Int Mgmt 352 Exam 2 study guide

Ch. 5,6,7,8

As MNC’s become more transnational, their strategies must address…?

Cultural similarities and differences in their varied markets

Ethnocentric predisposition

Nationalistic philosophy of management whereby the values and interests of the parent company guide strategic decisions

Polycentric predisposition

A philosophy of management whereby strategic decisions are tailored to suit the culture of the countries where the MNC operates

Regiocentric predisposition

A philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis

Geocentric predisposition

A philosophy of management whereby the company tries to integrate a global systems approach to decision making

Global imperative

A universal, non-negotiable obligation requiring coordinated, immediate action by all stakeholders to address critical challenges affecting planetary health, social equity, and long-term viability

Globalization

Process in which businesses or other organizations develop international influence or start operating on an international scale

Nation responsiveness

The degree to which an MNC adapts its products, services, and operations to meet the specific economic, political, cultural, and organizational conditions of each country in which it operates. (Ex. McDonalds in Japan offers food that caters to their palate.)

3 major challenges in adjusting global strategies for regional markets are…?

Temptation to assume all markets are the same, Difficulty in knowing the strengths and weaknesses of all subsidiaries, and Difficulty in identifying how much autonomy MNCs should give to their subsidiaries

Parochialism

The tendency to view the world through one’s own eyes and perspectives

Simplification

The process of exhibiting the same orientation toward different cultural groups

Human Resource Management

Different countries’ subsidiaries should be evaluated differently due to different criteria

What is the relationship between cultural clusters affected by?

Differences in culture

A company with a _____ predisposition allows the values and interests of the parent company to guide strategic decisions.

Ethnocentric

Guanxi (China)

Means ‘good connections’, but resembles nepotism

What are some major cultural differences between China and many Western countries?

The issue of time, Reciprocity, and the fact that China is a collective society, meaning they pride themselves on being members of a group

What are some guidelines to tap the potential opportunities in Russia?

Building personal relationships, using local consultants, respecting ethical standards that differ from US and Europe, and avoid settling to early

How is culture managed in India?

The universal greeting, Namaste, means greetings to you; also, India is tolerant of outsiders, meaning there is no need for forced attempts to imitate Indian culture

How is culture managed in France?

An emphasis is set on social class and status matter; class stereotypes exist and most do not change their social status, leading to a centralized, rigid workplace status

How is culture managed in Brazil?

Physical contact is common and preferred, and appearance matters

Organizational culture

Shared values and beliefs that enable members to understand their roles in the norms of the organization. Pattern of shared basic assumption that is curated by members

General perspective

Organizational culture moderate or erase the impact of national culture (Ex. US MNCs operated in Japan. It won’t take long before Japanese employees begin acting as if they were American.)

Hofstede’s research

The national cultural values of employees have a significant impact on their organizational performance. The cultural values employees bring to the workplace are not easily changed by the organization

What are the 2 structural mechanisms companies must develop after merging?

Organizational structure, when companies decide whether to focus on hierarchy or equality, and Managerial roles, which are either task or employee oriented

What are the 3 aspects in determining MNC organizational culture?

Employee-Organization relationship, Authority and Hierarchy, and Views on Purpose and Destiny

Family Culture (1 of 4 Org. cultures)

A strong emphasis on hierarchy and orientation to the person. Leaders are respected and looked to for guidance and approval. Management assumes a paternal relationship (Common in Turkey, Pakistan, China, Hong Kong)

Eiffel Tower Culture (1 of 4 Org. cultures)

Strong emphasis on hierarchy and orientation to the task. Well defined jobs, employees know the task, everything is coordinated from the top. Relationships are specific, status lies in the job. (Common in Denmark, Germany, Netherlands)

Guided Missile Culture (1 of 4 Org. cultures)

Strong emphasis on equality in the workplace and orientation to the task. Work-oriented, in terms or project groups who do whatever it takes to get the job done. (US and UK)

Incubator Culture (1 of 4 Org. cultures)

Strong emphasis on equality and orientation to the person. Organizations are secondary to the fulfillment of the individuals within them. (Often found among startup firms in Silicon Valley)

MNC success depends on the ability to…?

Manage both multiculturalism and diversity

What is the first phase of International Corporation evolution?

Domestic corporations with an orientation focus of product/service; Ethnocentric perspective

What is the second phase of International Corporation evolution?

International corporations with an orientation focus on the market; Polycentric perspective

What is the third phase of International Corporation evolution?

Multinational corporations with an orientation focus on Price; Multinational perspective

What is the fourth phase of International Corporation evolution?

Global corporations with an orientation focus on strategy; Multicentric perspective

How does the effect of multiculturalism and diversity vary?

Depending on the stage of the firm in its international evolution

International firms…?

Take a focus on the outside

Multinational firms…?

Take a focus on the inside

Global firms…?

Take a focus on both the inside and outside

Homogenous groups (Type of multiculturalism)

Members have similar backgrounds and generally perceive, interpret, and evaluate events in similar ways

Token groups (Type of multiculturalism)

All members but one have the same background

Bicultural groups (Type of multiculturalism)

Two or more members represent each of two distinct cultures

Multicultural groups (Type of multiculturalism)

There are individuals from three or more different ethnic backgrounds

What does Diversity in the workplace cause?

