global mindset

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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


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