Unit 5: The Global Environment
This unit dives into business in the global environment, discussing how globalization affects management and the challenges and opportunities of operating in international business.
Completing this unit should take you approximately 7 hours.
5.1: Business Is Going Global, and Management Has To Change
Read the introduction and section 3.1, which discuss why countries and corporations (both large and small) engage in international trade. With globalization in mind, pay particular attention to the different models and incentives for international trade and business cooperation that are discussed in this reading. Trade deficits and surpluses affect many aspects of our day-to-day lives. Think about how some of these determinants might impact the business market in your own country.
5.2: Getting Involved in International Business
Read this section, which discusses the various challenges and opportunities encountered by companies as they engage in international business. When a company enters the global market, the application of management principles intensifies as the demands of stakeholders begin to take shape. This reading provides a roadmap to how companies expand internationally, emphasizing the importance of international licensing agreements and franchising opportunities. Pay close attention to how companies outsource manufacturing to other countries with lower costs of labor in order to maximize profits. And keep in mind that both domestic and international manufacturing options have advantages and disadvantages in regards to environmental conditions, skilled labor, financial incentives, and cultural differences.
5.3: The Environment of Global Business: Cultural, Economic, and Legal
Read this section, which describes how to identify legal, political, cultural, and economic differences between two different countries. These are considered to be invaluable skills in the international business environment. Consider how business professionals utilize this information in order to increase organizational success. The concepts of language, time, and communication are also discussed in this reading, providing you with a basis for understanding how to improve your business environment while managing employees, resources, and capital.
5.4: Managing and Controlling Global Business
Read this section, which describes the ways in which governments and international bodies promote and regulate trade. You should be able to identify and discuss the various tools and policies that governments typically utilize to encourage economic growth. This information can be used by managers and leaders to make strategic decisions, including deciding if and when a business should expand on a global scale.
5.5: Managing through Trade Barriers
Read this section, which provides insight into the various ways to minimize and/or remove trade barriers, a process that directly supports the concept of free trade among designated nations. One example of this idea is NAFTA (the North American Free Trade Agreement), an agreement among the United States, Mexico, and Canada. This reading also introduces you to initiatives that countries and international organizations are taking to bridge the gap between developing and developed economies, allowing rapid growth in emerging markets and encouraging competition on a global scale.
5.6: Global Enterprise Management
Read this article and consider the following questions: How has the spread of globalization provided growth opportunities for businesses? On the flip side, how has globalization challenged businesses? Does the company you work for, or one you are familiar with, implement the three management strategies mentioned in the reading? If yes, how so? If not, do you think these strategies could help the company excel as a global enterprise?
Read this article and consider the following questions: How important is globalization to Coca-Cola's success? How did Coca-Cola begin its globalization journey? What specific practices supported Coca-Cola's goal to be the best beverage company in the world? How did Coca-Cola's global marketing strategies, product differentiation, and technology efforts support the company's desire to grow globally?
5.7: Global Management on a Local Level
Read this section, which describes how to apply global management practices to variations within local business contexts.