1. Identify the recent developments in technology affecting business and propelling globalization. What problems/challenges have arisen regarding use of the Internet for the global business environment and what probable solutions can you suggest? 200 words
2. How could a multinational company’s poor adaptation to the cultural environment of a nation lead to the company’s failure in management? Provide suggestions for ways to prevent the failure. 200 words
3.The operations of multinational managers are made complex given the diverse cultural environments in which they operate. Discuss the three diagnostic models available to help the multinational manager. What impacts would these have on your management operations?200 words
4. How can Regional Trade Agreements (RTAs) help in reducing trade barriers and in improving global economy? What roles can multinationals play to further the objectives of RTAs?200 words
Chapter 2 Chapter © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2 Culture and Multinational Management © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives (1 of 2) • Define culture and understand the basic components of culture. • Identify instances of cultural stereotyping and ethnocentrism. • Understand how various levels of culture influence multinational operations. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives (2 of 2) • Apply the Hofstede, GLOBE, and 7d models to diagnose and understand the impact of cultural differences on management processes. • Appreciate the complex differences among cultures and use these differences to build better organizations. • Recognize the complexity of understanding new cultures and the dangers of stereotyping and cultural paradoxes. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. What is Culture? (1 of 2) • Pervasive and shared beliefs, norms, values, and symbols that guide the everyday life of a group. • Cultural norms: both prescribe and proscribe behaviors • What we can and cannot do. • Cultural values: what is good, what is beautiful, what is holy, and what are legitimate goals for life. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. What is Culture? (2 of 2) • Cultural beliefs: represent our understandings about what is true. • Cultural symbols, stories, and rituals: communicate the norms, values, and beliefs of a society or a group to its members. • Culture is pervasive in society: affects all aspects of life. • Culture is shared: similarity in values, beliefs, norms. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Three Levels of Culture (1 of 2) 1. National culture: the dominant culture within the political boundaries of the nation-state. • But there may be subcultures within the national culture. 2. Business culture: norms, values, and beliefs that pertain to all aspects of doing business in a culture. • Tells people the correct, acceptable ways to conduct business in a society. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Three Levels of Culture (2 of 2) 3. Occupational and organizational culture • Occupational culture: the norms, values, beliefs, and expected ways of behaving for people in the same occupational group, regardless of employer. • Organizational culture: the set of important understandings (often unstated) that members of an organization share. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 2.1: Three Levels of Culture © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cultural Differences and Basic Values • Three diagnostic models to aid the multinational manager: • Hofstede model of national culture • Global Leadership and Organizational Behavior Effectiveness (GLOBE) project • 7d culture model © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Hofstede’s Model of National Culture • Five dimensions of basic cultural values: • Power distance • Uncertainty avoidance • Individualism • Masculinity • Long-term orientation © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Hofstede’s Model Applied to Organizations and Management (1 of 2) • Five management practices considered in the discussion of Hofstede’s model include: • 1. Human resources management • Management selection • Training • Evaluation and promotion • Remuneration © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Hofstede’s Model Applied to Organizations and Management (2 of 2) 2. Leadership styles • how leaders behave 3. Motivational assumptions • beliefs re how people respond to work 4. Decision making and organizational design • how managers make decisions and organize 5. Strategy • effects of culture on selecting strategies © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Power Distance (1 of 2) • Power distance concerns how cultures deal with inequality and focuses on: • Norms that tell superiors (e.g., bosses) how much they can determine the behavior of their subordinates • The belief that superiors and subordinates are fundamentally different kinds of people © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Power Distance (2 of 2) • High power distance countries have norms, values, and beliefs such as: • Inequality is fundamentally good. • Everyone has a place: some are high, some are low. • Most people should be dependent on a leader. • The powerful are entitled to privileges. • The powerful should not hide their power. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 2.2: Managerial Implications: Power Distance © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Uncertainty Avoidance • Uncertainty Avoidance: Norms, values, and beliefs regarding tolerance for ambiguity: • Conflict should be avoided. • Deviant people and ideas should not be tolerated. • Laws are very important and should be followed. • Experts and authorities are usually correct. • Consensus is important. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 2.3: Managerial Implications: Uncertainty Avoidance © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Individualism • Individualism: Focus is on the relationship between the individual and the group. • Countries high on individualism have norms, values, and beliefs such as: • People are responsible for themselves. • Individual achievement is ideal. • People need not be emotionally dependent on organizations or groups. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Collectivism • Collectivism: Collectivist countries have norms, values, and beliefs such as: • One’s identity is based on group membership. • Group decision making is best. • Groups protect individuals in exchange for their loyalty to the group. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 2.4: Managerial Implications: Individualism/Collectivism © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Masculinity • Masculinity: Tendency of a culture to support traditional masculine orientation. • High masculinity countries have beliefs such as: • Gender roles should be clearly distinguished. • Men are assertive and dominant. • Machismo or exaggerated maleness in men is good. • People – especially men - should be decisive. • Work takes priority over other duties, such as family. • Advancement, success, and money are important. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 2.5: Managerial Implications: Masculinity © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Long-Term (Confucian) Orientation (1 of 2) • Long-Term Orientation: Orientation towards time that values patience. • Managers are selected based on the fit of their personal and educational characteristics. • A prospective employee’s particular skills have less importance in the hiring decision. • Training and socialization for a long-term commitment to the organization compensate for any initial weaknesses in work-related skills. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Long-Term (Confucian) Orientation (2 of 2) • Eastern cultures rank highest on long-term orientation. • Value synthesis in organizational decisions rather than search for correct answer. • Designed to manage internal social relationships. • Investment in long-term employment skills. • Focus on long-term individual and company goals. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Short-term Orientation • Short-Term Orientation: focus is on immediately usable skills • Western cultures, which tend to have short-term orientations, value logical analysis in their approach to organizational decisions. • Designed and managed purposefully to respond to immediate pressures from the environment. • Want immediate financial returns. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 2.6: Managerial Implications Long-term Orientation © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted