Business versus labor outsourcing essay

Principles Of Business Management

Read Chapter 3 of your textbook Essentials of Management (10th edition) and write a 1,000-word essay that covers the following topics:

-Explain the extent of involvement in international trade

-Identify and summarize some trade agreements among countries

-What is the importance of sensitivity to cultural differences in international enterprise?.

-What are major challenges facing the global management worker?

All essays must include a comprehensive conclusion (include a heading for the conclusion). Do not copy paste text. Make sure to include at least 3 external references with in-text citations. Use APA style.

Watch the video “Cultural sensitivity” on the link below and write a minimum of 150 words on what you found interesting from the video. Make sure to reply to at least one of your classmate’s posts.

https://www.youtube.com/watch?v=WCu5LwvjiaY

CHAPTER 3

International Management and Cultural Diversity

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International Management

Internationalization of business exerts important influence on manager’s job.

Approximately 10 to 15 percent of U.S. jobs dependent on trade with other countries.

Many complex products are built with components from several countries.

Entire world has become more global.

One management challenge is to work well with organizations and people from other countries.

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Extent of Involvement in International Trade

Trading companies (includes overseas distributor)

Contract manufacturing

Strategic alliances and joint ventures (two companies cooperate on product)

Direct foreign investment (wholly owned facility in foreign country)

The multinational corporation (units in two or more countries in addition to its own)

Global startup (begins by serving global market)

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Trade Agreements Among Countries

North American Free Trade Agreement (NAFTA) establishes liberal trade among United States, Canada, and Mexico.

Many companies have benefited from NAFTA yet labor unions point to job losses.

Automotive workers who lose their jobs often shift to lower-paying service sector jobs.

Critics of NAFTA point out that agreement does not maintain labor or environmental standards.

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Trade Agreements Among Countries, continued

The European Union (EU) is 28-nation alliance.

Creates single marketplace for ideas, goods, services, investment strategies.

EU trades with member nations, U.S., Canada, and other countries in world.

Creates single space where EU citizens can travel, work, invest, use euro.

Challenges to EU include financial crisis in Greece, and England thinking about defecting.

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Trade Agreements Among Countries, continued

The World Trade Organization liberalizes trade among nations across the world.

Attempts to lower trade barriers among 159 countries.

Most favored nation clause requires each country to give all other countries its best agreement with respect to trade.

WTO settles disputes between countries.

WTO accused of creating job cuts and downward pressure on wages.

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Trade Agreement Among Countries, concluded

Trans-Pacific Partnership

A 12-nation pending trade agreement, accounting for 40 percent of the world’s economic output

Agreement would lower more than 18,000 existing tariffs that inhibit U.S. exports.

Concern that the TPP agreement lacks specific language to deal with currency manipulation.

U.S. labor groups concerned about losing jobs.

Strategy guru sees reduction of trade barriers.

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Global Outsourcing as Part of International Trade

Trade agreements facilitate sending work overseas, or outsourcing.

Outsourcing continues to grow in scope, including knowledge work.

Number of industries immune to outsourcing is shrinking.

Major force behind outsourcing is the pressure discounters like Walmart, Target, and dollar stores exert on manufacturers to keep their prices low.

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Case for Global Outsourcing

Can create new demand for lower-priced goods, leading to U. S. jobs.

Lowered production costs can help company become more competitive.

Can lead to reciprocity from other countries.

Country receiving work from U.S. might hire more American workers for its U.S. operations.

Foreign companies located in the U.S. might hire many American workers.

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Case Against Global Outsourcing

Could be responsible for permanent job loss and slow job creation.

American employers can offer low wages to domestic employees because work can be sent overseas.

Outsourcing call centers can result in language barriers for customers.

True cost savings from outsourcing are elusive. (Point not mentioned in the textbook.)

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Sensitivity to Cultural Differences

Sensitivity to cultural differences is guiding principle for international workers.

Cultural sensitivity is awareness of local and national customs, and how they affect interpersonal relationships.

