International Management Presentation

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International Management Presentation

  1. 1. Walta Nemariam, Emily Roberson, Katie Quill, and Madison Cawthon
  2. 2.  Culture is how people behave and react as a result of what they see and experience This knowledge forms values, creates attitudes, and influences behavior
  3. 3.  Learned -acquired by learning or experience Shared - not specific to single individuals Trans-generational - cumulative, passed down from one generation to the next
  4. 4.  Symbolic - culture is based on the human capacity to symbolize or use one thing to represent another Patterned - has structure and is integrated; a change in one part will bring changes in another Adaptive - based on human capacity to change or adapt
  5. 5.  -centralized vs. decentralized decision making -safety vs. risk -individual vs. group rewards -informal vs. formal procedures
  6. 6.  -high vs. low organizational loyalty -cooperation vs. competition -short term vs. long term horizons -stability vs. innovation
  7. 7.  Values are the basic convictions people have concerning right and wrong, good and bad, important and unimportant ◦ learned from the culture in which the individual is raised ◦ help direct the person’s behavior
  8. 8. • 5 dimensions that help explain how and whypeople from different cultures behave the waythey do
  9. 9. 1. Power distance- the extent to which lesspowerful members of institutions andorganizations accept that power is distributedunequally2. uncertainty avoidance- extent to whichpeople feel threatened by ambiguous situationsand have created beliefs and institutions thattry to avoid these
  10. 10. 3. Individualism/Collectivismindividualism- the tendency of people to lookafter themselves and their immediate familyonlycollectivism- tendency of people to belong togroups or collectives and to look after eachother in exchange for loyalty
  11. 11. 4. masculinity- a cultural characteristicin which the dominant values in societyare success, money, and materialisticthingsfemininity- a cultural characteristic inwhich the dominant values are caringfor others and the quality of life
  12. 12. 5. Time orientation is the fifth and newerdimension, but not as well known Integrating the dimensions of culture into pairings or clusters helps depict what countries are similar in values
  13. 13.  Dimensions: 1. Universalism vs. Particularism 2. Individualism vs. Communitarianism 3. Neutral culture vs. Emotional culture 4. Specific vs. Diffuse culture 5. Achievement vs. Ascription culture Widely accepted study of international management Conducted over 10-year period, 28 countries These dimensions address the way people deal with one another
  14. 14.  Universalism ◦ the belief that ideas and practices can be applied everywhere without modification ◦ Focus is on rules over relationships ◦ United States, Germany, Sweden, Australia Particularism ◦ The belief that circumstances dictate how ideas and practices should be applied ◦ Legal contracts are modified ◦ Venezuela, Indonesia, China ◦ Be prepared for small talk and meandering
  15. 15. a. My friend has a definite right as a friend to expect me to testify to the lower figure.b. He has some right as a friend to expect me to testify to the lower figurec. He has no right as friend to expect me to testify to the lower figure.
  16. 16.  Individualism ◦ People regard themselves as individuals. ◦ Negotiation takes the form of a representative Communitarianism ◦ People regard themselves as being part of a whole ◦ Decisions are usually referred to committees How should people from these different cultures deal with one another in business settings?
  17. 17.  Neutral culture ◦ One in which emotions are held in check ◦ Japan, UK ◦ Lack of emotion does not mean disinterest or boredom Emotional culture ◦ One in which emotions are expressed openly and naturally ◦ Mexico, the Netherlands, Switzerland ◦ Those in an emotional culture should respond warmly in a business setting
  18. 18.  Specific ◦ Individuals have large public space they readily enter and share, and a small public space they guard closely and share with close friends and associates ◦ Strong separation between work and private life ◦ United States, United Kingdom, Switzerland Diffuse ◦ Public and private space are similar in size and level of privacy ◦ Work and private life are more closely linked ◦ Venezuela, Spain, China ◦ Formality is maintained in individual titles
  19. 19.  Achievement culture ◦ Status based on performance at functions ◦ High status to high achievers ◦ United States, Switzerland, United Kingdom Ascription culture ◦ Status is based on who or what someone is ◦ Status based on age, gender, social connections ◦ Venezuela, Indonesia, China
  20. 20.  Sequential ◦ One activity at a time ◦ Keep appointments strictly ◦ Show strong preference for following plans ◦ United States Synchronous ◦ Multitasking ◦ Appointments are approximate ◦ Mexico ◦ “For French and Mexicans, what was important was that they get to the end, not the particular path or sequence by which that end was reached.” ◦ Past, present, future orientation
  21. 21.  One thing he did was asked managers to choose one of the following statements. 1. What happens to me is my own doing. 2. Sometimes I feel that I do not have enough control over the directions my life is taking. ◦ When dealing with those from cultures who believe in dominating the environment, it is important to play hardball. ◦ When dealing with cultures that believe in letting things run their course, it is important to be polite and to maintain relationships.
