Solved by verified expert:Required to hand in a 2000 word paper on the implications of International Management on their field of business and sector, with reference to the course content and material. The paper should include real examples, illustrations and insights to the challenges global businesses currently face. you may choose the fitting subject as attached (5 lecture)
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InternatIonal ManageMent
Cultural Context of global ManageMent
Dr. Amir Dhia
27 October 2017
Cultural Context of Global Management
* Understanding the Role of Culture in International Management
* Cross-Cultural Communication
Culture and its Effects on Organizations
Culture
A set of shared values, understandings,
assumptions, and goals that are learned
from earlier generations, imposed by
present members of a society, and passed on
to succeeding generations
Copyright ©2017 Pearson Education, Ltd.
Types of culture
•
•
•
•
•
Occupational (doctors, lawyers, teachers…)n,
Age (young, middle-aged, elderly…)
Religious (Christian, Muslim…)
Regional (Northern, Southern,…)
Class (social, middle, upper)
Organizational Culture
1.
Varies a great deal from one organization, company,
institution, or group to another
1.
Represents those expectations, norms, and goals held
in common by members of that group
Examples:
IBM vs. Apple
Daimler Benz vs. Chrysler
Copyright ©2017 Pearson Education, Inc
Occupational
Regional
Number of religious adherents, 1900-2025 (World Evangelization Research Center)
cross cultural
communication
• Interactions of different cultures are increasing more
than ever before:
– Interactions intensify civilization/culture
consciousness and awareness of the differences.
– Advances in ICTs and transportation have
enormously facilitated interaction.
• Cultural characteristics are less easily
compromised than political & economic ones
– The main question in class & ideology is
Which side are you on?
– In civilization & culture it is What are you?
Differences among cultures are not only real;
they are basic:
• Time concept: monochronic, polychronic
• Space concept: private, interpersonal, professional
• Language: no two languages represent the same social reality
• Values: evil, good, neutral
• Norms, manners: behavior in concrete, every day life
• Social groupings & relationships: families, classes, status, elites
Cross Cultural Communication
The successful exchange of meaning through use of
words & non-verbal factors.
When the sender & receiver are from different
cultures.
Barriers to cross cultural communication
1. Attitude
* Globalization means there is now only one
business culture everywhere.
* If they want to do business with me, they
have to adapt to me.
* I can’t simply just learn
everything about every culture I work with.
* I need a list of dos & don’ts
before I live abroad.
Culture’s Effects on Management
Convergence—the phenomenon of the shifting of individual
management styles to become similar to one another
Self-Reference Criterion—the subconscious reference point of
ones own cultural values. Many people in the world understand
and relate to others only in terms of their own cultures
Parochialism—occurs, for example, when a Frenchman expects
those from or in another country to automatically fall into
patterns of behavior common in France
Ethnocentrism—describes the attitude of those who operate from
the assumption that their ways of doing things are best—no
matter where or under what conditions they are applied
Copyright ©2017 Pearson Education, Ltd.
Barriers to cross cultural communication
2. Stereotypes
…a fixed idea/image that many people have of a
particular type of person/thing, yet not true in reality.
Sources of stereotypes
Inherited characteristics
Parents, family, friends
Media
Education (school,
university)
Neighborhood
Clubs & societies
Religion
– Travel
– Laziness, fear
– Sense of superiority / inferiority
– Limited imagination
– Lack of experience
– Poor communication skills
– Envy
Layers of culture…
inherited & learned
person
Educational
Professional
Gender
Class
Generational
Religious
Ethnic
Regional
National
learned
inherited
human nature (mankind)
Barriers to cross cultural communication
3. Interpretation
* perception checking
* listening effectively
* giving feedback
Monochronic
(Americans, Swiss, Germans,
Scandinavians)
Polychronic
(Latins, Mediterranean, Arabs, French)
do one thing at a time……………………… do many things at once
concentrate on the job… ………………..
