MGMT 6102 - Exam 3

LD6 - DOCSA

-DOCSA (Diagnosing Organizational Culture for Strategic Application) In examining and addressing the differences between organizational cultures, Hofstede provided the early database of a set of proprietary cultural-analysis techniques and programs known as the DOCSA This approach identifies the dimensions of organizational culture Table 6-1 (pg 183) It was found that when cultural comparisons were made between different subsidiaries of an MNC, different cultures often existed in each one

BK7 - How organizations in complex environments develop

-Harvard professors Lawrence and Lorsch famously found that organizations in complex, dynamic environments developed a high degree of differentiation to cope with challenges

BK7 - Organizational Integration

-Managers must also consider how different parts of the organization work together (integration and coordination) -typically, the more differentiated the organization, the more difficult the integration

BK7 - technology in organizational agility

-a critical factor affecting an organization's structure and responsiveness is its technology Technology can be viewed as the systematic application of scientific knowledge to a new product, process, or service -transforming inputs into outputs (resources into products) small batch technology, job shops, continuous process technology

BK7 - Centralized vs. Decentralized organizations

-delegating responsibility and authority decentralizes decision making Centralized organization is an organization in which high-level executives make most decisions and pass them to lower levels for implementation Decentralized organizations are organizations in which lower-level managers make important decisions -ideally decision making occurs at the level of the people who are most directly affected and have the most intimate knowledge about the work - this is particularly important when the business environment is fast-changing -sometimes orgs change their degree of centralization Tougher times often cause senior management to take charge, whereas in times of rapid growth, they push decisions down the chain of command

LD8 - Example of benefits of building plants in foreign countries

-ex of benefits of building plants in foreign countries: Ford Motor - has re-entered the market in Thailand - built a strong sales force to garner market share Ford's plan is based on offering the right combination of price and financing to a carefully identified market segmentation Manufacturing is also a key element for Ford in Thailand - the new plant looks to increase production to meet consumer demand for the Ford Ranger Building plants in foreign countries has benefits such as tax incentives and the increase in demand in the new country -General Electric (GE) strategically managed to shed unprofitable business in able to expand infrastructure, health care and environment technologies business

BK7 - Core Capabilities

-knowledge, expertise, skill - that allows the company to compete on the basis of its primary strengths and expertise, not just on what it produces --a good or service that the market needs and that the firm is better at providing than other firms - its core capability Managers must: identify existing core capabilities, acquire or build core capabilities, invest in them, extend them to find new applications and opportunities

LD8 - Strategy Implementation

-once formulated, the strategic plan next must be implemented' Strategy implementation is the process of providing goods and services in accord with a plan of action -Quite often this plan will have an overall philosophy or series of guidelines that direct the process Ex. Japanese electronics company entering US market

LD8 - Internal Resource Analysis

-some firms perform environmental scanning first, while others do both ES and Internal Resource analysis simultaneously Internal Resource analysis - helps the firm evaluate its current managerial, technical, material, and financial resources and capabilities to better assess its strengths and weaknesses MNC then uses this assessment to determine its ability to take advantage of international market opportunities Primary reason for this step is to match external opportunities (environmental scan) with internal capabilities (gained through IRA) How the company can utilize their resources and capabilities to best take advantage of environmental opportunities Internal analysis identifies the key factors for success that will dictate how well a firm is likely to do Key question for managers of MNCs - Do we have people and resources that can help us sustain KSFs or can we acquire them? Key success factor (KSF) is a factor necessary for a firm to effectively compete in a market niche -ex. KSF for an international airline is price, if co discounts price, they will gain market share -automobile industry KSF is quality - second is styling - Japanese firms have outperformed US firms as of late

LD10 - Economic Activity Sectors

-there are 3 sectors of economic activity The primary sector - consists of agriculture, forestry, and mineral exploration and extraction The industrial sector - consisting of manufacturing operations The service sector - includes transportation, finance, insurance, and related industries Levels of technological sophistication include: science and non-science based industry - science based industries require the continuous introduction of new products or processes

LD8 - Strategy Implementation - The role of functional area in implementation (3rd area)

-to implement strategies, MNCs must tap the primary functional areas of marketing, production, and finance Marketing - the implementation of strategy from a marketing perspective must be determined on a country-by-country basis What works in one locale may not work in another Determined heavily by market analysis Ex. German auto firms in Japan - investing a lot of money in facilities - sold almost three times as many cars in Japan as their US competitors do Japan also provides an excellent example of how the marketing process works Once a firm agrees on the goods it wants to sell in the international marketplace, the specific marketing strategy is implemented -The Four Ps The implementation of marketing strategy in the international arena is built around the 4 Ps of marketing (Product, Price, Promotion, and Place) As noted in example of Japanese - firms often develop and sell a product in local or peripheral markets before expanding to major overseas targets Price is largely a function of market demand The last two Ps are dictated by local conditions and often left in the hands of those running the subsidiary or affiliate Production -if a company is going to export goods to a foreign market, the production process traditionally has been handled through domestic operations until recent years In recent years MNCs have found that whether they are exporting or producing the goods locally in the host country, consideration of worldwide production is important Ex. Goods may be produced in foreign countries for export to other nations Sometimes a plant will specialize a product and ship to all MNCs Sometimes a plant will produce goods for a specific locale Other facilities will produce one or more components that are shipped to a larger network of assembly plants - (this has been adopted by auto and pharma firms) If the product is labor-intensive, as in the case of microcomputers, then the trend is to farm the product out of low-cost sites such as Mexico or Brazil (labor is relatively low and infrastructure is sufficient to support production) Multi-domestic firms - if the firm operated production plants in different countries but makes no attempt to integrate its overall operations A recent trend has been away from this approach and more toward global coordination of operations Finance - normally developed at the home office and carried out by overseas affiliates - but now the rise of global financing has ended this practice MNCs have learned that transferring funds from one place in the world to another, or borrowing money in international money markets, is often less expensive than relying on local sources Revaluation of currency is the biggest headache when implementing strategies in the financial dimension Some MNCs have bought currency options that (for a price) guarantee convertibility at a specified rate MNCs can also receive product in exchange for Currency (Russia paid Pepsi in Vodka) - called countertrade strategies - more popular in less developed countries

LD8 - Strategy Implementation - Location (1st area)

