Adobe Systems 1 MPH_AIMA International Management Adobe Systems 2 About the course Adobe Systems 3 What do you expect? What knowledge and skills do you expect after completing this course? Adobe Systems 4 Schedule and topics 16.2. The global business environment 23.2. To be confirmed 2.3. Cross cultural communication,Negotiating across cultures 9.3. Cross-cultural communication FNZ 16.3. Global HR 23.3. Developing global managers and teams Zebra Technologies 6.4. Developing strategy, entry modes, mergers and acquisitions 13.4. Acquisition SIKA 20.4. Organising for global operations 27.4. Global structure, cross cultural communication, aquisition Atlas Copco 4.5. To be confirmed 11.5. Negotiation/business model abroad Idea statica/Hartmann-Rico Adobe Systems Define footer – presentation title / department 5 Literature ̶Deresky, H. (2017). International management: Managing across borders and cultures : text and cases (Ninth edition, global edition.). Boston: Pearson. ̶Gooderham, P. N. (2003). International management: Cross-boundary challenges. Malden: Blackwell. ̶Luthans, F. (2009). International management: Culture, strategy, and behavior (7th ed.). Boston: McGraw-Hill/Irwin. ̶Phatak, A. V. (2009). International management: Managing in a diverse and dynamic global environment (2nd ed.). Boston: McGraw-Hill/Irwin. ̶Lecture notes, interactive study materials in IS!!! ̶Articles! (databases: EBSCO, ProQuest, JSTOR, etc.) ̶ Adobe Systems 6 Global environment ̶International Management ̶Global Trends and Globalization ̶Regional Blocks ̶Open System Model ̶Political Risk ̶Economic Risk ̶Legal Environment ̶Global Managers ̶ ̶ Adobe Systems 7 International Management = ‘The process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage.’ Deresky, H. (2017). International management: Managing across borders and cultures : text and cases (Ninth edition, global edition.). Boston: Pearson. Adobe Systems 8 FDI flows Outward Million US dollars 2006–2021 OECD (2023), "FDI flows" (indicator), https://doi.org/10.1787/99f6e393-en (accessed on 6February 2023). Adobe Systems 9 FDI flows Inward Million US dollars 2005–2021 Source: OECD (2023), "FDI flows" (indicator), https://doi.org/10.1787/99f6e393-en (accessed on 3 February 2023). Adobe Systems Define footer – presentation title / department 10 ̶ Adobe Systems 11 Should it be equal? ̶by definition, inward and outward FDI worldwide should be equal, but in practice, there are statistical discrepancies between inward and outward FDI. Adobe Systems Define footer – presentation title / department 12 Impact of the COVID 19/war on FDI flows ̶FDI flows are expected to decline sharply ̶Reinvested earning drop ̶The pandemic is having much greater impacts in some sectors than others (accommodation, food service, transportation – not visible in FDI statistics; primary sector, manufacturing – drops in earnings; information and communication – increase) ̶Further drops in FDI flows are possible in the medium to long term Adobe Systems 13 Share of turnover and persons employed in foreign affiliates abroad, business economy, EU-28, 2014 (% of extra-EU total) Source: https://ec.europa.eu/eurostat/statistics-explained Adobe Systems 14 Global Trends ̶growing number of middle-class consumers in emerging countries ̶global supply-chain management ̶environmental impacts and their solution ̶virtual marketplaces ̶global standards ̶cooperation across cultures ̶opportunities for SMEs ̶responsibility of MNCs… ̶ Adobe Systems 15 …but… ̶growing consumption of energy and resources ̶dependency on other companies, states, and trading blocks ̶global costs for ‘making change’ and negotiating ̶dependency on information technologies and infrastructure ̶backlash against capitalism and rekindling of nationalism ̶trade wars and increasing protectionism ̶management across cultures ̶abusing of weaker systems… Adobe Systems 16 Regional Trading Blocks ̶USA dominance is probably over ̶importance of the trading blocks is increasing (NAFTA, EU, ASEAN,…) ̶world trade takes place mostly within free trade blocks ̶dominant currencies (euro, yen, dollar, juan) Adobe Systems 17 Regional Trading Blocks and Other Regions ̶Asia ̶China ̶India ̶ASEAN ̶SAARC ̶Japan ̶Asian Tigers (Hong Kong, Singapore, South Korea, Taiwan) ̶ ̶political problems ̶differentiation within the region ̶Americas ̶NAFTA ̶CAFTA ̶MERCOSUR ̶Others ̶The Russian Federation ̶Middle East ̶The African Union ̶South Africa ̶ ̶Less Developed countries ̶Low GDP/GNP ̶Large, relatively unskilled workforce ̶High international debt ̶Rest of Europe ̶EU (after brexit) ̶unified market ̶over 447 million citizens ̶27 different countries ̶euro and 10 other national currencies Adobe Systems 18 Open System Model Skills OPERATING ENVIRONMENT Regulations Culture Social Responsibility Ethics Functions and People Adobe Systems 19 Global Managers What are the most important competencies, skills and knowledge of the excellent manager responsible for international operations? Adobe Systems 20 Political Risk = ‘any governmental action or politically motivated event, that could adversely affect the long-run profitability or value of a firm’ Venezuela took control of cement plants and offices belonging to Mexico, after failing to reach an agreement in nationalization talks. Bolivian president’s move to nationalize the national gas industry followed that in Venezuela. Argentina announced plans to nationalize Spanish oil company Repsol YPF and caused international arbitration. In Russia Kremlin exploited the finantial crisis to take control of energy companies. Adobe Systems 21 Political Risk Political Risks ̶expropriation and confiscation ̶nationalization ̶terrorism ̶discriminatory treatment ̶barriers to repatriation of funds ̶dishonesty by government officials ̶… Political Risk Assessment ̶consultation with experts ̶development of internal staff capabilities ̶cooperation with specialized agencies Avoidance / Adaptation ̶equity sharing ̶participating management ̶localization of the operation ̶development assistance Dependency / Hedging ̶input control ̶market control ̶position control ̶staged contribution ̶insurance ̶local debt financing Adobe Systems 22 Economic Risk ̶loss of profitability due to ̶abrupt changes in monetary and fiscal policy ̶changes in foreign investment policies ̶changes in currency exchange rate ̶connected with the political situation Quantitative approach ̶indexes ̶indicators ̶statistics Qualitative approach ̶monitoring ̶induction ̶experiences ̶assessments Checklist approach Combination Adobe Systems 23 The Legal Environment ̶local laws and legal systems of those countries in which an international company operates ̶international law, which governs relationships between sovereign countries (e.g. WTO rules, bilateral/multilateral agreements, CISG,…) ̶rules inside the free trade areas (e.g. EU law) ̶ CISG – United Nations Convention on Contracts for the International Sale of Goods Adobe Systems 24 CISG (Vienna Convention) signed ratified Source: https://commons.wikimedia.org/wiki/File:United_Nations_Convention_on_Contracts_for_the_Internationa l_Sale_of_Goods.png Adobe Systems 25 Legal Systems ̶common law ̶past court decisions as precedents ̶details must be written in the contract to be enforced ̶civil law ̶comprehensive set of laws organized into code ̶assumes promises will be enforced without specifying the details ̶Islamic law ̶based on religious beliefs ̶combination Adobe Systems By Maximilian Dörrbecker (Chumwa) - Own work, usingWorld map by Canuckguy and others UNESCO World Heritage map by NNWThe data sources are: University of Ottawa: JuriGlobe – World Legal Systems Research GroupWikipedia: List of national legal systemsEuropean legal systems map by Ain92 and others (which seems to be based on this map by C.Löser and others)World legal systems map by Robinkissac, CC BY-SA 2.5, https://commons.wikimedia.org/w/index.php?curid=40154967 Adobe Systems 27 The Technological Environment ̶Appropriability of technology ̶protecting own technology form competitors (patents, trademarks, trade names, copyrights, and trade secrets) ̶less developed countries = less protection of technology ̶The International Convention for the Protection of Industrial Property ̶Paris Convention ̶administered by WIPO (World Intellectual Property Organization) ̶risk of inappropriate use of technology ̶JV partners, licensees, employees, or stealing by competitors Adobe Systems 28 Subsidiary in the Czech Republic? Why? Why not? Source: http://emerging-markets-research.hktdc.com Adobe Systems 29 Questions? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Adobe Systems 30 Thank you for your attention!