IB 300 Exam 3 Study Guide: Key Concepts and Strategies

International Strategy

A plan that guides resource deployment to achieve international objectives. Must be consistent internally and with external competitive environments.

Competitive Advantage (VRIO Framework)

A framework consisting of Value, Rare, Imitable, and Organized to assess a firm's competitive advantage.

Value (VRIO Framework)

Create value customers are willing to pay for.

Rare (VRIO Framework)

Unique capabilities not possessed by competitors.

Imitable (VRIO Framework)

Difficult to imitate.

Organized (VRIO Framework)

Firm must be organized to capture value.

Global Strategic Planning Process

A series of steps including analyzing environments, controllable variables, defining mission, setting objectives, quantifying objectives, formulating strategies, and preparing tactical plans.

SWOT

A key tool used to analyze environments (domestic, international, foreign).

Time Horizon

Short, medium, or long term planning that differs by industry.

Organizational Level

Plans exist at multiple levels within an organization.

Top-down Planning

A planning method that is HQ-driven.

Bottom-up Planning

A planning method that is subsidiary input-driven.

Iterative Planning

A collaborative and reconciliatory planning method.

Home Replication Strategy

A strategy that involves centralized product development.

Multidomestic Strategy

A strategy that adapts products for local markets.

Global Strategy

A strategy that emphasizes cost reduction with minimal adaptation.

Transnational Strategy

A strategy that balances cost reduction and local adaptation.

Importance of Organizational Structure

Ensures efficient and effective global integration of activities and is closely tied to strategic planning.

Key Organizational Dimensions

Includes Product/Technical Expertise, Geographic Expertise, Customer Expertise, and Functional Expertise.

International Division

A central unit that manages all international operations.

Worldwide Product Division

A structure with global product responsibility and regional experts.

Geographic Region Structure

A structure where regional heads manage country operations.

Global Functional Structure

A structure used by few firms for narrow, technical offerings.

Hybrid Structure

A mix of structures depending on needs.

Matrix Structure

A structure that combines regions and products, resulting in complex reporting.

Wholly-Owned Subsidiaries

Decision-making split based on standardization, competence, size, etc.

JVs & Affiliates (<50% Ownership)

Maintain control via management contracts, finance/tech control, strategic personnel.

Global Mindset

Mix of IQ (analytical skill) and EI (emotional intelligence). Involves openness to and synthesis across diverse cultures and markets.

Global Leadership Complexity

Multiplicity: Many issues.

Global Leadership Complexity

Interdependence: International and domestic linkages.

Global Leadership Complexity

Ambiguity: Less clarity.

Global Leadership Complexity

Dynamism: Constant change.

Effective Global Leadership Competencies

1. See Differences (self-awareness of cultural styles). 2. Make Connections (relationship building). 3. Adjust (quick adaptability). 4. Integrate and Lead Change. 5. Localize (develop local talent).

Leadership Roles

Monitor, Spokesperson, Liaison, Leader, Negotiator, Innovator, Decision Maker, Change Agent.

Development Tools

Train in business, history, geography, politics, language, and culture. MBTI for self-awareness.

Factors Affecting Global Talent Supply/Demand

Workforce Size: Larger in developing countries (e.g., India, China).

Factors Affecting Global Talent Supply/Demand

Aging Populations: Shrinking workforce in developed nations.

Factors Affecting Global Talent Supply/Demand

Urbanization: Workforce moving to cities; cities offer infrastructure.

Factors Affecting Global Talent Supply/Demand

Immigration: Important for high-skill and low-skill roles.

Factors Affecting Global Talent Supply/Demand

Guest Workers: Temporary labor; face social/legal challenges.

Factors Affecting Global Talent Supply/Demand

Labor Unions: Vary by country; must adapt HR strategy accordingly.

Brain Drain

Loss of skilled workers to other countries.

Reverse Brain Drain

Skilled immigrants returning home.

IHRM Approaches & Strategic Alignment

Ethnocentric (Home Replication): PCNs in key roles.

IHRM Approaches & Strategic Alignment

Polycentric (Multidomestic): HCNs lead local ops.

IHRM Approaches & Strategic Alignment

Regiocentric (Regional): Mix of HCNs & TCNs.

IHRM Approaches & Strategic Alignment

Geocentric (Transnational): Best talent regardless of nationality.

Employee Types

PCN (Parent-Country National)

Employee Types

HCN (Host-Country National)

Employee Types

TCN (Third-Country National)

Expatriates

Common in strategic roles. Typical duration: 2-5 years.

Expatriates

Culture shock and reverse culture shock are key concerns.

Expatriates

Family issues: Main reason for expat failure.

Expatriates

Language training: Critical for success.

International strategy

A plan that outlines how a company will compete in the global market.

Competencies

Skills and abilities that enable an organization to achieve its objectives.

International competitive advantage

The edge a company has over its global competitors, allowing it to generate greater sales or margins.

Global strategic planning process

A systematic approach to defining a company's strategy for competing internationally.

Cost and adaptation pressures

Factors that influence how a company balances cost efficiency with the need to adapt to local markets.

Features of a strategic plan

Key elements that outline how an organization will achieve its goals.

Organizational structure

The way in which a company arranges its lines of authority and communications.

International structural stages model

A framework that describes the evolution of organizational structures in international contexts.

Decision making allocation

The process of determining how decisions are distributed between the parent company and its subsidiaries.

Global mindset

An awareness and understanding of global business dynamics and cultural differences.

Global leadership

The ability to lead and manage in a global context, distinct from domestic leadership.

Competencies for effective global leadership

Skills necessary for successfully leading in an international environment.

Brain drain

The emigration of highly trained or qualified people from a particular country.

Reverse brain drain

The return of skilled individuals to their home country after working abroad.

IHRM approach

The strategic management of human resources in an international context.

Recruitment and selection staffing policies

Guidelines for hiring and managing employees in international operations.

PCNs, HCNs, and TCNs

Parent Country Nationals, Host Country Nationals, and Third Country Nationals, respectively, referring to different types of employees in international assignments.

Expatriates

Employees who are sent to work in a foreign country.

Challenges and opportunities of an expatriate position

The difficulties and advantages faced by employees working outside their home country.