Management Chapter 4

Changing International Landscape India example

Mitra Biotech, a start-up company with locations in Boston and in Bangalore, India, is applying data analytics to rethink conventional cancer therapies. The company uses technology that re-creates an artificial environment for a patient's tumor sample and tests various drugs on it directly, enabling a physician to come up with an optimal personalized treatment plan in less than a week. Mitra has partnerships with several Indian hospitals, as well as with Cancer Treatment Centers of America.

GLOBE Project Value Dimensions Future orientation.

Similar to Hofstede's time orientation, this dimension refers to the extent to which a society encourages and rewards planning for the future over short-term results and quick gratification.

joint venture

an organization shares costs and risks with another firm in a foreign country to build a facility, develop new products, or set up a sales and distribution network.

Foreign companies often offshore their manufacturing here

china

Three Dimensions of Global Mind-Set

cognitive, psychological, social

Legal-Political Challenges Political instability:

includes events such as riots, revolutions, or government upheavals that can affect the operations of an international company

The large English-speaking population makes it ideal for outsourcing from U.S. companies.

india

Exporting

is a market-entry strategy in which a company maintains production facilities within its home country and ships those products for sale in foreign countries.

Communication Challenges High-context culture:

is one in which people use communication to build personal relationships.

International management

means managing business operations in more than one country

Communication Challenges Low-context culture:

people use communication primarily to exchange facts and information.

Ethnocentric companies

place emphasis on their home countries

Legal-Political Challenges Political risk:

refers to a company's risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments or other groups.

Communication Challenges Implicit communication:

refers to sending and receiving unspoken cues such as tone of voice or body language as well as spoken words.

Globalization

refers to the extent to which trade and investments, information, ideas, and political cooperation flow between countries.

Global outsourcing

sometimes called offshoring, means engaging in the international division of labor to obtain the cheapest sources of labor and supplies, regardless of country.

polycentric companies

which are oriented toward the markets of individual foreign host countries

geocentric companies

which are truly world-oriented and favor no specific country.

Sociocultural Challenges Ethnocentrism

which is the natural tendency among people to regard their own culture as superior to others.

Changing International Landscape China

−Population: 1.412b −Largest or second-largest market for a variety of products and services −Regulations and government policies make doing business in China a challenge A bitter trade war with the United States further complicates operations for firms and managers

Changing International Landscape India

−Second only to China in population §Population: 1.393b −Large English-speaking population makes it a natural for U.S. companies' outsourcing services −Rising power in software design, services, and precision engineering −Industry leader in IT outsourcing Per capita net national income (NNI): 135,000 rupees (2020) = $1,630.42

•European Union

−euro: the single European currency that replaced national currencies in many European countries −BREXIT - withdrawal of UK, 1/31/20

Exporting, Outsourcing, or Partnership? A California winery produces seven varieties of wine at their vineyard and sells them in 20 countries across the globe.

Exporting involves a company selling a product in a foreign country while maintaining the production facilities in their home country. Exporting is a low risk and relatively low cost way for companies to sell their products abroad. The California winery produces the wine in California and exports the final product to 20 countries.

True/False? According to the USMCA, the United States must pay duties on all items that it ships to Mexico.

False The United States — Mexico — Canada agreement continued the process of eliminating duties (tariffs) on all items shipped between the United States, Canada, and Mexico.

True/False? The goal of the EU is to integrate the markets of France, England, Spain, and Russia.

False The goal of the European Union is to integrate the markets of Europe. Russia is not included in the EU.

Legal-Political Challenges Political risk example

For example, Facebook, Google, and other technology firms are under pressure from sweeping new privacy laws in the European Union, such as the General Data Protection Regulation (GDPR), which has the potential to impose penalties as high as 4 percent of global revenue for companies that fail to comply with the new rules. The United Kingdom has also proposed new regulations to make social media companies more responsible for policing user content.

