FIN 350 Lecture Notes - Lecture 4: Global Sourcing, Parochialism, Franchising
Document Summary
Globalization and its impact: global village. A boundary less world where goods and services are produced and marketed world wide: parochialism. A narrow focus in which managers see things only through their own eyes and form their own perspectives. They do not recognize that countries have different morals customs and economic systems an laws which can affect how a business is managed: geocentric. How do organizations go global: global sourcing. Purchasing materials or belabor from the cheapest source in order to maintain a competitive edge. Exporting: an organizations products involves making products domestically and selling them abroad. Importing: involves acquiring product made abroad and selling them domestically. Licensing: often used by manufacturing organizations that make or sell another company"s product. Types of global organizations: primarily used by service organizations that want to use another company"s name and operating methods, multi domestic corporation. Management and other decisions are decentralized to the local country in which it is operating.