-two primary choices when choosing location The country The specific locale within the chosen country (first choice is often easier than the second) The Country Traditionally MNCs invest in highly industrialized countries, research reveals that annual investments have been increasing substantially -ex. Japan - trend in other countries purchasing small firms in Japan Foreign investors also pouring into Mexico - (Mexico is a gateway to US and Canadian markets and very cost-effective country to manufacture goods and declining value of the peso) -MNCs often invest in industrialized countries because they offer the biggest market for goods and services, may have legal restrictions to imports - therefore encouraging a local presence -US establishing is EU because of strict regulations for outsiders Another factor about choosing country is the amount of government control and restrictions on foreign investment (think Eastern Europe moving toward a free economy) China and India have required that control of the operation be in the hands of local partners - MNCs that are reluctant to accept such conditions will not establish operations there MNCs analyze specific benefits to going to a certain country (low tax rates, rent-free land and buildings, low interest / no interest loans, subsidized energy and transportation rates, and well developed infrastructure Local Markets -once MNC has selected country, they must choose specific locale Factors that influence this choice: access to markets, proximity to competitors, availability of transportation and electric power, and desirability of the location for employees coming in from the outside -German and Japanese firms place more importance on accessibility and desirability and less on financial considerations Nature of workforce is important when choosing locale - presence of strength of organized labor (Japanese firms tend to avoid heavily unionized areas) "greenfield areas" - rural area locations that don't have issues that come with urban locations Research has found that MNCs with a presence in developing countries have significantly higher market values than MNCs that operate only in countries that have advances economies Frontier Markets -sometimes referred to as pre-emerging, frontier markets are a unique subset of emerging economies These markets are less correlated to the ups and downs of global economy These markers offer potentially high rewards with high risk Most commonly cited frontier markets are in Africa and Asia Business initiatives in frontier markets require careful strategic considerations - joint-venture approach (pair with a local company that specializes in cultural knowledge of the marketplace Ex. Mara group in Africa - provides marketing, logistical, and bureaucratic assistance - Mara group works with IBM

LD8 - Technological learning

-usually most international management activities take place within the context of medium-large MNCs, but, increasingly, small and medium companies, often in the form of new ventures, are getting involved in international management This has been made possible by advances in telecommunication and internet technologies and by greater efficiencies and lower costs in shipping, allowing firms that were previously limited to access new markets

BK9 - Cultivating a Diverse Workforce (steps, effective practices) (cont.)

4.4 Train Employees to Understand and Work with Diversity -diversity training programs attempt to identify and reduce hidden biases and develop the skills needed to work with a diversified workforce Most US orgs sponsor some sort of diversity training, typically with two components: awareness building and skill building 4.5 Retain Talented Employees -replacing qualified and experienced workers is difficult and costly -retaining good workers is essential - several policies and strategies can help managers increase retention of all employees, especially those who are "different" from the norm

BK7 - Horizontal vs Vertical Organizational structure READ THESE SECTIONS

A firm's vertical structure - authority, span of control, delegation, and centralization - shapes reporting relationships, responsibility, and accountability Vertical structures have clearly defined roles with specific responsibilities for each person, reducing the level of employee autonomy. -As work becomes even more complex, the organization must subdivide - that is, departmentalize Horizontal structures have less structure, often providing employees with equal opportunities. However, this may result in a lack of guidance or lead to internal conflict.

LD10 - Termination of alliances

A number of business and legal issues that come with the termination of an alliance between two firms including: -Conditions of termination -The disposition of assets and liabilities Dispute resolution -The distributorship arrangements -The protection of proprietary information and property -Rights over sales territories and obligations to customers -business issues include: -Basic decision to exit -People-related issues -Relations with the host government

BK7 - Matrix Organization

An organization composed of dual reporting relationships in which some managers report to two superiors —a functional manager and a divisional manager STRENGTHS: -Cross-functional problem solving leads to better-informed and more creative decisions -Decision making is decentralized to a level where information is processed properly and relevant knowledge is applied -Extensive communication networks help process large amounts of information -With decisions delegated to appropriate levels, higher management levels are not overloaded with operational decisions -Resource utilization is efficient because key resources are shared across several important programs or products at the same time -Employees learn the collaborative skills needed to function in an environment characterized by frequent meetings and more informal interactions -More career options become available, on both sides of the organization

BK9 - Cultivating a Diverse Workforce (steps, effective practices)

An organization's plans for becoming multicultural and making the most of its diverse workforce should include these components: 1. Securing top management's leadership and commitment 2. Assessing the organization's progress toward goals 3. Attracting employees 4. Training employees in diversity 5. Retaining diverse employees 4.1 Start by Securing Top Managers' Commitment -incorporate attitudes about diversity values into the corporate mission statement and into strategic plans and objectives -many companies rely on minority advisory groups or task forces to monitor policy 4.2 Conduct an Organizational Assessment -management can periodically assess the orgs workforce, culture, policies, and practices in areas such as recruitment, promotion, benefits, and compensation -they can determine whether they are attracting diverse candidates from the labor pool and whether customer needs are well served by the current workforce 4.3 Attract a Diverse Group of Qualified Employees -companies can attract a diverse, qualified workforce via effective -recruiting practices -Accommodating employees' work and family needs -offering alternative work arrangements

BK7 - Divisional Organization (Departmentalization)

As organizations grow and become increasingly diversified, their functional departments have difficulty managing a wide variety of products, customers, and geographic regions (in this case, organizations may restructure by creating a divisional organization Divisional organizations departmentalize groups units around products, customers, or geographic regions Each division houses every function - (each division has its own operations, marketing, and finance departments Separate divisions may act almost as separate businesses or profit centers and work autonomously to accomplish goals of entire enterprise Organizations can form divisions around products, customers, and geography see exhibit 7.7 (the divisional organization) see differences between functional and divisional org as well as advantages and disadvantages

BK9 - Hofstede's model (what managers should be aware of in each type)

Cross-cultural research identifies differences and similarities among various countries - Working with IBM, Geert Hofstede famously found these cultural differences power distance - the extent to which society (and organizational members) accept the fact that power is distributed unequally individualism/collectivism - the extent to which people act on their own or as part of a group Uncertainty avoidance - the extent to which people feel threatened or uncomfortable by uncertain and ambiguous situations masculinity/femininity - the extent to which a society values quantity of life (accomplishment, money, fame) over quality of life (compassion, beauty, relationships)

LD10 - David Schmidt's framework (elements and understand)

David Schmidt has offered a three-dimensional framework that combines political risks, general investments, and special investments Figure 10-1 pg 362 three-dimensional framework that combines political risks, general investments, and special investments

BK7 - Delegation

Delegation is the assignment of new or additional responsibilities to a subordinate Delegation often requires a subordinate to report back to his/her boss This is the most fundamental process of management at all levels because it entails getting work done through others Can occur between any two individuals within an org, with any task Delegation also conserves one of the manager's most valuable assets - their time (so they are able to devote more energy to strategic planning and other higher-level activities A big advantage of delegation is that it help people develop new skills, plus an opportunity to demonstrate potential for additional responsibility and perhaps promotion Delegation also promotes a sense of being an important member of an org, so people feel a stronger commitment, perform better and innovate more When delegating work, it helps to distinguish among the concepts of authority, responsibility, and accountability

BK7 - Approaches to departmentalization Departmentalization

Departmentalization is the action of subdividing an organization into smaller subunits The 3 basic approaches to departmentalization are functional, divisional, and matrixB

BK7 - Departmentalization

Departmentalization is the action of subdividing an organization into smaller subunits The 3 basic approaches to departmentalization are functional, divisional, and matrix

BK7 - Differentiation and the relationship with integration

Differentiation is an aspect of the organization's internal environment created by job specialization and division of labor -Means the organization is composed of different units that work on different kinds of tasks, using different skills and work methods -Differentiation is high when an organization has many subunits and many specialists who think differently -Harvard professors Lawrence and Lorsch famously found that organizations in complex, dynamic environments developed a high degree of differentiation to cope with challenges -Companies in simple, stable environments had low levels of differentiation, and companies in intermediate environment had intermediate differentiation Integration is the degree to which differentiated work units work together and coordinate their efforts Means these differentiated units work together so that work is coordinated into an overall product