highly distractible & subject to
interruptions
take time commitments (deadlines,
schedules) seriously………………………. consider time commitments an
objective to be achieved if possible
low-context & need information…………… high-context & already have info
committed to the job……… committed to people & human relationships
Monochronic
Polychronic
adhere religiously to plans… ……………change plans often and easily
concerned about not disturbing others;
follow rules of privacy & consideration……… concerned with those closely
related (family, friends, close
business associate) than privacy
show respect for private property;
seldom borrow or lend……………………borrow & lend things often & easily
emphasize promptness…………………….base promptness on relationship
accustomed to short-term relationships………..have tendency to
build lifetime relationships
Cultures have varying views on the relations
between:
1. Religion & man
2. the individual & the group
3. the citizen & the state
4. parents & children
5. husband & wife
6. rights & responsibilities
7. liberty & authority
8. equality & hierarchy
Modern communication…
is not only about technology, but also about
human creativity.
Because something is communicated to someone,
the likely influence depends on how creatively the
content of communications is deployed.
Communication may involve:
Words: medium of business, politics, diplomacy
Music: drum beats, bells, alarms
Material things: usually indicators of status & power
Behavior: feedback on how other people feel, includes
techniques for avoiding confrontation
Which format…?
Sending numbers when words are wanted…
Sending words when recipient only feels
comfortable with numbers…
Sending words & numbers to the visually-
oriented person…
Communicating fast or slow…?
Fast messages
Headlines
Cartoon
Propaganda
Television
TV commercials
Slow messages
Books
Etchings
Art
Print
TV documentary
Communication style parameters
1. Systematic vs Organic
2. Direct vs Diplomatic
3. Formal vs Informal
4. Head vs Heart
5. High Context vs Low Context
6. Colleague vs Friend
Miscommunicating (culture & language sensibilities)…
• German AEG (Allgemeine Elektrische Gesellschaft)
redefined its initials as Advanced Engineering from
Germany
• Retail chain ‘Dixons’ named its launched brand Matsui
• Bahlsen biscuit company changed
‘Kipferl’ to ‘Croissant de lune’ to
simplify pronunciation
• In Italy, ‘Schweppes tonic water’ became ‘Schweppes
tonica’ because ‘il water’ translates to ‘bathroom’
GM car Nova (Chevy II) didn’t sell well in Latin
America, simply because ‘no va’ in Spanish means
‘does not go’.
The Mitsubishi “Pajero” is a rude word in Spanish.
The Fiat “Uno” was not suitable for Finland because in
Finnish it means ‘fool’
Come alive with the Pepsi generation translated into Chinese
as Pepsi brings your ancestors back from the grave
• IBM series 44 computers was named differently
in Japan.
• One Mercedes car in China was named C88.
Hong Kong Disneyland
Main ballroom at Disneyland Hotel at the Hong Kong Disneyland Resort is 888 m2
Angle of front gate shifted by 12 degrees after consulting a feng shui specialist,
saying the change would ensure prosperity for the park.
Print ads show a grandmother, mother and daughter together
700 extra seats were added to dining areas simply because the Chinese enjoy an
average of 10 minutes longer to eat than Americans
• Beijing Olympic Games started on 8/8/2008 at 8:08 pm.
Cultural Goofs: McDonald’s
1994 World Football Cup: Muslims protested against the reprint of the Saudi Arabian
flag on disposable packaging it used for promoting.
2002: cancelled plans to introduce its new McAfrika sandwich in Norwegian
restaurants
2002: agreed to donate $10 million to Hindu (and other groups) in partial settlement
involving mislabeling French fries and hash browns as vegetarian (cooked in oil
tainted with meat residue)
2005: introduced the spicy Prosperity Burger in 9 countries from South Korea to
Indonesia in recognition of the Lunar New Year.
