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lOM oA RcPSD |266 833 4 Cross Cultural Management Week 1 – Lecture 1 & Chapter 1 + 2 Chapter 1 The Challenging Role of the Global Manager Dramatic shifts in economics, politics and technology shape the role of the international management.  Globalization Various definitions of globalization.Globalization = a process whereby worldwide interconnections in virtually every sphere of activity are growing. Some of these interconnections lead to integration/unity worldwide; others do not.This increase in interconnections is the result of shifts that have taken place in technological, political and economic spheres.The following four categories of change illustrate the process of globalization: 1.Growing Economic Interconnectedness •The economic interconnections among countries were dramatically increased with the advent of free-trade areas in the 1990s.•The result of these agreements is to create a greater degree of interconnectedness among the world’s economies •Therefore, local economic conditions are no longer the result of purely domestic influence •The gap between regional GDP growth rates of the fastest growing and least dynamic regions of the world has begun to narrow, but in a context of low global growth. The GDP growth rates of the BRIC countries have all declined substantially between 2010 and 2014.•The level of foreign direct investment (FDI) also has a globalizing effect.FDI doubled between 1997 and 2014.•Global economic turmoil during the past decade indicates that the effects of globalization not only have the potential to favour developed market economies and small number of large emerging economies but are not even consistently positive in developed economies.•Organizational boundaries are also affected by globalization. In modern corporations production, sales, marketing and distribution might all be located in a different country to capitalize on certain location-specific advantages.•Less hierarchical relationships and cooperative strategic alliances with other firms •Emergence of virtual organization •Thus economic globalization connects countries and organizations in a network of international linkages that shape the environment in which global managers must function. 2 / 4

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lOM oA RcPSD |266 833 4 2.More Complex and Dynamic Work Environment •Changes that affect the stability of the work environment within

organizations: downsizing, privatization and movement toward team-based

management •The number of permanent migrant is changing the composition of the workforce in numerous countries. Migration resulting from economic, political and social factors increase.•Trends in migration: (1) 2014: war refugees from Syria, Afghanistan, Somalia.(2) number of women migrants has expanded and contracted. (3) Today’s migrants are much more likely to be highly skilled •Privatization enables formerly government-controlled enterprises to be available for purchase by foreign firms, thus reducing boundaries.•Organizations around the globe are increasingly looking toward the formation of teams of workers as a solution to productivity problems.•Thus, these changes contribute to create a more complex and dynamic work environment for firms around the world.

3.Increased Use and Sophistication of Information Technology •The most significant force toward globalization, the one with the most potential to shape the international management landscape, might be the dramatic advances in information technology.•The likely effect is that the work roles of employees and managers will need to be adjusted to reflect an increasingly information-driven environment.

4.More and Different Players on the Globe Stage •The number of new entrants to the international arena in recent years increased.•Most rapid expansion of international business occurred in the latter half of the 20 th century •Technology has facilitated the entry of small business into the international arena.•Transnational crime and terrorist groups. Imporvements in transportation, telecommunications and international finance have promoted the activities of these groups. The international activities of the two groups overlap and often aid one another.•One key result of globalization is that global managers face an external environment far more complex, more dynamic, more uncertain and more competitive than ever before.The elements of the global manager’s environment can be divided into four categories: economic, legal, political and cultural.Economic legal and political aspects of the global business environment provide the backdrop against which global managers must function.Culture is singled out as uniquely important to international management for three reasons: 1.To a great extent, the economic, legal and political characteristics of a country are a manifestation of a nation’s culture. These systems are derived from a country’s culture and history.

2.Culture is largely invisible. The influence of culture is difficult to detect.Managers therefore often overlook it.

3.One of the distinct characteristics of global management is that interpersonal interactions occur with individuals who are culturally different.

How Global Managers Carry Out Their Role: Sources of Guidance

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