International Management and Contemporary Issues
Domain 6 tests the global context and newer management concerns: entry modes, cultural dimensions, trade institutions, ethics, sustainability, and technology.
Going international
Globalization increases interdependence. A multinational corporation operates in multiple countries. Entry modes rise in control, commitment, and risk: exporting (low), licensing (technology/patents to a foreign firm), franchising (brand and system, common in services), strategic alliance/joint venture (shared ownership and control), and wholly owned subsidiary (greenfield or acquisition, highest control and risk). Trade barriers include tariffs (taxes on imports), quotas (quantity limits), embargoes (bans), and subsidies. The WTO governs trade rules; regional blocs include the EU and USMCA.
Culture
Hofstede's dimensions: power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, long-term orientation, and indulgence/restraint. Hall's high-context cultures rely on implicit cues; low-context cultures rely on explicit wording. GLOBE extends Hofstede with performance and humane orientation. These are national averages, not individual predictions.
Contemporary issues
CSR is the obligation to act in ways that benefit society; the triple bottom line is people, planet, profit. Ethical tests include utilitarian (greatest good), rights (respect entitlements), and justice (fairness). Sustainability addresses environmental impact and long-term viability. Entrepreneurship creates new ventures; intrapreneurship innovates inside an existing firm. Diversity management leverages differences; outsourcing contracts work to external providers, while offshoring moves it abroad. Technology enables e-commerce, remote work, and data-driven decisions, but raises privacy and security issues.
Worked example
A retailer wants to enter a country with high power distance and high uncertainty avoidance. Hofstede suggests employees and customers may expect formal hierarchy, clear rules, and predictable service. A joint venture with a local partner can supply regulatory knowledge and relationships, while the retailer retains brand standards. Franchising would offer speed but weaker control over standards; exporting would limit local adaptation. The choice depends on the trade-off between control and risk.
Traps
Licensing and franchising are not identical: franchising typically includes the business system and ongoing support. A joint venture shares ownership; a strategic alliance need not. Hofstede describes national tendencies, not individuals. Standardization versus localization is a continuum, not a binary. CSR is not the same as compliance with law.