Steps in the Strategic Planning Process

Environmental Scanning Internal Resource Analysis Goal Setting for Strategy Formulation

BK9 - Expatriates, host-country nationals, third-country nationals (define, compare, roles)

Expatriates are parent-company nationals who are sent to work at a foreign subsidiary -ex. LinkedIn sending American executive to establish a new office in Germany Host-country nationals are individuals from the country where an overseas subsidiary is located ex. expatriate will likely hire several experienced German managers - employees to assist with the start up Third-country nationals are individuals from a country other than the home country or the host country of an overseas subsidiary ex. Expatriate will hire an Austrian at the LinkedIn Germany offie as they are in the region and can assist with the start-up

LD6 - hierarchies (who stresses them)

Family, Eiffel tower

LD8 - CSA-FSA Matrix (part of the 2nd area)

Figure 8-2 - The CSA-FSA Matrix (PAGE 303) Managers use strategies that build upon the interactions of CSAs and FSAs Figure 8-2 provides a graphical depiction of this framework The strength or weaknesses of FSAs and CSAs is a relative notion that depends on the relevant market and the CSAs and FSAs of potential competitors Quadrant 1,2,3 would be expected to pursue different strategies Quadrant 1 firms tend to emphasize cost leadership; they are likely to be resource-based and/or mature internationally oriented firms producing commodity type products (in this case FSAs are less important compared to CSAs of location and energy costs, which are the main sources of a firm's competitive advantage Quadrant 2 -represent less intrinsic CFAs or FSAs Represents domestically based small and medium-sized firms with little global exposure Can benefit from low-cost and differentiation Quadrant 4 - generally differentiated firms with strong FSAs in marketing and customization - usually have strong brands FSAs dominate, so in the world markets the home-country CSAs are not essential in the long run Quadrant 3 - can generally choose either the cost or differentiation strategies, or perhaps combine them because of the strengths of their CFAs and FSAs Can benefit from low-cost and differentiation

LD8 - 3 areas of strategy implementation

First the MNC must decide where to locate operations Second, the MNC must carry out entry and ownership strategies Finally Management must implement functional strategies in areas such as marketing, production and finance

BK9 - Assimilation

Google definition: the process whereby individuals or groups of differing ethnic heritage are absorbed into the dominant culture of a society. the traditional American image of diversity emphasized assimilation - The US was a "melting pot" of the world, a country where ethnic and racial differences blended into an American puree -in real life many ethnic and racial groups retained their identity but did not express them at work -deemphasizing their ethnic and cultural distinctions helped employees keep their jobs and get ahead

LD10 - Integrative, Protective, and Defensive Techniques

Integrative techniques are designed to help an overseas operation become a part of the hot country's infrastructure The objective of this technique is to be perceived as "less foreign" and this unlikely to be a target of government action -some of the most integrative techniques include: Developing good relations with the host government and other local political groups Producing as much of the product locally as possible with the use of in-country suppliers and subcontractors, thus making it a "domestic" product Creating joint ventures and hiring local people to manage and run the operation Doing as much local research and development as possible Developing effective labor-management relations -MNCs should be cognizant of how integrated they become in foreign markets (should maintain close ties with both subsidiary and host country -companies that utilize little technology, such as steel manufacturing, exhibit the strongest integrative technique while still employing a defensive strategy Protective and defensive techniques are techniques that discourage the host government from interfering in operations (mainly by avoiding complex ties to the host country's economy In contrast to integrative techniques, these techniques encourage non-integration of the enterprise in the local environment Doing as little local manufacturing as possible and conducting all research and development outside the country Limiting the responsibility of local personnel and hiring only those who are vital to the operation Raising capital from local banks and the host government as well as outside sources Diversifying production of the product among a number of countries -organizations with an emphasis on innovative technology, such as Microsoft prefer these techniques to safeguard against things such as counterfeiting

LD8 - Barriers to firms that internationalize (International Entrepreneurship)

International Entrepreneurship is a combination of innovative, proactive, and risk-seeking behavior that crosses national boundaries and is intended to create value for organizations Barriers to these firms international expansion include: domestic orientation, internal domestic political ties, domestic decision making inertia Firms that internationalize earlier face fewer barriers to learning international environment

LD8 - Strategy Implementation - Entry and Exit Strategies (2nd area)

International management scholars have built a framework that builds upon the integration-responsiveness framework to help managers understand the interaction between the relative attractiveness of different country locations for a given activity and the firm-level attributes or strengths that can be leveraged in that location First set of factors is referred to as country-specific advantages - CSAs Can be based on natural resource endowments (minerals, energy, forests), the labor force, or less tangible factors that include education and skills, institutional protections of intellectual property, entrepreneurial dynamism, or other factors unique to a given market Second set of factors is referred to as firm-specific advantages - FSAs -are unique capabilities, proprietary to the organization, that may be based on product or process technology, marketing or distribution skills, or managerial know-how CSA-FSA Matrix

BK7 - Functional Organizations

Jobs and departments are specialized and grouped according to business functions and the skills they require: production, marketing, human resources, R&D, finance, accounting, and so forth departmentalize around specialized activities such as production, marketing, and human resources (see exhibit 7.6)

LD8 - How to Compete in a Market Niche (Key Success Factor)

Key success factor (KSF) is a factor necessary for a firm to effectively compete in a market niche -ex. KSF for an international airline is price, if co discounts price, they will gain market share -automobile industry KSF is quality - second is styling - Japanese firms have outperformed US firms as of late

LD6 - Figure 6.2

Look at this in book Trompenaars (4 types of organizational culture chart)

BK9 - Trends in US labor force (causes and examples)

Lower birthrates in the US and other developed countries are resulting in a smaller labor force An even more substantial slowdown in labor force growth is projected between now and 2028, as the baby boomer generation retires industries such as nursing and manufacturing are already facing tremendous loss of expertise as a result of the rapidly aging workforce Employers will need to find out where to get labor supply from in other countries as the US labor pool shrinks - employers are likely to outsource some work to factories and firms in developing nations where birthrates are high and labor supply is plentiful

BK9 - Cohesiveness and performance

Lower cohesiveness - diversity can decrease cohesiveness, defined as how tightly knit the group is and the degree to which group members act and think in similar ways Cohesiveness is lower because of differences in language, culture, and/or experience When miscommunication and stress reduce cohesiveness, performance may decline May explain study showing greater turnover among employees who felt they were greatly outnumbered by coworkers from other racial or ethnic groups

LD10 - Macro analysis of political risk (define, examples, trends)

