment
Market Economy
Command Economy
Mixed Economy
State Directed Economy
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End of Module 1
Thank you
Case study Discussion in Next Class
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Physical & Social Factors
Political Policies & Legal Practices
Cultural Factors
Economic Forces
Geographical Influences
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Competitive Environment
Major Advantage in Price, Marketing,Innovation and other factors
Number & Comparative capabilities ofcompetitors
Competitive differences by countries
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Means
Modes
Import & Export, Tourism & Transport, Licensing& Franchising, Turnkey operations,Management Contracts, FDI/FII
Functions
Marketing, Global Manf. Hub, SCM, Accounting& Finance, HR
AlternativesChoice of countries, Organization & ControlMechanism
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Countervailing Forces
Global v/s National Standards
Country v/s Company competitiveness
Sovereign v/s Cross-National relationships