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˘ˇhtaibi.free.fr/docs/MI Dauphine 2004.pdfSource: Adapted from Peter J. Dowling, Denice E. Welch,...
Transcript of ˘ˇhtaibi.free.fr/docs/MI Dauphine 2004.pdfSource: Adapted from Peter J. Dowling, Denice E. Welch,...
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International Management : Asia Perspectives
I. Some basic Principles of International Management
II. Asia Space : A Structure around Various Poles
III. Two Examples of Asia Countries : between Liberal Capitalism and Dogmatic Communism
International Management : Asia Perspectives
I. Some basic Principles of International Management
- Increasing Importance of International Management Understanding
- Types of Organizations- Expatriation : Success or Failure- Global Environment
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Increasing Importance of International Management
Understanding
16-1
International Mergers and Acquisitions
InternationalManagement
ForeignResources
Global Competition
Market Access Opportunities
SOURCE: Jagdish N. Sheth and Abdolreza S. Eshghi, Global Human Resources Perspectives (Cincinnati: South-Western, 1989), vii.
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Types of Organizations
- International Corporation Domestic firm that uses its existing capabilities to move into overseas markets
- Multinational Corporation (MNC) Firm with independent business units operating in multiple countries
- Global Corporation Firm that has integrated worldwide operations through a centralized home office
- Transnational Corporation Firm that attempts to balance local responsiveness and global scale via a
network of specialized operating units
Types of Organizations
16-2
GLOBAL
Views the world as a single market; operations are controlled centrally from the corporate office.
TRANSNATIONAL
Specialized facilities permit local responsiveness; complex coordination mechanisms provide global integration.
High
GLOBAL
EFFICIENCY INTERNATIONAL
Uses existing capabilioties to expand into foreign markets.Low
MULTINATIONAL
Several subsidiaries operating as stand-alone business units in multiple countries
Low High
Source: Adapted from Peter J. Dowling, Denice E. Welch, and Randall S. Schuler, International Dimensions of Human Resource Management, 3e (South-Western, 1999).
LOCAL RESPONSIVENESS
Case : Leclerc• Case: Independant under a single Flag?
– Creation in 1949. Today : 560 points of sale, 73 000 employees
– Network of independant entrepreneurs in the retaillingbusiness in France
– Economies of scale concerning different corefunctions: strategy, advertizing, purchasing
– Importance of strong common values: new supermarket owners chosen by the other members, competitive price, participations of employees to Leclerc profits (25%)
Air France / KLM Alliance
• Case: What would be the next step after the agreement on an effective takeover of the Dutch flag carrier by Air France?
– Deal => Europe’s biggest Airline– Turnover of 19.2 bn Euros– Workforce of about 106,000 – 226 destinations worldwide– Multi-hub system based on Schiphol and
Roissy
Johnson & Johnson
• Case: How to be “Big” and “Small” at the same time?
– Created in 1886 in the USA– Sanitary products, pharmaceutical, medical devices and
diagnostics.– 190 subsidiaries in 54 countries, selling in 175 countries– Major management principle: decentralization– Local Top Management in each subsidiary– Important information flow and tight control by the US
headquarters
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– Global : Creation of a World R&D Center, Vitapole, inaugurated at the end of 2002 in France, with 1000 employeesand 600 researchers, « push strategy »
– Local : Danone Institutes (40% of the R&D, « pull »)– Main focus: to improve offer to consumers (food concept +
marketing)– Axes : product quality, food security, environment
protection,…– R& D to improve past and future– Communication across the world and various hierarchical links
to develop ideas.
