Managing Organizations in a Global Economy BADM 728

1. Managing Organizations in a Global EconomyBADM 728 Spring 2010 Dr. Yvonne Stedham

2. Managing Organizations in a Global Economy BADM 720? First, second, third year MBA? Other? Undergraduate degree from UNR? Business? International business background? Travelled to other countries? USAC? Lived in country other than U.S.? Speak other languages? 2 2

3. Managing Organizations in a Global Economy Why this course? What do you expect to learn? 3 3

4. today Purpose of this course What do you know? Introduction Course Content Format - Syllabus Personal Instructor Students – Background Sheet 4 4

5. Purpose Management concepts and skills needed for businesses to succeed in an international environment 5 5

6. Purpose External Environment PESTEL – Political, Economic, Social, Technological, Environmental, Legal Globalization, Democracy, Free Markets, Culture, and the Bottom Line 6 6

7. Website Location http://www.business.unr.edu/faculty/stedham/ 7 7

8. Current Developments National Public Radio (NPR) FM 88.7 - KUNR FM 90.5 – Cap Radio The Economist https://www.economistacademic.com/subscribe_single.cfm - Student Subscription 12 weeks $19.95 Faculty ID: 4430 Wall Street Journal Sign-up sheet 8 8

9. For February 1 ISA Global Update – Web/Handout with Questions Answers due February 1, 2010 9 9

10. Student Group International Business Student Chapter (IBSC) President: Marc Bristol Email: marcdbristol@hotmail.com Cell phone: 530 613 2377 Meeting dates: Every two weeks on Tuesday from noon to 12:50. In AB 402.February 2 – Brazil; February 16 - Microsoft NEWTRAC Nevada World Trade Council www.newtrac.net February 11th event 10 10

11. What do you know? List the five largest countries based on population. What is the world population? What is “GDP”? What is the GDP/capita in the U.S.? What is a typical GDP growth rate for the U.S.? Which three countries have the highest GDP/capita? Which countries are culturally most similar to the U.S, which ones most dissimilar? How many countries are there in the world? 11 11

12. What do you know? 1. Five largest countries China 1.3 Bill India 1.16 Bill U.S. 307 Mill Indonesia 240 Mill Brazil 198 Mill Pakistan 176 Mill Bangladesh 156 Nigeria 149 Mill Russia 140 Mill Mexico 111 Mill #11 Japan 127.5Mill Germany 82 Mill #16 2. World Population 6.6 Bill 12 12

13. What do you know? 3. GDP/capita GDP/capita in U.S.: ~ $46,000 Growth rate in U.S.: .4% Typical growth rate ~ 3% GDP/sector: Agriculture 1.2%; Industry 19.2%; Service 79.6% Mexico: Population 111.2 Mill; GDP/capita: $14,300 Current growth rate: 1.3% GDP/sector: Agriculture 3.8%;Industry 35.2%; Service 61% 13 13

14. What do you know? 4. Which 5 countries have the highest GDP/capita Luxembourg $102,284 Norway $ 79, 154 Qatar $ 70,754 Iceland $ 62, 976 Ireland $ 58,883 Denmark $ 57,035 Switzerland $ 56,711 UK $ 47,300 US $ 46, 780 Netherlands $ 45,429 14 14

15. What do you know? 5. Which countries are culturally most similar to the U.S. Anglo Countries Canada Australia New Zealand U.K. Ireland South Africa 15 15

16. What do you know? 6. Number of countries in the world Total number of countries: 192 -194 Vatican, and Taiwan United Nations 192 16 16

