Chapter 4 Lecture Outlines International Management Copyright

Chapter 4 Lecture Outlines International Management Copyright © Houghton Mifflin Company. All rights reserved.

Chapter Objectives 1. Describe the six-step internationalization process and distinguish between a global company and a transnational company. 2. Distinguish between ethnocentric and geocentric attitudes. 3. Explain from a cross-cultural perspective the difference between individualistic and collectivist cultures and identify at least four of the GLOBE cultural dimensions. Copyright © Houghton Mifflin Company. All rights reserved. 2

Chapter Objectives (cont’d) 4. Explain what Geert Hofstede’s research has to say about the applicability of American management theories in foreign cultures and discuss lessons from international studies of work goals and leadership styles. 5. Identify the four leading reasons why U. S. expatriates fail, and discuss the nature and importance of cross-cultural training in international management. 6. Summarize the position of North American women on foreign assignments. Copyright © Houghton Mifflin Company. All rights reserved. 3

International Competition • Forces Shrinking Globe – Air travel – Modern information technology – Corporate globalism • International Management – The pursuit of organizational objectives in international and intercultural settings. Copyright © Houghton Mifflin Company. All rights reserved. 4

Global Organizations for a Global Economy • The Internationalization Process – Stage I: Licensing – Authorizing companies in foreign countries to produce and/or market a given product within a specified territory in return for a fee. – Stage 2: Exporting – Goods produced in one country are sold to customers in foreign countries. Copyright © Houghton Mifflin Company. All rights reserved. 5

Global Organizations for a Global Economy (cont’d) • The Internationalization Process (cont’d) – Stage 3: Local warehousing and selling – Goods produced in one country are shipped to the parent company’s storage and marketing facilities located in overseas countries. – Stage 4: Local assembly and packaging – Components, rather than finished products, are shipped to company-owned foreign facilities for final assembly and sales. Copyright © Houghton Mifflin Company. All rights reserved. 6

Global Organizations for a Global Economy (cont’d) • The Internationalization Process (cont’d) – Stage 5: Joint ventures (also strategic alliances or partnerships) – A company in one country pools its resources with another foreign company or companies to create and market products and jointly share profits and losses. – Stage 6: Direct foreign investments – The production and marketing of products through subsidiary in a foreign country that is wholly owned or as the result of cross-border merger. Copyright © Houghton Mifflin Company. All rights reserved. 7

Joint Ventures and Strategic Partnerships • Recommendations for Achieving Success – Be patient: select and build trust with a partner that produces compatible but not direct competitive products. – Learn quick: learn as fast and as much as possible without giving away core technologies and secrets. – Play fair: Establish ground rules about the rights and responsibilities of all parties at the outset. Copyright © Houghton Mifflin Company. All rights reserved. 8

From Global Companies to Transnational Companies • Global Company – A multinational venture centrally managed from one country. – Has global strategies for product design, financing, purchasing, manufacturing, and marketing. • Transnational Company – A global network of productive units with a decentralized authority structure and no distinct national identity. – Relies on a blend of global and local strategies. Copyright © Houghton Mifflin Company. All rights reserved. 9

Toward Greater Global Awareness and Cross-Cultural Competence • Travelers: • Settlers – Engage in short-term visits to foreign countries. – Take assignments lasting up to five years. – Have limited knowledge of local history, culture, and customs. – Have in-depth insights into the host country’s history, customs, and culture. – Have limited local language skills. – Speak the local language well or fluently. – Don’t attempt to adapt to the local environment. – Are culturally-trained to “go native. ” Copyright © Houghton Mifflin Company. All rights reserved. 10

Contrasting Attitudes • Ethnocentric Attitude – The view that assumes the home country’s personnel and ways of doing things are best. – Foreign nationals are not to be entrusted with making key decisions or most-recent technology. – Home country procedures and evaluation criteria are applied world-wide without variation. • Geocentric – A world-oriented view that draws upon the best skilled and most talent personnel from around the world. Copyright © Houghton Mifflin Company. All rights reserved. 11

The Cultural Imperative • Culture – A population’s taken-for-granted assumptions, values, beliefs, and symbols that foster patterned behavior. • Organizational Culture – The social glue binding members of an organization together • Cultural Profile of American Managers – Positive: Informal, creative, open-minded – Negative: Educationally and professionally narrow Copyright © Houghton Mifflin Company. All rights reserved. 12

The Cultural Imperative (cont’d) • High-Context Cultures – Cultures in which nonverbal and situational messages convey primary meaning. – Status of an individual is of tantamount importance in determining relationships. • Low-Context Cultures – Cultures in which words convey primary meaning. – Nonverbal messages are secondary to spoken words. – The terms of the deal are more important than building a business relationship. Copyright © Houghton Mifflin Company. All rights reserved. 13

The Cultural Imperative (cont’d) • Other Sources of Cultural Diversity – Individualistic cultures – Cultures that emphasize individual rights, roles, and achievements. – Collectivist cultures – Cultures that emphasize duty and loyalty to collective goals. Copyright © Houghton Mifflin Company. All rights reserved. 14

The Cultural Imperative (cont’d) • Other Sources of Cultural Diversity (cont’d) – Time – Monochronic time: a perception of time as a straight line broken into standard units. – Timely arrivals and keeping appointments is considered important. – Polychronic time: a perception of time as flexible, elastic, and multidimensional. – Appointment schedules are considered approximations and are not kept precisely. Copyright © Houghton Mifflin Company. All rights reserved. 15

The Cultural Imperative (cont’d) • Other Sources of Cultural Diversity (cont’d) – Interpersonal space – Some cultures prefer a close rather than wide distance between conversing individuals. – Language skills – Language fluency opens insights into another culture. – Religion has many effects on personal and professional activities in many cultures. Copyright © Houghton Mifflin Company. All rights reserved. 16

Comparative Management Insights • Comparative Management – The study of how organizational behavior and management practices differ across cultures. • Applying U. S. Management Theories Abroad – Gert Hofstede’s cultural need dimensions – Security and social – Self-actualization Copyright © Houghton Mifflin Company. All rights reserved. 17

A Cross-Cultural Study of Work Goals • Implications of Hofstede’s research – American management theories (e. g. , motivation) should be adapted to local preferences. – An international contingency approach to motivation is called for. Copyright © Houghton Mifflin Company. All rights reserved. 18

An International Contingency Model of Leadership • Model’s Assumptions/Guidelines – Leadership must be adapted to the local culture. – Participative leadership is the most applicable style where workers trust their leader. – Directive leadership is considered the least appropriate style of leadership. Copyright © Houghton Mifflin Company. All rights reserved. 19

Staffing Foreign Positions • Why Do Expatriates Fail? – Culture shock: not preparing managers foreign assignments leads to feelings of anxiety, self-doubt, and isolation. – Job performance: low performance requires recalling the employee or high performance attracts outside job offers. – Homesickness: for native culture and surroundings – Personal: family and personal adjustment problems that arose after arriving in the foreign assignment. Copyright © Houghton Mifflin Company. All rights reserved. 20

Cross-Cultural Training • Cross-Cultural Training – A guided experience that helps people live and work in foreign cultures. • Specific Training Techniques – Documentary programs to familiarize expatriates with their assignment destination. – Culture assimilator expose expatriates to simulated intercultural incident and situations. – Language instruction builds expatriates’ conversational skills in a foreign language. Copyright © Houghton Mifflin Company. All rights reserved. 21

Cross-Cultural Training (cont’d) • Specific Training Techniques (cont’d) – Sensitivity training provides experiential exercises to teach expatriates to be aware of the impact of their actions on others in another culture. – Field experiences provide firsthand exposure to ethnic subcultures that is intended to heighten expatriates’ cultural awareness. Copyright © Houghton Mifflin Company. All rights reserved. 22

Cross-Cultural Training (cont’d) • Conclusions – A combination of documentary and interpersonal training is the best combination for expatriates. – Orientation should be provided for both the expatriate and the family. – Family sponsors or assigned mentors should be available at the foreign assignment. – Successful repatriation (the process of returning home) is an important part of the entire foreign assignment experience. Copyright © Houghton Mifflin Company. All rights reserved. 23

An Integrated Expatriate Staffing System • Phase 1: Selection – Picking the right candidate and family • Phase 2: Orientation – Providing sponsors and mentors to reduce culture shock and to act as culture translators. • Phase 3: Repatriation – Returning the candidate and family after a tour of duty Copyright © Houghton Mifflin Company. All rights reserved. 24

What About North American Women on Foreign Assignments? • Women have above-average success in foreign assignments. • The strongest barriers to foreign assignments have been self-disqualification and the prejudice of home country managers. • Culture is a bigger hurdle than gender: women on foreign assignments are seen as North Americans first, then women. Copyright © Houghton Mifflin Company. All rights reserved. 25