Transcript of 1 International Management MGT 480/680 Spring 2009 Dr. Yvonne Stedham 1.
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- 1 International Management MGT 480/680 Spring 2009 Dr. Yvonne
Stedham 1
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- 2 International Management Seniors, Juniors, Majors???
Travelled to other countries? USAC? Speak other languages? 2
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- 3 International Management Why this course? What do you expect
to learn? 3
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- 4 This week Purpose of this course What do you know?
Introduction Course Content Format - Syllabus Personal Instructor
Students Background Sheet 4
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- 5 Purpose What new management/business knowledge could you
possibly learn in this class? Globalization, Democracy, Free
Markets, and the Bottom Line 5
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- 6 Website Location http://wolfweb.unr.edu/homepage/ystedham
6
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- 7 Current Developments National Public Radio (NPR) FM 88.7 -
KUNR FM 90.5 Cap Radio The Economist
https://www.economistacademic.com/subscribe_single.cfmhttps://www.economistacademic.com/subscribe_single.cfm
- Student Subscription 12 weeks $19.95 Faculty ID: 4430 Wall Street
Journal Sign-up sheet 7
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- 8 For February 5 Global Update Web/Handout Questions to be
handed out in class next week 8
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- 9 Student Group International Business Student Chapter (IBSC)
UNR_IBSC@yahoogroups.com or Adam Cole
[colea4@unr.nevada.edu]UNR_IBSC@yahoogroups.com NEWTRAC Nevada
World Trade Council www.newtrac.orgwww.newtrac.org 9
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- 10 What do you know? 1.List the five largest countries based on
population. 2.What is the world population? 3.What is GDP? What is
the GDP/capita in the U.S.? What is a typical GDP growth rate for
the U.S.? 4.Which three countries have the highest GDP/capita?
5.Which countries are culturally most similar to the U.S, which
ones most dissimilar? 6.How many countries are there in the world?
10
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- 11 What do you know? I. Five largest countries China 1.3 Bill
India 1Bill U.S. 301Mill Indonesia 220Mill Brazil 190Mill Japan
127.5Mill II. World Population World 6.6 Bill 11
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- 12 What do you know? III. GDP/capita GDP/capita in U.S.: ~
$46,000 Growth rate in U.S.: less than 3% Mexico: Population ~110
Mill; $10,700 12
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- 13 New Internet Sources Index of Economic Freedom
www.heritage.org/research/features/index/countries
www.heritage.org/research/features/index/countries What is economic
freedom? Economic freedom is defined as the absence of government
coercion or constraint on the production, distribution, or
consumption of goods and services beyond the extent necessary for
citizens to protect and maintain liberty itself. In other words,
people are free to work, produce, consume, and invest in the ways
they feel are most productive. How do you measure economic freedom?
To measure economic freedom and rate each country, the authors of
the Index study 50 independent economic variables. These variables
fall into 10 broad categories, or factors, of economic freedom:
Trade policy, Fiscal burden of government, Government intervention
in the economy, Monetary policy, Capital flows and foreign
investment, Banking and finance, Wages and prices, Property rights,
Regulation, Informal market activity. 13
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- 14 Some Data (APPROX.) JapanChinaBrazilUSWorld Population127.5
Mill1.3Bill190 Mill301 Mill6.6Bill GDP growth2.2%10.7%3.7%3.2%5.3%
GDP/ Capita $33,100$7,700$8,800$46,780$10,200 Industry ???? 14
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- 15 What do you know? 4. Which 5 countries have the highest
GDP/capita 1.Luxembourg$102,284 2.Norway$ 79, 154 3.Qatar$ 70,754
4.Iceland$ 62, 976 5.Ireland$ 58,883 6.Denmark$ 57,035
7.Switzerland$ 56,711 8.UK$ 47,300 9.US$ 46, 780 10.Netherlands$
45,429 15
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- 16 What do you know? 5. Which countries are culturally most
similar to the U.S. Anglo Countries Canada Australia New Zealand
U.K. Ireland South Africa 16
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- 17 What do you know? 6. Number of countries in the world Total
number of countries: 192 -195 Kosovo, Vatican, and Taiwan United
Nations 192 17
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- 18 Quiz #1 January 29th Deresky Chapter 1 Chapter 2 Adler
Chapter 1: pp 1-16 18
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- Class on February 3rd Attend COBA Business Summit: Navigating
the Ethics Maze Details and Syllabus
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- 20 World Economic Forum Davos 1/28-2/1 Committed to improving
the state of the world https://members.weforum.org/ 20
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- 21 World Economic Forum is an independent, international
organization incorporated as a Swiss not-for- profit foundation.
Our motto is entrepreneurship in the global public interest. We
believe that economic progress without social development is not
sustainable, while social development without economic progress is
not feasible. It aims to be: the foremost organization which builds
and energizes leading global communities; the creative force
shaping global, regional and industry strategies; the catalyst of
choice for its communities when undertaking global initiatives to
improve the state the world. 21
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- 22 World Economic Forum We enjoy a unique global standing by
recognizing and responding to two new developments: 1.The worlds
key challenges cannot be met by governments, business or civil
society alone 2.In a world characterized by complexity, fragility
and ever greater synchronicity, strategic insights cannot be
passively acquired. They are best developed through continuous
interaction with peers and with the most knowledgeable people in
the field. To carry out its mission, the World Economic Forum has
developed an integrated value chain by involving world leaders in
communities, inspiring them with strategic insights and enabling
them through initiatives. 22
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- 23 World Economic Forum Members represent the worlds 1,000
leading companies. Partners are select member companies who are
actively involved in the organization's activities and contribute
their expertise and resources. Members comprise in principle the
foremost 1,000 global enterprises. Characteristics of Members
include: Their rank among the top companies within their industry
and/or country The global dimension of their activities A leading
role in shaping the future of their industry and/or region Every
year, more than 100 of the worlds most influential companies
partner with the World Economic Forum to tackle the most complex
challenges facing humanity. Recognizing that each companys business
needs are unique, the Forum offers the possibility for partners to
engage in a specific community, project or event. 23
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- 24 Cost Benefit Risk Analysis www.cia.gov www.transparency.org
www.heritage.org 24
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- 25 Personal Introductions Students background sheets
Introduction Major Traveled internationally Speak other language
25
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- International Government Materials International financial
statistics yearbook
http://innopac.library.unr.edu/record=b1618229~S0 Trade policy
review. [country name]
http://innopac.library.unr.edu/search/a?searchtype=t&searcharg=trade+po
licy+review We also have extensive holdings of international
government publications on microfiche, with most titles searchable
in the catalog. In many cases this is the only format we own (that
is, we dont own a duplicate paper copy). Patrick Ragains Business
and Government Information Librarian ragains@unr.edu
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- 27 Dont confuse APEC OPEC 27
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- 28 APEC - Asia Pacific Economic Cooperation Premier forum for
facilitating economic growth, cooperation, trade and investment in
the Asia-Pacific region. It is one of the world's most important
regional groupings, encompassing 21 member economies who
collectively represent over 2.6 billion people and account for
approximately half of global GDP and trade. The primary focus of
APEC is promoting trade and investment liberalization and business
facilitation in the Asia-Pacific region. 28
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- 29 APEC Members Australia Brunei Darussalam Canada Chile
People's Republic of China Hong Kong, China Indonesia Japan
Republic of Korea Malaysia Mexico 29
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- 30 APEC Members New Zealand Papua New Guinea Peru Philippines
Russia Singapore Chinese Taipei Thailand United States Viet Nam
30
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- 31 APEC Australia 2007 Business Summit The is a significant,
invitation-only, annual meeting that provides unparalleled
opportunities for strategic engagement and networking with
prominent business leaders, international opinion setters, policy
makers and leaders of Asia-Pacific Economic Cooperation (APEC)
Member Economies. The two-day forum was part of the APEC meetings
hosted by the Australian Government in 2007, which culminated in
APEC Leaders Week and the Business Summit in September in Sydney.
The Business Summit, formerly the CEO Summit, has been held each
year since 1996. It was instituted to enable business leaders to
interact with APEC leaders during Leaders Week. The APEC Australia
2007 Business Summit will play a key role in supporting APEC's work
by bringing together a select group of influential business and
government leaders with opinion setters and policy makers at a
single event to examine some of the key issues facing the region.
31
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- 32 OPEC Organization of Petroleum Exporting Countries Eleven
members Algeria, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi
Arabia, UAE, Venezuela (Hugo Chavez) OPECs mission is to coordinate
& unify the petroleum policies of Member Countries & ensure
the stabilization of oil prices in order to secure an efficient,
economic & regular supply of petroleum to consumers, a steady
income to producers & a fair return on capital to those
investing in the petroleum industry. 32
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- 33 Women World Leaders G7 (G8) Countries US, Canada, Germany,
France, Italy, UK, Japan, (Russia) Never a female leader: US,
Italy, Japan Female leaders: First UK, then France, Canada, Germany
Other countries with female leaders: Finland, Ireland, India,
Indonesia, Chile 33
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- World Economic Forum Update Program
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- 35 International Management Introduction Course Content
Culture, Globalization, Cost-Benefits-Risk Format - Syllabus
Personal Background Sheet Framework of an international
organization Globalization Reasons for going international Types of
international organizations 35
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- 36 Framework Organizations and Organizational Effectiveness
What is an organization? Why do organizations exist? When is an
organization effective? Efficiency vs effectiveness? 36
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- 37 Organizations and Organizational Effectiveness What is an
organization? Why do organizations exist? Organizations = People
Mission, goals, objectives When is an organization effective?
