Globalisation and Cross Cultural Management

Topics: Culture, Sociology, Risk Pages: 6 (1462 words) Published: August 24, 2013
IBUS2001 notes

Globalisation and cross cultural management

Case: globalisation of health care- shortage of radiologists in the US and demand is twice as large as the rate of graduation. Solution is to send images over the internet to be interpreted by radiologists in India? In 2004 170,000 foreigners visited India for medical treatments and is expected to grow at 15% for the next several years.

Globalisation: The shift toward a more integrated and interdependent world economy.

Globalisation of markets: the merging of distinctly separate national markets into a global market place. This includes falling barriers to cross border trade (which have made it easier to sell internationally), the convergence of global tastes and preferences and the development of standardised products suited to a world market. Difficulties with the globalisation of markets generally arise from significant differences among these national markets, country specific marketing strategies and varied product mixes.

Globalisation of production: refers to the sourcing of goods and services from locations around the world to take advantage of differences in the cost or quality of the factors of production (land, labor, capital). Increasingly companies are taking advantage of modern communications technology, and particularly the internet, to outsource service activities to low cost producers in other nations. Outsourcing of productive activities to difference suppliers results in the creation of products that are global in nature. Impediments to the globalisation of production include: formal and informal barriers to trade, barriers to FDI, transportation costs, issues associated with economic risk and issues associated with political risk.

Drivers of globalisation: Two macro factors seem to underlie the trend toward greater globalisation. These include- * decline in barriers to the free flow of goods, services and capital that has occured since WW2 * technological change

Declining trade and investment barriers: During the 1920's and 30's, many of the nation states of the world erected formidable barriers to international trade and FDI. Advanced industrial nations of the west committed themselves after WW2 to removing barriers to the free flow of goods, services and capital between nations.

Technology: Lowering of trade barriers made globalisation possible; technology has made it a reality. Since the end of WW2 the world has seen advances in communications, information processing and transportation technology.

Advantages of globalisation:
* Lower prices for goods and services
* economic growth stimulation
* increase in consumer income
* creates jobs
* countries specialise in production of goods and services that are produced most efficiently

Disadvantages of globalisation:
* Destroys manufacturing jobs in wealthy, advanced countries * Wage rates of unskilled workers in advanced countries declines * companies move to countries with fewer labor and environment regulations * loss of sovereignty

What is culture? : Culture is coherent (each fragment of a culture makes sense if you know the whole tapestry of culture), Culture is learned (families, friends, media), Culture is the view of a group of people (nation, religion, clan, family), culture ranks what is important (values) and culture furnishes attitudes and dictates behaviour. There are two main elements of culture. These include: on stage or visible elements of culture and back stage or invisible elements of culture. Transactional culture is the culture that develops when cultures meet and have to collaborate (i.e an MNC).

Model of culture:

Artefacts and Products Explicit

Norms and Values
Off-stage culture

Basic Assumptions Implicit
Off-stage culture

Off stage culture: includes aspects such as the Aussie culture where we give everybody a fair go, and the Chinese culture where...
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