Wednesday, June 20, 2012
Monday, June 18, 2012
Cultural Mindset
"The issue for the American manager is whether the attributes that made him or her successful as a leader in the United States will also lead to success overseas, be of no value, or, worst of all, cause harm in the foreign operation."
What do you think?
"Success will be determined by two criteria: the executive's ability to produce results and to show effective leadership in different cultures and settings."
Are both criteria required? Should there be any other criteria? What is effective leadership?
Describe the "two-step process" suggested by Javidan et al. Do you agree with it? Why? Why not?
"...(national) culture colors nearly every aspect of human behavior..." (Javidan et al, 2006)
Provide an example of how your national culture influenced assumptions you made about things you experienced in Beijing.
Cultural universals vs cultural specifics
Cultural convergence or cultural divergence
What contributes to cultural universals (cultural convergence)?
What contributes to cultural specifics (cultural divergence)?
Why?
What do you think?
"Success will be determined by two criteria: the executive's ability to produce results and to show effective leadership in different cultures and settings."
Are both criteria required? Should there be any other criteria? What is effective leadership?
Describe the "two-step process" suggested by Javidan et al. Do you agree with it? Why? Why not?
"...(national) culture colors nearly every aspect of human behavior..." (Javidan et al, 2006)
Provide an example of how your national culture influenced assumptions you made about things you experienced in Beijing.
Cultural universals vs cultural specifics
Cultural convergence or cultural divergence
What contributes to cultural universals (cultural convergence)?
What contributes to cultural specifics (cultural divergence)?
Why?
Hypercompetition
Hypercompetition (Harvey, Novicevic, & Kiessling, 2001)
-continuous generation of new forms of competitive advantage through neutralizing, destroying, or rendering competitors advantage obsolete. (Harvey et al 2001)
-only enduring advantage ability to create new advantage (Harvey et al 2001)
Global competition and worldwide interactions require
-major resource commitments
-development of dynamic cross-border capabilities
Competitive landscape
-greater level of uncertainty
-diverse global rivalries
-rapid technological change
-price wars
-continuous restructuring activities
Achieve competitive advantage
-acts of innovation
-reformulation of existing strategies
Rivalry
-firms leapfrog in positioning within markets
-market-based strategic resources and relationships
-competitive creation and destruction of dominants position in product or geographic mkts
-attacks and counterattacks based on size and financial differentials
Strategic market orientation
-durable
-socially complex
"The single most important thing to remember about any enterpirse is that there are no results inside its walls. The result of a business is a satisfied customer, inside an enterprise there are only cost centers. Results exist only on the outside. " (Drucker, 1993, p. 54)
What does it require to develop a strategic market orientation?
What are some methods for achieving the necessary relationships?
-continuous generation of new forms of competitive advantage through neutralizing, destroying, or rendering competitors advantage obsolete. (Harvey et al 2001)
-only enduring advantage ability to create new advantage (Harvey et al 2001)
Global competition and worldwide interactions require
-major resource commitments
-development of dynamic cross-border capabilities
Competitive landscape
-greater level of uncertainty
-diverse global rivalries
-rapid technological change
-price wars
-continuous restructuring activities
Achieve competitive advantage
-acts of innovation
-reformulation of existing strategies
Rivalry
-firms leapfrog in positioning within markets
-market-based strategic resources and relationships
-competitive creation and destruction of dominants position in product or geographic mkts
-attacks and counterattacks based on size and financial differentials
Strategic market orientation
-durable
-socially complex
"The single most important thing to remember about any enterpirse is that there are no results inside its walls. The result of a business is a satisfied customer, inside an enterprise there are only cost centers. Results exist only on the outside. " (Drucker, 1993, p. 54)
What does it require to develop a strategic market orientation?
What are some methods for achieving the necessary relationships?
MNEs
The American Model of the Multinational Firm and the "New" Multinationals From Emerging Economies (Guillen & Garcia-Canal, 2009)
The authors address three questions:
From the traditional viewpoint -
Why did multinational firms develop?
Typical steps
________________________________________________________________________
Main features of new MNEs.
________________________________________________________________________
Motivations
Remember when we read about Porter's diamond on Wed.....
MNE - still need some capability that allows to overcome "liability of foreignness."
1. Which of the drivers identified by Yip (2003) or Hill (2008) are represented in Guillen & Garcia-Canal's (2008) list? What important ones are missing?
2. Thinking about the motivations and intangible assets of the new MNEs develop a list of capabilities and skills required for managers of these new MNEs? Provide support for your list.
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The Tortuous Evolution of the Multinational Corporation (Perlmutter, 2008)
Multinational firm - ownership, structure, nationality of execs, investment overseas....
Orientation - Ethnocentric, Polycentric, Geocentric
(What did the different chocolate companies use?)
3. Perlmutter outlines three types of orientation companies can have in conducting global business. Given the drivers and motivations for global competition what perspective/orientation would you recommend a company adopt? Why?
4. Rank the skills and capabilities you listed in the question 2 in terms of their contribution toward the perspective you recommended.
