Competing in a global economy Introduction: Competing in a global economy is both a major challenge and an opportunity for business today.

The nature of these challenges depends on a variety of factors including the size of the organization. In addition International management has implications for the basic functions of planning and decision making, organizing, leading and controlling. Meaning: The economic relations between countries in a world where markets in individual countries have now spread beyond national boundaries and are more integrated with those of other countries Definition: World-wide economic activity between various countries that are considered intertwined and thus can affect other countries negatively or positively Globalization and organization size: Although organizations of any size may compete in international markets, there are some basic differences in the challenges and opportunities faced by MNCs, Medium-size organizations, and small organizations. Multinational corporations: The large MNCs have long since made the choice to compete in a global marketplace. In general, these firms take a global perspective. They transfer capital, technology, human resources, inventory, and information from one market to another. They activity seek new expansion opportunities wherever feasible. MNCs tend to allow local managers a great deal of discretion in addressing local and regional issues. At the same time, each operation is ultimately accountable to a central authority managers at this central authority(headquarters, a central office) are responsible for setting the overall variety of cultures. strategic direction for the global economy and who are comfortable dealing with executives and government officials from a

Medium-size organizations: Many medium-size businesses remain primarily domestic organizations. But they still may buy and sell products made aboard and compete with businesses from other countries in their own domestic markets. Increasingly, however, medium-size organizations are expanding into foreign markets as well. For example, Golds Gym, a U.S. Fitness chain, has opened a very successful facility in Moscow. In contrast to MNCs, Medium-size organizations doing business aboard are much more selective about the markets they enter. They also depend more on a few international specialists to help them manage their foreign operations. Small organizations: More and more small organizations are also finding that they can benefit from the global economy. Some, for example, serve as local suppliers for MNCs. A dairy farmer who sells milk to carnation company, for example, is actually transacting business with Nestle. Local parts suppliers also have been successfully selling products to the Toyota and Honda plants in the United States. Beyond serving as local suppliers, some small businesses buy and sell products and services abroad. For example, the Collin street bakery, based in Corsicana, Texas, ships fruitcakes around the world. In 2003 the firm shipped over 150,000 pounds of fruitcake to Japan. Most small businesses reply on simple importing or exporting operations for their international sales. Thus only a few specialized management positions are needed. Collin street bakery, for example, has one local manager who handles international activities. Mail-order activities within each country are subcontracted to local firms in each market. Management challenges in a global economy: The management functions that constitute the framework for this book planning and decision making, organizing, leading, and controlling are just as relevant to international managers as to domestic managers. International managers need to have a clear view of where they want their firm to be in the future; they have to develop appropriate control mechanisms.

Planning and decision making in a global economy: To effectively plan and make decisions in a global economy , managers must have a broad-based understanding of both environmental issues and competitive issues. They need to understand local markets conditions and technological factors that will affect their operations. At the corporate level, executives need a great deal of information to function effectively. Which markets are growing? Which markets are shrinking? what are our domestic and foreign competitors doing in each markets? They must also make a variety of strategic decisions about their organizations. For example, if a firm wishes to enter the market in France, should it buy a local firm there, build a plant, or seek a strategic alliance? Critical issues include understanding environmental circumstances, the role of goals and planning in s global organization, and how decision making affects the global organization. We note special implications for global managers as we discuss planning and decision making. Organizing in a global economy: Managers in international business must also attend to a variety of organizing issues. For example, general electric has operations scattered around the globe. The firm has made the decision to give local managers a great deal of responsibility for how they run their business. In result, those managers must frequently travel back to Japan to present problem a or get decisions approved. Managers in an international business must address the basic issues of organization structure and dealing with human resources. We address the specialist issues of organizing the international organization. Leading in a global economy: We noted earlier some of the cultural factors that affect international organizations. Individual managers must be prepared to deal with these and other factors as they interact with people from different state in the united states, is likely to be much simpler than supervising a group of five managers each of whom is from is from a different culture. Managers must understand how motivational process culture. manager must understand how the role of leader changes in different cultures how communication varies across cultures, and how interpersonal and group cultural factors affects individuals, communication varies across cultures, and how interpersonal and group processes depend on cultural background.

Controlling in a global economy: Finally, manages in international organizations must also be concerned with control. Distances, time zone differences, and cultural factors also play a role in control. For example, in some cultures, close supervision is seen as being appropriate, whereas in other cultures, it is not. Likewise, executives in the united states and Japan may find it difficult to communicate vital information to one another because of time zone differences. Basic control issues for the international. manager revolve around operations management, productivity, quality, technology, and information systems. These issues are integrated throughout our discussion of control Global Economic Analysis Global Economic Analysis is a macro-level study of all the economies of the world taken as a whole. Globalization has helped the world economy become more integrated and homogenized with the free movement of goods and services. Its objective is to unify prices of commodities and wages worldwide. Diffusion of technical knowledge and information is also a positive effect of globalization. Global Economic Analysis tends to project a skewed picture of the economic development experienced by the world in general. Although globalization has marched on rapidly in recent years, it has not been a bed of roses all the way. Global Strategy During the last half of the twentieth century, many barriers to international trade fell and a wave of firms began pursuing global strategies to gain a competitive advantage. However, some industries benefit more from globalization than do others, and some nations have a comparative advantage over other nations in certain industries. To create a successful global strategy, managers first must understand the nature of global industries and the dynamics of global competition. Root Competition Root competition is defined as a reduction in the availability of a soil resource to roots that is caused by other roots. Resource availability to competitors can be affected through

