January 6, 2015

Global and Comparative Management

The study of international management focuses on the operations of multinational firms in host countries and related managerial issues. Managers in multinational firms have to interact with employees who have different educational and cultural  backgrounds and they have to cope up with different legal, political, and economic factors. International company managers have to develop social diplomatic skills to prevent conflicts and resolves the ones that occur.

International transactions for firms can take many forms. They include export of goods and services, licensing agreements for producing goods in other countries by companies of that country of that of another country, managing operations of companies, joint ventures, strategic alliances, and setting up branches for selling or production facilities. The branches may be upgraded to subsidiary companies registered in the host countries.

Now multinational companies are more and Fortune magazine annually published the list of 500 largest global companies.

In its early stages, multinational companies operated with an ethnocentric outlook, the orientation of the foreign operations were based on that of the parent company's domestic practices. But now MNCs have evolved and have developed geocentric orientation. The entire organization is viewed as an interdependent system and collaborative practices are used to develop practices in various countries. Also, key positions are being filled by managers of different nationalities in various countries so that more ecletic view is taken by managers in various activities.

MNCs have advantages like having access to raw materials and cost-effective production facilities.

Emergence of Global or Transnational Corporations

Some firms are developing into global firms that view entire world a one market and develop products for the world right from the stage of new product idea. Such firms introduce the product simultaneously in number of markets. In recent Apple is one such example. Its products were made available in large number of countries simultaneously.

India's Role in the World Economy

India has the 12th largest economy at the moment (2010). It is forecasted that it will become the third largest economy after USA and China by 2025 or subsequent to it. India is being studied in detail by various academicians and management research firms to support multinational and transnational firms to take advantage of the huge market that is going to develop in the next 10 to 15 years.

Cultural Differences

Geert Hostede, studied differences in culture across countries and came out with five dimensions.

Individualism - Collectivism
Large power distance - Small power distance
Uncertainty tolerance - Uncertainty avoidance
Masculanity - Feminity
Long-term orientation - Short-term orientation

Managers have to understand the role of Government and its various acts and rules put in place by Governments for business and industrial units to start and operate business units in various countries.


Management: A Global and Entrepreneurial Perspective  by Heinz Weihrich, Mark V. Cannice and Harold Koontz, 13 Edition, 2010

MBA Core Management Knowledge - One Year Revision Schedule

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