German style of communication…
Print-oriented
Demand facts, facts, and more facts! (figures and
examples)
Value honesty & directness
Verb in German comes at end of sentence, taking a while
to get to the point
Attention given to every word & its meaning, language
more literal than English
German style of communication…
Comparative advertising forbidden
Restrictions on the use of celebrities in ads, unless he/she actually
uses the product
“Pattern advertising” (using same slogan/brand name in every
country) is successful with well-known brands
Selling points of German products: good quality & performance,
competitive price, information (not on the basis of attractive image)
American style of communication…
Prefer directness in communication
Miss non-verbal cues: subtle shifts in voice, changes in
body posture & breathing
Keep social conversations light, rather than engaging in
serious/intellectual/philosophical discussions
American style of communication…
More interested in headlines and in bottom line, rather than in
what is in-between
CEO often takes a personal interest in company’s image and
advertising
Exaggerate in both written & oral communication in what
may be the newest, the most fashionable, the best, the finest…
French style of communication…
Subtlety and indirectness are signs of politeness & good
manners
Familiarize & socialize before engaging into business
U.S. business lunch:
67 minutes
French business lunch: 124 minutes
French style of communication…
Image Strategy:
1. aesthetics, color, design
2. product name recognition
3. simplicity to be visually attractive
and eye-catching
4. reinforced by repetition
Culture and its Effects on Organizations
• An awareness
of
and
an
Cultural
Sensitivity or honest caring
about
Cultural
another
Empathy?
individual’s
culture
Copyright ©2017 Pearson Education, Ltd.
Environmental Variables Affecting
Management Functions
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Business and Cultural determinants “cultural force fields”
Cultural Cluster
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Copyright ©2017 Pearson Education, Ltd.
Developing Cultural Profiles
Managers can gather
considerable information on
cultural variables from current
research, personal observation,
and discussion with people.
Managers can develop cultural
profiles of various countries.
Managers can use these profiles
to anticipate drastic differences
that may be encountered in a
given country.
It is difficult to pull together
descriptive cultural profiles in
other countries unless one has
lived there and been intricately
involved with those people.
Copyright ©2017 Pearson Education, Ltd.
Summary of Key Points
Each society has its own unique culture
Managers must develop cultural sensitivity
Researchers such as Hofstede and Trompenaar have
created studies which help describe cultural profiles;
GLOBE study created a body of data on cultural
dimensions
Managers can use research results and personal
observations to develop cultural profiles of countries
Copyright ©2017 Pearson Education, Ltd.
InternatIonal ManageMent
Dr. Amir Dhia
26 October 2017
The Global Manager’s Environment
* Global Approach
* Management Focus
Cultural Context of Global Management
* Understanding the Role of Culture in International Management
* Cross-Cultural Communication
International Negotiations
* Global Strategies and Tactics
* Cross-Cultural Conflict Resolution and Decision Making
Implementing Strategy for International Operations
* Formulation Strategy
* Global Alliances
* Organization Structure
Global Human Resources Management
* Staffing and Training
* Motivating and Leading
Final Quiz
Individual Assignment
* Developing an International Cadre
The Global Manager’s Environment
* Global Approach
* Management Focus
Copyright ©2014 Pearson Education, Inc. publishing as
Prentice Hall
International Management
The process of developing strategies,
designing and operating systems, and
working with people around the world
to ensure sustained competitive
advantage.
Copyright © 2017 Pearson Education, Ltd.
Globalization
Global competition characterized
by networks of international
linkages that bind countries,
institutions, and people in an
interdependent global economy.
Copyright © 2017 Pearson Education, Ltd.
Global Trends
• Five key global trends:
• Changing balance of growth towards emerging markets
• Need for increased productivity and consumption in
developed countries
• Increasing global interconnectivity
• Increasing gap between supply and demand of natural
resources
• Challenge for governments to develop policies for
economic growth and financial stability
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Challenges to Globalism
Backlash against capitalism and rekindling of
nationalism
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Challenges to Globalism
Backlash against capitalism and rekindling of
nationalism
Increased protectionism of high-demand
resources
Need to develop top managers with international
understanding and experience
Increasing pressure and publicity for companies
to consider the social responsibility of their
actions
Copyright © 2017 Pearson Education, Ltd.
2014–2015 Foreign Direct Investment Confidence
Index Top 25 Targets for FDI
•
The main types of FDI are acquisition of a subsidiary, joint ventures,
licensing, and investing in new facilities or expansion
The United States is in the lead since 2013, followed
by China, Canada, United Kingdom, and Brazil
India has dropped to seventh from second in 2 years
Results show confidence in the economic
recovery of the United States and Europe.