A lack of cohesion, or willingness to work as one, resulting in unproductive work and the inability to be efficient or effective

Groupthink

Social conformity and pressures on individual members of a group to conform and reach consensus

Which groups avoid the problem of ‘Groupthink’?

Multicultural diverse groups, as members do not think similarly or feel pressure to conform

Context

Info that surrounds a communication and helps convey the message. Two types.

High-context culture

Implicit messages; implied though not plainly expressed (China, Brazil, India, Russia)

Low-context culture

Explicit messages; straightforward and easy to understand (US, UK, Canada, Norway, Sweden)

Indirect styles (1 of 8 verbal communication styles)

High context cultures; Focus on meeting environment (Who will be at this meeting?)

Direct styles (1 of 8 verbal communication styles)

Low context cultures; Focus on meeting objectives (What is the meeting going to be about?)

Succinct styles (1 of 8 verbal communication styles)

High context cultures; Asian countries

Exacting styles (1 of 8 verbal communication styles)

Low context cultures; precision and the use of the right number of words to convey the messages. (England, Germany, Sweden)

Contextual styles (1 of 8 verbal communication styles)

High context cultures; The speaker and relationship of parties (Japan and India)

Personal styles (1 of 8 verbal communication styles)

Low context cultures; The speaker and reduction of barriers between parties (US, Australia, Canada)

Affective styles (1 of 8 verbal communication styles)

High context cultures; Language that requires the listener to carefully note what is being said and to observe how the sender is presenting the message (Receiver focused)

Instrumental styles (1 of 8 verbal communication styles)

Low context cultures; Sender focused

Downward communication

Transmission of info from Manager to Subordinate

Upward communication

Transmission of info from Subordinate to Superior

What are the 4 communication barriers?

Language, Perception, Culture, Nonverbal

Language (1 of 4 Communication barriers)

The ability to understand the language that is used at headquarters is essential

Perception (1 of 4 Communication barriers)

A persons view of reality (Ex. KFC’s ‘Finger licking good’; eat your finger off?)

Cultural (1 of 4 Communication barriers)

Cultural differences lead to misinterpretations both in how others see expatriate managers and in how the latter see themselves

Nonverbal (1 of 4 Communication barriers)

Kinesics and Proxemics (Ex. Office layout)

Kinesics

The study of communication through Body Movement and Facial Expression

Proxemics

The study of the way people use physical space to convey messages (Ex. Intimate, Personal, Social, and Public distance)

Chronemics

The way in which time is used in a culture (Ex. Monochromatic time schedule vs. Polychronic time schedule)

Chromatics

The use of color to communicate messages (Ex. Wear black to funeral signifies death; white to wedding signifies start of life together)

Monochronic time schedule

Tasks are done one at a time, schedules and deadlines are strictly followed; treats time as linear

Polychronic time schedule

Multitasking is the norm and schedules are loose guidelines; treats time as flexible

Negotiation

The process of bargaining with one or more parties for the purpose of arriving at a solution acceptable to all

Distributive negotiations

When two parties with opposing goals compete over a set value

Integrative negotiations

Cooperation between two groups to integrate interests, create value, and invest in the agreement

What are the 5 steps in the negotiation process?

Planning (identifying objectives), Interpersonal Relationship building, Exchanging Task-Related information, Persuasion, Agreement

Strategic Management

The process of implementing a plan of action based on a mission and long-term objective

Contingency based approach

Positive effect on firm performance; a relationship between MNF and subsidiaries

Cost leadership leads to…?

Global sourcing

Differentiation

Tailoring to specific preferences

Global integration

Standardization, making the same exact product to sell, not a unique or specialized product

International strategy

Low global integration/Low national responsiveness. Sells same product domestically and abroad

Multi-domestic strategy

Low global integration/High national responsiveness. Local consumers ideally perceive products

Global strategy

High global integration/Low national responsiveness. Economies of scale and location economies; Price competition

Transnational strategy

High global integration/High national responsiveness. “Think globally, act globally”

What are the 3 basic steps in formulating strategy?

Scanning external environment, conducting an internal resource analysis, formulate goals in light of previous steps

Environmental scanning

Technology trends, social and political environment

Internal resource analysis

How companies can utilize their resources and capabilities to best take advantage of environmental opportunities. Use of KSF’s.

Strategy formulation

Reviewing and undermining Profitability, Marketing, Operations, Finance, and Human Resource goals

KSF’s (Key success factors)

Factors necessary for a firm to effectively compete in a market niche

Strategy implementation

The process of providing goods and services in accord with a plan of action

What are the 3 general areas international managers must consider in strategy implementation?

Deciding where to locate operations, Carrying out entry and ownership stages, Implementing functional strategies

When pondering a location/country in which to do business, what must be considered?

Which countries are highly industrialized, the largest market for goods and services, less legal restrictions, specific benefits

Frontier markets

A unique subset of emerging economies. High-risk, high reward. A potential approach is a joint venture with a local company for the cultural knowledge

CSA (Country-specific advantages)

Attractiveness of a location. Natural resources, labor forces, or less tangible factors including education and skills

FSA (Firm-specific advantages)

Product or process technology, marketing or distributional skills, or managerial know-how

International entrepreneurship

A combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create value in organizations

Born-global firms

Firms that engage in significant international activity a short time after being established. Global orientation, market conditions, and an innovative culture. (Ex. Amazon)

Global orientation

A mindset in which a company views the entire world as a potential market and designs strategies that transcend national differences