Distinguish between efficiency and effectiveness. Distinguish
effectiveness measures for the short, intermediate, and long run.
37
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- 38 Measurement of organizational effectiveness Long run?
Intermediate run? Short run? A contingency approach to management
38
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- 39 Measurement of organizational effectiveness Long run:
Survival Intermediate run: Adaptation, Responsiveness Short run:
Productivity, Efficiency A contingency approach to management (as
opposed to administrative theory of management) It is managements
task to create the best possible fit between the external and
internal environments of the organization and must ensure internal
consistency between the organizations elements. 39
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- 40 The Organization 40
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- 41 The International Organization 41
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- 42 Globalization Thomas Friedman Why change? Characteristics of
the global system Previous system? 42
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- 43 Globalization Thomas Friedman (NY Times) The Lexus and the
Olive Tree The World is Flat Hot, Flat, and Crowded With the #1
bestseller The World Is Flat, he helped millions of readers see and
understand globalization in a new way. Now Thomas L. Friedman
explains how America can lead the green revolution in the 21st
century. 43
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- 44 Globalization Globalization is not just an economic fad and
it is not just a passing trend. It is an international system that
replaced the Cold War System after the fall of the Berlin wall The
World is ten years old (1999) 44
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- 45 Characteristics of the new system Separation and
independence VS Integration and interdependence 45
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- 46 Characteristics of the new system Free market capitalism
Homogenization of culture Americanization Defining technologies:
computerization, miniaturization, digitization, satellite
communications, fiber optics, the Internet 46
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- 47 Characteristics of the new system Defining measurement:
Weight (missles) VS Speed.. Of travel, innovation, communication,
commerce 47
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- 48 Characteristics of the new system Defining economists: Karl
Marx and Keynes VS Schumpeter Capitalism and Creative Destruction
48
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- 49 Characteristics of the new system Defining political views:
Friends and Enemies VS Competitors 49
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- 50 Reminder Extra Credit IBSC Meeting AB 107 February 10 -
12:15pm 50
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- 51 Termpaper List DRAFT 2/10/09 2:30 COUNTRYSTUDENT NAMES
Comment 1.Italy EChristian, Blake, Tony 2.Norway EJosh, Andrew,
Enrique 3.AustraliaSteven, James, Gabe 4.Argentina LA Amy, Valerie,
Shawna 5.Ireland EAmanda, Addie, Greg 6.Thailand AJace, Chris,
Chanut 7.Germany EKatie, Andrea, Chad, Stephan 8.Uruguay LAMichael,
Iris, Raymond 9.China AEmily, Lia, Brian 10.AfghanistanJennifer,
Josh, Breann 11.Brazil or Chile LA Sandra, Russell, Brittany,
Brian, (Stephan) 5 students 12.ChileSandra, Russell, Brittany
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- Termpaper List 2/12/09 2:30 COUNTRYSTUDENT NAMESPRESENTATION
Ireland Amanda Mack, Addie Munson, Greg Welch April 14 Norway
Enrique Ramos, Andrew Herr, Josh Sells April 16 Germany Katie
Schwarzrock, Andrea Avent, Chad Grayot, Stephan Graves April 21
Italy Blake William, Anthony Gallian, Christian Reviglio April 21
Afghanistan Jennifer Noel, Josh Orolofo, Breann Boustang April 23
Uruguay Mihael Sperry, Iris Figuera, Raymond Gurries April 23
Argentina Amy Beaupre, Valerie Lear, Shawna Hankins April 28 Chile
Sandra Vasquez, Russell Elder, Brittany Warner April 28 Thailand
Jace OMallan, Chris Gerace, Chanut Sriphyak April 30 China Lia
Shim, Emily Kao (Chiung-Tzu), Brian Bausinger April 30 Australia
Steven Wear, James Furman, Gabe Scheel May 5
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- 53 Termpaper List DRAFT 2/5/09 4:00 COUNTRYSTUDENT NAMES
Comment 1.TurkeySteven, Lauren, Alyssa 3.EgyptAshley, Jenna, Lacy
4.Czech RepublicMatt, Jack, Brett1 spot 5.South KoreaVanessa,
Tyler, Kelsey1 spot 6.GermanyBen, ChrisGraduate 2 person group
7.ItalyMeghan, Kevin, Amber 8.JapanJeanette, Marion, Matt
9.FranceBen, Erika, Jason, Lucas1 spot 10.NorwayKatelyn, Drew,
Chris 11.PolandJill, Janenne, Katherine 12.IrelandJared, Seamus,
Phil
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- Termpaper List 2/12/09 4:00pm CountryStudent NamesPresentation
Ireland Jared Becher, Seamus Murphy, Phil Bowman April 14 Norway
Katelyn Zuppan, Drew Haitt,Chris Thompkins April 16 Germany Ben
Larson, Chris Hofman April 21 Poland Jill Collins, Janenne Johnson,
Katherine Tooker April 21 Czech Republic Matt Smith, Jack
Darlington, Lucas Draeger April 23 France Ben David, Erika
Ibaibarriaga, Jason Shurtleff, Kelsey Poentis April 23 Italy Meghan
Bartley, Kevin Lynch, Amber Wadginski April 28 Turkey Steven
Schnell, Lauren Rosensteel, Alyssa Durham April 28 Egypt Ahsley
Cray, Jenna Henning, Lacey Sourkup April 30 South Korea Vanessa
Briones, Tyler Schafer, Brett Kishkis April 30 Japan Jeanette Dory,
Marion Dillon, Matt Ruggiero May 5
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- 55 Groups Why do organizations go international? List at least
3 reasons 55
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- 56 Reasons for becoming international 1.A desire for continued
growth. 2.Domestic market saturation 3.The potential to now exploit
a new technological advantage 4.Preferable suppliers (quality,
cost) 5.Labor market (supply, quality, cost) 6.Government
involvement/restrictions 7.Reducing distance to customers (cost)
8.Tariff barriers 9.Increased foreign competition in home country
10.Reduce general business risk by diversifying into other
countries 56
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- 57 Internationalization Process by which firms 1.increase their
awareness 2.of the influence of international activities on their
future 3.and establish 4.and conduct 5.transactions with firms from
other countries. 57
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- 58 An International Organization 1.operates in multiple
environments, 2.home country and one or more host countries, 3.has
foreign sales, 4.and a nationality mix of managers and owners.
58
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- 59 Types of "international" organizations Multi-domestic
organization Multinational organization Global or transnational
organization 59
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- 60 Types of "international" organizations Multi-domestic
organization: Any organization that exports to/imports from
organizations in other countries with primarily domestic
production. 60
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- 61 Types of "international" organizations Multinational
organization: An organization with operations in different
countries but each is viewed as a relatively separate enterprise.
61
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- 62 Types of "international" organizations Global or
transnational organization: An enterprise structured so that
national boundaries become blurred. The best people are hired
irrespective of national origin. 62
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- 63 Graphic Representation Headquarters Subsidiary Relationship
63
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- 64 Stages Model of Internationalization Outward looking
perspective: activities/issues related to the other countries
(e.g., exporting) vs an inward perspective (e.g., importing)
Descriptive Reflects the commonly observed pattern of increased
commitment to international business 64
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- 65 Four stages of internationalization Stage 1: Indirect/ad hoc
exporting - perhaps from unsolicited export orders Stage 2: Active
exporting and/or licensing Stage 3: Active exporting, licensing,
and joint equity investments in foreign manufacture Stage 4:
Full-scale multinational marketing and production See also: Adler
Chapter 1 pages 8 and 9 65
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- 66 International Orientation Ethnocentric Polycentric
Geocentric Regiocentric 66
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- 67 International Orientation PCN Parent Country National HCN
Host Country National TCN Third Country National 67
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- 68 The Relationship between Level of Internationalization and
Firm Performance More international => more performance?????