Explain communication challenges managers face in global environment and why important for managers to develop their cultural intelligence

Implicit communication refers to sending and receiving unspoken cues such as tone of voice or body language as well as spoken words. Cultural intelligence: Person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and device appropriate response. High context culture: People are sensitive to circumstances surrounding social exchanges Low context culture: People use communication primarily to exchange facts and information; meaning is derived primarily from words

Describe multinational corporation

Receives more than 25% of total sales revenue from operations outside parent's home country.- Managed as integrated worldwide business systems- Controlled by a single management authority- Regard entire world as one market

Remember This

The potential for communication breakdowns increases when managers are interacting with people from different countries and varied cultural backgrounds. Implicit communication refers to sending and receiving unspoken cues such as tone of voice or body language as well as spoken words. A high-context culture is one in which people use communication to build personal relationships. In a low-context culture, people use communication primarily to exchange facts and information. When China's Lenovo Group acquired IBM's PC business, Western managers were frustrated by their Chinese counterparts' reluctance to speak up, while the Chinese managers were irritated by the Americans' propensity to "just talk and talk." Managers who develop cultural intelligence are more successful in international assignments. Cultural intelligence (CQ) refers to a person's ability to use reasoning and observation to interpret culturally unfamiliar situations and know how to respond appropriately. The three aspects of CQ are cognitive CQ, emotional CQ, and physical CQ

Hofstede's Value Dimensions −Long-term orientation: −Short-term orientation:

A long-term orientation, which is found in China and other Asian countries, includes a greater concern for the future and highly values thrift and perseverance. A short-term orientation, like that found in Russia and West Africa, is more concerned with the past and the present and places a high value on tradition and meeting social obligations.

Remember This

A multinational corporation (MNC) is an organization that receives more than 25 percent of its total sales revenues from operations outside the parent company's home country and has a number of distinctive managerial characteristics. Nestlé SA is a good example of a multinational corporation. Some researchers distinguish among ethnocentric companies, which place emphasis on their home countries; polycentric companies, which are oriented toward the markets of individual host countries; and geocentric companies, which are truly world-oriented. Multinational corporations have the resources necessary to reach and serve the world's poorest people, who cannot afford the typical products and services offered by big companies. The bottom of the pyramid (BOP) concept proposes that corporations can alleviate poverty and other social ills, as well as make significant profits, by selling to the world's poor. Godrej & Boyce created an innovative battery-powered refrigerator called the chotuKool for rural markets in India.

Exporting, Outsourcing, or Partnership? Coca Cola manufactures and sells concentrates and syrups to bottling companies in many countries. The bottling companies then manufacture, package and distribute the Coca Cola branded products to customers and vendors.

A partnership is often the fastest, least risky, and cheapest way to sell products internationally. A joint venture is a type of partnership in which a company shares costs and risks with another company in the host country. Coca Cola relies on these partnerships to distribute their product globally.

GLOBE Project Value Dimensions Performance orientation.

A society with a high performance orientation places great emphasis on performance and rewards people for performance improvements and excellence. A low performance orientation means that people pay less attention to performance and more attention to loyalty, belonging, and background.

Serving the Bottom of the Pyramid

An approach for multinationals to do good Corporations can alleviate problems and make large profits by selling to the world's poor There are more than 4 billion people at the lowest level of the economic pyramid Many companies are adopting BOP strategies •Citibank's ATM-based banking experiment in India, called Suvidha, for instance, which requires a minimum deposit of just $25, enlisted 150,000 customers in one year in the city of Bangalore alone.

Multinational corporation (MNC):

As one of the primary agents of globalization, this business has headquarters in one country and production facilities in one or more other countries; sometimes called a transnational corporation. he Maharaja Mac and Vegetable Burger served at this McDonald's in New Delhi, India, demonstrate how this multinational corporation (MNC) changed its business model by decentralizing its operations. When McDonald's initiated its international units, it copied what it did and sold in the United States. Today, however, the fast-food giant seeks out local managers who understand the culture and laws of each country. Country managers have the freedom to use different furnishings and develop new products to suit local tastes.

Partnerships

Business organizations in which two or more persons share responsibilities, costs, profits, and losses.

