software project management

1. Chapter#3
MANAGING IN A GLOBAL
ENVIRONMENT
Course Instructor:
Hamza

2.  Is it good to learn different languages?

3. WHAT’S YOUR GLOBAL
PERSPECTIVE
 Parochialism:
 A narrow view of the world; an inability to
recognize differences between people.
 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 isn’t the only one. In
fact, there are three possible global attitudes.

4. Ethnocentric Attitude:
 A parochialistic belief that the best work
approaches and practices are those of the home
country (the country in which the company’s
headquarters 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 do. They don’t trust foreign
employees with key decisions or technology.

5. Polycentric Attitude:
 The view that the managers in the host country (the foreign country
in which the organization is doing business) know the best work
approaches and practices for running the business.
 Managers with this attitude view every foreign operation as different
and hard to understand. Thus, they’re likely to let employees there
figure out how best to do things.

6. 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.
 A geocentric attitude requires eliminating
parochial attitudes and developing an
understanding of cross-cultural differences. That’s
the type of approach successful managers will
need in today’s global environment.

7. DOING BUSINESS GLOBALLY
 Different types of global organizations:
1. Multinational Corporations (MNC’s)
 A company that maintain significant operations in multiple
countries but manages them from a base in the home country.
(Characteristic of ethnocentric attitude)
2. Transnational Corporations (TNC’s)
 A company that maintain significant operations in more than one
country but decentralizes management to the local country.
(Characteristic of polycentric attitude)
3. Borderless Organizations
 A global type of organization in which artificial geographical
barriers are eliminated. (Characteristic of geocentric attitude)

8. HOW ORGANIZATIONS GO GLOBAL
Stage 1 Stage 2 Stage 3

9. Cont’d..
 Exporting
 An approach to going global that involves making products at home
and selling them overseas.
 Importing
 An approach to going global that involves selling products at home that
are made overseas.

10. Cont’d…
 Licensing
 An approach to going global by manufacturing organizations that
involves giving other organizations the right to use your brand name,
technology or product specification. For example:
 A company may choose to license its brand(s) when they believe there
is strong consumer acceptance for brand extensions or products. For
example, when Apple launched the iPod there was an immediate need
for accessories such as headphones, charging and syncing stations and
carrying cases. Apple decided not to manufacture these products and
instead chose to have a licensee make the products. By doing so,
Apple could offer branded “Ear bud Headphones”, “iPod docking
stations” and “iPod socks.” Each is made by a separate company but
together offer the consumer an elegant solution. All of these
accessories are sold by licenses.

11. Cont’d…
 Franchising
 An approach to going global by service organizations
that involves giving other organizations the right to use
your brand name, technology or product specification.
 Franchising is a business model in which many different
owners share a single brand name. A parent company
allows entrepreneurs to use the company's strategies and
trademarks; in exchange, the franchisee pays an initial fee
and royalties based on revenues. The parent company
also provides the franchisee with support, including
advertising and training, as part of the franchising
agreement

12. Cont’d…
 Strategic Alliances
 An approach to going global that involves partnerships
between an organization and a foreign company in which
both share resources and knowledge in developing new
products or building production facilities.
 In a strategic alliance, each company maintains its autonomy
while gaining a new opportunity. A strategic alliance could
help a company develop a more effective process, expand
into a new market or develop an advantage over a
competitor, among other possibilities.
 E.g. A clothing retailer might form a strategic alliance with a
single clothing manufacturer to ensure consistent quality
and sizing. A major website could form a strategic alliance
with an analytics company to improve its marketing efforts

13. Cont’d…
 Joint Venture
 An approach to going global that is a specific type of
strategic alliance in which the partners agree to form a
separate, independent organization for some business
purpose.
 E.g. Sony-Ericsson is a joint venture by the Japanese
consumer electronics company Sony Corporation and the
Swedish telecommunications company Ericsson to make
mobile phones. The stated reason for this venture is to
combine Sony's consumer electronics expertise with
Ericsson's technological leadership in the
communications sector. Both companies have stopped
making their own mobile phones.

14. Cont’d…
 Foreign Subsidiary
 An approach to going global that involves a direct
investment in a foreign country by setting up a separate
and independent production facility or office.
 E.g. IBM and Walmart are biggest examples of foreign
subsidiary

15. MANAGING IN A GLOBAL
ENVIRONMENT-Economic
 Market Economy
 An economic system in which resources are primarily
owned and controlled by the Private Sector.
 E.g. An example of a market economy is the United
States. A market economy is where the resources of a
country are owned and controlled by the people of the
country, rather than the government. Other examples of
a market economy include Canada, UK, Germany, and the
Netherlands

16. Cont’d…
 Command Economy
 An economic system in which all economic decisions are
planned by a Central Government. It is also known as
planned economy.
 Some of the examples of a command economy are the
economies of Cuba, Libya during Gaddafi's reign, North
Korea, Saudi Arabia and Belarus as well as Myanmar. A
command economy is also referred to as a centrally
planned economy or a control economy.

17.  Managers must stay informed of the specific laws in
countries where they do business. For instance, the
president of Zimbabwe is pushing ahead with plans to
force foreign companies to sell majority stakes to
locals
 Swedish retailer Ikea has halted further investment in
Russia because of continual governmental red tape
delays. Per Kaufmann, Ikea’s Russia country manager,
said the decision was “due to the unpredictability of
the administrative processes in some regions.”
 Businesses in Afghanistan nowadays?
MANAGING IN A GLOBAL
ENVIRONMENT-Political/Legal

18.  National Culture:
 The values and attitudes shared by individuals from a specific country that
shape their behavior and beliefs about what is important.
 At Hewlett-Packard, a cross-global team of U.S. and French engineers were
assigned to work together on a software project. The U.S. engineers sent long,
detailed e-mails to their counterparts in France. The French engineers viewed
the lengthy e-mails as patronizing and replied with quick, concise e-mails. This
made the U.S. engineers think that the French were hiding something from
them. The situation spiraled out of control and negatively affected output until
team members went through cultural training.
MANAGING IN A GLOBAL
ENVIRONMENT-Culture

19. Hofstede’s five dimensions