Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
Interactive Classroom Material:
EXAMPLE: E-Commerce: Alibaba
If asked, most Americans would point to Amazon.com as the largest online retail outlet. They
would be wrong. Alibaba, founded by Jack Ma in 1999 in China, is actually larger than Amazon
and eBay combined. This example describes some of the products and services provided by
Alibaba.
Click for follow-up activity.
One Big World Market: The Global Economy
● The demise of communism, the opening of economies to foreign trade by Asian
countries, and deregulation of economies have created a global economy.
● The global economy is the increasing tendency of the economies of the world to interact
with one another as one market instead of many national markets.
Cross-Border Business: The Rise of Megamergers and Minifirms Worldwide
● The global market has fueled the growth of two opposite kinds of businesses:
megamergers and minifirms.
● Megamergers occur when huge companies merge into even larger companies.
4.2 You and International Management
POWERPOINT SLIDES:
#9 International Management
#10 Why Learn About International Management?
#11 Learning to be a Success Abroad
#12 & 13 The Successful International Manager
Section 4.2 describes how studying international management prepares you to work with foreign
customers or suppliers, or to work for a foreign firm in the United States or abroad. Successful
international managers aren’t ethnocentric or polycentric but geocentric.
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Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
● Working overseas can be an advantage to your career.
● Foreign experience demonstrates independence, resourcefulness, entrepreneurship.
● You can develop a global mindset, which combines (1) an openness to and awareness of
diversity across cultures and markets with (2) a propensity and ability to see common
patterns across countries and markets.
Interactive Classroom Material:
EXAMPLE: Managing Your Career: Getting the Edge in the Global Job Market
This Example points out that 70 percent of Millennials want to travel—that is why they work to
begin with! Therefore, seeking jobs overseas could fulfill both these desires. However, what
should they do to increase their chances of landing an overseas job?
Click for follow-up activity.
Why Learn About International Management?
● International management is management that oversees the conduct of operations in or
with organizations in foreign countries.
● A multinational corporation, or multinational enterprise, is a business firm with
operations in several countries.
● A multinational organization is a nonprofit organization with operations in several
countries.
● Even if you never travel outside North America, the world will assuredly come to you.
o You may deal with foreign customers or partners.
Connect® Exercise
CLICK AND DRAG: The Successful International Manager
Summary of Activity:
As a new manager, there are a number of reasons students should learn about international
management. In this two-part click and drag exercise, students will first match the various
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
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attitudes held by international managers into the correct place in a provided timeline. Then,
students will review fictitious behaviors by managers, and correctly categorize them.
Ethnocentric Managers—“We Know Best”
● Ethnocentric managers believe that their native country, culture, language, and behavior
are superior to all others.
SELF-ASSESSMENT 4.1
Assessing Your Consumer Ethnocentrism
This 9-question self-assessment measures students’ consumer ethnocentrism. Questions on
foreign-made products, trade, and taxation are presented.
Click for Self-Assessment activity.
Polycentric Managers—“They Know Best”
● Polycentric managers believe that native managers in the foreign offices best understand
native personnel and practices, so the home office should leave them alone.
● The attitude of polycentric managers is nearly the opposite of that of ethnocentric
managers.
Geocentric Managers—“What’s Best Is What’s Effective, Regardless of Origin”
● Geocentric managers accept that there are differences and similarities between home and
foreign personnel and practices.
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
4.3 Why & How Companies Expand Internationally
POWERPOINT SLIDES:
#15 Why Companies Expand Internationally
#16 Five Ways of Expanding Internationally
#17 Top 10 Exporting Countries, 1999 and 2016
#18, 19, 20, 21 How Companies Expand Internationally
Section 4.3 discusses why and how companies expand abroad. Multinationals expand to take
advantage of availability of supplies, new markets, lower labor costs, access to finance capital, or
to avoid tariffs and import quotas. Five ways companies expand internationally are: 1) global
outsourcing; 2) importing, exporting, and countertrading; 3) licensing and franchising; 4) joint
ventures; and 5) wholly-owned subsidiaries.