Carly is eager to tell the interviewer about the team she led of product managers from the United States, Latin America, and Europe. At first, team members were unsure of how to relate to each other, but she was able to find common ground and relate in a culturally sensitive way with each one. Which dimension of her global mindset would this experience show the interviewer? Cognitive dimension Psychological dimension Social dimension

Carly's story about leading an international team would demonstrate the social dimension of her global mindset, because it would show that she can build trusting relationships with people of other cultures. The psychological dimension relates to how much someone enjoys culturally diverse situations, and the cognitive dimension concerns how much someone knows about other business environments and cultures.

Becoming a fan of "football" (American soccer) to be able to discuss this globally popular sport with people around the world Cognitive or physical?

Cognitive Learning about a sport that is very popular in other countries is an example of the cognitive dimension of cultural intelligence, which concerns knowing and understanding cultural differences. These can include whether a culture or subculture is high context or low context, religious beliefs, patterns of verbal and nonverbal communication, expectations of gender roles, food and music preferences, and much more.

Remember This

Complicated legal and political forces can create huge risks for international managers and organizations. Political risk refers to a company's risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments or other groups. Political instability includes events such as riots, revolutions, or government upheavals that can affect the operations of an international company. Managers must understand and follow the differing laws and regulations in the various countries where they do business. Today's international firms face broader and more complex political risks than ever before. Marriott had to make a public apology and suspend online reservation services for a week in China after it mistakenly listed Tibet as a country instead of as a part of China in a message to the hotel's rewards members

Serving the Bottom of the Pyramid example

Consider India's Godrej & Boyce. "As a company that made refrigerators for more than 50 years, we asked ourselves why it was that refrigerator penetration [in India] was just 18 percent," said Gopalan Sunderraman, vice president of corporate development. Managers realized that many people not only couldn't afford a refrigerator, but also didn't need a large refrigerator that took up too much space in a small house and used a lot of electricity. So, Godrej & Boyce introduced chotuKool ("The Little Cool"), a mini-fridge designed to cool five or six bottles of water and store a few pounds of food. The chotuKool was portable, ran on batteries, and sold for about 3,250 rupees (US$69), about 35 percent less than the cheapest refrigerator on the market.

Communication Challenges High-context culture example

Consider the culture gap that emerged when China's Lenovo Group acquired IBM's PC business. In meetings and conference calls, Western executives were frustrated by their Chinese counterparts' reluctance to speak up, while the Chinese managers were irritated by the Americans' propensity to "just talk and talk," as one vice president of human resources put it.

Communication Challenges Low-context culture example

Consider the culture gap that emerged when China's Lenovo Group acquired IBM's PC business. In meetings and conference calls, Western executives were frustrated by their Chinese counterparts' reluctance to speak up, while the Chinese managers were irritated by the Americans' propensity to "just talk and talk," as one vice president of human resources put it.

Carly interviews for the job—and she gets it! Her new boss says that what impressed him most was her global mindset, and he wants her to be a role model for other employees in the company. How can Carly best demonstrate how one acquires a global mindset? Check all that apply. Opting for assignments that will not involve travel to other countries Taking the position that the way most Americans do things is best and people in other countries should adapt to it Cultivating relationships with immediate coworkers from other cultures and people within and outside the organization in other countries Expressing a consistent curiosity about world affairs and the international business environment

Cultivating relationships with immediate coworkers from other cultures and people within and outside the organization in other countries Expressing a consistent curiosity about world affairs and the international business environment

•U.S.-Mexico-Canada Agreement (USMCA) Revision of the North American Free Trade Agreement (NAFTA) that merged the United States, Canada, and Mexico into a single market in 1994

Early 2020 saw another significant change in trading agreements, when the United States, Canada, and Mexico approved a revision of the North American Free Trade Agreement (NAFTA). U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña signed the new U.S.-Mexico-Canada Agreement (USMCA) in late 2018 in Buenos Aires while all were attending the Group of 20 (G-20) Summit there. The United States and Mexico have since ratified USMCA, which replaces NAFTA, and Canada began the ratification process when that country's parliament returned to session on January 27, 2020.