68
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- 69 The Relationship between Level of Internationalization and
Firm Performance There is a strong CURVILINEAR relationship between
the degree of internationalization and organizational performance
69
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- 70 The Relationship between Level of Internationalization and
Firm Performance Degree of internationalization: "sales generated
by foreign affiliates" MNE (multinational enterprise) performance:
"profit to sales" or "profit to assets". 70
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- 71 The Relationship between Level of Internationalization and
Firm Performance Performance is at a max. at a level of
internationalization of 60 to 80% and then decreases with
continuing internationalization 71
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- 72 Reasons for becoming international Profit = Revenue Cost
Profit = (Volume*Price) - Cost 72
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- 73 Reasons for becoming international Profit = Revenue Cost =
(Volume*Price) Cost 1.A desire for continued growth. VOLUME
2.Domestic market saturation VOLUME 3.The potential to now exploit
a new technological advantage V 4.Preferable suppliers (quality,
cost) PRICE, COST 5.Labor market (supply, quality, cost) PRICE,
COST 6.Government involvement/restrictions COST 7.Reducing distance
to customers COST 8.Tariff barriers COST 9.Increased foreign
competition in home country VOLUME, PRICE 10.Reduce general
business risk by diversifying into other countries 73
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- 74 CBR Analysis Cost Cultural differences Lack of
infrastructure Taxes Resources Benefits (= reasons for going
international) Larger volume Lower cost Higher quality Less
competition => Higher price Risk Political, Economic,
Operational 74
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- Case 1 Corporate Social Responsibility Colombia Mexico India
Stakeholders
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- The Multiple Responsibilities of Business Economic
Responsibility Legal Responsibility Social Responsibility
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- 77 2005, Dr. Rafik Beekun, MGRS /28, University of Nevada,
Reno, NV 89557 USA
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- Business Ethics from a Stakeholders Perspective Relationship of
the firm to its employees: Hiring, promotion and other
employee-related decisions. Fair wages. Respect for employees
beliefs. Accountability. Right to privacy. Relationship of
employees to the firm: Conflicts of interest. Secrecy. Relationship
of the firm to other stakeholders - CSR
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- 79 External Environment Theory Competitive Advantage
Competitiveness International Competitiveness 79
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- 80 External Environment Porter Diamond The major determinants
of national competitive advantage why some nations succeed and
others fail in international competition. Porter's research is
based on studying 100 industries in 10 nations. 80
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- 81 PORTER DIAMOND National Competitive Advantage Why a nation
achieves success in a particular industry? Why Japan -- automobile,
cameras Why CH (Switzerland) -- precision instruments,
pharmaceuticals Why Germany -- engineering 81
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- 82 Porter Diamond Four broad attributes of a nation that shape
the environment in which local firms compete, and these attributes
promote or impede the creation of competitive advantage Diamond of
four mutually reinforcing factors 82
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- 83 Porter Diamond 1.Factor Endowments or Conditions Basic
Advanced Examples: Nokia, Ericsson 2. Demand Conditions 1. Quality
2. Innovativeness 3. Variety - customization 83
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- 84 Porter Diamond 3. Related and Supporting Industries
Suppliers (U.S. - semiconductor/comp) 4. Firm Strategy, Structure,
Rivalry Executive background Domestic environment encourages the
development of characteristics that make company internationally
competitive 84
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- Porters Diamond
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- 86 References for Porter 1. Michael Porter, 1990. The
Competitive Advantage of Nations. Free Press 2. M. Grant, 1991. The
Competitive Advantage of Nations: An Assessment. Strategic
Management Journal, 12, 535-548 86
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- Final Comments Additional Thoughts and Examples Japan high
priced land JIT inventory technique Sweden short building season
pre-fabricated houses Clustering Related and Supporting Industries
Silicon Valley Detroit Italy leather/shoes S. Korea Example
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- 88 Review Types of international organizations Criterion --
Level of Global Participation International/Multi-Domestic
Multinational Transnational/Global Stages of Development to an
International O. Descriptive Model Effectiveness of
Internationalization Relationship between extent of
internationalization and performance External Enviro Theory
1.National Competitive Advantage Porter Diamond 2.Trade Agreements
88
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- 89 External Environment - Theory 2. Trade Agreements Why?
Protectionism? Pro /Con 89
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- 90 Types of Trade Agreements 1.Trade Area Common tariffs among
members -- individual tariffs with non-members. NAFTA, ASEAN
(Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand,
Vietnam - 420 Mill) 2.Customs Union Common tariffs for non-members.
ANDEAN (Bolivia, Ecuador, Peru, Columbia, Venezuela) 3.Common
Market Free flow of goods and labor. Mercosur (Brazil, Paraguay,
Uruguay, Argentina, Chile) 4.Economic Union Common currency, common
overseeing institutions European Union -- 15 Members; Euro;
European Parliament; Court of Justice 5.Political Union 90
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- 91 External Environment - Addendum You need to know this about
-- 91
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- 92 Level of International Activities International Investment
International Trade 92
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- 93 North America United States - which industries most
internationally active? Why? US-Canada Free Trade Agreement (1989)
NAFTA . Mexico - wage rate; maquiladora industry (1965) 93
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- 94 Europe delayed differentiation acquisitions/alliances EU -
27 members .. EU The Euro 94
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- 95 European Union EU (27): Austria, Belgium, Cyprus, Czech
Republic, Denmark, Estonia, Finland, Iceland, Italy, Latvia,
Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal,
Slovakia, Slovenia, Spain, Sweden, UK, France, Germany, Ireland,
Greece, Romania (07), Bulgaria (07) EMU (13): Austria, Belgium,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Slovenia 95
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- 96 European Union - continued The European Commission The
Council of Ministers (counterbalance to Commission) The European
Parliament The European Court of Justice 96
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- 97 European Union The European Commission proposes policies and
legislation responsible for the administration of the EU ensures -
provisions of the EU treaties+the decisions of the other
institutions are properly implemented one rep per country (two for
the 5 larger countries) represent, protect, further the European
interest + its members do not represent or take orders from their
national governments 97
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- 98 Eastern Europe Break-up of The Soviet Union (Dec 1991)
Russia (glasnost, perestroika) The Ukraine Czech Republic Slovakia
Poland 98
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- 99 New Internet Sources Emerging markets/ economies in
transition http://ddcn.prowebis.com/ 99
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- 100 Russia Gazprom Europe (25%) Limitations on foreign
ownership Centralization of authority Weak infrastructure 100
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- 101 External Environment Latin America Middle (Central) and
South Mexico, Costa Rica, El Salvador, Nicaragua Peru, Colombia,
Venezuela Brazil Argentina Chile 101
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- 102 External Environment Asia Japan MITI (Ministry of
International Trade and Industry) keiretsus Current economic
conditions South Korea - chaebols China GNP growth of 10% (80s) low
wage rates 102
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- 103 External Environment What about Australia? 103
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- 104 External Environment The Four Tigers South Korea, Hong
Kong, Singapore, Taiwan Baby Tigers Thailand, Malaysia, Indonesia
104
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- 105 Less developed countries Large population, high
unemployment, inflation, low or negative economic growth, low
literacy rate India, African countries, Central and South American
countries, Middle East 105
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- 106 Kenya and Tanzania Kenya 34 Mill; 6.7% HIV; 85% literacy;
$1,200 GDP/capita; growth 5%; UE 40% Tanzania 37 Mill; 8.8% HIV;
78% literacy; $700 GDP/capita; growth 6% USA 301 Mill;.6% HIV; 95%
literacy; $48,600; 3.2% 106
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- 107 Major economic regions North America Europe Asia 107
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- 108 Economic Superpowers The Triad 1.The United States 2.The EU
(dominated by Germany), 3.Japan Dominates foreign direct investment
and international trade 108
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- 109 FDI Clusters For the U.S. Latin America For EU Eastern
Europe 109
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- 110 FDI Clusters - For Japan The Four Tigers South Korea, Hong
Kong, Singapore, Taiwan Baby Tigers Thailand, Malaysia, Indonesia
110
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- 111 Data USJapanGermany Population 301 Mill127.5 Mill82.5 Mill.
GDP growth 3.2%2.2%2.7% GDP/ Capita $44,800$33,100$31,900 CPI ECF
7.3 (20) 5 7.6 (17) 18 8.0 (16) 19 111
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- 112 Group Dynamics Why groups? 112
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- 113 Group Dynamics Group performance = Sum of individual
performance PLUS group dynamics Group dynamics can be positive or
negative Higher quantity and quality of solutions 113
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- 114 Group Dynamics Advantages Benefits Different viewpoints
Differences in expertise Differences in training and experience
Cultural differences Value differences 114
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- 115 Group Dynamics Process losses Loafing Intra-group conflict
Miscommunication Wrong leader In appropriate role and task
assignments Role ambiguity Role conflict Informal, dysfunctional
norms 115
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- 116 Group Dynamics Group management - Handout Roles What List
of tasks Who Is responsible for what, based on expertise How -
Enforcement Timeline When Specific deadlines What Effective
communication Who - Commitment 116
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- 117 Group Dynamics Group management Leadership Formal Why
Expertise and role Norms Must be explicit Agreed upon by all
Consequences of norm violations 117
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- 118 External Environment National Culture Harry and Sally in
Saudi Arabia Lack of prep -> ????? -> Loss of contract What
went wrong? Specific examples! 118
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- 119 What went wrong? Specific examples! Sabbath Flights
Language - Taxi Coffee Refusal Rude Food Role of women Negotiation
Relationship- building Why did things go wrong? Lack of preparation
Cultural knowledge Cross-Cultural sensitivity 119
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- 120 Culture and International Management Relevance Cultural
Toughness Cultural Distance Cross-cultural literacy Cost of doing
bus in a particular culture 120
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- 121 Internationalization Decision Benefits from
internationalization into a specific country Cost associated with
internationalization into a specific country Risk associated with
internationalization into a specific country. Decision = f
(benefit-cost-risk tradeoff) 121
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- 122 Cultural Dimensions All people have common life problems
such as . Possible solutions to such problems .. Different people
choose different solutions . Culture 122
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- 123 Cultural Dimensions Six basic dimensions describe the
cultural orientations of societies What is the nature of people?
What is a person's relationship to nature? What is a person's
relationship to other people? What is the primary mode of activity?
What is the conception of space? What is the temporal orientation?
123
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- 124 Cultural dimensions Six basic dimensions describe the
cultural orientations of societies 1. What is the nature of people?
