International and Comparative Management

1
International and Comparative Management

• Course Review

BUS 162 (6) Final Exam Monday, May 19, 715
930 am
Hodgetts, Luthans and Doh, International
Management Culture, Strategy and Behavior , 6th
edition (New York McGraw-Hill Irwin,
2006) Osland, Broadening the Debate The Pros
and Cons of Globalization. Journal of
Management Inquiry, 12(2) 137-154 (June
2003) Augsburger, David W., Conflict Mediation
Across Cultures Pathways and Patterns (London
Westminster John Knox Press, 1992), pp. 18-25,
28-35, 84-94, 137-142, 244-258, and
279-283. Readings from ExecutivePlanet.com on
business and negotiation practices in Japan and
the US. (http//www.executiveplanet.com/index.Php?
titleJapan and http//www.executiveplanet.com/ind
ex.php?titleUnited_States)
2
The Global Environment

• Globalization
• The International Environment
• Ethics and Social Responsibility
• Case Studies Colgate and Nike

3
Globalization

• Definition
• Globalization is the process of social,
  political, economic, cultural, and technological
  integration among countries around the world
  (HLD, p. 7)

• Drivers
• Individual and social needs and aspirations
• Technological innovation
• Reduced technological and economic barriers to
  trade

4
Global Environmental Forces (1)

• Economic Environment
• Global and regional integration
• Political Environment
• Uncertain responses to democratization
• Less stable governments increase risk
• Legal/Regulatory Environment
• Differences in regulatory regimes increase
  transaction costs, restrict and distort trade,
  and can result in retaliatory actions or
  sanctions
• Four main legal traditions common law,
  civil/code law, Islamic/theocratic law, and
  socialist law

5
Global Environmental Forces (2)

• Technological Environment
• The commodification of information
• Reduced costs of entry/leapfrogging
• Mass customization
• Socio-Cultural Environment
• Increased tensions around differences in business
  practices, labor standards, corporate governance,
  and protection of intellectual property
• Cultures differ in their responses to authority,
  need for individual vs. group recognition, how
  they balance work and family obligations, and in
  approaches to managing and resolving conflict

6
Ethics and Social Responsibility

• Ethics
• The study of morality and standards of conduct
  (HLD, p. 57)
• Corporate Social Responsibility (CSR)
• Those actions taken by a firm that are intended
  to benefit society beyond the requirements of
  the law and the direct interests of the firm
  (HLD, p. 65)

7
MNCs and Ethics

• Challenges for MNCs
• Widespread perception that MNCs are untrustworthy
  and corrupt
• Increased capacity of NGOs to mobilize public
  pressure in response to perceived ethical lapses
• Expectation that MNCs will adhere to higher
  standards
• MNC responses
• Adopting internal codes of conduct to establish
  minimal social and environmental standards
• Building alliances with NGOs
• Committing international standards such as the UN
  Global Compact, SA8000 and ISO14000

8
Implications for Managers

• Need for lifelong learning
• The most valuable asset is the ability to learn
  how to learn (Thomas Friedman, The World is
  Flat)
• Responsiveness
• Being alert for changes and quick to respond
• Adaptability
• Knowing how to work with others
• Being comfortable with uncertainty and ambiguity
• Having a global perspective
• Seeing the big picture (global economy/whole
  organization)
• Developing local knowledge
• Understanding the details of operating at the
  local level

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The role OF CULTURE

• Culture Nature and Characteristics
• Culture Meanings and Dimensions
• Organizational Cultures
• Cross-Cultural Communication
• Cross-Cultural Conflict and Negotiation
• Case Studies EuroDisney and Walmart Japan

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Culture Nature and Characteristics

• The Barnga Game
• Understanding the subtle nature of cultural
  difference
• The nature and characteristics of culture
• Acquired knowledge that people use to interprete
  experience and generate social behavior
• Culture is learned, shared, transgenerational,
  patterned, symbolic and adaptive
• Role of values and their distribution
• Fundamental beliefs about what is right or wrong,
  good or bad
• Cultures differ in the values they hold and in
  how these values are distributed across the
  culture

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Culture Meaning and Dimensions

• Edgar Scheins bulls-eye model of culture
• Core implicit, basic assumptions
• Middle norms and values
• What is most visible material artifacts and
  institutions
• Hofstedes four cultural dimensions
• Collectivism/individualism identification with
  the group or with the individual self
• Uncertainty avoidance having institutions,
  beliefs or norms that minimize ambiguity and
  uncertainty
• Power distance acceptance of status differences
  in society
• Masculinity/femininity prioritization of values
  associated with competition, material success,
  recognition over values of caring for others and
  enhancing the quality of life

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Organizational Cultures

• Strategic predispositions
• Ethnocentric
• Polycentric
• Regiocentric
• Geocentric
• Trumpenaars Organizational Typology
• Family power-oriented culture (people/hierarchy)
• Eiffel Tower role-oriented culture
  (task/hierarchy)
• Guided Missile project-oriented culture
  (task/equity)
• Incubator Fulfillment-oriented culture
  (people/equity
• The evolution of international firms
• Domestic, international, multinational, global

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Cross-Cultural Communication

• Communication
• The process of transferring meaning from sender
  to receiver
• High-context and low-context cultures
• Major verbal communication styles
• Indirect and direct
• Succinct, exacting and elaborate
• Contextual and personal
• Affective and instrumental
• Aspects of nonverbal communication
• body language, use of color, personal space, and
  time
• Communication and perception

14
Cross-Cultural Conflict

• Cultures shape
• Our understanding of what constitutes a conflict
• How individuals and groups respond to conflict
• How and on what basis conflicts are resolves
• Conflict in individualistic, low-context and
  collectivistic, high-context cultures
• Individual differences or violations of group
  norms
• Conflict justified by instrumental or expressive
  needs
• Conflicts resolved through confrontational or
  triangulation
• Resolution is factual-inductive (a focus on
  facts) axiomatic-deductive (a focus on general
  principles) or affectual-inductive (a focus on
  emotions and perceptions)

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Cross-Cultural Negotiation

• Conflict and face-work
• Low-context saving self-negative and positive
  face
• High-context saving other-negative and positive
  face
• Negotiation across cultures varies in terms of
• Who negotiates seniority vs. expertise
• How one negotiate directly or third-parties
  issue-by-issue, from general principles, or
  through compromise
• What makes a good agreement consensus,
  splitting the difference, creating new value
• The Mustang Jeans exercise
• Differences in Japanese and American
  communication and negotiating styles

16
International strategic and human resource
management

• Strategy Formulation and Implementation
• Entry Strategies and Organizational Structures
• Control Mechanisms and Decision Making
• Managing Political Risk
• Motivation and Leadership Across Cultures
• HRM and Labor Relations Across Cultures
• Case Studies HP-Compaq, AirAsia, BP and Chiquita

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Strategy Formulation and Implementation

• Strategic options in response to pressures for
  global integration and national responsiveness
• International strategy (low GI / low NR)
• Multi-domestic strategy (low GI / high NR)
• Global strategy (high GI / low NR)
• Transnational strategy (high GI / high NR)
• Specialized strategies
• first-mover, Bottom of the Pyramid and Born
  Global
• Strategy implementation
• Country factors and location issues
• Roles of marketing, production and finance

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Entry Strategies and Organizational Structures

• Entry strategies
• Whole-owned subsidiaries
• Mergers and acquisitions
• Alliances and joint ventures
• Licensing and franchising
• Exporting and importing
• Organizational structures
• International division structures
• Product, area and functional divisions
• Mixed, matrix and transnational network
  structures
• Mergers, joint ventures and keiretsu

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Control Mechanisms and Decision-Making

• Control mechanisms
• Output control production, sales and profits
• Bureaucratic control policies and procedures
• Decision-making control centralization vs.
  decentralization
• Cultural control shared values, norms and
  objectives
• Organizational characteristics
• Formulation, specialization and locus of decision
  making
• Decision-making and control
• Choosing a course of action
• Monitoring performance and evaluating results
• Locus of decision making depends on a range of
  factors, including size, level of investment, etc.

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Managing Political Risk

• Micro and macro risk factors
• Macro-factors impact all companies
• Micro-factors target specific industries or firms
• Critical risks include
• Government policy transfer, operational or
  ownership risks
• Monetary policy changes and currency fluctuations
• Socio-political disturbances and labor-management
  conflict
• Global sustainability risk
• Assessing and managing political risk
• Conglomerate, vertical, and horizontal
  investments
• Impact on risk of sector, technology and
  ownership
• Defensive, proactive, and integrative strategies

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Motivation and Leadership

• Content theories of motivation
• Mazlows hierarchy of needs
• Hertzbergs two-factor theory
• Achievement motivation theory
• Process theories of motivation
• Goal-setting, expectancy, and equity theory
• Theories of leadership
• Theories X, Y and Z
• Authoritarian, paternalistic and participative
  leadership
• Leadership styles across cultures
• Both globalization and culture influence
  leadership styles
• Leadership can both reinforce and offset cultural
  traits

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HRM and Labor Relations

• Indentifying international managers
• Home-country, host-country, and third-country
  nationals
• Inpatriates non-home-country nationals in home
  country
• Self- and firm-level selection criteria
• Importance of leadership, adaptability, and
  self-reliance
• Importance of social networks and spousal support
• The relocation curve and repatriation challenges
• International labor relations future challenges
• Prevalence of labor unrest in emerging economies
• Increased globalization and democratization
  contributes to demand for improved wages and
  working conditions
• Pressure on MNCs to adhere to international
  standards and codes of conduct

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Congratulations!!

• Youve made it to the end of term
• good luck on the final exam!
• Mark McKenna