Organizations are considered global if they exchange goods and services with consumers in other countries, if they use managerial and technical employee talent from other countries, or if they use financial sources and resources outside their home country. Businesses going global are usually referred to as multinational corporations (MNCs). As an MNC, they may operate as a multidomestic corporation, a global corporation, or a transnational or borderless organization. When a business goes global, it may start with global sourcing, move to exporting or importing, use licensing or franchising, pursue a global strategic alliance, or set up a foreign subsidiary.

In doing business globally, managers need to be aware of different laws, economic systems, as well as political views on issues such as immigration and free trade. But the biggest challenge is understanding the different country cultures. Two cross-cultural frameworks that managers can use are Hofstede’s and GLOBE.

Society expects organizations and managers to be responsible and ethical. An organization’s social involvement can be from the perspective of social obligation, social responsiveness, or social responsibility. After much analysis, researchers have concluded that managers can afford to be (and should be) socially responsible. Sustainability has become an important societal issue for managers and organizations.

Ethics can be viewed from the utilitarian view, the rights view, or the theory of justice view. Whether a manager acts ethically or unethically depends on his or her morality, values, personality, and experiences; the organization’s culture; and the ethical issue being faced. Managers can encourage ethical behavior by hiring employees with high ethical standards, establishing a code of ethics, leading by example, linking ethical behavior to job goals and performance appraisal, providing ethics training, and implementing protective mechanisms for employees who face ethical dilemmas.