Good/evil/change 2. What is a person's relationship to nature?
Dominant/harmony subjugation 3. What is a person's relationship to
other people? Individualistic/group hierarchical/lateral 124
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- 125 Cultural dimensions Six basic dimensions describe the
cultural orientations of societies 4.What is the primary mode of
activity? Doing/being 5.What is the conception of space?
Private/public 6. What is the temporal orientation?
Future/present/past 125
- Slide 126
- 126 Characteristics of Culture - Values and Norms 1)Social
structure 2)Religion 3)Political philosophy 4)Economic philosophy
5)Education 6)Language 126
- Slide 127
- 127 1) Social structure 1.Social stratification 2.Class
consciousness 3.Class membership is a function of ? 4. Social
mobility 127
- Slide 128
- 128 2) Religion www.adherents.com Minimal level of
self-identification Non-religious 14% Christianity 2 bill; 33%
Protestant work ethic Catholic vs Protestant/Lutheran Take care of
your neighbor and the less fortunate 10 commandments 128
- Slide 129
- 129 Islam 1.3 bill; 22% Sunni and Shiite best known branches
all embracing way of life, governing the totality of a Muslim
being; prayer five times a day; free enterprise/hostile to
socialist ideals - earning a legitimate profit through commerce and
trade; Koran; contractual obligations, keeping one's word role of
women and men 129
- Slide 130
- 130 Hinduism 900 mill; 15% spiritual achievement; Nirvana;
Samsara birth, death, re-birth; Buddhism 360 mill; 6% Central and
Southeast Asia, China, Korea, Japan; "life is suffering; misery is
everywhere and originates in people's desire for pleasure; Noble
Eightfold Path: right views, right intention, right speech, right
action, right livelihood, right effort, right awareness, right
concentration Japan Temples, Shrines (Shinto) 130
- Slide 131
- 131 Characteristics of Culture (Contd) 3 ) Political philosophy
Political freedom dominant political orientation 4) Economic
philosophy Free Market to what extent Economic freedom -
www.heritage.org/research/features/index/ 5) Education Importance
Access Type 6) Language (verbal/spoken; non-verbal) Communication;
word equivalency 131
- Slide 132
- 132 Ignoring Culture Religion Ads for refrigerator, airlines
(Middle East) Language Baby Food in Africa, English candy Zit,
Finnish product unfreezes car locks Super Piss Electrolux sucks
(Sweden) 132
- Slide 133
- 133 The US Culture???? Describe . 133
- Slide 134
- 134 Culture Relevance CBR Analysis Cultural toughness
Cross-cultural literacy Cultural sensitivity Three aspects 1.Basic
Assumptions 2.Characteristics 3.Measurement Application of cultural
dimensions
- Slide 135
- 135 Measurement of Culture Purpose ???? Geert Hofstede 1970s
IBM employees 100,000 across 30+ countries Survey typical work
situations Identify systematic differences Factor Analysis Four
independent factors Follow up research: Cultures consequences
(2001) Culture: Collective programming of the mind 135
- Slide 136
- 136 Dimensions of culture 1.Individualism/Collectivism 2.Power
Distance 3.Uncertainty Avoidance 4.Masculinity/Femininity
5.Confucian Dynamism 136
- Slide 137
- 137 Individualism/Collectivism Individualism exists when people
define themselves as individuals. It implies loosely knit social
frameworks in which people are supposed to take care only of
themselves and their immediate families. Collectivism is
characterized by tight social frameworks in which people
distinguish between their own groups, "in-groups", (relatives,
clans, organizations) and other groups. People expect in-groups to
look after their members, protect them, and give security in
exchange for members' loyalty. 137
- Slide 138
- 138 Power distance Indicates how a society deals with the
inequality among people's physical and intellectual capabilities. A
culture with high power distance allows inequality to grow to
inequality in power and wealth, one low in power distance aims at
removing such inequalities. Indicates to what extent the unequal
distribution of power is accepted. 138
- Slide 139
- 139 Uncertainty avoidance The extent to which people in a
society feel threatened by ambiguous situations and the extent to
which they try to avoid these situations by providing greater
career stability, establishing more formal rules, and rejecting
deviant ideas and behavior. Lifetime employment is more common in
countries with high uncertainty avoidance - the reverse is true for
job mobility. 139
- Slide 140
- 140 Masculinity/Femininity Masculinity is defined as the extent
to which the dominant values of society emphasize assertiveness and
acquisition of money and things (materialism). Femininity is
defined as the extent to which the dominant values in society
emphasize relationships among people, concern for others, and the
overall quality of life. 140
- Slide 141
- 141 Confucian dynamism or Long-term orientation (1993) Refers
to the time perspective in a society for the gratification of
people's needs. A high CD or long-term oriented society is one
which emphasizes thrift and perseverance. A low CD or short-term
oriented society focuses on gratifying needs here and now. 141
- Slide 142
- 142 Sources for International Research Hofstede, Geert (1980):
Cultures Consequences Hofstede, Geert (1991): Cultures and
Organizations Hofstede, Geert (1984): Cultures Consequences:
International Differences in Work-Related Values Hofstede, Geert
and Michael Harris Bond (1984): The Confucius Connection: from
cultural roots to economic growth. Organizational Dynamics, 16, 4,
4-21 websites 142
- Slide 143
- 143 U.S. Japan Germany Individualism:91 4667 Power distance: 40
5435 Uncertainty avoidance: 46 92 65 Masculinity: 62 95 66 ST/LT:
29 8025 143
- Slide 144
- 144 Applying Hofstedes Dimensions Lawyers per 100,000
population U.S. Germany Great Britain Japan Italy France 144
- Slide 145
- 145 Applying Hofstedes Dimensions Lawyers per 100,000
population (1996) U.S.312 Germany190 Great Britain134 Japan106
Italy81 France49 145
- Slide 146
- 146 Laurents Research-See Adler 9 Western countries, US, 2
Asian countries More than sixty common work situation (yes/no)
1.The main reason for hierarchical structure is so that everybody
knows who has authority over whom 2.In order to have efficient work
relationships, it is often necessary to bypass hierarchical lines
3.It is important for a manager to have at hand precise answers to
most of the questions that his subordinates may raise about their
work 146
- Slide 147
- 147 Laurents Research The main reason for hierarchical
structure is so that everybody knows who has authority over whom US
18% agree, Germany 24%, Italy 50% France 45%, Japan 52% Power
Distance 147
- Slide 148
- 148 Laurents Research In order to have efficient work
relationships, it is often necessary to bypass hierarchical lines
US 68% agree, Germany 54%, Italy 25% Uncertainty Avoidance 148
- Slide 149
- 149 Laurents Research It is important for a manager to have at
hand precise answers to most of the questions that his subordinates
may raise about their work US 18% agree, Germany 46%, Italy 66%,
Japan 78% Uncertainty Avoidance 149
- Slide 150
- 150 Fons Trompenaars Riding the Waves of Culture (1998; 2 nd
edition) Dimensions (see textbook): 1.UniversalisticParticularistic
(Obligation) 2.Neutral-Affective (Emotional Orientation in
Relationships) 3.Specific-Diffuse (Involvement in Relationships)
4.Achievement-Ascription (Legitimization of Power) 150
- Slide 151
- 151 Expatriate Assignment Why to use expatriates?Why to use
expatriates? Ethnocentric, polycentric, regiocentric, geocentric
Culture ShockCulture Shock SelectionSelection KSA Requirements KSA
Assessment TrainingTraining Type and rigor of training Failure
RatesFailure Rates Reasons 151
- Slide 152
- 152 Four stages cross-cultural adaptation: 1.Honeymoon
2.Irritation and hostility 3.Gradual adjustment 4.Biculturalism
152
- Slide 153
- 153 The Expatriate Assignment Experience of uncertainty
Anticipatory and in-country adjustment Expatriate Selection
Relevant KSAs? Technical, Managerial Adaptiveness Measurement
SMILE: Speciality; management ability; international flexibility;
language facility; endeavor (Matsushita) Spouse and Family -
Failure rates 40% on average; lower for European and Japanese
153
- Slide 154
- 154 The Expatriate Assignment Failure rates Rosalie Tung:
Reasons 1.Selection is based on headquarter criteria 2.Lack of
training, preparation, orientation 3.Alienation/lack of support
from headquarters 4.Inability to adapt to local culture/work enviro
5.Problems with spouse, family 6.Compensation 7.Poor programs for
career support/repatriation 154
- Slide 155
- 155 Training Techniques and Rigor of Training Area studies
Culture assimilators Language training Sensitivity training Field
experiences 155
- Slide 156
- 156 The Expatriate Assignment Training Cultural toughness
China, Brazil, India, Japan, Russia, Mexico, Saudi Arabia, South
Korea, France Less than 1/3 of expatriates receive training
Pre-departure training, post-arrival training, reentry training
Culture, language, everyday matters Cross-cultural training to ease
the adjustment to the new environment by reducing culture shock: a
state of disorientation and anxiety about not knowing how to behave
in an unfamiliar culture 156
- Slide 157
- 157 The Expatriate Assignment Training Examples ABB (Asea Brown
Bovari) rotates 500 managers around the world.. Every two to three
years PesiCo orientation program for foreign managers one year at
U.S. bottling division plants Honda of America Japanese language,
culture, lifestyle training.. Tokyo up to 3 years GE engineers and
managers must have global perspective.. Regular language and
cross-cultural training 157
- Slide 158
- 158 The Expatriate Assignment Compensation $100,000 manager in
U.S. -> $300,000 in London, $1mill in Tokyo or Stockholm Equity
and goodwill Purchasing power and standard of living Tax
differentials and tax equalization Balance sheet approach
Allowances Cost of living, housing, education, home leave, shipping
and storage Repatriation Reverse Culture Shock 158
- Slide 159
- 159 Expatriate Assignment DVD
- Slide 160
- Case 2 - Expatriate in China What other concerns do you have
about Controls HRM Strategy? Selection of employees for expatriate
assignments not very well structured. Orientation well planned but
not carefully implemented checklist not completed in a timely
manner Language training was not completed Preparatory training
should have included details on the specific plant where James
would be working, including physical aspects of the plant and
management aspects as well as interaction with the government and
unions. Sudden, unexpected termination of the assignment is a main
issue. What will James position be back in the U.S.? What changes
would you recommend to Controls Management? Or its parent? In
addition to the general orientation and preparatory training for
the assignment in China, Controls needs to provide an orientation
to the specific situation the expatriate will face. Also, the
expatriate needs to be fully aware of the relationship between and
the respective roles of the parent company and Controls. The
expatriate assignment should be planned thoroughly from beginning
to end. Was James Randolf a good choice for this position? Justify
your arguments. Yes, he had the appropriate technical skills as
well as the ability to adjust and adapt to another culture.
