Cumulative Final Exam

Zaibatsu: Pre-war Japan

- The term zaibatsu 財閥 is applied to certain giant financial, commercial, and industrial combines - Is loosely used for prewar big business in Japan - The four largest zaibatsu in the 1920s Mitsui, Mitsubishi, Sumitomo, and Yasuda - Centralized control in a Zaibatsu family - Well-knit tightly controlled relationships by means of holding companies, interlocking directorship

What is keiretsu?

6 major keiretsu: Mitsubishi, Mitsui, Sumitomo, Fuyo, Dai-Ichi Kangyo, and Sanwa Keiretsu is an organizational structure that is comprised of several aspects - Financial: cross shareholdings, stock cross ownership - Managerial: exchanging of management expertise, advice, training (collective) - Exclusion: keeps foreign competition out of domestic economy - Political: tightly interwoven relationships with government - Social: "old boys network" of presidents and senior executives

Stereotyping

A cultural profile that tends to develop some tentative expectations—some cultural context—as a backdrop to managing in a specific international setting

Cultural region

A cultural region is a geographical area with relatively homogeneous cultural elements. These elements can include religion, language, cuisine or architecture, and many other complex activities.

Joint Venture

A new independent entity is jointly created and owned by two or more parent companies. A joint venture is *Not* a merger of two existing companies.

Expatriate

A person who lives outside their native country

What is 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

Power Distance

A society's acceptance of unequal power distribution. - In high power distance cultures, formal authority and hierarchy are very respected. Thus leadership tends to be autocratic and centralized. In low power distance cultures superiors and subordinates are more likely to view one another as equals, leading to more cooperation.

What is chaebol?

Chaebol 財閥 - A family-controlled business conglomerates in Korea - Family owns holding company which in turn owns affiliated companies - Virtually control most of the big business activities - Diversification - Cross shareholding - Chaebol ownership dominates Korean markets

Kinesic behavior

Communication through body movements (posture, gestures, facial expressions, and eye contact)

Assertiveness

Concerns how much people are expected to be tough, confrontational, and competitive versus modest and tender.

Performance Orientation

Concerns the importance of performance improvement and excellence and refers to whether people are encouraged to strive for continued improvement

Horizontal keiretsu

Conglomerates covering several industries linked by cross-shareholding, intra-group financing and high level management by a central body of directors

GLOBE (Global Leadership and Organizational Behavior Effectiveness)

Dimensions are based on data gathered by 170 researchers over seven years. The data were collected from 18,000 managers in sixty-two countries.

Vertical keiretsu

Groups around one big manufacturer and consist of a multi-layered system of suppliers focused on the core company (e.g. Toyota)

Moral Universalism

Guideline for code of morality - Addressing the need for a moral standard that is accepted by all cultures

Ethical Relativism

Guideline for code of morality - Adopting the moral code of whatever country in which the firm is operating in

Ethnocentric Approach

Guideline for code of morality - Applying the morality used in home country, regardless of the host country's system of ethics

Paralanguage

How something is said rather than the content

Hofstede's Study

In 1980, 116,000 people were surveyed in 50 countries Criticism: only ONE MNC examined- IBM.

GLOBE Research Project Dimensions

Includes: - Assertiveness - Future Orientation - Performance Orientation - Humane Orientation

Trompenaar's Dimensions

Includes: - Obligation (universalistic v particularistic); - Emotional orientation (neutral versus affective); - Privacy (specific v diffuse); source of - Power/status (achievement v. ascription)

Hofstede's Value Dimensions

Includes: - Power Distance - Uncertainty Avoidance - Individualism vs. Collectivism - Masculinity vs. Femininity - Long-Term vs. Short-Term Orientation

Source of power/status - Personal or Society

Individual achievement (personal) or ascribed status/power (society)

Know the concept of subcontracting and why it's bad

Know the concept of subcontracting and why it's bad

Subcultures

Many countries comprise diverse *BLANK* whose constituents conform only in varying degrees to the national character. Example: Canada

Humane Orientation

Measures the extent to which a society encourages and rewards people for being fair, altruistic, generous, caring, and kind.

Ecological Fallacy

Occurs when you make conclusions based on analysis of group data

Exceptional Fallacy

Occurs when you reach a group conclusion based on one part of the group

CSR Dilemma

Profit is an MNC's only goal vs. MNC's should anticipate and solve social needs

Velocity of information

Rate at which technical information about product development is shared, built on, and reconstituted between individuals and firms

Long-Term vs. Short-Term Orientation

The extent to which a culture programs its members to accept delayed gratification of their material, social, and emotional needs. - Managers from these cultures strive toward long-term goals; they value investment in the future and are prepared to sacrifice short-term profits.