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Human Resource Management Issues
Compensation and Benefits
Training and Development
Productivity
Staffing
Labor Relations
- Host Country : Country in which an international corporation operates
- Expatriates, or Home-Country Nationals :Employees from the home country who are sent on international assignment
- Host-Country Nationals : Natives of the host country
- Third-Country Nationals : Natives of a country other than the home country or the host country
- Guest Workers : Foreign workers invited in to perform needed labor
Advantages of Different Sources for Overseas Managers
HOST COUNTRY
• Less Cost • Preference of
host-country government
• Knowledge of environment
• Language facility
HOME COUNTRY
• Talent available
within company • Greater control • Company
experience • Mobility • Experience
provided to corporate executives
THIRD COUNTRY
• Broad
experience • International
outlook • Multilingualism
Time
Em
phas
is in
Sta
ffin
g
ExpatriatesExpatriates
Host CountryNationals
Host CountryNationals
Changes in International Staffing Over Time
International Staffing
Recruitment
Selection
Training and Development
Key IssuesKey Issues
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A B
C D
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� A B C DEducation (*)
Social Status (*)
Revenues (*)
Job: writer, consultant, lawyer, cleaning staff
Nationality: French, American, Mexican, Turkish
Hobbies:Photo, Surf, Food, Poker
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Technicalcompetence
Professionalexperience
Interpersonalskills
Internationalexperience
Familyflexibility
Countryexperience
Languageskills
Expatriate Selection Criteria
Augmented SkillsExperience
Decision-makingResourcefulness
AdaptabilityCultural sensitivity
Team buildingMaturity
Augmented SkillsExperience
Decision-makingResourcefulness
AdaptabilityCultural sensitivity
Team buildingMaturity
Core SkillsExperienceDecision-makingResourcefulnessAdaptabilityCultural sensitivityTeam buildingMaturity
Core SkillsExperienceDecision-makingResourcefulnessAdaptabilityCultural sensitivityTeam buildingMaturity
Skills of Expatriate Managers
REDUCING EXPATRIATE FAILURES
• Selecting the right expatriate– Do an extremely sophisticated job of selecting the people– Find out why the candidate wants the foreign assignment– Select only top-notch, proven people– Familiarize the expatriate and his/her family with the country– An administrative branch to is supporting your international staff
• Assessing expatriates’ effectiveness potential– Expatriate managers must listen well, – Expatriate managers must be patient– Expatriate managers must have respect for the locals
Skills of Expatriate Managers
- Core Skills : Skills considered critical in an employee’s success abroad
- Augmented Skills : Skills helpful in facilitating the efforts of expatriate managers
- Failure Rate : Percentage of expatriates who do not perform satisfactorily
International Managers
- Global Manager : Manager equipped to run a global business
- Transnational Teams : Teams composed of members of multiple nationalities working on projects that span multiple countries
- Repatriation : Process of employee transition home from an international assignment
Global ManagersManage
Decentralized Operations
Aware of Global Issues
Interpersonal Competence
Sensitive to Diversity Issues
Seize Strategic Opportunities
Skilled in Building
Communities
Content of Training Programs
Language Training
Cultural Training
Personal and Family Life
Career Development and
Mentoring
Key Elements Needed to Prepare
Employees to Work Overseas
Key Elements Needed to Prepare
Employees to Work Overseas
International Performance Appraisals
Host-Country Evaluations
Augmenting Job Duties
Organizational Learning
Individual Learning
Home-Country Evaluations
Providing Feedback
Key IssuesKey Issues
Performance Evaluation
Home-CountryEvaluation
Host-CountryEvaluation
GLOBALPERSPECTIVE
LOCALPERSPECTIVE
Why Do Expatriates Fail?
• Family adjustment• Lifestyle issues• Work adjustment• Bad selection• Poor performance• Other opportunities arise• Business reasons• Repatriation issues
REDUCING EXPATRIATE FAILURES
• Selecting the right expatriate– Do an extremely sophisticated job of selecting the people– Find out why the candidate wants the foreign assignment– Select only top-notch, proven people– Familiarize the expatriate and his/her family with the country– An administrative branch to is supporting your international staff
• Assessing expatriates’ effectiveness potential– Expatriate managers must listen well, – Expatriate managers must be patient– Expatriate managers must have respect for the locals
Communication:A Chinese and a French
Words Perception
French: How long will it take you to finish the report
French: I asked him to participate
Chinese: I don’t know.How long shouldit take?
French: You are in the best positionto analyze time requirements.
Chinese: Ten days.
French: Take 15.Is it agreed? You will do it in 15 days?
Chinese: His behavior makes no sense. He is the boss. Why doesn’t he tell me?French: He refused to take responsibility.
Chinese: I asked him for an order.
French: I press him to take responsibility for his actions.
Chinese: Nonsense-I’d better give him an answer
French: He lacks the ability to estimatehis time; this estimate is totally inadequate.