Communication Challenges Implicit communication example:

For example, Ian Bickley worked for many years with Coach in Japan, where he learned that it was extremely important to suppress impatience and devote the necessary time to build personal relationships. "You have to spend a lot of time actively listening and you have to learn how to read between the lines," Bickley advises. "It's almost more important to listen to what is not being said than what is said." Similarly, Olivier Jolivet found that the way a question is phrased makes all the difference in Japan. "The Japanese will tell you the word 'no' doesn't exist," Jolivet says. But 'yes' can mean 'Yes, I understand the message.' It doesn't mean they agree with you."

International Trade Alliances

General Agreement on Tariffs and Trade (GATT) World Trade Organization (WTO)

Describe a global mind-set and why important for companies operating internationally

Global mind set: can be defined as the ability of managers to appreciate and influence individuals, groups, organizations, and systems that represent different social, cultural, political, institutional, intellectual, and psychological characteristics.

Define globalization and how it is creating a borderless world for today's managers

Globalization: refers to the extent to which trade and investments, information, ideas, and political cooperation flow between countries.

At Davis Corp., the employees engage in team building activities on a regular basis to encourage friendships and harmony among the coworkers. High context or low context?

In high context cultures, people use communication to build personal social relationships. Meaning is derived from context--setting, status, and nonverbal behavior--more than from words. Relationships and trust are more important than business and the welfare and harmony of the group are valued rather than individual achievement.

has the second largest population in the world and is a major source of technological and scientific brainpower.

India has the second largest population in the world behind China. Its strong educational system provides exceptional training in science and technological areas.

Hofstede's Value Dimensions Individualism and collectivism

Individualism and collectivism. Individualism is an orientation that favors a loosely knit social framework in which individuals are expected to take care of themselves. Collectivism means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests. Countries with individualist values include the United States, Canada, and Great Britain. Countries with collectivist values include China, Mexico, and Brazil.

As a manager for a company that is looking to expand to India, what should your company focus on? Check all that apply. Information technology Research and development opportunities Employing translators to help break down the language barrier Manufacturing processes

Information technology Research and development opportunities India is quickly becoming a leader in information technology, software design, services, and precision engineering. India is home to scientifically trained, highly skilled workers which has attracted companies' research and development centers. The large population of English speaking people is encouraging for companies to outsource service-related parts of their business there.

An MNC is ___ vulnerable to an economic downturn in a given national or regional economy, such as the United States or the European Union. multinational corporations more or less?

Less Although they will be hurt by a worldwide recession, MNCs are relatively sheltered from national and regional economic downturns because they operate in many parts of the world at once

A multinational company's website design for a German country features a lot of text and information on the products in addition to pictures of a person engaged in a solitary activity. High context or low context?

Low context cultures generally use communication to exchange facts and information rather than to build personal relationships. Meaning is derived from words and business transactions are more important than building relationships and trust. Low context cultures also focus on individual welfare and achievement rather than the welfare of the group.

Hofstede's Value Dimensions Masculinity/femininity

Masculinity/femininity. Masculinity is associated with a preference for achievement, heroism, assertiveness, work centrality (with resultant high stress), and material success. Femininity reflects the values of relationships, cooperation, group decision making, and quality of life. Societies with strong masculine values include Japan, Germany, Italy, and Mexico. Countries with feminine values include Sweden, Costa Rica, Norway, and France. Both men and women subscribe to the dominant value in masculine and feminine cultures.