Positive was as well that his wife was very supportive and
interested in the assignment. What were some aspects of the Chinese
business environment (including culture) that James had to deal
with? Concept of face and time Chinese think about thinking and
relationships Importance of gift-giving Concept of privacy does not
exist Guanxi Strict Human Resource Management rules applying to
Joint Ventures in the Special Economic Zones Personnel files Effect
of type of work done and where worked on employees reputation Rank
Quality control Lack of infrastructure Mostly young female
employees Terrible conditions in the factory Ongoing negotiations
James role relative to the role of the managing director Huge
difference between managers education and workers education
Importance of being a role model as a manager
- Slide 161
- Cultural Stereotypes What are stereotypes? Why stereotypes?
Good/bad? Exercise Five jobs!
- Slide 162
- 162 European Scholars Conference EU Economic Restructuring
Funds Geography Globalization Manageable/Unmanageable East West
Divide v North-South Divide Hungary hi capital, hi skill Bulgaria
hi capital, low skill (Mining) Slovakia low capital, hi skill (high
Tech) Romania low capital, low skill (Textile) EU Consumer
Protection Public Health Task Force WHO Obesity (BMI Index: 30+)
U.S. 33%; UK 22%, G 12%, Switzerland 8%, Italy 9% Europe Migration
World Competitiveness Yearbook 162
- Slide 163
- 163 Overall Attractiveness of a Country Trade-off between Costs
Benefits Risks 163
- Slide 164
- 164 Overall Attractiveness of a Country Trade-off between
Costs: legal requirements, availability of resources,
infrastructure, level of economic development, free market?
Benefits: market size, wealth (purchasing power), future wealth,
resources (quality and cost) Risks: the likelihood that political,
economic, legal forces will cause drastic changes in a country's
business environment that adversely affects the profit and other
goals of a particular business enterprise. 164
- Slide 165
- 165 Political Risk What is risk? What is economic risk? What is
political risk? 165
- Slide 166
- 166 Political Risk Definition the likelihood that political
forces will cause drastic changes in a country's business
environment that adversely affect the profit and other goals of a
particular business enterprise. 166
- Slide 167
- 167 Political Risk Characteristics of countries with a higher
likelihood for political risk: 1.Social unrest* (see below)
2.Demonstrations 3.Terrorism *Social Unrest 1.More than one ethnic
nationality 2.Competing ideologies battle for political control
3.High inflation and falling living standards 4.Strikes 167
- Slide 168
- 168 Results of Social Unrest: Change in government and/or
policy Results of Political Change: Expropriation Indigenization
168
- Slide 169
- 169 Risk Assessment Euromoney Magazines Country Risk Ratings
Analytical Indicators: political risk (20%) - measures stability
and potential fall out from instability economic indicators and
risk(20%) Credit Indicators Market Indicators Political Risk
Yearbook 169
- Slide 170
- 170 Political Risk Data - Example Dun & Bradstreets Guide
to Doing Business around the World (textbook) Comparative Country
Risk Rankings Overall Ratings: Political Risk, GDP Growth, Per
Capita Income, Trade Flow with the US, Monetary Policy, Trade
Policy, Protection of Property Rights, Foreign Investment Climate
170
- Slide 171
- 171 Risk Management Management 1.Integrative
2.Protective/Defensive 171
- Slide 172
- 172 Integrative Approach Become part of the host countrys
infrastructure Good relationship with host government Produce
locally in-country suppliers Joint ventures Local R&D Effective
in long-run 172
- Slide 173
- 173 Protective/Defensive Approach Discourage host government
from interfering As little as possible local manufacturing and
R&D Capital from local banks and outside Diversify production
among several countries 173
- Slide 174
- 174 Contingency Approach Overall risk for an international
company depends on the polit. risk and characteristics of the firm.
Three primary factors to be considered: 1.Political risk type -
Transfer risk/Operational Risk/Ownership risk 2.General investment
type - Conglomerate/Vertical/ Horizontal 3. Specific Investment
(1=most risky) - Sector (primary=1 /industrial=3/service=2)
Technology (science=2/non- science=1) Ownership (wholly=1/partially
owned=2) 174
- Slide 175
- 175 Political Risk Insurance -covers the loss of firms assets,
not the loss of revenue -Overseas Private Investment Corp (OPIC)
inability to repatriate profits, expropriation, nationalization,
damage from war, terrorism Foreign Credit Insurance Association
war, revolution, currency inconvertibility, cancellation of import
or export licenses 175
- Slide 176
- 176 A Risky Country: 1.unstable government 2.unstable economy
3.war/revolution/terrorism 4.unfriendly/hostile people
5.unacceptable customs/values/attitudes 176
- Slide 177
- 177 A Risky Company: 1.type of product and/or service offered
2.type of industry 3.structure of ownership 4.level of technology
177
- Slide 178
- Political Risk ONDD Office National Du Ducroirce
www.ondd.be
- Slide 179
- 179 Progress Report #2 Questions?
- Slide 180
- 180 Termpaper Integration of course material 1.The purpose of
your paper is to report the cost-benefits-risk associated with
internationalizing into your country. What do you know about the
cost, benefits, risk associated with your country? 2.The first
section in your country analysis is an assessment of the external
environment to determine cost-benefits-risk. What aspects of the
environment will you review? What of the material that we have
covered in class will you be using for that assessment? 3.What is
the population size of your country? What is the GDP/capita? 4.How
will you address the cultural aspects of your country? Is your
country culturally tough for Americans? 5.We started a review of
the internal environment of an international organization. You will
be reporting on the components of the internal environment in
businesses in your country and determine the associated
cost-benefits-risk. Give examples of the issues that will have to
be addressed in this section of the report. 180
- Slide 181
- 181 Integration of Course Material Strategic Management Four
components of the internal environment 1.Behavior Group and
Individual 1.Leadership 2.Motivation, Rewards, and Compensation
2.Processes 1.Communication 2.Decision-making 3.HR processes
3.Structure 1.Hierarchical versus open 2.Formal versus informal
4.Organizational Culture 1.Six dimensions tight vs loose control,
open vs closed etc 181
- Slide 182
- 182 Self-Assessment (Group) for Termpaper and Peer Evaluation
Rubric provided to students Completed self-assessment - submitted
when the termpaper is handed in Each group member evaluates each
group member Peer Evaluation - Completed form to be submitted with
the termpaper 182
- Slide 183
- 183 Strategy The science and art of conducting military
campaign on a broad scale. A plan or technique for achieving some
end. 183
- Slide 184
- 184 Strategic management set of decisions and subsequent
actions used to formulate and implement strategies that will
optimize the fit between the organization and its environment in an
effort to achieve organizational effectiveness. 184
- Slide 185
- 185 Strategy and the Firm Purpose of any business: Provide
products or services that are desired by society and, hence, to
make a profit Profit = Revenue - Cost Profit = Volume * Price -
Cost 185
- Slide 186
- 186 Profit If the price the firm can charge for its output is
greater than its costs of producing that output. 186
- Slide 187
- 187 Profit To do this, a firm must produce a product that is
valued by consumers. 187
- Slide 188
- 188 Value Thus the firm must engage in value creation. 188
- Slide 189
- 189 Value to Customer The price that consumers are willing to
pay indicates the value/worth of the product to the consumer.
189
- Slide 190
- 190 Strategy Porter, 1985 Strategy Model (Distinguish from
Porters Diamond - National Competitive Advantage) 190
- Slide 191
- 191 Strategy Firms can increase profit in two ways: 1. adding
value to a product so that consumers are willing to pay more for it
(improve quality, provide service, customize product to consumer
needs) 2. by lowering the costs of value creation (perform value
creation activities more economically). 191
- Slide 192
- 192 The firm is a value chain composed of a series of distinct
value creation activities Value creation activities 1.Primary
activities Production and marketing 2. Support activities Materials
management, R&D, Human resource management 192
- Slide 193
- 193 Strategy - Michael Porter The steps a firm takes to ensure
that the cost of value creation are reduced and that value creation
activities are performed in such a way that consumers are willing
to pay more for the product than it costs to produce it. 193
- Slide 194
- 194 Strategy and Global Expansion Performing certain value
creation activities may have two benefits for the value chain 1.