Macro political risk analysis - analysis that reviews major political decisions likely to affect all enterprises in the country Ex. China's decision regarding restrictions on foreign exchange transaction -trends in recent years show macro risk analysis has become of increasing concern to MNCs because of the growing number of countries that are finding their economies in trouble (Latin America or Russia- Russia is tightening flow of foreign currency for IMF -India provides plenty of example for political risk - laws and bureaucratic red tape - not enough judges - 19.5 per million citizens and vacancy on high court level, MNCs are hardly able to rely on Indian judicial system -Timken Company of Canton, Ohio - making alloy steel found many fake Timken products in the Indian market, realized how long it would take to sue, so forged packaging so it was impossible to forge Vietnam - earned bad name among foreign investors because of all the pitfalls they had to face - foreign investors were required to establish joint ventures with local partners -Vietnam ranked 69th out of 190 in World Bank's 2019 "Doing Business Rankings" -an example of a macro consideration of political risk is an analysis of what would happen to a company's investment if opposition government leaders were to take control -Isis in the middle east, Saddam Hussein in Iraq - US MNCs who were invested here lost their investment -Central/Eastern Europe, Russia/Ukraine, Venezuela - all risky places for MNCs to invest for different reasons -Indonesia - very bribery prone - family of President Suhatro

BK7 - Matrix Organization (Departmentalization)

Matrix organizations are organizations composed of dual reporting relationships in which some managers report to two superiors - a functional manager and a divisional manager A hybrid in which functional and divisional forms overlap see exhibit 7.8 (matrix organizational structure) as well as advantages and disadvantages

LD10 - Micro analysis of political risk (define, examples, trends)

Micro political risk analysis - analysis directed toward government policies and actions that influence selected sectors of the economy or specific foreign businesses in the country Ex. The US's government tariffs on steel and aluminum Often takes such forms as industry regulation, taxes on specific business activity, and restrictive local laws Steel industry - foreign steel producers dumping steel into the US market for an extremely low price affecting US steel manufacturers - Trump imposed 25% import tariff on these foreign companies WTO and EU regulations on American MNCs (1916 Anti-dumping Act violates global trade regulations) EU examines all mergers and acquisitions - chose to block Siemens (German) and Alstom (French) from merging - these firms should have done a better job at micro political risk analysis posed by governments in EU blocking merger

LD8 - Stimulating profit and growth (key group) - Under economic imperative

Middle managers are the key to stimulating profit growth within a company, so expanding those efforts on an international level is a necessary tool to learn for today's new managers

BK9 - Types of multicultural organizations (define, examples)

Monolithic organizations have a low degree of structural integration - employing few women, minorities, or other groups that differ from the majority - and thus has a homogeneous employee population If a monolithic org does hire someone outside of the norm, it is usually a low-status job Discrimination prevails, informal integration is almost nonexistent, and minority groups do not identify strongly with the company Pluralistic organizations have a more diverse employee population and work to involve employees from different gender, racial, or cultural backgrounds -they have much more integration than do monolithic organizations, but minority group members still tend to be clustered at certain levels or in particular functions -Fails to address cultural integration all the way Multicultural organizations value cultural diversity and seek to utilize and encourage it These orgs value and draw on experience Absence of prejudice -Creates a synergistic environment in which all members can contribute -draws on experience and knowledge employees bring to the org and help it achieve agreed-upon strategies and goals

LD8 - The Four P's

Product, Price, Promotion, and Place -The implementation of marketing strategy in the international arena is built around the 4 Ps of marketing (Product, Price, Promotion, and Place) -As noted in example of Japanese - firms often develop and sell a product in local or peripheral markets before expanding to major overseas targets -Price is largely a function of market demand -The last two Ps are dictated by local conditions and often left in the hands of those running the subsidiary or affiliate

LD8 - First-Mover Strategy (1 of 2 unique strategies for emerging markets)

Research suggests that entry order into developing markets is important, given the transitional nature of these markets First mover - includes capturing learning effects important for increasing market share, achieving scale economies that accrue from opportunities for capturing greater share, and developing alliances with more attractive local partners Small window in emerging economies to be first-mover (first-mover strategies allow entrants to preempt competition, establish beachhead positions, and influence evolving competitive environment in a manner conducive to their long-term interests and market position Especially true for first movers in China, not so clear in Eastern Europe, Russia Privatization presents a powerful case for FM (state-owned enterprises - Telecom, energy firms Telemex

BK7 - Responsibility and accountability

Responsibility is the assignment of a task that an employee is supposed to carry out -When delegating work responsibilities, the manager can also delegate enough authority to the subordinate to get the job done -People often have more responsibility than authority Accountability is the expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance -Managers remain accountable not only for their own actions, but also for the actions of the subordinate -Managers should not use delegation to escape from their own responsibilities

BK7 - Delegation (cont.) relationship with responsibility and accountability

Responsibility is the assignment of a task that an employee is supposed to carry out When delegating work responsibilities, the manager can also delegate enough authority to the subordinate to get the job done -People often have more responsibility than authority Accountability is the expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance -Managers remain accountable not only for their own actions, but also for the actions of the subordinate -Managers should not use delegation to escape from their own responsibilities

LD10 - 2018 Transparency International Corruption Perceptions Index (what it tells us, where countries fall)

Table 10-1 (2018 Transparency International Corruption Perceptions Index) pg 359 Provides the results of the perceived level of public-sector corruption in which 180 countries/territories were ranked US ranked 22nd - Denmark 1st - India 78th - Somalia - 180th

LD6 - Dimensions of Organizational Culture

Table 6-1

BK7 - Technology in organizational agility (flexible manufacturing)

Technology can be viewed as the systematic application of scientific knowledge to a new product, process, or service -transforming inputs into outputs (resources into products)

LD10 - Relative Bargaining Power

The MNC works to maintain a bargaining power position stronger than that of host country (a good example arises when the MNC has proprietary technology that will be unavailable to the host country if the firm is expropriated or forced to abide by govt decisions The firm must continuously develop new technology to have bargaining power (as older tech becomes outdated and local firms develop the same tech) Look at Figure 10-2 Gaining bargaining power depends on factors such as host country's perception of the MNCs size, experience, and legitimacy

LD8 - Total Quality Management (TQM)

Total Quality Management (TQM) can be summarized as follows: Quality is operationalized by meeting or exceeding customer expectations. Customers include not only the buyer or external user of the product or service but also the support personnel both inside and outside the organization who are associated with the good or service The quality strategy is formulated at the top management level and is diffused throughout the organization. From top executives to hourly employees, everyone operated under a TQM strategy of delivering quality products or services to internal and external customers. Middle managers will better understand and implement these strategies if they are a part of the process TQM techniques range from traditional inspection and statistical quality control to cutting-edge human resource management techniques, such as self-managing teams and empowerment -TQM cover the full gamut from strategy formulation to implementation -customers are both internal and external -many MNCs make quality a major part of their overall strategy because they have learned that this is the way to increase market share and profitability -ex. Sony and Nintendo - going back and forth with PS2 and GameCube, PS4 and Wii etc. -ex. American auto industry catching up to Japanese automakers on safety (JD Power awards) -ex. Apple products improving quality in response to quality-related issues -MNCs are finding that they must continually revise their strategies and make renewed commitment to the quality imperative because they are being bested by emerging market forces -Motorola failing to switch to digital cell technology