  22. 22.  Trompenaar’s research lends itself to cultural patterns. ◦ Anglo cluster: United States, United Kingdom ◦ Asian cluster: Japan, China, Indonesia, Hong Kong, Singapore ◦ Latin American cluster: Argentina, Mexico, Venezuela, Brazil ◦ Latin European cluster: France, Belgium, Spain, Italy ◦ Germanic cluster: Austria, Germany, Switzerland, Czechoslovakia
  23. 23.  Similar to Trompenaars and Hofsted with greater emphasis on managerial styles A different approach to measuring cultural differences Conducted by a team of multicultural researchers
  24. 24.  Researchers use these attributes to predict the most suitable, effective and acceptable organizational and leader practices within that culture Goal: to develop an empirically based theory to describe, understand and predict the impact of cultural variables on leadership and organizational processes and their effectiveness
  25. 25.  For MNCs to be successful companies must carefully address the cultural similarities and differences in their varied markets. ◦ Renault
  26. 26.  Ethnocentric Predisposition ◦ allows the values of the parent company to guide strategic decisions. Polycentric Predisposition ◦ firms make strategic decisions tailored to suit the cultures of the countries where the MNC operates. EX- Disney Regiocentric Predisposition ◦ firm tries to blend its own interests with those of its subsidiaries on a regional basis. Geocentric Predisposition ◦ tries to integrate a global systems approach to decision making
  27. 27.  Some companies are committed to a globalization imperative or one worldwide approach to doing business. ◦ A study showed that 103 medium and large MNCs out of 115 use the same strategies at home as they do abroad. ◦ http://www.youtube.com/watch?v=m0rKn7X7UWk ◦ http://www.youtube.com/watch?v=rB85iQ0Y_bw
  28. 28.  The most effective MNCs are constantly trying to address local needs. ◦ Warner-Lambert  They have manufacturing facilities in Belgium, France, Germany, Italy, Ireland, Spain, and the United Kingdom. Each plant is specializes and produces a small number of products for the entire European market. This allows each one to focus on the unique demands for the various markets.
  29. 29.  There are several reasons for differentiating strategies to meet the needs of different cultures. ◦ 1. Industry standards are different for each country. ◦ 2. Customers want differentiated products ◦ 3. Customers prefer to buy local ◦ 4. The difficulty of managing global organizations ◦ 5. Letting subsidiaries customize their products for their market
  30. 30.  Marketing becomes especially different when dealing cultures. ◦ Cosmetic products  In Spain and Greece tooth paste is marketed as a cosmetic product but is marketed as a cavity-fighter in the Netherlands and the US. Soap is also considered a cosmetic product in Spain.  http://www.youtube.com/watch?v=mCSxbIvpE4Q  http://www.youtube.com/watch?v=nT1uvi7qjrs
  31. 31.  How the marketing message is delivered is essential. ◦ German advertising is factual and rational. They fear being manipulated. ◦ French avoid reasoning and logic. Their advertising is emotional and dramatic. Commercials are viewed as short films. ◦ British value laughter above all else. They like to mock the advertiser and consumer.  However, with a high end or low end products marketing messages are similar world wide. Ex. Coca- Cola, Porsche
  32. 32.  The need to adjust global strategies for regional markets presents three major challenges: ◦ 1. The MNC must stay up to date about local markets and be careful not to assume that all markets are basically the same. ◦ 2.The MNC must know the needs of the subsidiaries so that it can provide best for these units when it comes to addressing local demands ◦ 3. The company must give the subsidiary more autonomy so that it can respond to changes in local demands.