Remember This

Managers working internationally should guard against ethnocentrism, which is the natural tendency among people to regard their own culture as superior to others. Hofstede's sociocultural value dimensions measure power distance, uncertainty avoidance, individualism-collectivism, and masculinity-femininity. Power distance is the degree to which people accept inequality in power among institutions, organizations, and people. Uncertainty avoidance is characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity. Individualism refers to a preference for a loosely knit social framework in which individuals are expected to take care of themselves. Collectivism refers to a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests. Masculinity is a cultural preference for achievement, heroism, assertiveness, work centrality, and material success. Femininity is a cultural preference for relationships, cooperation, group decision making, and quality of life. Hofstede later identified another dimension: long-term orientation, which reflects a greater concern for the future and a high value on thrift and perseverance, versus short-term orientation, which reflects a concern with the past and present and a high value on meeting current obligations. Additional value dimensions recently identified by the GLOBE Project are assertiveness, future orientation, gender differentiation, performance orientation, and humane orientation.

Remember This

Many companies are going straight to China or India as a first step into international business. China is strong in manufacturing, whereas India is a major provider of services. China's economic power is growing rapidly, and it will likely soon become the dominant country in global big businesses. Foreign firms and managers face many challenges in China, including new rules and regulations, increased taxes and other costs, and tighter government control. A U.S.-China trade battle has further complicated matters for American firms and managers. Chinese phonemaker Xiaomi has become the top smartphone brand in India and the fourth largest smartphone maker in the world. India is a leader in the pharmaceuticals industry and is the world's largest exporter of generic drugs. Amazon is spending $5 billion to compete with India's Flipkart (now owned by Walmart) and local start-ups to capture the growing numbers of Indian customers shopping online.

Discuss how international landscape is changing, and the growing power of China and India

Many companies today are going straight to China or India as a first step into international business. At the same time, companies in these countries are growing rapidly as providers of both products and services to the United States, Canada, Europe, and other developed nations.

Global mind-set example

Olivier Jolivet, CEO of COMO Hotels and Resorts, calls this "situational intelligence," the ability to adapt yourself and your attitude when interacting with people from different cultures. During his career managing in Asia, Jolivet has learned, for example, that getting consensus around a decision is extremely important in Japan but requires a great deal of time and discussion. "You need to start from the bottom to convince and slowly move to the top." If you fail to follow this process, Jolivet says, "the project may never move forward." In Southeast Asia, however, the opposite pattern usually prevails: Getting commitment from the top first is more important and the people at lower levels will follow through on the project.

Exporting, Outsourcing, or Partnership? Nike products are sold in many countries throughout the world. Nike manufactures their shoes in China and Vietnam.

Outsourcing or offshoring occurs when a company moves a division of labor to another country. Many companies choose to outsource manufacturing to China where labor is less expensive. The internet and lower telecommunications costs have allowed companies to outsource higher levels of work, such as software development, as well. Nike outsources their manufacturing to other countries.

Define outsource and market entry strategies of exporting and partnerships. Indicate how dissimilarities in the sociocultural and legal-political environments throughout the world can affect business operations

Outsourcing: Engaging in international division of labor so work activities can be done in countries with cheapest sources of labor and supplies.- Partnership: Often fastest, cheapest, and least risky way to get in global business- Joint venture: Company shares costs and risks with another firm, typically in host country, to develop new products, build a manufacturing facility, or set up sales and distribution network- Exporting: Strategy where the corporation maintains its production facilities within the home nation and transfers its products for sale in foreign countries

Suppose you are a manager for a multinational company that produces a variety of beauty products. Heartland Company was founded in 1942 and began making shampoo and soap products. Heartland, headquartered in St. Louis, Missouri, now sells hair care, soap, and makeup products in 22 countries across the globe. Heartland holds the majority market share in the U.S. and is largely regarded as a trend-leader in hair and beauty products. As the Global Brand Vice President, you have been tasked with taking the brand to Brazil, considered to be a large cosmetics market in the next few years. The Brazilian cosmetics and hair care market is largely dominated by Belleza who currently holds a 60% market share. Belleza is marketed toward young, fashion-forward women. The second largest company, Botánico, holds just a 20% share of the market. Your research suggests that while Botánico has efficient manufacturing and distribution, young consumers see them as being a brand for their mothers and grandmothers. Given the information above, what is the best market entry strategy for this company?