French: I offer a contract.
Chinese: These are my orders.
BUSINESS CUSTOMS IN CHINA, JAPAN, AND SOUTH KOREA
• Guanxi: it refers to the special relationship two people have with each other.
• Wa: it necessitates that members of a group, be it a work team, a company, or a nation, cooperate with and trust each other.
• Inhwa: it stresses harmony; linking of people who are unequal in rank, prestige, and power; loyalty to hierarchical rankings; superior being concerned for the well-being of subordinates.
• Cross-Cultural Generalizations: A Caveat– While the culture influences the mode of doing business in a country, the
introduction of new technology changes culture.– Generalized information about nations serves mainly as a stereotype, and
stereotypes are useful mainly as starting points for analysis.
• Cross-Cultural Adaptation: A Caveat
CULTURE DEFINED
Culture comprises an entire set of social norms and responses that condition people’s behavior; it is acquired and inculcated, a set of rules and behavior patterns that an individual learns but does not inherit at birth.
Culture Environment of International Management
- Organizational Culture
- Cultural Environment : Language, religion, values, attitudes, education, social organization, technology, politics, and laws of a country
- Culture Shock : Perceptual stress experienced by people who settle overseas
Case : Lafarge
• Problem: How to recruit employees with Organizational Culture?
– Powerful International Firm– HR = Most important Asset for Lafarge– Key values: innovation, challenge, new perspectives – Necessary permanent Added-Value– Strong interpersonal relationships– Importance of Union Dialogue
Culture Environment of International Management
Observable level: ceremonies, stories, slogans, behaviors, dress, physical settings
Underlying values,
assumptions, beliefs, attitudes,
feelings
Source : Daft, 2001, p.315
Definition of Culture
SOURCES OF CULTURAL LEARNING
• The Family– Nuclear or Joint Family
• Educational Institutions – Focus on structured or conceptual ideas
• Major Religions– Christianity– Islam– Hinduism– Buddhism– Religions and International Management Process
Culture Environment of International Management
THE IMPACT OF CULTURE
• International Planning: – Master of Destiny or Predetermination?
• International Organizing:– Importance of Enterprise or Personal Relationships
• International Staffing:– Merit or Family?
• International Co-ordinating:– Shared Decision Making versus Centralized Decision Making– Issues with Local Leadership Styles and Communicational Styles
• International Controlling:– Based on Data versus Emotions and Judgment
HOFSTEDE’S MODEL: FIVE CULTURAL DIMENSIONS
1 Power Distance: Low score on this dimension suggests that inequality in the society will be minimized.
2 Uncertainty Avoidance: Low score in this dimension suggests that the uncertainty inherent in life is more easily accepted.
3 Individualism Dimension: High scores indicates a person’s identity is based at the individual level and a low score (collectivist) indicates a person’s identity is based at the social level.
HOFSTEDE’S MODEL: FIVE CULTURAL DIMENSIONS (continued)
4 The Masculine Dimension: High score indicates that the “ideal” in the society is “Independence” where as a low score (Feminine) indicates the “ideal” in the society is “Interdependence” or co-operation.
5 Confucian Dynamism: High score on this dimension reflects Traditional Chinese value system. Basic tenet is that unequal relationships between people create stability in society.
Cultural Differences
Adhocracy (UK, North Europe)
Family (ArabCountries, Africa, Asia)
Weak
ImpersonalBureaucracy(Germany, Central Europe)
HierarchicalBureaucracy(France, Italy, Spain)
Strong
WeakStrongUncertaintyAvoidance
Power Distance
Power Distance
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Organizations Existin a Global Environment
• The environment is made up of those things outside of the organization’s boundaries.
• Organizations are affected by events at the local, regional, national, and global levels.
• The specific parts of the environment that affect a given organization are called its task environment.
Eight KeyEnvironmental Sectors
• Industry• Cultural• Legal/Political• Economic• Technology• Human Resources• Physical Resources• Consumer/Clients
Air France
• Case: Describe the Organization’s Environment of Air France.