resource depletion (scramble competition) and by mechanisms that inhibit access of other roots to resources (contest competition, such as allelopathy). It has been proposed that soil heterogeneity can cause size-asymmetric root competition. Support for this hypothesis is limited and contradictory, possibly because resource uptake is affected more by the amount and spatial distribution of resource-acquiring organs, relative to the spatial distribution of resources, than by root system size per se. Root competition intensity between individual plants generally decreases as resource availability (but not necessarily habitat productivity) increases, but the importance of root competition relative to other factors that structure communities may increase with resource availability. Soil organisms play important, and often species-specific, roles in root interactions. The findings that some roots can detect other roots, or inert objects, before they are contacted and can distinguish between self and non-self roots create experimental challenges for those attempting to untangle the effects of self/non-self root recognition, self-inhibition and root segregation or proliferation in response to competition. Recent studies suggesting that root competition may represent a 'tragedy-of-the-commons' may have failed to account for this complexity. Theories about potential effects of root competition on plant diversity (and vice versa) appear to be ahead of the experimental evidence, with only one study documenting different effects of root competition on plant diversity under different levels of resource availability. Roots can interact with their biotic and abiotic environments using a large variety of often species-specific mechanisms, far beyond the traditional view that plants interact mainly through resource depletion. Research on root interactions between exotic invasives and native species holds great promise for a better understanding of the way in which root competition may affect community structure and plant diversity, and may create new insights into convolution of plants, their competitors and the soil community.

The importance of the global economy Greater transparency on the capital markets A stable currency is the foundation of every national economy. Export-oriented countries like Germany are closely integrated into the international financial system, with the result that currency fluctuations impact directly on their economic situation, their international competitiveness and thus also on their labor markets. In Germany alone, eight million jobs depend on exports. At previous G8 summits, the fight against inflation and efforts to achieve stable exchange rates were important topics. The German G8 Presidency is endeavoring to make capital markets more transparent. Open markets need clear regulations. This applies, for instance, to hedge funds. At their recent meeting near Potsdam, the G8 ministers of finance recommended common standards. Involving emerging economies The "outreach countries", Brazil, China, India, Mexico and South Africa, now play an extremely important part in the global economy, as emerging economies. They are being integrated into global responsibility, and have been invited to meet the G8 states at the Summit in Heiligendamm. The protection of intellectual property and the fight against product piracy are major concerns of the German G8 Presidency in this context. Counterfeits cost the German economy alone 25 billion euros every year. Worldwide, the cost is put at 120 billion euros. Pirate products are often made of inferior materials, and do not comply with the quality or safety standards of the originals. The fight against product piracy thus also protects consumers, making it essential to look at both the manufacture of and the demand for pirate products. Without the cooperation of emerging economies, progress here would be inconceivable.

Liberalizing trade Now worldwide trade should be liberalized and protectionism further overcome. This calls for efforts on all sides. If fair regulations are agreed and respected, globalization will bring prosperity for all. Open markets foster mutual trade and thus growth. It is then crucial that a breakthrough be achieved in the Doha Round of world trade negotiations. Advantages of Global Economy The global economy can reap the benefits of increasing economies of scale. With the opening up of the economy the industrial sector has benefited with the attainment of cheap labor, capital and technology. Small companies also witness rapid growth owing to a wider customer base. Many opine that the global economy has promoted international peace and cooperation. Disadvantages of Global Economy The global economy has encouraged transportation on a wider scale for the free flow of goods and services across nations. This has , in turn, led to the emission of greenhouse gases. The global economy has also resulted in the loss of domestic jobs. The labor intensive industries of the developed countries find it profitable to shift to third world countries where wage rates are low. This leads to the displacement of labor in the developed countries. Further, it is difficult to formulate regulations and legislations that are undifferentiated across the globe Global Economic Competition. Global competitiveness has always been a hotly debated issue, promoting differing opinions among economists, management strategists, business leaders, and policy analysts and consultants. Global Economic Competition provides a broad framework to compare the United States economy with 23 other global economies. This is done by presenting empirical evidence in a series of comparative analyses of economic competition using data pertaining to specific countries, industries and companies. In this volume, the electronics industries are used to illustrate an ongoing economic warfare among competing regions, nations, and cluster companies across the electronic technology chain. Employing the latest empirical data

to evaluate the competitiveness of the US economy and its electronic industries and companies in the 1980s and early 1990s, Global Economic Competition will be of interest not only to those who study economics, management science and international trade, but also to policy makers and business leaders. Conclusion These are just a few high-level themes for competing in the global economy. The competition will keep evolving, and there are always more lessons to learn. But theres no going back. Just as weve embraced the benefits of competing in the global economy, weve also embraced the challenges. And were ready to continue to innovate and change so we can deliver the products and services that will help our customers succeed.

Reference: ec.europa.eu/clima/tenders/2011/190739/specifications_en.pdf en.wikipedia.org/wiki/Globalization

PSR ENGINEERING COLLEGE SIVAKASI DEPARTMENT OF MANAGEMENT STUDIES SEMINAR TOPIC COMPETING IN A GLOBAL ECONOMY

Guided By:

Mr. R. THIRUMALI KUMAR. BE., MBA Asst.Prof

Submitted To
J. HEMA. M.Com., M.Phil. Asst-Prof V.M. SANGEETHA. B.Tech., MBA- Asst Prof

Submitted By
M.PONSURESH I Year MBA

Submission Date: 23-09-2011