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Why Companies Expand Internationally
● Companies may have to go where their basic supplies or raw materials are located.
● Companies can reach new markets and can make money overseas when demand for their
products decreases at home.
How Companies Expand Internationally
● Most companies enter into international business in one of five ways.
● Figure 4.1 shows the entry modes ranging from the lowest risk and investment to the
highest risk and investment.
● Global Outsourcing
o Outsourcing is defined as using suppliers outside the company to provide goods
and services.
● Importing, Exporting, and Countertrading
o When importing, a company buys goods outside the country and resells them
domestically.
Interactive Classroom Material:
EXAMPLE: Global Outsourcing: Which Jobs Have Fallen Victim?
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4-16
This Example begins by discussing the large number of jobs that have been offshored and how
this worries workers. It then moves to a quick list of the types of jobs least likely to be offshored:
those requiring face-to-face and physical contact, those requiring exceptionally high skilled
workers, and those requiring the recognition of complex patterns. There is also a short discussion
of the types of service jobs that have recently been offshored. The example ends with the cheery
note that those with more education are the least likely to lose their jobs to offshoring when the
economy shifts downward.
Click for follow-up activity.
● Licensing and Franchising
o In licensing, a company allows a foreign company to pay a fee to make or
distribute the first company’s product or service.
● Joint Ventures
o A U.S. firm may form a joint venture, also known as a strategic alliance, with a
● Wholly-Owned Subsidiaries
o A wholly-owned subsidiary is a foreign subsidiary that is totally owned and
controlled by an organization.
Connect® Exercise
CLICK AND DRAG: Five Ways of Expanding Internationally
Summary of Activity:
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
There are five basic ways companies can expand internationally. In this click and drag exercise,
students will match descriptions of international expansion methods with their correct methods.
4.4 The World of Free Trade: Regional Economic Cooperation
and Competition
POWERPOINT SLIDES:
#23 The World of Free Trade
#24 Barriers to International Trade
#25, 26, 27 Organizations Promoting International Trade
#28 Major Trading Blocs
#29 The Trans-Pacific Partnership
#30 Most Favored Nation Trading Status
#31 Exchange Rates
#32 The BRICS Countries
Section 4.4 discusses barriers to free trade, which include tariffs, import quotas, and embargoes.
Organizations promoting international trade are the World Trade Organization, the World Bank,
and the International Monetary Fund. Major trading blocs include NAFTA and the European
Union. Trans-Pacific Partnership (TPP) is a trade agreement among 12 Pacific Rim countries that
One way that you could begin your coverage of these topics is to have students watch a United
States Department of Commerce video on Free Trade Agreements: FTAs: U.S. Exporting Help.
ONLINE
4-18
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
for American consumers, and the possibility that China will retaliate with tariffs on some
American goods as well.
2. The United States is often accused by other nations of using trade as a political weapon,
by imposing trade sanctions on countries whose political policies we don’t like (e.g.,
Cuba embargo). Discuss the advantages and disadvantages of using embargoes, and
evaluate the extent to which you think they are an appropriate use of trade policy.
Section 4.4 Key Concepts:
Barriers to International Trade
● Free trade is the movement of goods and services among nations without political or
economic obstruction.
● Countries often use trade protection—the use of government regulations to limit the
import of goods and services—to protect their domestic industries against foreign
competition.
● Tariffs
o A tariff is a trade barrier in the form of a customs duty or tax levied mainly on
imports.
● Import Quotas
o An import quota is a trade barrier in the form of a limit on the amount of a
product that can be imported.
o The intent of an import quota is to protect domestic industry by restricting the
availability of foreign products.
● Embargos and Sanctions
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o An embargo is a complete ban or prohibition of trade of one country with
another.
Organizations Promoting International Trade
● After World War II, the advanced nations of the world began to realize that if all
countries could freely exchange the products that each could produce most efficiently,
this would lead to lower prices all around.
● Nations began to focus on the removal of barriers to free trade.
● Three principal organizations designed to facilitate international trade were formed.
