1 Part 3: Strategy Chapter 8: Competing Across Borders.

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Part 3: StrategyChapter 8: Competing Across Borders

Besides information technology, the other major environmental context impacting organizational behavior is globalization.

Today, well-known U.S.-based multinational corporations have more than half their assets overseas.

With trends toward similar clothes, entertainment, material possessions, and recognition that English is the international business language, people around the world still think and behave in different ways.

The starting point of how the globalization environment affects and is affected by organizational behavior is culture.

Stereotypes vs. Archetypes Culture stories that stuck out?

Heaven is where…

The police are British,

The cooks are French,

The mechanics are German,

The lovers are Italian and

it’s all organized by the Swiss

Hell is where…

The police are German,

The cooks are British,

The mechanics are French,

The lovers are Swiss and

it’s all organized by the Italians

Culture is a social construct “Culture makes the unnatural seem natural”

Culture is man made & learned Culture = Problem solving

“culture is the way a group of people solves problems and reconciles dilemmas.” - Dr. Fons Trompenaars

Culture is not static

Take a piece of paper and a pen/pencil and draw “culture”.

Outer Layer: Explicit Products Observable reality Symbols of deeper layers

Middle Layer: Norms & Values Core: assumptions about existence

Problem-solving in relation to environment

Burka I value modesty My body belongs to my husband

Understanding own culture: “THE FISH IS THE LAST TO KNOW IT IS IN

WATER.” (Proverb) Hard to see own culture

Trying to understand cultures does not give us license to stereotype: Culture is a normal distribution We tend to recognize elements of other

cultures that are different than our own, and use our values to determine if good or bad.

Can never fully understand another culture. Use the framework to: Understand own cultural “baggage” Integrate and Reconcile

Best Practices for international business interactions: “A truly intercultural person is one who is

comfortable being uncomfortable.”

How do Cultures Vary? How People See Themselves People’s Relationship to Their World Individualism versus Collectivism The Time Dimension Public and Private Space

Hofstede’s Cultural Dimensions Individualism/Collectivism Power Distance Uncertainty Avoidance Masculinity/Feminity

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Trompenaars’s Cultural Dimensions Universalism versus Particularism Individualism versus Collectivism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription

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What you know Equality Rules and procedures Business oriented Black and white

Who you know Favoritism Flexibility People oriented Gray

Particularist

Characteristics of…

Bureaucracy isefficient

Start on time Predictability Straight to point

Bureaucracy isinefficient

Late is acceptable Unpredictability Socialization

Universalist Particularist

Perceptions of . . . Perceptions of . . .

Universalist Particularist Too straight forward Does not care

about people Inflexible

Vague

Does not care about business or rules

Corrupt

Individualism

• More frequent use of “I”

• Limited interpersonal connection with coworkers

• Vacations taken in pairs, even alone

Collectivism

• More frequent use of “We”

• Extensive interpersonal connection with coworkers

• Vacations in organized groups, or with extended family

VS.

Individualism• Achieve alone • Punishment can

enhance productivity• Decision-Making

stems from Individual

• Looking out for self-interest before what is best for the group

Collectivism• Achieve in groups • Punishment can

impede productivity• Decision-making stems

from Groups• Productivity comes

from harmonization or cooperation

VS.

Get Straight to the Point

No Overlapping between Private and Business

Transparent Procedure

Frustration

PRIVATEPRIVATE

PUBLICPUBLIC

Indirect, Evasive, tactful and ambiguous

Highly situational Life is a whole Losing face

PRIVATEPRIVATE

PUBLICPUBLIC

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Home based employee sent to a foreign assignment for an extended period of time. Challenges in turnover

Personal Adjustment Perceived Equity with host and home countries Family Adjustment

Cultural understanding and training contributes to successful assignment.

Are countries synonymous with cultures? Why are they studied that way? What the limitations

Sub-cultures (all American’s are alike right?)

What are we really trying to get at? Variance- “can geography predict

culture?”

Does this still apply?

Would we say there are basic assumptions about business that

transcend culture?

The increase in globalization is based on historical events Tariffs and quotas on imported goods after

World War I Foreign direct investment after World War II

GATT WTO NAFTA vs. EU The Internet BRIC

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As a result of these events managers must develop global mind-sets…what is this?

The costs and risks of doing business outside a firm’s domestic market can be significant – the liability of foreignness Practices Laws Relationships Business Customs

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Use of current resources and access to new resources

Seeking to expand or develop new markets Competitive rivalry Leveraging core competencies and learning Less cost of

Land Labor Capital Shipping routes/distribution efficiencies

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Exporting- sell over there Licensing- Give intellectual property to sell (and

make and sell) over there Franchising- McDonalds Contract manufacturing- contract to build Turnkey projects Foreign direct investment

Buying in China in the 1990s China buying elsewhere now EADS and Toyota building in the U.S. More risky- remember the liability of foreignness and

resentment.

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Firm-specific resources advantages If you do something that must be taught typically

you will acquire or do a joint venture Country-specific or location advantages

E.g., Singapore (shipping route), Khartoum (maturing of government), Vietnam (enforceable laws)

Internal coordination or administrative advantages If there is great risk with others building and

selling (e.g., Toyota losing quality reputation), better to do it yourself.

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