In chapter seventeen several topics for debate are presented about managing global operations. For many global organizations, or organizations that produce or sells goods or services in more than one country, a difficult question is how to develop and place managers in foreign operations. Some people believe organizations should let foreign managers run foreign subsidiaries because of the large differences among national cultures while others believe that domestic managers should be trained to run foreign subsidiaries because of loyalty issues. Nation culture is the particular set of economic, political, and social values that exist in a particular nation. This culture effects all aspects of global organizations operations. Foreign exchange rates, banking and accounting laws, and tax codes can all affect the profitability of foreign subsidiaries. These rules and regulations vary from country to county. The way Japan accounts for good will varies dramatically from the way the United Sates regulatory agency demands it be recorded. In some countries politics play a larger role than others. In smaller less industrialized countries it may be necessary to support specific political candidates in order to be able to establish a profitable business. To do business in a country like Iraq you would probably have to make a large donation to the Hussein family, however in England you dont have to support the Royal Family to operate an organization. In addition to economic and political problems a more fundamental problem appears. Social values have a dramatic affect on how products and services are perceived and how effective advertising can be. An advertising campaign with women in bikinis promoting Budweiser products may be highly effective in a small collage town in the United States, but in Saudi Arabia it would probably offend a number of people, because of the local customs. Having a local foreign manager can aid in the effici...