● World Trade Organization
o World Trade Organization (WTO) is a 164-member organization designed to
monitor and enforce trade agreements.
o The agreements are based on the General Agreement on Tariffs and Trade
(GATT), an international accord first signed in 1947, which helped to reduce
worldwide tariffs.
● World Bank
o The World Bank is a 189-member organization whose purpose is to provide low-
interest loans to developing nations for improving transportation, education,
health, and telecommunications.
● International Monetary Fund (IMF)
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
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o The 189-member IMF is a last-resort lender, making short-term loans to countries
suffering from unfavorable balance of payments.
Major Trading Blocs
● A trading bloc, also known as an economic community, is a group of nations within a
geographical region that have removed trade barriers with one another.
● Two major trading blocs are the NAFTA nations and the European Union.
● Four other trading blocs, APEC, ASEAN, Mercosur, and CAFTA, are described in Table
4.5.
● North American Free Trade Agreement (NAFTA)
o The North American Free Trade Agreement (NAFTA) is a trading bloc
consisting of the United States, Canada, and Mexico.
● European Union (EU)
o The European Union (EU) is a trading bloc consisting of 28 countries in Europe.
o Nearly all internal trade barriers have been eliminated, including movement of
labor between countries.
Interactive Classroom Material:
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
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EXAMPLE: What Will Brexit Mean for Britain and the EU?
This Example presents the problems Great Britain faces with its exit from the EU in 2019. It
focuses, in particular, on the banking industry as London has been the hub of the EU banking
world. Banks are fleeing London for Frankfurt and Paris. Students are asked to consider the
implications of a hard vs a soft “Brexit.” Further, they are asked to examine the advantages and
disadvantages of common markets.
Click for follow-up activity.
● The Trans-Pacific Partnership
Most Favored Nation Trading Status
● With most favored nation trading status, a country grants other countries favorable
trading treatment such as the reduction of import duties.
● The purpose is to promote stronger and more stable ties between the countries.
Exchange Rates
● The exchange rate is the rate at which the currency of one country can be exchanged for
the currency of another.
● Because of changing economic conditions, the values of currencies fluctuate in relation to
each other.
Interactive Classroom Material:
EXAMPLE: An American in London Dealing with Currency Exchange—How Much Are
Those Jeans, Really?
Click for follow-up activity.
The BRICS Countries: Important International Competitors
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● The term BRICS stands for the five major emerging economies of Brazil, Russia, India,
China, and South Africa.
● The BRICS are important because they make up 40 percent of the world’s population,
represent about 20 percent of the world’s economic activity, and have established their
own $100 billion reserve fund to rival the International Monetary Fund.
● China
● India
● Brazil
4.5 The Importance of Understanding Cultural Differences
Connect® Exercise
CLICK AND DRAG: Barriers to International Trade
Summary of Activity:
In this Click and Drag exercise, students will match the barriers to international trade with their
correct examples.
POWERPOINT SLIDES:
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
#33 Understanding Cultural Differences
#34 Understanding Cultural Dimensions
#35, 36 Cultural Dimensions: The GLOBE Project
#37 Other Cultural Variations
#38 U.S. Managers on Foreign Assignments
Section 4.5 describes the importance of national culture and cultural dimensions. Hofstede’s four
cultural dimensions and the nine dimensions of Project GLOBE are useful frameworks for
understanding cultural differences. Basic cultural perceptions are embodied in language,
interpersonal space, communication, time orientation, religion, and law and political stability.
Expatriates, people living or working in a foreign country, often fail on foreign assignments.
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
4-24
● We begin learning our culture starting at an early age through everyday interaction with
people around us.
● Visitors to another culture may experience culture shock—the feelings of discomfort and
disorientation associated with being in an unfamiliar culture.
Hofstede’s Model of Cultural Dimensions
● Geert Hofstede collected data from 116,000 IBM employees in 53 countries and
proposed four dimensions along which national cultures can be placed.
● The dimensions are:
o Individualism/collectivism: how much people prefer a loosely knit social
framework in which people are expected to take care of themselves, or a tightly
The GLOBE Project Cultural Dimensions
● The GLOBE project is an ongoing cross-cultural investigation of nine cultural
dimensions involved in leadership and organizational processes.
