global mindset
legal systems
"rules of the game" about how a countries laws are enacted & enforced civil law, common law
economic systems
"rules of the game" about how a country is governed economically - market economy private ownership v state ownership
political systems
"rules of the game" how a country is governed risk associated with political changes may negatively impact domestic & foreign firms
globalise
- Growth to global or worldwide scale - The way companies, ideas are spread around the world.
global standards
- Refer to having one product standard for all countries.
impact of globalisation
- builds relationships between economies - erodes cultural barriers - Increased job opportunities
international monetary fund
- established at the end of WW1 created to assist with the task of rebuilding national economies - provides funds with very low interest rates as to ensure countries can manage their own funds
global social capital
- great interaction with others within the global network - contacts & interaction, access to information within the social capital
benefits of global mindset
- identifying emerging opportunities - smoother coordination across borders - superior financial performance
WTO - WORLD TRADE ORGANISATION
- nations met to reduce tariffs to 7% - provides structures for continued negotiations & selling trade - looks to promote global interaction to ensure increased trade across borders
good global mindset
- no ethnocentrism (belief that your culture is elite or more important) - avoid self deception (not seeing ones own perceptions) - awareness of cultural distance
what shapes a global mindset (who does and doesn't develop a gm)
- some industries pre dispose (i.e shipping companies) - not everyone develops a global mindset - personality
china - economic
- worlds second largest market - gdp 10.35 trillion - many industries state owned - proactive in removing taxes for trade in goods with other countries (WTO)
global brands
-must constantly adjust to suit the local market i.e nestle (70 countries) -must take into account competitors, price exchange and food standards
european union EU
27 european countries - allows free movement of goods & services - common currency EURO
india - economic
3rd largest market - developing country economic outlook remains challenging due to high inflation, weak currency & lack of foreign investment
business ethics
Applying principles of right and wrong to workplace situations. i.e sweatshops
china - political
Chinese communist party - no seperation of powers, all controlled by the party and its members (CHAIRMAN)
global mindset
Combines an openness to and an awareness of diversity across markets and cultures with a propensity and ability to synthesize across this diversity
what is globalisation
The process by which businesses or other organizations develop international influence or start operating on an international scale.
china - legal
confucian theory: disputes are settled ideally through relationship based methods (mediation) - many laws based on acquisition etc by foreign investment
- cultural acumen
correct understanding of other cultures
high context
culture in which behaviour is conveyed, demonstrates important information i.e china, japanese
low context
culture is conveyed more explicitly rather than through behaviour i.e german, swiss
global integration
efforts to reduce trade & investment barriers around the world.
china - cultural values
extremely high power distance extremely low individualism
3 elements of global mindset
global intellectual capital global social capital global psychological capital
caste groupings
grouped on essential qualities - people are born into groups & there is a sense of inseparability from these groups
india - cultural
groups are given more emphasis than individuals - hierachy is respected and honoured in India (elders are respected) marriage deemed essential - often arranged through caste system
global mindset must
have an openness & awareness of diversity across cultures, with the ability to synthesise across this diversity
india- social system
hierarchal society = people & social groups are ranked according to essential qualities
multi national company
i.e apple a company that engages in business beyond its domestic borders
china foreign investment
incentives such as reduced taxes & income increases are used to entice foreign investors
institutions..
influence behaviour, constrain and influence conduct
institutional framework
informal: society, culture,family formal: legal, political and police
formal training by companies
involve cultural assimilation, briefing of areas and field experience.
global intellectual capital
knowledge of -a global industry - interconnection and integration of different companies - high capacity of problem solving
elements of culture
language education religion & beliefs social Institutions - relationships
ethics/corruption
legislation is important to minimise corruption & uphold global ethics
global consumer needs
new products start in the minds of consumers NOT in factories - consumers are becoming increasingly brand, health and environmentally conscious
ethics
principles, standards and norms of conduct that govern behaviour
important legal systems include..
property rights (resources), intellectual property rights (copyright, trademark)
culture shock (cultural knowledge)
reactions to disorientation that most people experience when they move into a drastically different culture
china- social
social groups are organised in a hierachial principle i.e family = class puts emphasis into groups rather than individuals
institutions
structure, mechanism and co operation governing the behaviour of a set of individuals within a given community
global competition
The ability of profit-making organizations to compete with other businesses in other countries.
global leadership
The ability to exercise effective leadership in a variety of countries - develop competencies to go beyond the boundaries of their own country and home
india - political
bicameral parliamentary form of government (British judicial influence) - federal republic
political uncertainty
civil war, military take over = renders long term planning obsolete also damages the country
Cluster (understanding culture)
clustering countries according to cultural similarity GLOBE clustering power distance: the degree to which members expect power to distributed equally
global psychological
confidence - take on challenges optimism - openness to & curiosity about cultural systems
faux pas
a slip or blunder in etiquette, manners or conduct
Dimension (understanding culture)
a society in terms of a set of dimensions, 1. power distance 2. individualism/collectivism
customs union
african countries
technology in globalisation
allows companies to communicate with companies anywhere in the world - email internet
culture intelligence (cultural knowledge)
an individuals ability to understand & adjust to new cultures
what is culture?
the ideas, customs and social behaviour of a particular people or society. - transmitted from generation to generation by learning & sharing
economic integration
the unification of economic policies between different states through partial/full abolition of taxes on trade - less tax = easier integration/trade across borders
context (understanding culture)
underlying background upon which social interaction takes place. high & low context culture
economic uncertainty
unemployment, global financial crisis = transactional costs (forces the cost of doing business being too high or impossible)
india - legal system
use of english court proceedings (british judicial system) - court divisions i.e supreme,high and lower courts
india - foreign investors
usually joint ventures with an indian partner - hard to do business in india i.e with permits, registration and acquisition of property/companies
conducting business in a new country
when entering a new country, you must do your homework by having a through understanding of formal institutions - economic - legal - political
