SEU Discussion Board Rubric Meets Expectation Content Support Writing Quality 2 Points Meets Expectation Demonstrates excellent knowledge of concepts, skills, and theories relevant to topic. 2 Points Meets Expectation Statements are well supported; posts extend discussion. 2 Points Meets Expectation Writing is well organized, clear, concise, and focused; no errors. 2 Points Timeliness Meets Expectation - Initial post made before deadline. 2 Points Quantity Meets Expectation - Initial post and two other posts of substance. Points Possible: 10 Approaches Expectation 1.5 Points Approaches Expectation Demonstrates fair knowledge of concepts, skills, and theories. 1.5 Points Approaches Expectation Statements are partially supported; posts may extend discussion. 1.5 Points Approaches Expectation - Some significant but not major errors or omissions in writing organization, focus, and clarity. 1.5 Points Approaches Expectation - Initial post made 1 day late. 1.5 Points Approaches Expectation - Initial post and one other post of substance. Below Limited Expectation Evidence Content, Research, and Analysis 1 Point .5 Points Below Limited Evidence Expectation Demonstrates poor Demonstrates or absent significantly flawed knowledge of knowledge of concepts, skills, concepts, skills, and theories. and theories. No Evidence 0 Points No Evidence - Did not participate. 1 Point Below Expectation Support is deficient; posts do not extend discussion. .5 Points Limited Evidence Statements are not supported 0 Points No Evidence - Did not participate. 1 Point Below Expectation Numerous significant errors or omissions in writing organization, focus, and clarity. 1 Point Below Expectation - Initial post 2 days late. .5 Points Limited Evidence Numerous errors or omissions—at least some major— in writing organization, focus, and clarity. 0 Points No Evidence - Did not participate. .5 Points Limited Evidence Initial post 3 days late. 0 Points No Evidence - Did not participate. 1 Point Below Expectation - Initial post only. .5 Points Limited Evidence One post of substance to colleagues. 0 Points No Evidence - Did not participate. © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 5 Managing across Cultures © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Learning Objectives • Examine the strategic dispositions that characterize responses to different cultures • Discuss cross-cultural differences and similarities • Review cultural differences in select countries and regions, and note some of the important strategic guidelines for doing business in each © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Strategic Predispositions Ethnocentric • Firm allows values and interests of the parent company to guide strategic decisions Polycentric • Company makes strategic decisions tailored to suit the cultures of the countries where the MNC operates Regiocentric • Firm blends its own interests with those of its subsidiaries on a regional basis Geocentric • Company integrates a global systems approach to decision making © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Table 5.1 - Orientation of an MNC under Different Profiles Source: From Balaji S. Chakravarthy and Howard V. Perlmutter, “Strategic Planning for a Global Business,” Columbia Journal of World Business, Summer 1985, pp. 5–6. © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Table 5.1 - Orientation of an MNC under Different Profiles (continued 1) Source: From Balaji S. Chakravarthy and Howard V. Perlmutter, “Strategic Planning for a Global Business,” Columbia Journal of World Business, Summer 1985, pp. 5–6. © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Table 5.1 - Orientation of an MNC under Different Profiles (continued 2) Source: From Balaji S. Chakravarthy and Howard V. Perlmutter, “Strategic Planning for a Global Business,” Columbia Journal of World Business, Summer 1985, pp. 5–6. © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Globalization Imperative • Belief that one worldwide approach to doing business is key to efficiency and effectiveness • Effective multinational companies (MNCs) should make efforts to address local needs – Regional strategies can be used effectively to capture and maintain worldwide market niches © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Need for Unique Strategies for Different Cultures • Diversity of worldwide industry standards • Continual demand by local customers for differentiated and locally-sourced products • Difficulty of managing global organizations • Local units should be allowed to use their own abilities and talents unconstrained by headquarters © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Delivery of Marketing Message Nationality Nature of advertising Germans • Factual and rational • Spots feature a standard family of two parents, two children, and grandmother French • Avoidance of reasoning or logic • Emotional, dramatic, and symbolic • Spots are viewed as cultural events and reviewed as if they were literature or films British • Laughter is valued • Typical broad, self-deprecating commercial mocks both the advertiser and consumer © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Challenges Faced by MNCs • Staying abreast of local market conditions and not assuming that all markets are same • Knowing the strengths and weaknesses of its subsidiaries and assisting them in addressing local demands • Giving more autonomy to the subsidiary © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Barriers to Cross-Cultural Management Parochialism • Tendency to view the world through one’s own eyes and perspectives Simplification • Process of exhibiting the same orientation toward different cultural groups © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Table 5.2 - Six Basic Cultural Variations Note: *Indicates the dominant U.S. orientation. Source: Adapted from the work of Florence Rockwood Kluckhohn and Fred L. Stodtbeck. © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Table 5.2 - Six Basic Cultural Variations (continued) Note: *Indicates the dominant U.S. orientation. Source: Adapted from the work of Florence Rockwood Kluckhohn and Fred L. Stodtbeck. © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Cross-Cultural Similarities • Russia and U.S. – Traditional management, communication, human resources, and networking activities – Organizational behavior modification interventions © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Cross-Cultural Similarities (continued) • Korea and U.S. – Organizational commitment relates to employees' position in the hierarchy, tenure in their current position, and age – Commitment increases with positive perceptions of organizational climate © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Cross-Cultural Differences Examples Human resource management differences Mexico • Concept of an hourly wage plays a minor role Austria and Brazil • Employees with one year of service are automatically given 30 days of paid vacation Some jurisdictions in Canada • Legislated pay equity between male- and femaleintensive jobs Japan • Compensation levels are determined by age, length of service, and educational background United Kingdom • Employees are allowed up to 40 weeks of maternity leave, and employers must provide a governmentmandated amount of pay for 18 of those weeks Majority of large Swedish companies • Head of human resources is on the board of directors © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Approaches for Formulating Effective Compensation Strategies in Different Clusters Examples Strategies Pacific Rim countries • Incentive plans should be group-based Japan, Hong Kong, Malaysia, the Philippines, and Singapore • High salaries should be paid to senior-level managers Italy and Belgium • Higher salaries should be paid to local seniorlevel managers Portugal and Greece • Profit-sharing plans are effective Denmark, the Netherlands, and • Personal-incentive plans are useful Germany Great Britain, Ireland, and the United States • Compensation plans should provide opportunity for earnings, recognition, advancement, and challenge © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. GLOBE Project • Provides an extensive breakdown of: – How managers behave – How different cultures can affect the perspectives of managers © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Business in China • Primary criterion - Technical competence • Value is placed on punctuality, patience, guanxi networking, and reciprocity – Guanxi: Good connections © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Business in Russia • Building personal relationships with partners is important • Working with local consultants can be valuable • Gift-giving is considered ethical when engaging in business transactions © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Business in India • India has become a desirable market because of unsaturated consumer markets with cheap labor and production locations • Bureaucratic restrictions have been lifted to attract foreign investment and raise economic growth rate © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Business in France • Social interactions are affected by class stereotypes • French organizations tend to be highly centralized and have rigid structures • Management is autocratic in nature © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Business in Brazil • Brazilian businesspeople tend to have a relaxed work ethic • Face-to-face interaction is preferred • Patience is key when managing business © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Business in Arab Countries • Arab businesspeople: – Follow a fatalistic approach to time – Tend to attach a great deal of importance to status and rank • Business-related discussions may not occur until the third or fourth meeting © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Review and Discuss 1. Define the four basic predispositions MNCs have toward their international operations 2. If a locally based manufacturing firm with sales of $350 million decided to enter the EU market by setting up operations in France, which orientation would be the most effective: ethnocentric, polycentric, regiocentric, or geocentric? Why? – Explain your choice © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Review and Discuss (continued 1) 3. In what ways are parochialism and simplification barriers to effective crosscultural management? – Give an example for each case © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Review and Discuss (continued 2) 4. Many MNCs would like to do business overseas in the same way that they do business domestically – Do research findings show that any approaches that work well in the U.S. also work well in other cultures? • If so, identify and describe two © 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Hana Multinational enterprises (MNEs) venturing into developing countries operate in unfamiliar environments that often encounter a high degree of cultural differences; compared with their environment (Reimann et al., 2015). These enterprises may draw erroneous inferences and learn incorrectly from expanding to different cultures (Zeng et al., 2013). As a leader, MNEs can demonstrate their commitment to working with different nations, such as Saudi Arabia and respecting the cultural and natural environments of it by training employees to acquire new skills, attitudes, and behaviors that will help them work broadly and across cultures. Especially in Saudi Arabia, where there is a conservative culture that needs high degree of respect, it is a religious one, as well, which means every intruder must pay strong attention to its rituals and heed its people. The type of decisions that need to be make are about embracing positive indifferences, by overlooking many cultural differences, even when they are not worthy of attention in order to engage into the culture and success in it. Furthermore, the decisions should be about adapting to the new practices that are culturally foreign without