Globalization and management

Globalization and Management

www.profmanishparihar.blogspot.com

Topics (1 hour each)

• Part 1: – Introduction to Globalization– Definition– Pros & cons of globalization– Building global management skills

• Part 2:– Global healthcare organization: Doctors

without borders– Case study: Medical tourism in India

The Shrinking Globe

1500 -1840 1850 - 1930 1950s 1960s

Best average speed ofhorse-drawn coachesand sailing ships, 10mph.

Steam locomotivesaverage 65 mph.Steamships average36 mph.

Propelleraircraft300 - 400mph.

Jetpassengeraircraft,500 - 700mph.

Globalization

 1975 8% of world’s countries had a

free-market system

2007 38% had one with $1644 bn FDI

Evidence of Globalization

World trade increased more than:– 20x between ’50 and ’98 – 25x from ’70 to ’02

FDI annual flows increased more than: – 10x from ’84 to ’98, or– 50x between ’75 and ’02

More evidence of Globalization

By 2000, 60,000 parent companies:– operated away from home markets

through 500,000 subsidiaries / affiliates

– Produced US$11 trillion in global sales, 25% of global output

US, Japanese, Western European companies the major investors in Europe, Asia, and North America

Globalization of Markets

Distinct/separate markets merging into a huge global marketplace– Mostly NOT consumer product markets– Mostly industrial products

MNCs creating global marketplaceMNCs more vulnerable to competition

in their home markets

“Drivers” of Globalization:Technological Change

Globalization of markets and production– result of lowering of trade barriers– enabled by technological change

Telecommunications and microprocessors

The internet and the world-wide webTransportation technology

Global Telecommunications

Globalization: A Preliminary Definition

“an unprecedented compression of time and space reflected in the tremendous intensification of social, political, economic, and cultural interconnections and interdependencies on a global scale.”

Stegler, p. ix

• time-space compression

• deterritorialization

From Wikipedia:

• Globalization refers to the increasing unification of the world's economic order through reduction of such barriers to international trade as tariffs, export fees, and import quotas.

Positive effects of globalization

• Industrial• Financial• Economic• Political• Informational• Ecological• Cultural• Technical

Negatives:

• Income inequality

• Brain drains

• Sweat shops

• Illicit goods trade

Opening question:

How can we best prepare today’s managers for tomorrow’s global challenges?

14

Building Global Management Skills

GlobalGlobal Management Management

SkillsSkills

Integration of management

and cross-cultural skills

(p. 37)

Types of Global Managers

Expatriates Frequent flyers Virtual managers

Management Focus • Long-term• Face to face• Live in foreign country

• Short term• Face to face• Frequent visits

• Remote • Work through technology

Mode of communication

Mostly face to face Mixed face-to-face and virtual

Mostly virtual

Key success factors

• Deep knowledge of local culture

• Local language• Local business environment

• Global business issues

• Understanding of cultural issues

• Multilingual skills important

• Deep understanding of global issues

• Some understanding of cultural differences and variation in business practices

• Multilingual skills useful

Cultural challenge Regional myopia: overemphasis of local versus global

Global myopia: overemphasis of global versus local

Technological myopia: ignore impact of culture on uses and applications of technology

16 (p. 29)

Globalization: Stylized Shifts

(c) Venkatraman, 2008

Globalization 1.0

(c) Venkatraman, 2008

18

One of the First Global Corporations…

(c) Venkatraman, 2008

Globalization 2.0

(c) Venkatraman, 2008

21

Globalization 2.0 Infrastructure

(c) Venkatraman, 2006

22

Globalization 2.0 Infrastructure

(c) Venkatraman, 2006

23

(c) Venkatraman, 2006 24

Globalization 3.0

Globalization 3.0 is about IT-enabled work

(c) Venkatraman, 2008

25

Engineering

Legal

Medical

Software

BPOCall Centers

Tech Support

??

R&D

Analytics

??

??

Services

Design??

Where’s it designed? Where is it manufactured?

(c) Venkatraman, 2006

26

Globalization through digital networks..

(c) Venkatraman, 2008

27

Remote, Connected Work

(c) Venkatraman, 2006

28

Globalization 3.0:Early observations….

(c) Venkatraman, 2008

29

It’s not all about accent neutralization!

(c) Venkatraman, 2008

30

Globalization 3.0: Early Experimenters

(c) Venkatraman, 2008

31

Part 2

Global healthcare organization: Doctors without borders

Case study: Medical tourism in India

Globalization in Healthcare

33

(c) Venkatraman, 2008

Heart Bypass

U.S.: $130,000Singapore: $18,500Thailand: $11,000India: $10,000

Photo: EastShore Hospital, SingaporeData: Business Week, The EastShore Hospital is an International

Member of Blue Cross, Blue Shield ofSouth Carolina..

Heart Valve Replacement

U.S.: $160,000Singapore: $12,500Thailand: $10,000India: $9,000

Photo: Apollo Hospital, Chennai. IndiaData: Business Week, The Apollo Hospital is an International

Member of Blue Cross, Blue Shield ofSouth Carolina..

Angioplasty

U.S.: $57,000Singapore: $13,000Thailand: $13,000India: $11,000

Photo: Bumrungard International Hospital , BangkokData: Business Week, 35,000 Americans traveled to Bangkok in 2007

for this treatment

Hip Replacement

U.S.: $43,000Singapore: $12,000Thailand: $12,000India: $9,000

Photo: Gleneagles, SingaporeData: Business Week,

US Private equity firm, TPG has taken a controllinginterest in the Parkway Group that owns the hospital.

Hysterectomy

U.S.: $20,000Singapore: $6,000Thailand: $4,500India: $3,000

Photo: a subsidiary of Wockhardt in Mumbai, IndiaData: Business Week,

Active discussions with US insurers

Knee Replacement

U.S.: $40,000Singapore: $13,000Thailand: $10,000India: $8,500

Photo: St. Luke’s Hospital in ManilaData: Business Week,

Early stage infrastructure; not yet world-class..

Spinal Fusion

U.S.: $62,000Singapore: $9,000Thailand: $7,000India: $5,500

Photo: Tiantan Puhua Hospital, Beijing, ChinaData: Business Week,

Experimental stem cell treatments, not availablein the USA..

Article Discussion:

Globalization of health care:

Discuss article on “Medical Tourism in India”

(Wharton Business School)

Discussion points:

• “India has the highest potential in medical tourism in the world”. Do you agree? Why?

• Give examples of Indian Hospitals taking advantage of medical tourism.

• Is “medical tourism” the correct terminology to describe overseas medial care?

Discussion points:

• It is said that the biggest beneficiary of medical tourism in the world is U.S… Why is that so?

• Are the government policies friendly for Indian Medical Tourism?