Partnership

Speaking more softly to match the way other people are speaking Cognitive or physical?

Physical Speaking more softly is an example of the physical dimension of cultural intelligence. The physical dimension has to do with one's ability to adapt components of nonverbal communication to operate more effectively in a cross-cultural situation. These components include facial expressions, gestures, tone of voice, and other physical behaviors.

GLOBE Project Value Dimensions Assertiveness.

Placing a high value on assertiveness means that a society encourages toughness, assertiveness, and competitiveness. Low assertiveness means that people value tenderness and concern for others over being competitive.

Hofstede's Value Dimensions Power distance:

Power distance. High power distance means that people accept inequality in power among institutions, organizations, and people. Low power distance means that people expect equality in power. Countries that value high power distance include Malaysia, India, and the Philippines. Countries that value low power distance include Denmark, Israel, and New Zealand

Explain bottom of the pyramid concept

Proposes that corporations can alleviate poverty and other social ills as well as make significant profits by selling to the world's poorest people

Remember This

Regional trading alliances and international trade agreements are reshaping global business. The World Trade Organization (WTO) is a permanent membership organization that monitors trade and has the authority to arbitrate disputes among 164 member countries. Two important, yet sometimes controversial, regional alliances are the European Union (EU) and the U.S.-Mexico-Canada Agreement (USMCA). The euro is a single European currency that has replaced the currencies of 19 EU member nations. The United Kingdom voted by referendum in June 2016 to withdraw from the European Union entirely; its withdrawal, referred to as Brexit, took place on January 31, 2020. The USMCA is a significant update of the North American Free Trade Agreement (NAFTA). The United States and the United Mexican States have ratified USMCA, but Canada still needs to approve the deal before it will take effect and replace NAFTA.

Suppose you own a company located in India that makes digital games similar to "Grand Theft Auto" and "Minecraft." You are thinking about opening a new research and development department in the United States, but you've heard that many towns in the U.S. are the scene of riots related to racism and inequality. U.S. riots may cause you to think about ______ in the U.S. which is likely to ___ease the probability that you will want to do business in the U.S.

Riots are a sign of political instability which is likely to decrease the probability of working in a different country.

Imagine you are a well-known management scholar who is looking at how different companies fit into countries that vary on Hofstede's dimensions of national cultures. Your friend, an organizational sociologist, found four choice examples for your work: one company that will fit in with high power distance, another that will fit with high uncertainty avoidance, a third that will fit with high collectivism, and a fourth that will fit with high femininity. Unfortunately, one of your graduate students dropped the file folders containing this research, and now you are faced with a stack of random examples, including some that meet your needs and some that don't. Today, you are trying to figure out which companies would fit best into the following two cultures. Which of the following companies has high power distance? At Sollient, managers listen carefully to employees when they raise concerns or questions, and employees are not afraid to speak up. Employees expect to be treated equally and fairly. At Jupiter Jumpers, teams make decisions together, and everyone in the company is called an associate. The employees and managers often get together to socialize outside of work, and they can be heard laughing and talking over each other while they have drinks together. At Sabine Industries, the CEO is seen as the undisputed leader of the office. People are afraid to correct him when he is wrong, and he is always addressed as Mr. CEO, while the people who report to him are addressed by their first names.

Sabine Industries is a company with high power distance. In high power-distance cultures, there is a distinct difference between the people in charge and the people who follow them. One indicator of a high power-distance culture is the use of titles, particularly if they are used for one level of employees and not another. Another indicator is whether or not people expect to be asked for their opinions: In high power-distance cultures, decisions are made by those in charge, and lower-level employees are not consulted.

Legal-Political Challenges Political instability example

The CEO of Cathay Pacific Airways Ltd. was forced to resign after some of the company's employees took part in pro-democracy marches in Hong Kong and China threatened to cut off access to its airspace. Even the National Basketball Association (NBA) got entangled in the instability in Hong Kong after Houston Rockets general manager Daryl Morey tweeted an image with the words "Fight for Freedom. Stand with Hong Kong." Morey quickly deleted the tweet—but not quickly enough to prevent several league partners in China from suspending their ties with the Rockets and the NBA. The standoff with China cost the NBA hundreds of millions of dollars.