becoming confused. Lastly, seeking commonality between cultures is an inevitable decision that allow to understand the foreign culture and become receptive to its differences. In conclusion, the MNEs decision-making process should not have any bias, to avoid what happened in Coca Cola in India. For example, when CSE discovered that Indian Coca Cola had 36% of pesticide residues while in the U.S. the percentage was significantly low. Biases create major obstacles in any decision-making process, and every company must be aware of its decisions and its processes while making them in order to smooth the executing process and bridge any gaps in emerging economies. References Reimann, F., Rauer, J., & Kaufmann, L. (2015). MNE Subsidiaries’ Strategic Commitment to CSR in Emerging Economies: The Role of Administrative Distance, Subsidiary Size, and Experience in the Host Country. Journal of Business Ethics, 132(4), 845–857. https://doiorg.sdl.idm.oclc.org/10.1007/s10551-014-2334-1 Zeng, Y., Shenkar, O., Lee, S., & Song, S. (2013). Cultural differences, MNE learning abilities, and the effect of experience on subsidiary mortality in a dissimilar culture: Evidence from Korean MNEs. Journal of International Business Studies, 44(1), 42-65. Retrieved February 7, 2021, from http://www.jstor.org/stable/23434102 Salma When businesses move strategically seeking growth and efficiency across borders and involve in mergers and acquisitions, it is very often that extreme difficulties or even failure experience would be the result. Because of what companies are facing during the integration phase of cultural differences that manifest in communication, compensation systems, work policies, and other aspects of strategy and operations. International managers must look at and deal with the cultural differences as they may be intensified by geographical location, institutional, or psychological distance. Multinational enterprises and companies with global operations will need to understand and address the culturally diverse communities and be able to modify their practices and operation correspondingly. According to Luthans and Doh (2018), culture is defined as the knowledge that is acquired as a result of human interactions and used by people to interpret experiences and generate social behavior. This knowledge shapes the values of people and societies, creates attitudes, and influences behavior. Cultural Diversity could resemble a real challenge due to its impact on international management. Culture affects how people think and behave and consequently affects the transfer of technology, managerial attitudes, decision-making, ideologies and even business-government relations. Cultural differences influence the international management approach and how business should be conducted whether to use Centralized vs. decentralized decision making, Individual vs. group rewards, perform Informal vs. formal procedures, High vs. low organizational loyalty, Safety vs. risk, Cooperation vs. competition, Short-term vs. long-term horizons and encouraging Stability vs. innovation (Luthans, & Doh, 2018). In the Coca-Cola India case, the Indian government had forced the company to leave the Indian market i n the 1970s after demanding its secret formula. In 1993, the company made an entry into the Indian market again, but this time Coke used its financial strength to kill all its competitors. Additionally, the image of the company was ruined after the controversy related to unsafe pesticide levels that were used in Coca-Cola’s products to the extent of bringing down the sales by 11 percent (Ghosh, 2016). However, Coca-Cola was caught off guard, it did not appreciate how fast local politicians attacked the company in light of the test results. Coke faced another ethical challenge when it was not looking into the concern of the depletion of water caused by its bottling operations which were causing health, environmental damage, and depletion of water levels (Karam, 2013). Coke also failed to understand how news travels fast in India and did not respond quickly enough to its consumer's concerns and the communication failed to ensure proper appeal to Indian consumers and went ahead with global communications only. To promote the brand, the company has made several campaigns to create mass appeal and used famous Bollywood stars to advertise and regain popularity in rural areas. To overcome its biggest challenge faced with the pesticide controversy, Coke came up with an airing ad about the production process and how they use 400 quality-control tests and gave a tours of the Coca-Cola factory to showcase and revive the trust of the customers (Ghosh, 2016). Moreover, Coca-Cola is currently focused on improving its standards and participation in the global water challenge and enhancing global packaging of its products. Using innovation and transformation embed the success of business in different cultures and considered the key points to business sustainable growth. The example of the Coca-Cola company and how they are continuously working to improve their performance is a great demonstration to the MNEs. For Saudi Arabia and with respect to the strategy of vision 2030 to promoting and adopting a healthier lifestyle, actions need to be taken on sugar level reduction for consumers. Another decision-making must take place regarding packing materials to reduce the use and consumption of plastics to become environmentally friendly. References: Ghosh, M., Ghosh, A., & Ghosh, M. (2016). Impact and influence of culture on brands in Indian market. IOSR Journal of Business and Management (IOSR-JBM), 18(7), 54-60. Karam, A. (2013). Cultural Impact on Brand: A Case Study on Coca Cola’s Cultural Issues in India. Cultural Impact on Brand: A Case Study on Coca Cola’s Cultural Issues in India. Luthans, F., & Doh, J. P. (2018) International management: Culture, strategy, and behavior (10th ed.) McGrawHill Education, New York, NY ISBN 13: 978-1259705076
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