Lower the cost of value creation 2. Improve the quality of the
product - create more value Perform value creation in best location
194
- Slide 195
- 195 Strategy and Global Expansion Firms realize location
economies by dispersing particular value creation activities to
those locations where they can be performed most efficiently and
effectively. 195
- Slide 196
- 196 Location economies and/or experience economies: Basing each
value creation activity that the firm performs at the location
where economic, political, and cultural conditions, including
relative factor costs, are more conducive to the performance of
that activity. Consider transportation costs (weight-to-value
ratio) and trade barriers. 196
- Slide 197
- 197 Strategy and Global Expansion Firms that expand to
international markets will gain greater returns from their
distinctive skills or core competencies. Core Competencies - Skills
within the firm that competitors cannot easily match or imitate.
Examples. 197
- Slide 198
- 198 Strategy and Global Expansion Constrains on transferring
core competencies result from the need for local responsiveness
Need for local responsiveness results from national differences in
consumer tastes and preferences, business practices, distribution
channels, competitive conditions, and government policies - these
constrain the firm's ability to transfer core competencies and
realize location economies. 198
- Slide 199
- 199 Strategy of an international organization concerns
identifying and taking actions that will reduce the cost of value
creation and/or will add value by better serving the consumer needs
through transferring core competencies and realizing location
economies taking into account national differences. 199
- Slide 200
- 200 Strategic Predispositions Ethnocentric: strategic decisions
are made at headquarters, key jobs at both domestic and foreign
operations are held by headquarters management personnel (PCN's).
200
- Slide 201
- 201 Polycentric: the MNC's subsidiaries are treated as distinct
national entities with extensive decision-making autonomy (HCN's
mane the foreign operations). Geocentric: tries to worldwide
integrate business strategy and decision-making. Regiocentric:
reflects the geographic structure of the MNC. 201
- Slide 202
- 202 Strategic Planning Process External Scanning and Internal
Scanning (SWOT) Opportunities/Threats Strengths/Weaknesses Vision,
Mission, Goals, Objectives, Strategies Strategy Implementation
202
- Slide 203
- 203 Three Traditional Strategies (Bartlett/Goshal, 1989)
Multinational Strategy: focus on cost reduction and product
standardization that is marketed worldwide. International Strategy:
limited local responsiveness, focus on transfer of valuable skills
and products where indigenous competitors lack those skills and
products. Multidomestic Strategy: like international but extensive
local responsiveness. 203
- Slide 204
- 204 Pressures for Local Responsiveness 1. Differences in
consumer tastes and preferences 2. Differences in infrastructure
and traditional practices 3. Differences in distribution channels
204
- Slide 205
- 205 Privatization http://www.privatizationbarometer.net/
Register but free Library ask business librarian for help 205
- Slide 206
- 206 The Internal Environment of an International Organization
Organizational Culture People Processes Structure 206
- Slide 207
- 207 Organizational Culture What is it? Relevance? Why is it
important? Where does it come from? What happens when two companies
merge? Boeing-McDonnel Douglas; GE and Bently NV What happens when
two companies from different countries merge? 207
- Slide 208
- 208 Organizational Culture What is organizational culture? The
shared values, beliefs, norms, and patterns of behavior in an
organization. Schein's Three Layer Model: Artifacts, Values, Basic
Assumptions Measurement of organizational culture In the workplace
cultural differences are accounted for by work practices. 208
- Slide 209
- 209 D imensions of Organizational Culture 1.Process Results
oriented 2.Tight Loose Control 3.Job Employee oriented 4.Parochial
Professional oriented 5.Closed system Open system 6.Normative
Pragmatic 209
- Slide 210
- 210 Culture and Org Characteristics
StructureCommunicationRewardsDecision- Making Process Results Job
Employee Tight Loose Parochial Professional Open Closed Normative
Pragmatic 210
- Slide 211
- 211 Organizational Culture Creating and changing the culture of
an organization? National and Organizational Culture Organizations
in Japan, Germany, the U.S. are likely to have which org. culture
characteristics? Hofstede The Organizational Culture of a MNC A
universal org. culture? 211
- Slide 212
- 212 Behavior Individual Behavior P = f (A, M) Motivation
defined! Homeostasis---applied to psychological needs
MotivationTheories --- Applicability across cultures?? 212
- Slide 213
- 213 Behavior MotivationTheories Content Theories Maslows Need
Hierarchy Two Factor Theory of Motivation McClelland Achievement
Motivation 213
- Slide 214
- 214 Motivation Theories - International Context How applicable
are the motivation theories proposed by Maslow and Herzberg in the
international context? 214
- Slide 215
- 215 Motivation Theories in the International Context Maslows
needs, in particular the upper-level ones, are important at the
managerial level Ronen concluded that need clusters are constant
across nationalities and that Maslows need hierarchy is confirmed
by these clusters. Also, Herzbergs categories are confirmed by the
cross-national need clusters. 215
- Slide 216
- 216 Behavior - Motivation Process Theories Equity Theory of
Motivation Goal - Setting Expectancy Theory of Motivation valence
Effort Performance Outcome expectancy instrumentality 216
- Slide 217
- 217 Motivation and Hofstede High UNC - job security Low UNC -
fast-track, more risky opportunities Low POW - motivation through
teamwork and peers High POW - motivation depends on boss High IND -
motivation through opportunities for individual advancement Low IND
- motivation through appeals to group goals and support High MASC -
comfortable with traditional division of work roles Feminine -
looser definition of roles, more flexible 217
- Slide 218
- 218 Hofstede and Internal Environment UNCPOWMAS/FIND/CST/LT
Motivation and Rewards Leadership Decision Making Communication
Org. Culture Structure
- Slide 219
- 219 Reinforcement Theory Applicability? Assumptions?? Behavior
is a function of its consequences 219
- Slide 220
- 220 The International Organization 220
- Slide 221
- 221 Motivation Theories - Summary TheoryMain
AttributesInternational Applicability Maslow Need Hierarchy
Herzberg Two Factor Theory McCelland Learned Needs Stacy Adams
Equity Theory House Goal Setting Vroom Expectancy
Reinforcement
- Slide 222
- 222 Motivation Theories - Summary TheoryMain
AttributesInternational Applicability Maslow - Need Hierarchy Five
needsWith modification order of needs Herzberg Two Factor Theory
Hygiene factors work context and Motivators work content With
modification best in individualistic environment McCelland Learned
Needs Three needsWith modification Collectivistic vs
individualistic Stacy Adams Equity Theory Social comparisonsWith
modification does not work in collectivistic culture House Goal
SettingGoal commitment, difficulty, MBO With modification best in
ST environment Vroom ExpectancyEffort, performance, outcome,
expectancies, instrumentalities, valence Applicable all factors are
explicit and can be determined based on culture
ReinforcementBehavior is a function of its consequences Applicable
very BASIC model
- Slide 223
- 223 The Meaning of Work Tied to economic necessity What else?
223
- Slide 224
- 224 The Meaning of Work Six functions of work: 1.needed income,
2.interesting & satisfying, 3.contact with others, 4.serve
society, 5.keeps one occupied, 6.status and prestige These may be
satisfied through other aspects of life 224
- Slide 225
- 225 MOW - Work Centrality the degree of general importance that
working has in the life of an individual at any given point in
time. As the mean work centrality score increases, the more
motivated and committed the workers would be. 225
- Slide 226
- 226 Study results Britain (lowest), Germany, Netherlands,
Belgium, USA, Israel, Japan 226
- Slide 227
- 227 Work Centrality 8.0 7.75 7.5 7.25 7.0 6.75 6.5 6.25 6.0
Japan (former) Yugoslavia Israel USA Belgium Netherlands Germany
Britain 7.78 7.30 7.10 6.94 6.81 6.69 6.67 6.36 N = 3144 N = 521 N
= 893 N = 996 N = 446 N = 976 N = 1276 N = 409 Work is more
important and more central in life Mean work centrality score
227
- Slide 228
- 228 Group Behavior Group effectiveness = individual behavior +
Mature group = effective group Stages of development (F, S, N, P)
Two main characteristics for the analysis of groups Leadership
Composition 228
- Slide 229
- 229 Leadership Which Hofstede dimension? Types of leadership
styles: autocratic, participative, group authoritarian, democratic,
laissez-faire Theory X, Theory Y 229
- Slide 230
- 230 Leadership Research Traits, Behaviors, Contingency approach
Kouzes and Posner: Challenging the process, inspiring shared
vision, enabling to act, modeling the way, encouraging the heart
Across cultures: Haire, Ghiselli, Porter South-European and
Nordic-European --- more autocratic, more Theory X South-European
give a little more autonomy to employees in working out details
230
- Slide 231
- 231 Japanese Theory Y --- employees learn from mistakes Germans
Theory X --- autocratic, stop poor performance asap 231
- Slide 232
- 232 Culturally-Contingent Beliefs Regarding Effective
Leadership Styles CountryN CharismaTeamSelf-Part.HumaneAuton.