Remember This

The basic management functions are the same in either a domestic or an international subsidiary, but managers will experience greater difficulties and risks when performing these functions internationally. International management means managing business operations in more than one country. Today's companies and managers operate in a borderless world that provides both risks and opportunities. Globalization refers to the extent to which trade and investments, information, ideas, and political cooperation flow between countries. China is close to overtaking the United States in having the most companies on Fortune's Global 500 list. To succeed on a global level requires managers at all levels to have a global mind-set, which is the ability to appreciate and influence individuals, groups, organizations, and systems that possess different social, cultural, political, institutional, intellectual, and psychological characteristics. Olivier Jolivet, CEO of COMO Hotels and Resorts, says global managers need "situational intelligence," the ability to adapt themselves and their attitudes depending on the culture they are dealing with.

Cultural intelligence (CQ):

The cognitive component encompasses a person's observational and learning skills and the ability to pick up on clues to understanding. The emotional aspect concerns one's self-confidence and self-motivation. A manager must believe in his or her ability to understand and assimilate into a different culture. Difficulties and setbacks are triggers to work harder, not a cause to give up. The physical component of cultural intelligence refers to a person's ability to shift his or her speech patterns, expressions, and body language to match those of people from a different culture.

If Talia is hired as a manager at an MNC, what can she can expect? Check all that apply. The corporate structure will integrate the activities of foreign affiliates. She and her colleagues will cultivate a global perspective and view the entire world as one market. The headquarters function will be dispersed, and various parts of the company will operate semi-independently. Strategy will include finding raw materials and locating production wherever it is most profitable to do so.

The corporate structure will integrate the activities of foreign affiliates. She and her colleagues will cultivate a global perspective and view the entire world as one market. Strategy will include finding raw materials and locating production wherever it is most profitable to do so. MNCs integrate and coordinate the activities of their affiliates in many countries in a centralized headquarters function. Top managers at MNCs adopt a global perspective, viewing the world as one entity as they make strategy, acquire resources and produce goods, and market and sell their services and products. Managers move resources across national boundaries, and they source inputs and locate manufacturing where it is most profitable.

GLOBE Project Value Dimensions Humane orientation.

The final dimension refers to the degree to which a society encourages and rewards people for being fair, altruistic, generous, and caring. A country with a high humane orientation places great value on helping others and being kind. A country low on this orientation expects people to take care of themselves; self-enhancement and gratification have high importance in these societies

Which of the following companies has high femininity? At Big Fat Losers, Inc., weight counselors compete to see who can get the weight off their clients the fastest and keep it off the longest. If counselors have to intimidate clients a little to spur them on to a healthier lifestyle, well, that's the way it goes. Yes, sometimes the clients leave their counseling sessions in tears, but you can't argue with success. Last year, one counselor was responsible for clients losing more than 5,000 pounds of excess weight. The fishermen in the small salmon fishing cooperative of Kodiak Island, off the coast of Alaska, routinely help each other by sharing information on where fish are biting, providing each other with materials for boat repairs, and sharing the profits from their catches. In addition, the fishermen on Kodiak Island donated almost 13,000 pounds of salmon to a nearby village with a 25% unemployment rate. You had better be completely dedicated to your job if you want to work for Rajbit Research. Scientists are routinely expected to work 16-hour days and don't even think about asking the boss about time off for a child's soccer game. But if you're willing to put in the hours, Rajbit is an exciting company to work for. It has patented 20 new drugs in the last 2 years.

The fishing cooperative on Kodiak Island is an example of a feminine organization. In feminine organizations, cooperation is expected and relationships (including family relationships) are valued. Feminine cultures value quality of life, and their members work in order to live, rather than live in order to work. Masculine organizations place a high value on achievement, and they expect people to be assertive, tough, and focused on material success.

GLOBE Project Value Dimensions Gender differentiation.

