Unit 10

I. Information for study.

Прочтите и постарайтесь понять текст. Запишите на полях основные термины.

The nature of international management

If you took an inventory of the items that are in your living quarters, you would probably find many that reflect the increasing volume of business conducted on an international basis. For example, you might have shoes from Italy or Brazil, a television and VCR from Japan, and a shirt made in Korea. Even items that bear, the brand names of a U.S. - based company may have been produced in a far-off land in the course of international business. International business refers to profit-related activities conducted across national boundaries. Such activities encompass importing supplies from other countries, selling products or services to customers abroad, or providing for the transfer of funds to subsidiaries in other countries. International management is the process of planning, organizing, leading, and controlling in organizations engaged in international business.

Changing character of international business

There is strong evidence that the United States is losing its competitive edge in international trade and is facing increasing competiting in world markets. According to some accounts, the United State enjoyed an abnormal advantage for several decades after World War II because the productive facilities of other large industrial powers had been severely damaged by wartime activities. Now countries such as Japan and Germany have become formidable competitors, and developing national such as Brazil, India, and South Korea also are emerging as potential major players. Despite the increased competition, though, international markets are growing rapidly, providing expanded opportunities for many U.S. - based businesses.

Organizations engaging in International management

Organizations that engage in international management vary considerably in size and in the extent to which their business activities cross national boundaries. One special type of organization involved in international management is the multinational corporation. Although definitions differ somewhat, the term multinational corporation (MNC) is typically reserved for an organization that engages in production or service activities though its own affiliates in several countries, maintains control over the policies of those affiliates, and manages from a global perspective.

The World's 25 Largest Industrial Multinational Corporations rank

1988	1987	Company	Headquarters	Industry
1	1	General Motors	Detroit	Motor vehicles
2	4	Ford Motors	Dearborn, Mich	Motor vehicles
3	3	Exxon	New Yerk	Petroleum refining
4	2	Royal Dutch/Shell Group	London/The Hague	Petroleum refining
5	5	International Business Machines	Armonk, N.Y.	Computers
6	8	Toyota Motor	Toyota City (Japan)	Motor vehicles
7	10	General Electric	Fairfleild, Conn	Electronics
8	6	Mobil	New York	Petroleum refining
9	7	British Petroleum	London	Petroleum refining
10	9	IRI	Rome	Metals
11	11	Daimler-Benz	Stuttgart	Motor vehicles
12	16	Hitachi	Tokyo	Electronics
13	21	Chrysler	Highland Park, Mich	Motor vehicles
14	18	Siemens	Munich	Electronics
15	17	Fiat	Turin	Motor vehicles
16	19	Matsushita Electric Industrial	Osaka	Electronics
17	15	Volkswagen	Wolfsburg(W.Ger.)	Motor vehicles
18	12	Texaco	White Plains, N.Y.	Petroleum refining
19	14	E.I. Du Pont de Nemours	Wilmington, Del	Chemicals
20	20	Unilever	London/Rotterdam	Food
21	24	Nissan Motor	Tokyo	Motor vehicles
22	22	Philips' Gloeilampenfabrieken	Endhoven (Netherlands)	Electronics
23	27	Nestle	Vevey (Switzeriands)	Food
24	32	Samsung	Seoul	Electronics
25	25	Renault	Paris	Motor vehicles

Multinational corporations are not always easy to identify, since it may be difficult to determine from the outside how much control management maintains over the policies of affiliates or whether management actually uses a global perspective. As a result? for purposes of gathering statistics, an arbitrary percentage (such as 25 percent of sales from foreign sources) is sometimes used to distinguish multinational corporations from other types of international businesses. However, there is no single universally accepted percentage of foreign sales that clearly separates multinational corporations from others.

Regardless of their size, companies may decide to expand internationally for a number of different reasons. Some organizations may become involved through unsolicited orders from foreign customers. Others may initiate international efforts in order to open new markets or to preclude foreign companies from entering specific foreign markets and eventually becoming domestic competitors. Still others may be motivated by the need to develop sources of supplies, possibilities of acquiring needed technology or prospects for reducing costs by operating in foreign countries. Whatever the reason, managers need to think through their basic orientation toward international management.