LD8 - location choice for investment, disincentives

Traditionally MNCs invest in highly industrialized countries, research reveals that annual investments have been increasing substantially -ex. Japan - trend in other countries purchasing small firms in Japan Foreign investors also pouring into Mexico - (Mexico is a gateway to US and Canadian markets and very cost-effective country to manufacture goods and declining value of the peso) -MNCs often invest in industrialized countries because they offer the biggest market for goods and services, may have legal restrictions to imports - therefore encouraging a local presence -US establishing is EU because of strict regulations for outsiders Another factor about choosing country is the amount of government control and restrictions on foreign investment (think Eastern Europe moving toward a free economy) China and India have required that control of the operation be in the hands of local partners - MNCs that are reluctant to accept such conditions will not establish operations there MNCs analyze specific benefits to going to a certain country (low tax rates, rent-free land and buildings, low interest / no interest loans, subsidized energy and transportation rates, and well developed infrastructure -emerging economies have assumed an increasingly important role in the global economy and are predicted to compose more than half of global economic output by midcentury Partly because of this growth, MNNCs are directing increasing attention to those markets Foreign direct investment (FDI) increased from 23 billion to 671 billion in 2018 Asia is largest recipient of FDI in 2018, reaching nearly 476 billion making it one of the largest recipients of FDI worldwide DISINCENTIVES These emerging markets do pose risks due to their political and economic volatility and their relatively underdeveloped institutional systems (these risks show up in the form of corruption, failure to enforce contracts, red tape and bureaucratic costs, and general uncertainty in the legal environment

LD10 - Vertical and Horizontal Investments

Vertical Investment - include the production of raw materials or intermediate goods that are to be processed into final products -These investments run the risk of being taken over by the government because they are export oriented, and governments like a business that helps them generate foreign capital Horizontal Investment - involve the investment of an MNC in foreign operations to produce the same goods or services as those produced at home These investments are made with an eye toward satisfying the host country's market demands - as a result they are not likely to be takeover targets

BK9 - Glass ceiling

a metaphor for an invisible barrier that makes it difficult for women and minorities to rise above a certain level in the organization only 33 women are chief executives of Fortune 500 companies

BK7 - Specialization

a process in which different individuals and units perform different tasks -different people or groups perform specific parts of the larger task -administrative assistants and accountants specialize in, and perform, different jobs specialization and division of labor are necessary because of the many tasks that must be carried out in an organization

BK7 - hierarchy - network organizations

a system or organization in which people or groups are ranked one above the other according to status or authority. not all firms are traditional hierarchies that include all business functions (network organization is an example of this) network organization is a collection of independent, most single-function firms that collaborate to produce a good or service - a type of network organization is a modular network

BK7 - Just-in-time (JIT)

a system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed -JIT is a companywide philosophy oriented toward eliminating waste and improving materials throughout all operations - THIS ELIMINATES EXCESS INVENTORY AND REDUCES COSTS -JIT offers efficiency only when the costs of storing items are greater than the costs of frequent delivery

LD8 - Economic Imperative - (Approach to Implementing Strategy)

a worldwide strategy based on cost leadership, differentiation, and segmentation Middle managers are the key to stimulating profit growth within a company, so expanding those efforts on an international level is a necessary tool to learn for today's new managers Many of these companies typically sell products for which a large portion of the value is added during upstream activity (Research and development, manufacturing, distribution) -ex. Think automobiles companies, chemical companies - product is basically homogeneous and requires no alteration to fit need of specific country This Strategy is also based on Generic goods Computer market in Europe - consumers used to buy based on brand, now they are more computer literate and realize quality is the same at lower price -the economic imperative dominates the strategic plans of computer manufacturers Global sourcing - Li & Fung (control more of supply chain process) going upstream to make production process faster - clothing (store will order, but doesn't know color)

LD6 - Token Groups (Type of group multiculturalism)

all members but one have the same background Ex. A group of Japanese retailers and a British attorney who are looking into the benefits and shortcomings of setting up operations in Bermuda

BK7 - Quality management (total quality management, six sigma, lean sigma, ISO 9001)

an integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that result in high- quality goods and services The continuous improvement of quality through all employees Edward Deming was one of the founders of the quality management movement (Deming's 14 Points of Quality) six sigma quality - at six sigma, a product or process is defect free 99.99966 percent of the time lean six sigma - combines six sigma quality improvement with initiatives that eliminate waste in time processes and materials ( a way to be more efficient) ISO 9001 - a series of voluntary quality standards developed by a committee working under the international organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers ISO 9001 - 8 principles:

BK7 - Lean Manufacturing (another organizing approach)

an operation that strives to achieve the highest possible productivity and total quality, cost-effectively, by eliminating unnecessary steps in the production process and continually striving for improvement -rejects are unacceptable, and staff, overhead, and inventory are considered wasteful -emphasis is on speed, quality, and flexibility more than on cost -allows company to develop with half or less of human effort, space, time, and overall cost

LD8 - Born Global Firms

are firms that engage in significant international activities shortly after being established More than half of firms in Norway and France Decision maker's global orientation and market conditions are important factors Born-global firms leverage a distinctive mix of orientation and strategies that allow them to succeed in diverse international markets Tend to distribute goods to distant markets in multiple regions, and revenues from international activity surpass 25% Ex. Of Born-Global firm is Amazon - has been able to distribute its products and services on international scale from the offset -internet has removed entry barriers that have historically restricted quick market entry

LD10 - indigenization laws

are laws that require nationals to hold a majority interest in the operation

LD10 - Proactive political strategies

are lobbying, campaign financing, advocacy, and other political interventions designed to shape and influence the political decisions prior to their impact on the firm Designed to develop ongoing relationships with government policy makers These strategies may include leveraging bilateral, regional, and international trade and investment agreements, drawing on bi and unilateral financial support Can help buffer host-government actions that may constrain

LD8 - Base of the Pyramid Strategy

are strategies to identify, target, adapt, and respond to needs among the lowest income consumer segments 7 billion or more potential customers MNCs only focusing on elite and middle-class markets and not lower-class segment Companies must consider smaller-scale strategies and build relationships with local governments, small entrepreneurs, and non-profits rather than depend on established partners This strategy ^ helps foster trust to overcome lack of informal institutions in local area Good for incubating new ideas, leapfrog technology, disruptive - renewable energy and telecom Companies forget at BOP can also travel to higher-income markets with adding costs and features Teaming up with NGOs can add intangible assets - knowledge, reputation, and brand and tangible assets like human capital, production capabilities, and market access Ex. Nestle - NGOs in Africa Ex. Danone - drinkable yogurt for dollar a day budget families - Indonesia BOP strategy is challenging to implement - companies must offer affordable goods that are highly available in a community that is willing to accept the product - company must bring awareness Illiteracy issues, poverty, poor infrastructure, corruption - deter investments into these firms Smart Communications - cell phones in the Philippines "pay as you go"

LD6 - organizational climate

atmosphere of the enterprises - how employees interact with each other and how they feel they are treated by corporation

organizational integration

besides structuring their organization around differentiation - different jobs and tasks, and the way they fit on an organization chart - managers also need to consider integration and coordination - how different part of the organization work together -Managers must also consider how different parts of the organization work together -typically, the more differentiated the organization, the more difficult the integration

LD8 - internet business

can be lost in a digital maze more competition

LD10 - Religiously Motivated Terrorism

carried out by individuals holding on to very strong core beliefs, regardless of how well defined their objectives are. Tends to be more chaotic and scattered because the individuals involved are extremely passionate about the cause -Al-Qaeda, ISIS, Boko Haram

LD6 - organizational culture (norms/dimensions/characteristics)

characteristics of an orgs culture -observed behavior regularities - common language, terminology and rituals norms - reflected such as work to be done and degree of corporation between management and employees dominant values - advocates and expects members to share - high product quality, low absenteeism philosophy - how employees should be treated rules - do's and dont's of behavior - productivity, customer relations, integral corp organizational climate - atmosphere of the enterprises - how employees interact with each other and how they feel they are treated by corporation

LD6 - Guided Missile Culture (type of organizational culture)

characterized by a strong emphasis on equality in the workplace and orientation to the task This culture is oriented to work, which typically is undertaken by teams or project groups Personnel in this culture can do whatever it takes to get the job done Culture got its name from NASA All team members are equal because of their relative contributions to the project Egalitarian and task-driven culture fits well in the US and UK with high-tech firms Change comes quickly in this culture, unlike the other two cultures Team members become enthusiastic in the struggle to achieve the overall team goal Petty problems and issues are set aside for the sake of accomplishing the goal

LD6 - Family Culture (type of organizational culture) group with Eiffel tower culture

characterized by a strong emphasis on hierarchy and orientation to the person (age and position are important) The result is a family-type environment that is power oriented and headed by a leader who is regarded as a caring parent and one who knows what is best for the personnel Trompenaars found this popular in countries such as: Turkey, Pakistan, Venezuela, China, Hong Kong, and Singapore Personnel not only respect the individuals who are in charge but look to them for both guidance and approval Management assumes a paternal relationship and looks after personnel Hard for outsiders to become members Ex. Dutch delegation surprised when Brazilian owner of company appointed a junior accountant to an important role because he was the Brazilian owners nephew

LD6 - Incubator Culture (type of organizational culture) group with guided missile

characterized by strong emphasis on equality and personal orientation This culture is based heavily on the existential idea that organizations per se are secondary to the fulfillment of the individuals within them Based on the premise that the role of an organization is to serve as incubators for the self-expression and self-fulfillment of their members; as a result, this culture often has little formal structure Participants in this culture are there to often criticize, develop, find resources for, or help complete the development of an innovative product or service Often found among start up cultures in Silicon Valley These incubator-type orgs are typically entrepreneurial and often founded band make up by a creative team who left Eiffel Tower-type employers (want to be a part of an org where creative talents will not be stifled) Personnel is often overworked and underfunded - but they love to work After developed enough, incubator-culture orgs are often replaced with one of the other cultures

LD10 - Macro impacts of terrorism (pg 361)

companies are wary to set up shop in high risk terrorism countries - especially because terrorist groups target business -MNCs must thoroughly evaluate the political environment, install modern security systems, compile a crisis handbook, and prepare employees for situations that may arise

BK9 - Corporate gifts

corporate gifts or payments are acceptable if the value does not influence the outcome of the negotiation

BK7 - Functional Organization (Departmentalization)

departmentalize around specialized activities such as production, marketing, and human resources Jobs and departments are specialized and grouped according to business functions and the skills they require: production, marketing, human resources, R&D, finance, accounting, and so forth see exhibit 7.6 (functional org chart) see advantages and disadvantages

BK9 - Diversity training (goals, components)

diversity training programs attempt to identify and reduce hidden biases and develop the skills needed to work with a diversified workforce Most US orgs sponsor some sort of diversity training, typically with two components: awareness building and skill building Awareness building is designed to increase recognition of the meaning and importance of valuing diversity Its aim is not to teach specific skills but to sensitize employees to the assumptions they make about others and the way those assumptions affect their behaviors, decisions, and judgment -ex. Nielsen "unconscious bias" training Participants learn stereotypes and cultural differences plus organizational barriers that inhibit the full contribution of all employees Skill building aims to develop the behaviors needed to work best with one another and with customers in a diverse environment Most of the skills taught are interpersonal, such as active listening, coaching, and giving feedback Org assessment ideally identifies which skills should be taught

LD10 - Classic terrorism

entails a specific, well-defined objective pursued by well-trained, professional, underground members

LD6 - Group development stage

entry stage - focus should be on building trust and developing team cohesion work stage - attention may be directed more towards describing and analyzing the problem or task that has been assigned action stage - focus shifts to decision making and implementing and often requires consensus building among the members

LD10 - Operational Risks

government policies and procedures that directly constrain management and performance of local operations Ex. - price controls, financing restrictions, export commitments, taxes, and local sourcing requirements

LD10 - Ownership-control risks

government policies or actions that inhibit ownership or control of local operations Ex. - foreign-ownership limitations, pressure for local participation, confiscation, expropriation, and abrogation of proprietary rights Russian owned gas giant - Gazprom cancels project under black sea by Italian company Saipem

LD10 - Transfer Risks

government policies that limit the transfer of capital, payments, production, people, and technology in and out of the country Ex. - tariffs on exports and imports as well as restrictions on exports, dividend remittance, and capital repatriation

LD6 - Trompenaars

had 2 continua - one distinguishes between equity and hierarchy -the other examines orientation to the person and task identifies and describes the 4 different types of organizational cultures These groupings can be useful in examining the bases of how individuals relate to each other, think, learn, change, are motivated, and resolve conflict

LD8 - Strategic Management

he process of determining an organization's basic mission and long-term objectives, then implementing a plan of action for attaining these goals -top management is usually responsible for setting the strategy while middle management has been viewed as primarily responsible for strategic implementation process BUT Now, companies are realizing how imperative all levels of management are to the entire process -ex. Volvo found out the most informed, enthusiastic, and effective managers were those who were involved in the entire process

BK9 - Mentors

higher-level managers who coach, advise, and help people meet top managers and learn the norms and values of the organization Having good mentors is perhaps more important for women and minorities

LD8 - Exportation (where is it handled by?

if a company is going to export goods to a foreign market, the production process traditionally has been handled through domestic operations until recent years In recent years MNCs have found that whether they are exporting or producing the goods locally in the host country, consideration of worldwide production is important Ex. Goods may be produced in foreign countries for export to other nations Sometimes a plant will specialize a product and ship to all MNCs Sometimes a plant will produce goods for a specific locale Other facilities will produce one or more components that are shipped to a larger network of assembly plants - (this has been adopted by auto and pharma firms) If the product is labor-intensive, as in the case of microcomputers, then the trend is to farm the product out of low-cost sites such as Mexico or Brazil (labor is relatively low and infrastructure is sufficient to support production)

LD8 - multi-domestic firm

if the firm operated production plants in different countries but makes no attempt to integrate its overall operations A recent trend has been away from this approach and more toward global coordination of operations

BK9 - Diversity

includes religious affiliation, age, disability status, military experience, sexual orientation, economic class, educational level, and lifestyle, as well as gender, race, ethnicity, and nationality

BK7 - Mechanistic organization

is a form of organization that seeks to maximize internal efficiency -Burns and Stalker wrote about structure of organizations describing it as (mechanic organization) a formal structure intended to promote internal efficiency) see exhibit 7.2 - Comparison of Mechanistic and Organic Organizations

BK7 - Unity-of-Command principle

is a structure in which each worker reports to one boss, who in turn reports to one boss Reporting to two superiors can be create confusion

LD10 - Conglomerate investment

is a type of high-risk investment in which goods or services produced are not similar to those produced at home These types of investments are usually rate high-risk because foreign governments see them as providing fewer benefits to the country and greater benefits to the MNC than other investments

BK7 - Organic Structure

is an organizational form that emphasizes flexibility -Burns and Stalker went on to suggest the modern corporation has another option (organizational structure) -Depends heavily on informal structure of employee networks -Managers encourage employees to work more as teammates than as subordinates who take orders from the boss -The more organic a firm is, the more responsive it is to changing competitive demands

LD6 - Eiffel Tower Culture (type of organizational culture)

is characterized by a strong emphasis on hierarchy and orientation to the task Under this organizational culture, jobs are well-defined, employees know what they are supposed to do, and everything is coordinated from the top (as a result, this culture - like the Eiffel Tower - is steep, narrow at the top and broad at the base Person holding highest position could be replaced at any time and it would have no effect on work that members of the org or doing or their reason for existence Operates like a formal hierarchy Jobs are awarded based on best fit, unlike family culture Most common in: Northwest European countries - Denmark, Germany, and the Netherlands Assessment centers are common here When changes need to be made, this culture if often ill-equipped to handle: manuals must be re-written, procedures changed

BK9 - Sexual harassment

is conduct of a sexual nature that has negative consequences for employment. Sexual harassment falls into 2 categories: -Quid pro quo harassment - occurs when "submission to or rejection of sexual conduct is used as a basis for employment decisions" -Hostile environment (more common)- occurs when unwelcome sexual conduct "has the purpose or effect of unreasonably interfering with job performance or creating an intimidating, hostile, or offensive work environment" Both categories violate Title VII of the Civil RIghts Act of 1964, regardless of the sex of the harasser and the victim (in a recent year, more than 16% of complaints filed with the federal government came from males

LD8 - Multi-Domestic Strategy Global Intergration vs National Responsiveness Matrix

is differentiated strategy emphasizing local adaptation organizations should use this strategy when there is high pressure for local responsiveness and low pressure for cost-reductions changing offerings on a localized level increases a firm's overall cost structure but increases the likelihood that its products and services will be responsive to local needs and therefore be successful

LD8 - Global Strategy Global Intergration vs National Responsiveness Matrix

is integrated strategy based primarily on price competition firms that experience high-cost pressures should use a global strategy in an attempt to benefit from scale economies in production, distribution, and marketing by offering standardized products worldwide, firms can leverage their experience and use aggressive pricing schemes this strategy makes the most sense where there are high-cost pressures and low demand for localized product offerings

LD8 - Transnational Strategy Global Intergration vs National Responsiveness Matrix

is integrated strategy emphasizing both global integration and local responsiveness this strategy is necessary when there are high-cost pressures and high demand for local responsiveness very difficult to pursue effectively pressures for cost reduction and local responsiveness put contradictory demands on a company because localized product offerings increase cost orgs that can find appropriate synergies in global corporate functions are the ones that can leverage a transnational strategy effectively

LD8 - International Strategy Global Intergration vs National Responsiveness Matrix

is mixed strategy combining low demand for integration and responsiveness firms that pursue this strategy have valuable core competencies that host-country competitors do not possess and face minimal pressures for local-responsiveness and cost reductions McDonalds, WalMart and Microsoft

BK9 - Affirmative Action

is special efforts to recruit and hire qualified members of groups that were discriminated against in the past -To correct the past exclusion of women and minorities, companies introduced affirmative action - special efforts to recruit and hire qualified members of groups that had been discriminated against -Many orgs started diversifying their workforce out of concerns for social responsibility and legal necessity -contractors, subcontractors with 50 or more employees that receive for than 50,000 from government business are required to develop affirmative action program

BK7 - Modular Network - a type of organizational network

is temporary arrangement among partners that can be assembled and reassembled to adapt to the environment; also called virtual network -A very flexible version of the network organization Contracts stipulate expected results (market mechanisms), rather than hierarchy and authority Poorly performing firms can be removed and replaced

LD10 - Expropriation (define, risks, how to avoid)

is the seizure of businesses by a host country with little, if any, compensation to the owners Such seizures of foreign enterprises by developing countries were quite common in the 60s-90s More likely to occur in non-Western countries that are poor, relatively unstable, and suspicious of foreign multinationals Firms at greatest risk are extractive, agricultural, or infrastructural industries such as utilities and transportation because of their importance to the country Large firms are often more of a target for expropriation than small ones because more is to be gained To avoid expropriation: MNCs can bring in local partners They can limit the use of high technology so that if the firm is expropriated, the country cannot duplicate the technology They can acquire an affiliate that depends on the parent company for keys areas of the operation such as financing, research, and technology transfer, so that no practical value exists in seizing the affiliate

BK9 - Ethnocentrism (define)

judging foreign people or groups by the standards of one's own culture or group, and seeing one's own standards as superior is the tendency to judge others by the standards of one's group or culture, which are seen as superior These tendencies may be unconscious

BK7 - Large Batch vs Small Batch (technologies) - 3 basic technologies that characterize how work is done is service/mfg companies

large batch technologies -companies with higher volumes and lower varieties than a job shop --ex. AirPods assembly operations at Apple, In-n-Out --production runs are standardized, customers receive similar (if not identical) products --machines may replace people in the physical execution of work --communication is more formal, and hierarchal authority is more more prominent - structure tends to be mechanistic, with more rules and formal procedures small batch technologies - when a good or service is provided in a very low volume - companies that do this are called job shops --ex. small custom metalworking company produces stainless steel assemblies, local restaurants, doctors offices - all provide low-volume customized services --structure is organic, with few rules and formal procedures and decision making tends to be decentralized

BK9 - Managing Diversity pg 209 READ THIS SECTION

means not just tolerating or accommodating all sorts of differences but also supporting, nurturing, and using these differences to the organization's advantage managing a diverse workforce by recognizing the characteristics common to groups while dealing with people as individuals and supporting, nurturing, and using their differences to the organization's advantage -Equal Employment Opportunity (EEO) - meaning "freedom from discrimination on the basis of sex, color, religion, national origin, disability, and age" -Orgs engage in two types of diversity and inclusion activities: Diversity management - proactive in nature - involves basic activities like recruiting, training, and using to full advantage people with different backgrounds, beliefs, capabilities, and cultures - means understanding and deeply valuing employee differences to build a more effective and profitable company Affirmative action programs - more reactive and focus on compliance

LD6 - Homogeneous Groups (Type of group multiculturalism)

members have similar backgrounds and generally perceive, interpret, and evaluate events in similar ways Ex. A group of male German bankers who are forecasting the economic outlook for a foreign investment

BK7 - High-involvement organizations

organizations in which top management ensures that there is consensus about the direction in which the business is heading leaders seek input from their teams and lower levels, task forces, study groups, and other techniques foster participation in important decisions, participants receive feedback particularly in high-technology companies facing still international competition, aim is to generate high levels of commitment and involvement as employees and managers work together to achieve organizational goals

BK7 - Informal Authority

people with particular expertise, or personal qualities ex. scientists in research companies, or employees who are computer savvy

LK6 - Lessem and Neubauer (look over this in book)

portrayed Europe as offering four distinct ways of dealing with multiculturalism (based on UK, French, German, and Italian characteristics) -Table 6.2 briefly describes each of these sets of cultural characteristics Close examination of the differences highlights how difficult it can be to do business with two or more of these groups because each group perceives things differently than the others

LD10 - Quantification process

process in which a range of variables are simultaneously analyzed to derive an overall rating of the degree of political risk in a given jurisdiction (this would allow an MNC, for example to compare how risky a venture would be in Russia and in Argentina Factors that are typically quantified reflect the political and economic environment, domestic economic conditions, and external economic conditions

BK7 - Span of Control

refers to the number of subordinates who report directly to an executive or superior see exhibit 7.3 - the optimal span of control is a balancing act The optimal span of control depends on a number of factors: The span should be wide if The work is clearly defined and unambiguous Subordinates are highly trained and have access to information The managers is highly capable and supportive Jobs are similar, and performance measures are comparable Subordinates prefer autonomy -if the opposite conditions exist, then a narrow span of control is more appropriate

BK7 - Coordination

related to integration, referring to the procedures that link the various parts of the organization to achieve the organization's overall mission -integration occurs through structural mechanisms that enhance collaboration and coordination The more highly differentiated the firm, the greater the need for integration among its units

BK7 - Conventional Organization

see exhibit 7.1 -traditional org chart - solid lines indicate reporting authority connections and superior-subordinate relationships - the horizontal laters indicate levels of management - all persons of the same rank are on one level resembles the structure of organizations that German sociologist Max Weber addressed when he wrote about bureaucracy Burns and Stalker described this as a mechanistic organization

LD8 - Administrative Coordination

strategic formulation and implementation in which the MNC makes strategic decisions based on the merits of the individual situation rather than using a predetermined economically or politically driven strategy -ex. Walmart - using ideas that worked well in North American market serving for basis in Southern Hemisphere, they soon realized the tastes were different -Many bigger MNCs work to combine the economic, political, quality, and administrative approaches to strategic planning -the first three approaches to formulating and implementing strategy are much more common because of the firm's desire to coordinate its strategy both regionally and globally

LD8 - Quality Imperative - (Approach to Implementing Strategy)

strategic formulation and implementation utilizing strategies of total quality management to meet or exceed customers' expectations and continuously -takes two interdependent paths: A change in attitudes and a raising of expectation for service and quality The implementation of management practices that are designed to make quality improvement an ongoing process (commonly called total quality management (TQM) - cross-training personnel to do all jobs, re-engineering designed to help identify and eliminate redundant tasks and wasteful effort, and reward systems designed to reinforce quality performance

LD6 - Dirigiste (what it describes)

system in which a government has a lot of control over a country's economy

LD10 - Amateur Terrorism

tends to occur once and often has poorly defined objectives, and therefore members are not as committed

BK9 - Disability

the Americans with Disabilities Act (ADA) defines a disability as a physical or mental impairment that substantially limits one or more major life activities ex. orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy, multiple sclerosis, HIV infections, cancer, heart disease, diabetes, psychological illness, specific learning disabilities, drug addiction, and alcoholism people with disabilities are an unexplored but fruitful labor market -employers often find that disabled employees are more dependable than other employees, miss fewer days of work, and are less likely to quit -companies that hire disabled workers receive tax credits and signal to other employees and stakeholders their strong interest in creating an inclusive organizational culture

BK7 - Division of Labor

the assignment of different tasks to different people or groups Means the work of the organization is subdivided into smaller tasks to be performed by individuals and units throughout the organization

BK9 - Culture shock (define, examples)

the disorientation and stress associated with being in a foreign environment Managers are better able to navigate if they are sensitive to their surroundings, including social norms and customs, and adjust their behavior to circumstances

LD8 - Environmental Scanning

the process of providing management with accurate forecasts of trends related to external changes in geographic areas where the firm currently is doing business or is considering setting up operations These changes relate to environmental factors that can affect the company and include the industry or market, technology, and regulatory, economic, social, and political aspects Technological managers want to stay on top of the rise of new products, services Shifting regulatory environment can affect MNCs - ex. Change in minimum wage can affect a company's finances Social environment - demographic shifts - age, education, consumer attitudes are all imperative to know if a company's services would be welcomed in a region Political environment -after getting the information above ^ MNCs then go through an analysis process that gives rise to relevant features of the external environment Company can discover risks and opportunities US and Malaysia - US considers regulatory issues more relevant than Malaysians Netflix into Europe (ENVIRONMENTAL SCANNING EXAMPLE) Company analyzed the wireless streaming environment in Europe and concluded that the mobile market was ideal for penetration Made a number of strategic positioning moves - (signed deal with Vodafone - gave 6 months free to phone users to encourage Netflix on the go) Went after untapped European markets with highest internet usage Cisco Systems Example World's largest maker of networking equipment, continues to grow through acquisition Careful scanning on political environment as well as competitor landscape

BK7 - Organization Chart

the reporting structure and division of labor in an organization -Depicts the positions in the firm and the way they are arranged -Who reports to whom and various activities that are carried out in different jobs -The titles show work performed by each unit -Solid lines indicate reporting and authority connections and superior-subordinate relationships -Horizontal lines indicate levels of management and rank -German sociologist Max Weber addressed structure of organization when he wrote about bureaucracy at the beginning of the 20th century

LD6 - organizational culture (definition)

the shared values and beliefs that enable members to understand their roles and the norms of the organization learns to cope with external adaptation and internal integration Edgar Schein - a pattern of assumptions - perceive, think, and feel the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization - think, see, and feel

LD6 - Group think

the social conformity and pressure on individual members of a group to conform and reach a consensus When groupthink occurs, group participants come to believe that their ideas and actions are correct and that those who disagree with them either are uninformed or are deliberately trying to sabotage their efforts

LD8 - Political Imperative - (Approach to Implementing Strategy)

the strategic formulation and implementation utilizing strategies that are country responsive and designed to protect local market niches MNCs often have a large portion of their value added in the downstream activities of the value chain (industries such as insurance and consumer packaged goods are examples - the success of the product or service generally depends heavily on marketing, sales, and service (these industries use a country-centered or multi-domestic strategy) Ex. Country-centered strategy - Coke and Thums Up (drink that tastes similar to Coke) when Coke returned to India, they tried to replace Thums Up with Coke, but India kept buying Thums Up so Coke relented Thums Up was the best vehicle for expansion - Coke has expanded the Thums Up brand and caused the Coke brand itself to expand in India

LD6 - Multicultural Groups (Type of group multiculturalism)

there are individuals from three or more different ethnic backgrounds Ex. A group of three American, three German, three Uruguayan, and three Chinese managers who are looking into mining operations in Chile

LD10 - Political Risks

transfer risks, operational risks, ownership-control risks

LD6 - Bicultural Groups (Type of group multiculturalism)

two or more members represent each of the two distinct cultures Ex. A group of four Mexicans and four Canadians who have formed a team to investigate the possibility of investing in Russia