Multicultural worker enjoys learning about other cultures.

How a manager manages people in different culture can influence results.

Cultural agility results from advanced cultural sensitivity.

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Challenges Facing the Global Managerial Worker

Developing global leadership skills (See slide 14.)

Currency fluctuations (strong currency makes exporting more difficult)

Human rights violations, corruption, and violence (also, customers may object)

Complaints have been made that the U. S. also engages in human rights violations, such as paying undocumented immigrants very low wages.

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Challenges Facing the Global Managerial Worker, continued

Culture shock (problems may develop with person placed in another culture, including coming back home right away)

Differences in negotiating style (Americans may need to be more patient and formal)

Recognizing that national culture may or may not influence the effectiveness of a management technique.

High-performance work systems are associated with good business performance in all countries studied.

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Developing Global Leadership Skills

Global leadership skills focus on ability to deal effectively with people from other cultures.

Combination of cultural sensitivity and leadership skills.

The global leader manages across distance, countries, and cultures.

Welcoming other cultures is helpful.

Must understand how well management principles from one’s own culture transfer to another culture.

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Success Factors in the Global Marketplace

Think globally, act locally (focus on locals).

Recruit and select talented nationals (need the right people in other country).

Hire or develop multicultural workers (multiculturalism helps acceptance of firm by overseas personnel and customers).

Research and assess potential markets (get valid information about markets).

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The Advantages and Disadvantages of Globalization

Globalization may be inevitable and desirable, yet for many workers it has created more problems than opportunities.

Advantages versus disadvantages depend on person’s vantage point such as being the CEO.

Figure 2-4 (text) outlines the many pros and cons of globalization. For example:

Productivity grows with use of comparative advantage.

Millions of Americans have lost jobs.

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Diversity: Introductory Comments

Managerial workers must deal well with people from different countries, and diverse groups in their company and country.

“Diversity” really refers to both demographic (group person belongs to) and cultural diversity.

Cultural diversity refers to mix of cultures and subcultures to which organization’s workforce belongs (e.g. Muslim, Jewish, Native American).

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The Scope of Diversity

Valuing diversity means respecting and enjoying a wide range of cultural and individual differences.

To be diverse is to be different in some measurable way.

Goal of diverse organization is for persons of all cultural back grounds to achieve their full potential.

Accommodation for physical disabilities is important.

Working well across generations is emphasized.

Inclusion emphasized for gay, lesbian, bisexual, and transgender (LGBT) people.

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Competitive Advantage of Diversity

Marketing advantage, including increased sales and profits.

Can reduce costs by lowered turnover and absenteeism.

Helps in recruiting talented people. Shortage of workers gives impetus to diversity.

Heterogeneity may result in creativity because variety of perspectives contribute to creative alternatives.

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Potential Problems Associated with Diversity

Heterogeneous groups are assembled but they may not work harmoniously.

Diverse team may not survive long enough to produce creative results.

When group members are supportive toward each other, the benefits of group diversity will be forthcoming.

Diverse groups may be less cohesive than those with less diverse composition.

Diversity does not always translate into profits.

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Organizational Practices to Encourage Diversity

Corporate policies favoring diversity (such as monitoring recruitment and promotion to assure that diverse people get good jobs)

Employee network groups (employees affiliate based on demographic group such as race, ethnicity, or sexual orientation)

Diversity training (focus on harmony)

Unconscious bias training (biases could adversely affect certain demographic and cultural groups)

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Diversity Training

Strive for harmony by teaching how to get along with diverse work associates.

Aims to minimize open expressions of racism and sexism.

Increases awareness of and empathy for people who are different than oneself.

Diversity training leads to better retention when linked to strategy, endorsed by CEO.

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English Language as a Force for Unity

To compete, international workers have to communicate effectively with each other.

Many European and Asian business firms are making English their official language.

English grammar less complex than that of many other languages.

Internet encourages use of English.

Despite wide use of English, a second language for North Americans can help build relationships.