1. Competing in the twenty-first century requires firms to invest in the increasingly refined managerial skills needed to perform effectively in a multicultural environment. Managers need a global orientation to meet the challenges of world markets and rapid, fundamental changes in a world of increasing economic interdependence.
2. Global management is the process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage.
3. One major direction in world trade is the development of regional free-trade blocs. The TRIAD market refers to the three trade blocs of Western Europe, Asia, and North America.
4. New markets and trading opportunities are emerging in Eastern Europe (in countries like Hungary and those of the Commonwealth of Independent States), in China, and in less developed countries.
5. Drastic worldwide changes present dynamic challenges to global managers, including the political and economic trend toward the privatization of businesses, rapid advances in information technology, and a growing culturally diverse workforce.
6. Global managers must be aware of political risks around the world. Political risks are any governmental actions or politically motivated events that adversely affect the long-run profitability or value of a firm.
7. Political risk assessment by MNCs usually takes two forms: consultation with experts familiar with the area and the development of internal staff capabilities. Political risk can be managed through (1. the avoidance or withdrawal of investment; (2. adaptations to the political regulatory environmenL (3.maintthning the husf country's dependency on the parent corporation; and (4. hedging potential losses through political risk insurance and local debt financing.
8. Economic risk refers to the ability of a country to meet its financial obligations. The risk is that the government may change its economic policies, thereby making a foreign company unprofitable or unable to repatriate its foreign earnings.
9. The regulatory environment comprises the many different laws and courts of those nations in which a company operates. Most legal systems derive from the common law, civil law, or Muslim law.
10. Use of the Internet in e-commerce-particularly in business-to-business transactions-and for intracompany efficiencies is rapidly becoming an important factor in global competitiveness.
11. The appropriability of technology is the ability of the innovating firm to protect its technology from competitors and to obtain economic benefits from that technology. Risks to the appropriability of technology include technology transfer and pirating and legal restrictions on the protection of proprietary technology. Intellectual property can be protected through patents, trademarks, trade names, copyrights, and trade secrets.
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