17. Some Data (APPROX.) 17 17

18. Data Sources www.cia.gov www.transparency.org www.heritage.org 18 18

19. Economic Freedom Index of Economic Freedom www.heritage.org/research/features/index/countries What is economic freedom? Economic freedom is defined as the absence of government coercion or constraint on the production, distribution, or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself. In other words, people are free to work, produce, consume, and invest in the ways they feel are most productive. How do you measure economic freedom? To measure economic freedom and rate each country, the authors of the Index study 50 independent economic variables. These variables fall into 10 broad categories, or factors, of economic freedom: Trade policy , Fiscal burden of government, Government intervention in the economy, Monetary policy, Capital flows and foreign investment, Banking and finance, Wages and prices, Property rights, Regulation, Informal market activity. 19 19

20. International Government Materials International financial statistics yearbook http://innopac.library.unr.edu/record=b1618229~S0 Trade policy review http://innopac.library.unr.edu/search/ Patrick Ragains Business and Government Information Librarian ragains@unr.edu

21. Managing Organizations in a Global Economy Introduction Course Content – Culture, Globalization, Cost-Benefits-Risk Format - Syllabus Personal (Background Sheet) Framework of an international organization Globalization Reasons for going international Types of international organizations 21 21

22. Course Format • Syllabus

23. Personal Introductions Instructor Students (Background Sheets) Introduction Current position/company International experience – Travel, work, study abroad, class/education Speak other language For CBRA – interested in which country 23 23

24. Managing Organizations in a Global Economy Introduction Course Content – Culture, Globalization, Cost-Benefits-Risk Format - Syllabus Personal Framework of an international organization Globalization Reasons for going international Types of international organizations 24 24

25. CBRA Project – Presentation Dates 2/22/10Written Papers are due during class the week before!

26. Framework Organizations and Organizational Effectiveness What is an organization? Why do organizations exist? When is an organization effective? Efficiency vs effectiveness? 26 26

27. Organizations and Organizational Effectiveness What is an organization? Why do organizations exist? Organizations = People Mission, goals, objectives When is an organization effective? Distinguish between efficiency and effectiveness. Distinguish effectiveness measures for the short, intermediate, and long run. 27 27

28. Measurement of organizational effectiveness Long run? Intermediate run? Short run? A contingency approach to management 28 28

29. Measurement of organizational effectiveness Long run: Survival Intermediate run: Adaptation, Responsiveness Short run: Productivity, Efficiency A contingency approach to management (opposed to “administrative theory” of management) It is management’s task to create the best possible fit between the external and internal environments of the organization and must ensure internal consistency between the organization’s elements. 29 29

30. The Organization 30 30

31. The International Organization 31 31

32. Globalization International business environment Global Economy Thomas Friedman Why change? Characteristics of the global system Previous system? 32 32

33. Globalization Thomas Friedman (NY Times) NY Times January 31st – report on World Economic Forum The Lexus and the Olive Tree The World is Flat Hot, Flat, and Crowded The World Is Flat - understand globalization in a new way. Hot, Flat, and Crowded explains how America can lead the green revolution in the 21st century. 33 33

34. Globalization Globalization is not just an economic fad and it is not just a passing trend. It is an international system that replaced the Cold War System after the fall of the Berlin wall The World is ten years old (1999) 34 34

35. Characteristics of the new system Separation and independence VS Integration and interdependence 35 35

36. Characteristics of the new system Free market capitalism Homogenization of culture – Americanization Defining technologies: computerization, miniaturization, digitization, satellite communications, fiber optics, the Internet 36 36

37. Characteristics of the new system Defining measurement: Weight (missles) VS Speed .. Of travel, innovation, communication, commerce 37 37

38. Characteristics of the new system Defining economists: Karl Marx and Keynes VS Schumpeter Capitalism and Creative Destruction 38 38

39. Characteristics of the new system Defining political views: Friends and Enemies VS Competitors 39 39

40. International Institutions Don’t confuse APEC OPEC 40 40

41. APECAsia Pacific Economic Cooperation Premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. It is one of the world's most important regional groupings, encompassing 21 member economies who collectively represent over 2.6 billion people and account for approximately half of global GDP and trade. The primary focus of APEC is promoting trade and investment liberalization and business facilitation in the Asia-Pacific region. 41 41