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(a) Competitors, industry size andcompetitiveness, related issues
(b) Suppliers, manufacturers, realestate, services
(c) Labor market, employment agencies,universities, trainingschools, employeesin other companies,unionization
(d) Stock markets,banks, savings andloans, privateinvestors
(e) Customers, clients,potential users of productsand services
(f) Techniques of production, science,computers, information technology
(g) Recession, unemployment rate,inflation rate, rate of investment,
economics, growth(h) City, state, federal laws
and regulations, taxes,services, court system,
political processes(i) Age, values, beliefs,
education, religion,work ethic, consumer
and greenmovements
(j) Competition fromand acquisition by
foreign firms,entry into overseas
markets, foreign customs, regulations,
exchange rates
An Organization’s Environment
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The Nature of the General Organizational Environment
• The environment contains both opportunities and threats.
• Managers must monitor their organization’s environment.
• Environments are becoming increasing complex.• They are experiencing change and turbulence.• Environments differ with respect to munificence
DOMESTIC ENVIRONMENT
• Domestic Political Climate– Government may attach tariffs (taxes) or place quotas (number or limits)
on certain imports.
• Domestic Competitive Climate– Domestic competitors may be developing strategies
• to penetrate foreign markets • to manufacture their products in a foreign country where labor is cheaper.
• Domestic Economic Climate– Boom or Recession ?– Potential by Foreign Firms to exploit the domestic economy
• Domestic Legal System and Government Policies– For security and for political reasons, governments sometimes prohibit
the export of certain technologies.
THE INTERNATIONAL ENVIRONMENT
• Focus on countries and country blocks… – e.g., NAFTA, EU
• International Institutions – e.g., IMF, WTO, …etc.
• International Agreements– e.g., OPEC
INDIVIDUAL NATION’S ENVIRONMENT
• Cultural Environment• Economic Environment• Industrial Development and Technological Needs.• Legal and political systems
– Rules of competition– Labor laws and enforcement– Foreign investment policy– Product policy– Foreign exchange policy
INDIVIDUAL NATION’S ENVIRONMENT (continued)
• Competition– Cartels– Bribery– Government ownership of business– Economic conditions– Managerial orientation (short vs long)
• Trade Barriers• Tariffs and Quotas• Monetary Barriers• Non-Tariff Protection• Impact of Exchange Rate Fluctuations• Industrial Relations and Labor Unions
Managing The EnvironmentManagers should formulate strategies so as to
maximize the organization’s fit with the environment.
Knowing the environment
Adapting to the environment
Changing the environment
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�Diminution of the classical photo business (photo grand public) but still 70% of the sales figures
�Growth of the Image activities�Development of knowledge on new «businesses» :
- medical imagery,- numeric technology.
� Strategy for the future : information business?�Knowledge Management => increase of partnerships
to enter new market segments
La Poste
• Case: Describe the Organization’s Domain of “La Poste”.
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Renault
• Case: Renault built its growth strategy on unstable emerging markets. Is it risky ?
– Strong European Base– 4/5 of the world population without a car– Markets with important growth potential– Investments in Brazil for South America, Korea
for Asia, Roumania for East Europe,…
Renault
– Multiplication of alliances with Volvo, Fiat, General Motors, Matra
– Example: Renault / Peugeot Alliance created in 1966, « Française de Mécanique Co. » for thedesign and the production of 500 000 car engines
• Case: How to deal with the high uncertainty of international environments, investment growth, and related risk increase?
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International Management : Asia Perspectives
II. Asia Space : A structure around various polesII.1 Asia between Unity and Diversity
II.1.1 Factors of UnityII.1.2 Factors of Diversity
II.2 Various Asia Blocks II.2.1 India : a Regional PowerII.2.2 Central AsiaII.2.3 ASEANII.2.4 China and its NetworksII.2.5 Japan as an Economic Power
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International Management : Asia Perspectives
III. Two Examples of Asia Countries : between Liberal Capitalism and Dogmatic Communism
III.1 Singapore : An Ambitious Tiger - Geography- History- Political Structure- Economy- Populations, Values, Habits- Contacts and Negociation
International Management : Asia Perspectives
III. Two Examples of Asia Countries : between Liberal Capitalism and Dogmatic Communism
III.2 Vietnam : A Future Power or a “Tiger on Bicycle” - Geography- History- Political Structure- Economy- Populations, Values, Habits- Contacts and Negociation
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