5. Outline how companies can attract people with these S & C or develop S & C within their own employees.
When You Shouldn't Go Global (Alexander & Korine, 2008)
Alexander & Korine (2008) suggest not all companies should go global. One of the questions they believe companies should ask is "Do we have the necessary management skills?'
6. Come up with 6 questions you would ask about a company's management skills if the suggestion to enter a global market was raised.
The authors address three questions:
- "Do these firms (new MNEs) share some common features that distinguish them from the traditional model of the MNE?"
- "What advantages have made it possible for them to operate and compete not only in host countries a the same or lower level of economic development but also in the richest economies?"
- "Why have they been able to expand abroad at dizzying speed, in defiance of the conventional wisdom about the virtues of a staged, incremental approach to international expansion?"
From the traditional viewpoint -
Why did multinational firms develop?
- What is the "liability of foreignness?"
- Vertical expansion - necessary condition? sufficient condition?
- necessary - comparative advantage
- Sufficient - uncertainty and asset specificity
- Horizontal expansion - necessary condition? sufficient condition?
- necessary - protectionists barriers, transportation costs, unfav currency exchange, local adaptation
- sufficient - intangible assets make licensing risky
Typical steps
- exports
- local agent exports
- sales subsidiary
- production and marketing subsidiary
________________________________________________________________________
Main features of new MNEs.
- Speed of internationalization
- Competitive advantage
- Political capabilities
- Expansion path
- Default entry mode
- Organizational adaptability
________________________________________________________________________
Motivations
- Backward linkages into raw materials
- Forward linkages into foreign markets
- Home-country government curbs
- Spreading of risk
- Movement of personal capital abroad
- Following home-country customer to foreign markets
- Investment in new markets in response to economic reforms in the home country
- Acquisition of firm-specific intangible assets
- Exploitation of firm-specific intangible assets
Remember when we read about Porter's diamond on Wed.....
MNE - still need some capability that allows to overcome "liability of foreignness."
1. Which of the drivers identified by Yip (2003) or Hill (2008) are represented in Guillen & Garcia-Canal's (2008) list? What important ones are missing?
2. Thinking about the motivations and intangible assets of the new MNEs develop a list of capabilities and skills required for managers of these new MNEs? Provide support for your list.
-----------------------------------------------------------------------------
The Tortuous Evolution of the Multinational Corporation (Perlmutter, 2008)
Multinational firm - ownership, structure, nationality of execs, investment overseas....
Orientation - Ethnocentric, Polycentric, Geocentric
(What did the different chocolate companies use?)
—Multinational Corporation Definition
Requires
substantial direct investment in foreign countries and actively manage and
regard those operations as integral parts of the company, both strategically
and organizationally.
—UN
definition
—comprising
entities in 2 or more countries, regardless of the legal form and fields of
activity of those entities.
—which
operates under a system of decision making centers
—in
which the entities are so linked, by ownership or otherwise, that one or more
of them may be able to exercise a significant influence over the activities of
the others, in particular to share knowledge, resources, and responsibilities.
3. Perlmutter outlines three types of orientation companies can have in conducting global business. Given the drivers and motivations for global competition what perspective/orientation would you recommend a company adopt? Why?
4. Rank the skills and capabilities you listed in the question 2 in terms of their contribution toward the perspective you recommended.
5. Outline how companies can attract people with these S & C or develop S & C within their own employees.
When You Shouldn't Go Global (Alexander & Korine, 2008)
Alexander & Korine (2008) suggest not all companies should go global. One of the questions they believe companies should ask is "Do we have the necessary management skills?'
6. Come up with 6 questions you would ask about a company's management skills if the suggestion to enter a global market was raised.
Globablization
Globalization - The questions
What are the benefits and costs of globalization for different sectors of the society? (companies, workers, communities)
For years we have seen the benefits of globalization, what risks did we overlook?
What ramifications will the economic downturn have on the pace of globalization?
What model does globalization follow in different countries? in different organizations?
https://www.cia.gov/library/publications/the-world-factbook/index.html
For years we have seen the benefits of globalization, what risks did we overlook?
What ramifications will the economic downturn have on the pace of globalization?
What model does globalization follow in different countries? in different organizations?
https://www.cia.gov/library/publications/the-world-factbook/index.html
Globalization
It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve to death.
It doesn't matter whether you are a lion or a gazelle.
When the sun comes up, you better start running.
(African proverb - from Friedman, 2007)
Definitions
- shift toward a more integrated and interdependent world economy. (Hill, 2008)
- the process of social, political, economic, cultural, and technological integration of countries around the world. (Luthans & Doh, 2009)
June 20
Learning Objectives
In-class assignment
- Define globalization.
- Impact of International business.
- Differences between global business and domestic.
- Identify, explain, provide examples of major forces in globalization of markets and products for companies.
- Assess implications of global drivers on push for globalization.
- Assess advantages and disadvantages of globalization.
- Discuss relationship to Global Economic Crisis 2008-10.
- Understand changing nature of competition in a global setting.
- Implications of China as the world's largest economy.
In-class assignment
- Definition of globalization.
- Groups - implications of global business
- Groups - differences with global business
- China - world trading system, world monetary, business strategy, commodity prices
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