  33. 33.  Cross-Cultural Differences and Similarities- The way MNCs manage their home businesses often should be different from the way they manage their overseas operations. Parochialism- the tendency to view the world through one’s own eyes and perspectives. ◦ Soviet Companies Simplification- exhibiting the same orientation toward different cultural groups.
  34. 34.  There was a lot of hope that businesses would be able to keep their practices the same when internationalization started in the 1970s which proved to be false. However, there are similarities. Studies show that the US has several similarities with Russia. ◦ Managerial Activities- Networking ◦ Organizational Behavioral Modification- providing corrective feedback proved to have positive results in Russia after adopting the US practice.
  35. 35.  From a Human Resource Standpoint ◦ Management has to be careful when letting each national operating company oversee evaluations. Each evaluation will vary greatly from country to country. ◦ Shell Oil had the head office established criteria to evaluate the personal and had the national operating company do the evaluating. Each company had completely different results.
  36. 36.  Other Human Resource Management differences: wages, compensation, pay equity, and maternity leave. ◦ Hourly wage plays a minor role in Mexico. Labor law requires that employees receive full pay 365 days a year. ◦ Austrian and Brazilian employees with one year of service are automatically given 30 days of paid vacation. ◦ Japan: compensation levels are determined by age, length of service, and educational background rather than skill, ability, and performance…that comes into play at age 45 ◦ United Kingdom: Employees are given 40 weeks for maternity leave including 18 weeks of government mandated pay.
  37. 37.  Incentive Plans are also different for different cultures ◦ Pacific Rim: Japan, Hong Kong, Malaysia, the Philippines, Singapore. High salaries should be paid to senior-level managers. ◦ For Belgium and Italy- significantly higher salaries should be paid to local senior-level managers because of the high masculinity index. ◦ Portugal and Greece- both of which have a low individualism index, profit sharing plans would be more effective than individual incentive plan. ◦ Personal Incentive plans would be highly useful for Denmark, Netherlands, Germany because of the high individualism in these cultures. ◦ Great Britain and Ireland and the US managers value their individualism and are motivated by the opportunity for earnings, recognition, advancement, and challenge.
  38. 38.  Hiring also varies from country to country. ◦ In the Untied States people are hired based on what they can do for the firm in the short run. Americans also prefer specialized training. ◦ In Japan, they hire based on who will help the firm in the long run, and prefer cross training. ◦ Americans prefer to reward people as individuals while in Japan they prefer to reward people as a group.
  39. 39.  1979-Deng Xiaoping opened the country to the world US and Europeans find doing business with China a long and grueling process ◦ Technical Competence ◦ Time/Patience Guanxi: means good connection in Chinese Collective society: pride themselves on being members of a group
  40. 40. • Build personal relationships with partners• Use local consultants• Consider business ethics• Stress exclusivity• Keep financial information personal• Research the company• Stress mutual gain• Written contracts are not as binding
  41. 41.  Unsaturated consumer markets, cheap labor and production location Be on time Personal questions should not be asked Titles are important PDA is inappropriate (backslaps) Namaste gesture Many Indians understand that Westerners may not be familiar with their culture and that’s ok
  42. 42.  Social class is very important Friendly, humorous and sarcastic Accustomed to conflict Trustworthiness View on Work ethic Highly centralized and have rigid structures Management differences French business tips
  43. 43.  Portuguese influence Relaxed work ethic Good natured and avoid confrontation Working with Brazil: Personal space Face-to-Face interaction Trust Patience Appearance Loyal and Committed Consistency
  44. 44.  Allah controls time Status is determined by family position and connections Emotions over logic Working with Arabs: Never display feelings of superiority Never take credit for joint efforts Administrative channels Connections are important Patience

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