Rapidly developing economies continue
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Globalization of Human Capital
While firms still offshore manufacturing jobs,
some are reshoring jobs to lower shipping costs
Firms are outsourcing white-collar jobs
For global firms, winning the war for talent is a
pressing issue
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Globalization of Information Technology
The speed and accuracy of information transmission are
changing the nature of international manager’s jobs
Cultural barriers are being lowered gradually
Technology gets dispersed around the world by MNEs
Explosive growth of information technology is both a
cause and effect of globalism
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Management In Action:
Global Cybertheft of Corporate Secrets
Cybertheft: hard to detect and combat
In 2014, the U.S. Department of Justice charged Chinese
military personnel of stealing trade secrets
Digital reprisal: China targeted firms which contested its
policies at the World Trade Organization
Protection of intellectual property is the primary risk in
China
China’s goal is to achieve technological superiority by
importing and adapting technologies
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Effects of Globalization on
Corporations
Global companies are becoming less tied to
specific locations
Companies that desire to remain competitive
will have to develop a cadre of experienced
international managers
Small companies are also affected by and in
turn affect globalism
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Regional Trading Blocs
Much of today’s world trade is grouped around
three dominant currencies:
euro, yen, dollar
These trade blocs are continually expanding their
borders to include neighboring countries
Much of today’s world trade takes place within
these three regional free-trade blocs:
Western Europe, Asia, and the Americas
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The European Union “EU”
A unified market over 500 million people in 28
nations
Stability of the euro and the debt crisis in question
2014-2015 Global Competitiveness Index shows that
Europe has 6 of the top 10 countries
Challenges for global managers:
“Fortress Europe”
Multiple cultures in one market
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Asia
China
India
ASEAN
South Asia Association of Regional Cooperation (SAARC)
Japan
Asian Tigers:
Hong Kong
Singapore
South Korea
Taiwan
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The Americas
North American Free Trade Agreement (NAFTA)
Brazil
MERCOSUR
Central America Free Trade Agreement (CAFTA)
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Other Regions in the World
The Russian Federation
Middle East
The African Union—AU
South Africa
Less developed countries—LDCs
Low Gross National Product (GNP)
Low Gross Domestic Product (GDP)
Large, relatively unskilled workforce
High international debt
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The Global
Manager’s
Role
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The Political and Economic Environment
Sustainability—economic, political, social, and
environmental—has become a significant worldwide issue
Ethnicity—a driving force behind political instability
around the world
Religion—religious disputes lie at the heart of regional
instabilities, for example, former Yugoslavia, Middle East…
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Political Risk
Any governmental action or politically motivated event that
could adversely affect the long-term profitability or value
of a firm
Examples:
Argentina announced plans to
nationalize Repsol YPF, the
Spanish oil co., taking 51%
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In Russia, the Kremlin
exploited the financial crisis
to take control of energy
companies
The Political Risk (continued)
Typical Political Risks
Expropriation and
confiscation
Nationalization
Terrorism
Discriminatory treatment
Barriers to repatriation of
funds
Interference in managerial
decision making
Dishonesty by government
officials
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Political Risk Assessment
Helps companies manage
exposure to risk and
minimize financial loss
Two forms:
Consultation with experts
Development of internal
staff capabilities –
increasingly common
Managing Political Risk
Avoidance and Adaptation
Equity sharing
Participating
management
Localization of the
operation
Development assistance
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Dependency and Hedging
Input control
Technology control
Expatriate position
control
Distribution control
Political risk insurance
Local debt financing
Managing Terrorism Risk
Develop a benevolent image (IBM and Exxon)
Maintain a low profile and minimize publicity
Using teams to monitor terrorist activities
Hiring counterterrorism consultants
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Economic Risk
Closely related to political risk
Determined by a country’s ability or
intention to meet its financial obligations
Historically, most industrialized nations
have posed little risk of economic
instability
However the level of economic risk in
Europe is of concern in the Eurozone due
to debt problems in Greece
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