Protective Austria1696.035.743.076.004.934.47
Brazil2646.016.17*3.506.06*4.842.27
China1605.575.573.805.055.184.07 Denmark
3276.015.702.825.804.233.79 England1686.015.713.045.574.903.92
India2315.855.723.784.995.26*3.85 Japan1975.495.563.615.084.683.67
Mexico3275.665.753.86*4.644.713.86
Russia3015.665.633.694.674.084.63* USA3996.12*5.803.165.935.213.75
Scale 1 to 7 in order of how important those behaviors are
considered for effective leadership (7 = highest) 232
- Slide 233
- 233 Culturally-Contingent Beliefs - Effective Leadership Style
Americans appreciate two kinds of leaders. They seek empowerment
from leaders who grant autonomy and delegate authority to
subordinates. They also respect the bold, forceful, confident, and
risk- taking leader, as personified by John Wayne. The Dutch place
emphasis on egalitarianism and are skeptical about the value of
leadership. Terms like leader and manager carry a stigma. If a
father is employed as a manager, Dutch children will not admit it
to their schoolmates. Arabs worship their leaders as long as they
are in power! 233
- Slide 234
- 234 Culturally-Contingent Beliefs Regarding Effective
Leadership Styles (contd.) Iranians seek power and strength in
their leaders. Malaysians expect their leaders to behave in a
manner that is humble, modest, and dignified. The French expect
their leaders to be cultivated highly educated in the arts and in
mathematics. R. House, et al. 234
- Slide 235
- 235 G roup Composition --- Multicultural Teams Impact of
cultural diversity on group performance? group productivity =
f(task, resources, process) actual productivity = potential
productivity - losses due to faulty process actual productivity or
= potential productivity or - losses or 235
- Slide 236
- 236 Benefits associated with cultural diversity: # of
alternatives generated; quality of alternatives;
creativity/divergence; no groupthink 236
- Slide 237
- 237 Process Losses: potential for miscommunication increases;
cohesiveness decreases; negative attitudes (dislike, mistrust);
perceptual problems (stereotyping); stress 237
- Slide 238
- 238 Multicultural teams have the potential to be the most or
the least effective teams Group development stages: entry, work,
action Task: innovative or routine 238
- Slide 239
- 239 Manage culturally diverse teams through: task-related
selection recognition of differences super-ordinate goals equal
power mutual respect feedback 239
- Slide 240
- 240 Communication: Macro - Level Communication Flows
upward/downward formal/informal 240
- Slide 241
- 241 Communication: Micro - Level Micro/Interpersonal Level
Definition: Transmission of meaning through the use of common
symbols Sender -> Message -> Receive ( Encoding)(Medium)
(Decoding) 241
- Slide 242
- 242 Communication: Micro - Level Interpersonal communication
Process encoding message decoding 242
- Slide 243
- 243 Communication: Micro - Level Communication barriers
language perception - stereotyping culture nonverbal communication
projected similarity parochialism 243
- Slide 244
- 244 Micro -Level Explicit vs implicit communication High vs low
context High vs low contact 244
- Slide 245
- 245 Opening Profile: Keeping Your Foot out of Your Mouth Small
slips can be big errors : Hello, wife of the boss Thank you for
your hostility Patting someone on the head Do you shake hands, bow,
hug, or kiss when meeting someone?
- Slide 246
- 246 The Communication Process
- Slide 247
- 247 Cultural Noise BehaviorAttribution American: How long will
it take to finish this report? American: I asked him to
participate. Greek: He is the boss. Why doesnt he tell me? Greek: I
dont know. How long should it take? American: He refuses to take
responsibility. Greek: I asked for an order.
- Slide 248
- 248 Trust in Communication Business transactions based on
long-standing vs. arms length relationships High propensity to
trust: Nordic countries, China, Canada, US, Britain Low propensity
to trust: Brazil, Turkey, Romania, Slovenia, Latvia
- Slide 249
- 249 The GLOBE Project and Communication High performance
orientation (e.g., US) present objective information directly and
explicitly Low assertiveness (e.g., Sweden) two-way discourse and
friendly relationships High humane orientation (e.g., Ireland)
avoid conflict, be supportive
- Slide 250
- 250 Cultural Variables in Communication Attitudes Stereotyping
Social organization e.g., United Auto Workers (UAW) Thought
patterns The meaning of double lines
- Slide 251
- 251 Cultural Variables in Communication Roles Language Come out
of the grave with Pepsi When yes doesnt mean yes
- Slide 252
- 252 Cultural Variables in Communication Nonverbal communication
Kinesic behavior (e.g., sticking out the tongue in China) Proxemics
(e.g., the corner office, closeness when talking) Paralanguage
(e.g., the sound of silence) Object language (e.g., monochronic vs.
polychronic)
- Slide 253
- 253 Context
- Slide 254
- 254 Comparative Management in Focus: Communicating with Arabs
Arabs are quick to sound off Communication is built on friendship,
honor, hospitality Arabs are high-contact communicators Time is key
in communication process
- Slide 255
- 255 Managing Cross-cultural Communication Develop cultural
sensitivity Anticipate the meaning the receiver will get Careful
encoding Use words, pictures, and gestures Avoid slang, idioms,
regional sayings
- Slide 256
- 256 Managing Cross-cultural Communication Selective
transmission Build relationships face-to-face if possible Careful
decoding of feedback Get feedback from multiple parties Improve
listening and observation skills Follow-up actions
- Slide 257
- 257 Micro -Level Non-verbal communication Body Language Emblems
Illustrators Affect Display Regulators/Adaptors Space (proxemics)
Touch Voice Dermal Code 257
- Slide 258
- 258 Decision-Making Quality of decisions Organizational
Effectiveness Differences across Cultures? 258
- Slide 259
- 259 DM Process and Culture 1.Problem Recognition 2.Information
Search 3.Alternative Generation 4.Choice 5.Implementation 259
- Slide 260
- 260 International Negotiations Definition: The process in which
at least two partners with different needs and viewpoints try to
reach an agreement that is acceptable to all on matters of mutual
interest -> International managers spend more than 50% of their
time negotiating 260
- Slide 261
- 261 Recommendations (Fisher and Ury "Getting to Yes"): 1.
Separate the people from the problem 2. Focus on interest, not
position 3. Insist on objective criteria 4. Invent options for
mutual gain 261
- Slide 262
- 262 The Negotiation Process
- Slide 263
- 263 Stage One: Preparation Develop profiles of counterparts
Find out likely demands, team composition, and counterpart
authority Uzbekistan had to learn from scratch Choose a negotiation
site British/French Chunnel negotiations
- Slide 264
- 264 Stage Two: Relationship Building Getting to know ones
contacts and building mutual trust Nontask sounding (nemawashi) Use
an intermediary I have come as a mediator
- Slide 265
- 265 Stage Three: Exchanging Task-related Information Cultural
differences remain an issue Mexicans can be suspicious and indirect
The French enjoy debate and conflict The Chinese ask many
questions, but provide ambiguous information in return Show
understanding of the other viewpoint
- Slide 266
- 266 Stage Four: Persuasion Dirty tricks are in the eye of the
beholder False information Ambiguous authority Uncomfortable rooms
Rudeness, threats Calculated delays
- Slide 267
- 267 Stage Five: Concessions and Agreement Russians and the
Chinese start with extreme positions Swedes start with what they
will accept Starting with extremes may be most effective
- Slide 268
- 268 Comparison of Negotiation Styles JapaneseNorth
AmericanLatin American Hide emotionsDeal impersonally Emotionally
passionate Subtle power plays Litigation, not conciliation Great
power plays Step-by-step approach Methodical organization
Impulsive, spontaneous Group good is aimProfit is aim
Group/individ-ual good is aim
- Slide 269
- 269 Successful Negotiators: Americans Know when to compromise,
but stand firm at beginning Refuse to make concessions beforehand
Keep cards close to chest, but make other party reveal his/her
position Keep maximum options open, operate in good faith
- Slide 270
- 270 Successful Negotiators: Indians Look for and say the truth,
not afraid to speak up Exercise self-control Respect other party,
look for solutions acceptable to all parties Will change their
minds, even at risk of seeming inconsistent and unpredictable
- Slide 271
- 271 Successful Negotiators: Arabs Protect honor, self-respect,
dignity and, thus, are trusted and respected Avoid direct
confrontation Come up with creative, honorable solutions Are
impartial and can resist pressure
- Slide 272
- 272 Successful Negotiators: Swedes Quiet, thoughtful, polite,
straightforward Overcautious, but flexible Slow to react to new
proposals, but eager to be productive and efficient Able to hide
emotions, afraid of confrontation
- Slide 273
- 273 Successful Negotiators: Italians Have a sense of drama, do
not hide emotions Good at reading facial expressions and gestures
Want to make a good impression and use flattery, but are
distrusting Handle confrontation with subtlety and tact
- Slide 274
- 274 Managing Negotiation Avoid person-related conflict Examples
Low-context Americans appear impatient, cold, and blunt to
Mexicans. Americans must approach negotiations with Mexicans with
patience and tolerance; refrain from attacking ideas
- Slide 275
- 275 Cross-cultural Negotiation Variables
- Slide 276
- 276 Comparative Management in Focus: Negotiating with the
Chinese
- Slide 277
- 277 Comparative Management in Focus: Negotiating with the
Chinese Two problems Chinese desire for detail Apparent insincerity
Saving Face Lien Mien-tzu
- Slide 278
- 278 Comparative Management in Focus: Negotiating with the
Chinese Importance of harmony Guanxi Guanxihu networks Two stages
of Chinese negotiation Technical Commercial
- Slide 279
- 279 Comparative Management in Focus: Negotiating with the
Chinese Some recommendations: Practice patience Accept prolonged
stalemate Refrain from exaggerated expectations Expect shaming
Resist blaming for difficulties Understand Chinese cultural
traits
- Slide 280
- 280 Managing Conflict Resolution Instrumental oriented
Expressive oriented
- Slide 281
- 281 Low-context, High-context Sources of Conflict
Low-contextHigh-context Why Analytic, linear logicSynthetic, spiral
logic When Individualistic oriented violations Group oriented
violations What Revealment, confrontationalConcealment, non-
confrontational How Explicit, open, directImplicit, ambiguous,
indirect
- Slide 282
- 282 The Influence of Culture on Decision Making Individualism
vs. collectivism Objective vs. subjective approach Risk tolerance
Comfort with unfamiliar solutions
- Slide 283
- 283 Approaches to Decision Making Utilitarianism vs. moral
idealism Autocratic vs. participative leadership Speed of decision
making
- Slide 284
- 284 Summary of Cultural Variables in Decision Making
- Slide 285
- 285 Comparative Management in Focus: Decision-making in Japan
Wa Amae Shinyo Ringi
- Slide 286
- 286 Comparative Management in Focus: Decision-making in
Japan
- Slide 287
- 287 Course Summary Global Economic System MACRO When and what
Institutions Companies make decisions with respect to specific
countries - MICRO ==> Europe? Asia? Latin America? Australia?