42. APEC Members AustraliaBruneiCanadaChilePeople's Republic of ChinaHong Kong, ChinaIndonesiaJapanRepublic of KoreaMalaysiaMexico New ZealandPapua New GuineaPeruPhilippinesRussiaSingaporeChinese TaipeiThailandUnited StatesVietnam 42 42

43. APEC Business Summit Invitation-only, annual meeting that provides unparalleled opportunities for strategic engagement and networking with prominent business leaders, international opinion setters, policy makers and leaders of Asia-Pacific Economic Cooperation (APEC) Member Economies. The Business Summit, formerly the CEO Summit, has been held each year since 1996. It was instituted to enable business leaders to interact with APEC leaders. 43 43

44. OPECOrganization of Petroleum Exporting Countries Twelve members Algeria, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, Venezuela (Hugo Chavez) OPEC’s Mission is to coordinate & unify the petroleum policies of member countries & ensure the stabilization of oil prices in order to secure an efficient, economic & regular supply of petroleum to consumers, a steady income to producers & a fair return on capital to those investing in the petroleum industry. 44 44

45. World Economic Forum Davos 1/27-1/31/2010 https://www.weforum.org/ Committed to improving the state of the world Participation Annual Meeting - invitation only - limited to the criteria and quota of each stakeholder group. Of the 2500 participants, more than half from the business sector. Over 900 chief executives - Basic Industries, Consumer, Financial Institutions, Information Technology, Electronics & Telecommunications, Mobility, Energy, Health, Media, and Professional Services. Co-Chairs Josef Ackermann, Chairman of the Management Board and the Group Executive Committee, Deutsche Bank, Germany; Member of the Foundation Board of the World Economic Forum and Melinda French Gates, Co-Chair, Bill & Melinda Gates Foundation, USA Azim H. Premji, Chairman, Wipro, IndiaPeter Sands, Group Chief Executive, Standard Chartered, United KingdomEric Schmidt, Chairman of the Executive Committee and Chief Executive Officer, Google, USARonald A. Williams, Chairman and Chief Executive Officer, Aetna, USAPatricia A. Woertz, Chairman, President and Chief Executive Officer, Archer Daniels Midland (ADM), USA 45 45

46. World Economic Forum Mission Independent, international Swiss not-for-profit organization Motto ‘entrepreneurship in the global public interest’ Economic progress without social development is not sustainable, while social development without economic progress is not feasible. To be the foremost organization builds and energizes leading global communities; the creative force shaping global, regional and industry strategies; the catalyst of choice for its communities when undertaking global initiatives to improve the state the world. 46 46

47. World Economic Forum Values The world’s key challenges cannot be met by governments, business or civil society alone In a world characterized by complexity, fragility and ever greater synchronicity, strategic insights cannot be passively acquired. They are best developed through continuous interaction with peers and with the most knowledgeable people in the field. Strategies To carry out its mission, the World Economic Forum has developed an integrated value chain by involving world leaders in communities, inspiring them with strategic insights and enabling them through initiatives. 47 47

48. World Economic Forum Members - foremost 1,000 global enterprises. Characteristics of Members include:· Their rank among the top companies within their industry and/or country· The global dimension of their activities· A leading role in shaping the future of their industry and/or region Every year, more than 100 of the world’s most influential companies partner with the World Economic Forum to tackle the most complex challenges facing humanity.Recognizing that each company’s business needs are unique, the Forum offers the possibility for partners to engage in a specific community, project or event. 48 48

49. G7 (G8) and G20 G20 (Group of 20) Purpose (1999): Bring together systemically important industrialized and developing economies to discuss key issues in the global economy. Website: http://www.g20.org Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan,Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, European Union (map) G7 (G8) Countries US, Canada, Germany, France, Italy, UK, Japan, (Russia) 49 49

50. G 20 Map G 20