This dimension refers to the extent to which a society maximizes gender role differences. In countries with low gender differentiation, such as Denmark, women typically have a higher status and play a larger role in decision making. Countries with high gender differentiation accord men higher social, political, and economic status.

Global mind-set

To succeed on a global level requires managers at all levels to have a global mind-set, which is the ability to appreciate and influence individuals, groups, organizations, and systems that possess different social, cultural, political, institutional, intellectual, and psychological characteristics.

joint venture example

Tony the Tiger, who has been advertising Kellogg's Frosted Flakes since 1951, joined managers in announcing a joint venture between U.S.-based Kellogg Company and Singapore-based Wilmar International Limited for the manufacture, sale, and distribution of breakfast cereals and snacks in China. Kellogg brings deep expertise in cereal and snacks and a portfolio of globally recognized brands. Wilmar contributes infrastructure, an extensive sales and distribution network in China, and knowledge of the local market. The joint venture company has its headquarters in Shanghai.

True/False? The WTO was proposed during the Uruguay Round of the GATT.

True The WTO (World Trade Organization) was proposed during the Uruguay Round of the General Agreements on Tariffs and Trade. It is a permanent alliance of 164 countries that monitors international trade and arbitrates disputes between countries. The purpose of the WTO is to liberalize trade restrictions across the world.

Remember This

Two major alternatives for engaging in the international arena are to seek cheaper resources via outsourcing and to develop markets outside the home country. Global outsourcing, sometimes called offshoring, means engaging in the international division of labor to obtain the cheapest sources of labor and supplies, regardless of country. Exporting is a market-entry strategy in which a company maintains production facilities within its home country and ships those products for sale in foreign countries. With a joint venture, an organization shares costs and risks with another firm in a foreign country to build a facility, develop new products, or set up a sales and distribution network. Starbucks has used joint ventures to expand in China and India.

Hofstede's Value Dimensions Uncertainty avoidance:

Uncertainty avoidance. High uncertainty avoidance means that members of a society feel uncomfortable with uncertainty and ambiguity and, therefore, support beliefs and structures that promise certainty and conformity. Low uncertainty avoidance means that people have great tolerance for the unstructured, the unclear, and the unpredictable. Countries characterized by high uncertainty avoidance include Greece, Portugal, and Uruguay. Countries with low uncertainty avoidance values include Sweden, Singapore, and Jamaica.

Globalization example

Walmart managers are struggling with this reality. Even though Walmart is the largest company in the world and today has more stores outside the United States than it does inside its home country, it is still viewed as an American company with an international presence rather than as a global firm. The largest part of Walmart's sales and profits still come from the domestic business. Judith McKenna (photo), CEO of Walmart International, and her team are working to transform Walmart into a truly global company, but Walmart has made mistakes adapting its business to other cultures. For example, after nine years trying to make the Walmart low-price, American-style retail experience work in Germany, the company sold its stores to local rival Metro and left the country. Germany has a law prohibiting merchants from selling products below cost, eliminating one of Walmart's key competitive strategies. The Walmart shopping experience, with smiling employees enthusiastically greeting shoppers at the door and offering help every 10 feet, irritated German customers. Some customers were also offended by the grocery bagging—Germans don't like strangers handling their food. As a Canadian radio station reported, "even the most successful retailer in the world can trip across a border."

Changing International Landscape China example

Xiaomi, founded in Beijing in 2010 with only a few engineers and technologists, quickly became the top smartphone brand in India and the fourth largest smartphone maker in the world. Founder Lei Jun began studying the smartphone business in the early 2000s. He carried a dozen or so phones around in his backpack and studied every detail of their design and operation. Lei was convinced that there was an opportunity to produce stylish, innovative phones at lower cost. Xiaomi's first phone went on sale in October 2011 for the equivalent of $330. "China has understood that providing value for money is very important in emerging markets," said Narayana Murthy, founder of India's second-largest technology company, Infosys. "Look at Xiaomi..... Why would I waste ten times the price to buy anything else?"