Uncertainty Avoidance

The extent to which people feel threatened by ambiguous situations. - High uncertainty avoidance cultures are very uncomfortable with ambiguity and tend to have strict laws and closely followed procedures. In businesses, managers tend to make low-risk decisions, employees are not aggressive, and lifetime employment is common. Low uncertainty avoidance cultures are more comfortable with ambiguity. In these cultures, company activities are less formal and structured, managers take more risks, and employees have more job mobility.

Proxemics

The influence of proximity and space on communication—both personal space and office space or layout - High-contact cultures: prefer to stand close and to experience a "close" sensory involvement - Low-contact cultures: have a "distant" style of body language.

Organization for Economic Cooperation and Development convention on bribery

The organization for Economic Cooperation and Development convention on bribery has been signed by 36 countries. Nonetheless, evidential problems hinder prosecution—unless there is a complaint or whistle blowing.

Attribution

The process in which people look for an explanation in another person's message

Negotiation

The process of discussion by which two or more parties aim for mutually acceptable agreement

Communication

The process of sharing meaning by transmitting messages through media such as words, behavior, or material artifacts

Individualism

The tendency for people to look after themselves and their immediate families only and to neglect the needs of society. - Democracy, individual initiative, and achievement are valued. Collectivism entails tight social frameworks, emotional dependence on the organization, and strong belief in group decisions. Countries scoring higher on individualism tend to have higher GNPs and freer political systems. Social loafing is more common in individual than in collective cultures.

Communication Process

Thoughts -> words and symbols -> interpretation of words and symbols-> understanding of thoughts

Emotional orientation - (neutral v. affective/emotional)

To what extent to people value restraint in their emotions? How much effort is made to control emotions?

Honne

What one says

Tatemae

What one thinks

Cross shareholding

When two or more corporations own shares in one another Gives each corporation: - Financial incentives to help the other perform - Financial disincentives to compete with one another - A degree of control in the decision-making of one another

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. (P&G's sale was set back in Japan)

Guanxi

"friendship with implications of continued exchange of favors"

Polychronic Cultures

(Latin Americans, Arabs): tolerate many things happening simultaneously and may focus on several things at once

Monochronic Cultures

(Switzerland, Germany, United States): time is experienced in a linear way

Trompenaar's Study

in 1993, More rigorous research design compared to Hofstede 15,000 managers from 28 countries, representing 47 national cultures and various organizations. Examines many of the same cultural dimensions as Hofstede

Parochialism

occurs, for example, when a Frenchman expects those from or in another country to automatically fall into patterns of behavior common in France. (narrow-mindedness)

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 (interrupt conversations, East vs West)

Steps to Ethical Decision

1 - Consult the laws of both home and host countries - such as the FCPA 2 - Consult the International Codes of Conduct for MNE's 3 - Consult the company's code of ethics and established norms 4 - Weigh Shareholder's rights 5 - Follow your own conscience and moral code

The Negotiation Process

1 - Preperation 2 - Relationship Building 3 - Exchange of Task-Related Information 4 - Persuasion 5 - Concessions and Agreement

Types of Codes of Conduct

1) Company Specific - Regulate supply chains by using codes of conduct 2) Industry Wide - Agreements among producers to operate in a particular way

Noise

Anything that undermines the communication of the intended meaning is typically referred to as:

Deresky's definition of "societal culture" (because it shows the process by which geography helps to shape culture)

Because these have geographic dimensions, the expression of culture can also be seen as a geographic phenomenon.

Cultural Differences That Impact Negotiating

Cultural *BLANK* that Impacts *BLANK* - Desire for a long-term relationship or just a one-time deal - Preference to win negotiation or preference for a win-win situation - Informal or formal attitude - Direct or indirect communication style - Show emotions or hide emotions - Decisions made by the group or by a leader

Masculinity vs. Femininity

Refers to the degree to which traditionally masculine values (e.g., assertiveness, materialism, and lack of concern for others) prevail, versus The traditionally feminine values of concern for others, relationships, and quality of life. In more feminine cultures one tends to find less work-family conflict, less job stress, more women in high-level jobs, and a reduced need for assertiveness.

Future Orientation

Refers to the level of importance a society attaches to future-orientated behaviors such as planning and investigating in the future.

Obligation - (universalistic v. particularistic)

Rules and systems should apply universally or should be tailored to the circumstances and people involved in each individual case.

Privacy in Relationships

Specific (separate work from home life) or diffuse (home relationships spill over into work and visa versa)

Foreign Corrupt Practices Act (FCPA)

The FCPA was created to help Americans distinguish between harmless practices (e.g., gift giving) and bribery. The FCPA prohibits illegal payments, or other gifts, or political contributions to foreign government officials for the purposes of influencing them in business transactions. Penalties include severe fines and sometimes imprisonment.