Managing in a Global Environment

MANAGING IN A GLOBAL ENVIRONMENT

Monolingualism is one sign that a nation suffers from parochialism-viewing the world solely through one’s own eyes and perspectives. People with a parochial attitude do not recognize that others have different ways of living and working. They ignore others’ values and customs and rigidly apply an attitude of “ours is better than theirs” to foreign cultures. This type of narrow, restricted attitude is one approach that managers might take, but it isn’t the only one. In fact, there are three possible global attitudes. Let’s look at each more closely.

First, an ethnocentric attitude is the parochialistic belief that the best work approaches and practices are those of the home country (the country in which the company’s main offices are located). Managers with an ethnocentric attitude believe that people in foreign countries don’t have the needed skills, expertise, knowledge, or experience to make the best business decisions, as people in the home country in the home country do. They don’t trust foreign employees with key decisions or technology.

Next, a polycentric attitude is the view that employees in the host country (the foreign country in which the organization is doing business) know the best work approaches and practices for running their business. Managers with this attitude view every foreign operation as different and difficult to understand. Thus, they’re likely to let employees in the host country figure out how best to do things.

The final type of global attitude managers might have is geocentric attitude, a world-oriented view that focuses on using the best approaches and people from around the globe. Managers with this type of attitude have a global view and look for the best approaches and people, regardless of origin. For instance, the CEO of a fast-growing manufacturer of household accessories is a Chinese immigrant who describes the company’s strategy as “combining Chinese cost with Japanese quality.” That’s the type of approach successful managers will need in today’s global environment.

UNDERSTANDING THE GLOBAL ENVIRONMENT

One important feature of today’s global environment is global trade. Countries and organizations have been trading with each other for centuries and it continues today. Global trade today is shaped by two forces: regional trading alliances and trade agreements negotiated through the World Trade Organization.

REGIONAL TRADING ALLIANCES

Global competition was once considered country against country- the U.S. versus Japan, France versus Germany, Mexico versus Canada, etc. Now, global competition is shaped by regional trading agreements, including the European Union (EU), the North America Free Trade Agreement (NAFTA), the Association of Southeast Asian nations (ASEAN), and others.

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