● The dimensions are:
o Power distance: the degree to which a society’s members expect power to be
unequally shared.
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o Institutional collectivism: the extent to which individuals are encouraged and
rewarded for loyalty to the group as opposed to pursuing individual goals.
o In-group collectivism: the extent to which people should take pride in being
altruistic, caring, kind, generous, and fair.
● The GLOBE dimensions show how cultural patterns vary.
● Knowing the cultural tendencies of foreign business partners and competitors can give
you a strategic competitive advantage.
Connect® Exercise
CLICK AND DRAG: Dimensions of Culture—The GLOBE Project
Summary of Activity:
In 1993, researcher Robert House started the GLOBE Project (Global Leadership and National
Behavior Effectiveness)—a cross-cultural investigation of cultural dimensions that impact
leadership and other organizational processes. In this Click and Drag exercise, students will
match the cultural dimension into the appropriate spot on the provided chart that corresponds
with the description.
SELF-ASSESSMENT 4.2 CAREER READINESS
Assessing Your Standing on the GLOBE Dimensions
This 17-question self-assessment determines students’ standing on dimensions such as
collectivism, uncertainty avoidance, future orientation, power distance, and others.
CAREER
READINESS
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
4-26
Click for Self-Assessment activity.
Other Cultural Variations
● Language
o There are more than 3,000 different languages spoken throughout the world.
o Even though global business speaks English, there are nuances among cultures
that can lead to misperceptions.
o In communicating across cultures you have four options:
● Interpersonal Space
o Interpersonal space measures how close or far away one should be when
communicating with another person.
o People of different cultures have different ideas about what is acceptable
interpersonal space.
Connect® Exercise
CLICK AND DRAG: Interpersonal Space
Summary of Activity:
In this Click and Drag exercise, students will match the different interpersonal space
measurements with their appropriate culture.
● Communication
o The key to doing business in different cultures is to remember that you don’t
know what you don’t know.
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
4-27
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
o When working cross-culturally, you need to work on listening and being more
patient and understanding of local ways of doing business.
● Time Orientation
o Monochronic time is a preference for doing one thing at a time.
o Polychronic time is a preference for doing more than one thing at a time.
Interactive Classroom Material:
PRACTICAL ACTION: How to Run an International Meeting
This Practical Action presents a number of questions for students to consider when conducting
(or even attending) a meeting with cross-national participants. The five sections include knowing
your audience, understanding culture norms of status and personal space, considering cultural
difference surrounding the use of time, the need to adapt in many areas you would not have
thought about, and a consideration of culturally different decision-making styles and the need to
be aware of them.
Click for follow-up activity.
● Religion
o There are wide variations in work-related values for different religious
affiliations.
● Law and Political Stability
o Firms operating abroad must deal with other countries’ laws and business
practices and make calculations about political risk.
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o Even in a developed country, a company may be victimized by political
instability, such as riots or civil disorder.
o Firms should be concerned about expropriation, a government’s seizure of a
domestic or foreign company’s assets.
Interactive Classroom Material:
CASE ANALYSIS: Costco Plans to Grow Its International Markets
Summary of Activity:
In this case analysis students will first read about Costco’s expansion outside the United
States, and then respond to questions to measure comprehension.
Follow-Up Activity:
Instructor should begin by asking students if they have ever utilized any of the international
expansion strategies described in the activity. Second, students can be placed in one of five
groups. Each group would represent one strategy for international expansion. What are the
pros and cons of this particular strategy? Do you know of any organizations currently utilizing
this strategy? Each group should share with the class.
U.S. Managers on Foreign Assignments: Why Do They Fail?
● Expatriates are people living or working in a foreign country.
● Using expatriate managers is expensive, and many return early because of job
dissatisfaction or adjustment difficulties.
SELF-ASSESSMENT 4.3 CAREER READINESS
Kinicki/Williams, Management, 9e: Chapter 4 Global Management: Managing across Borders
Assessing Your Global Manager Potential