Specific countries? Internationalization Strategy:
Generalizations?? Cost Management - cultural differences...
religion, education; Hofstede Benefits . Market growth (pop size;
income) and Value creation activities (labor cost, exp.) Risk....
South America? Asia? Europe? 287
- Slide 288
- 288 The International Organization 288
- Slide 289
- 289 Managing the International Organization 1.External
Environment... Porter Diamond; Status Quo; Culture (Hofstede)
2.Strategy... Value creation activities; Location economies; Market
entry 3.Internal Environment... Behavior: Individual (Motivation)
and Group (Leadership; Multicultural Teams) Processes:
Communication -- Macro (communication flow); Micro (communication
process); Nonverbal communication; Decision Making; Negotiation; HR
Processes (The Expatriate Assignment). Organizational Culture six
dimensions; Structure Macro and Micro power distance; 289
- Slide 290
- 290
- Slide 291
- 291
- Slide 292
- 292
- Slide 293
- 293
- Slide 294
- 294 Strategy Defined
- Slide 295
- 295 India Where India has the edge (in comparison to China):
LANGUAGE - English gives India a big edge in IT Services and
Back-Office work. CAPITAL MARKETS - Private firms have readier
access to funding. China favors state sector LEGAL SYSTEMS -
Contract law and copyright protection are more developed than in
China. DEMOGRAPHICS - Some 53% of India's population in under age
25, vs. 45% in China. 295
- Slide 296
- 296 External Environment Relevant variables: GDP GDP/capita GDP
growth and factor endowments; demand conditions The GDP (gross
domestic product): The value of the final output of goods and
services produced by the residents of an economy (World Bank).
There are several methods to calculate the GDP. The PPP (purchasing
power parity) method reflects the cost of a basket of goods in two
countries in their local currencies. 296
- Slide 297
- 297 ISA Analysis Fall 2008 1.The Global Update report provides
a useful overview of current political and economic issues.
a)Zimbabwe - summarize the current political and economic
challenges in Zimbabwe. Robert Mugabe, President, only ruler since
1980 Pseudo-Democracy, contested election in Spring 2008 No clear
winner Mugabe self-proclaimed winner -> violence White
population 1% but owns 70% of land -> Mugabe took away land
African Union leaders do NOT put enough pressure on Mugabe
Agricultural production and inflation are severe economic issues
Solutions: stay in office, share power with opponentTsvangirai,
foreign military will intervene b)Vietnam - Summarize the
challenges and the predictions for Vietnams economy. GDP growth
8.5% to 6.5% AND 20% inflation Domestic market; foreign markets
(exports) Long term good low cost manufacturing, hi-tech programs,
relatively stable government 297
- Slide 298
- 298 ISA Analysis Fall 2008 1.The Global Update report provides
a useful overview of current political and economic issues. c)
African countries tend to not be part of the new global economy.
What do you think are a couple of primary reasons for that?
Nigeria, South Africa, Kenya, and Zimbabwe compare. Lack of
democratic political system and free-market economic system. Lack
of infrastructure Corruption AIDS and other health issues Lack of
education Culture?Religion? d) Asian countries such as Thailand,
Vietnam, and the Philippines What do you think do these countries
have to offer to foreign investors that China is lacking? Compare.
All have (except Vietnam) have more economic freedom than China All
have high corruption BUT also high GDP growth Cultural differences
see religion Attitude towards U.S. companies 298
- Slide 299
- 299 ISA Analysis Fall 2008 Table 1: Compare African Countries
Table 2: Compare Asian Countries 299
- Slide 300
- 300 ISA Analysis Fall 2008 2. Venezuela, Colombia, and Bolivia.
Summarize current activities related to Americas conflict with
these countries. What do these countries have to offer that may be
of interest to U.S. businesses? What is the CPI ranking for each
country? Colombia Drugs, FARC, Bolivia Drugs coca, natural gas,
nationalization Venezuela -Hugo Chavez Farmers, Colombia,
Constitution, Bolivia U.S. oil 15% Nationalization electricity and
telephone UN Speech 2006 CPI 162 - Venezuela, 68 - Colombia, 105 -
Bolivia 300
- Slide 301
- 301 ISA Analysis Fall 2008 3. a) Which countries belong to the
EU? Only some of the 27 EU members are also members of the EMU
(European Monetary Union). Which countries belong to the EMU?
European Union (EU): Austria, Belgium, Bulgaria, Cyprus, Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The
Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden, and United Kingdom. European Monetary Union (EMU) Ireland,
Belgium, France, Spain, Portugal, Finland, The Netherlands,
Germany, Luxembourg, Austria, and Italy. b) Italy has the worst CPI
ranking of the Western EU countries. What is the current issue
related to that reported in the ISA Global Update? Berlusconi,
immunity from law for government officials; c) Russia is not a
member of the EU but is of critical importance to the economies of
the European countries. Why? Oil and natural gas; Gazprom 301
- Slide 302
- 302 ISA Analysis Fall 2008 4. OPEC - Organization of Petroleum
Exporting Countries. Algeria, Iran, Iraq, Kuwait, Libya, Nigeria,
Qatar, Saudi Arabia, United Arab Emirates (UAE), Indonesia,
Ecuador, Angola, and Venezuela
(http://www.opec.org/aboutus/index.htm). The OPEC Countries
coordinate their oil production policies in order to help stabilize
the oil market and help oil producers achieve a reasonable rate of
return on their investments. It is also designed to ensure that oil
consumers continue to receive stable supplies of oil
(http://www.opec.org/aboutus/functions/functions.htm).http://www.opec.org/aboutus/functions/functions.htm
5.The World Economic Forum (WEF) has a 3-fold vision aiming to be
the foremost organization which builds and energizes leading global
communities; the creative force shaping global, regional, and
industry strategies; the catalyst of choice for its communities
when undertaking global initiatives to improve the state of the
world. WEF is a Geneva-based non-profit foundation best known for
its annual meetings bringing together top business leaders,
international political leaders, selected intellectuals and
journalists to discuss the most pressing issues facing the world
(http://www.weforum.org/en/about/Our%20Organization/index.htm).
Forum Members are companies that are driving the world economy
forward. The typical Member Company is a global enterprise with
more than 5 billion dollars in turnover, although the latter varies
by industry and region. The Forum has 1,000 member companies Group
of Seven (G7) consists of Canada, France, Germany, Italy, Japan,
United Kingdom, and the United States of America (Russia). G7 is an
international forum for governments. 302
- Slide 303
- 303 ISA Analysis Spring 2008 U.S. Economic Slowdown Indicators
Housing Market Lowering of interest rates GDP growth Unemployment
Developed Countries Same effect Less Developed Countries Export
dependence Central and Eastern Europe; Mexico NOT India and China
strong domestic demand 303
- Slide 304
- 304 ISA Analysis Venezuela Recent events Hugo Chavez Farmers
Colombia Constitution Government restructuring Bolivia U.S. oil 15%
Nationalization electricity and telephone Television station UN
Speech 2006 304
- Slide 305
- 305 ISA Report Catholicism in Latin America Table Turkey EU
Opposition Kurds Human Rights Economic and political requirements
Religion Islam Culture and location Cyprus 305
- Slide 306
- 306 ISA Report Kenya Table Tata Motors $7.6 bill revenue and
22,000 employees Commercial vehicles 18% international Africa,
Middle East, Europe, Australia, S and SE Asia Japan Declining
domestic car market Oil prices Eco growth 306