Case 1 Fitzburg Tire Company Management Across Culture Participants: • Max Bierman, construction manager (first time working outside U.S.) • Leopodo Sanchez Garcia, chief engineer for Fitzburg in Mexico Situation: • Fitzburg Tire Co. is building a plant in Cuernavaca, Mexico • Construction three months behind schedule • Costs over budget • Last three weeks must be redone • Max Bierman has strong views on specific reasons for the problems • Leopodo Sanchez Garcia has no clear reasons for the problems and does not think the problem is serious
Case 1 Fitzburg Tire Company. Management Across Culture Participants: Max Bierman, construction manager (first time working outside U.S.) Leopodo Sanchez Garcia, chief engineer for Fitzburg in Mexico Situation: Fitzburg Tire Co. is building a plant in Cuernavaca, Mexico - PowerPoint PPT Presentation
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Case 1 Fitzburg Tire Company Management Across Culture Participants:
• Max Bierman, construction manager (first time working outside U.S.)
• Leopodo Sanchez Garcia, chief engineer for Fitzburg in Mexico
Situation:• Fitzburg Tire Co. is building a plant in Cuernavaca, Mexico• Construction three months behind schedule• Costs over budget • Last three weeks must be redone• Max Bierman has strong views on specific reasons for the
problems• Leopodo Sanchez Garcia has no clear reasons for the problems
and does not think the problem is serious
Culture Characteristics Learned: culture is learned and experienced Shared: culture is not specific to single individuals Transgenerational: culture is cumulative, passed down Symbolic: culture is based on using one thing to represent
another thing Patterned: culture has an interdependent structure Adaptive: culture matches human ability to adapt
Values Values:
• basic convictions that people have regarding what is right and wrong, good and bad, important or unimportant
• Different cultures have different values• Some values are similar across cultures
Management success factors (values) include:• pragmatic, dynamic, achievement-oriented, active role in
interaction with other individuals who are instrumental to achieving the manager's organizational goals.
Values can change over time and over geographic location
Cultural Dimensions (Hofstede, p8) Power distance:
• the extent to which less powerful members of institutions and organizations accept that power is distributed unequally
Uncertainty avoidance: • the extent to which people feel threatened by ambiguous situations,
and have created beliefs and institutions that try to avoid these (need for security)
Individualism: • the tendency of people to look after themselves and their
immediate family only
Masculinity: • the degree to which the dominant values in society are success,
money and things.
Moving to a culture near your own makes management transition easier (p17)
Cultural Dimension (Trompenaars)(p18) Universalism Vs. Particularism Individualism Vs. collectivism: one rule applied
everywhere/special case Neutral Vs. affective: emotions held back/showing feelings Specific Vs. diffuse: public and private space treated
differently/public and private space are nearly the same and guarded (entry to public space is also entry to private space)
Achievement Vs. ascription: status is based on performance of function/status based on who or what a person is
Time: sequential Vs. synchronous (p22)
Globalization Vs. National Responsiveness (p35)
• Integration comes from economies of scale
• Differentiation comes from local needs– Most firms today belief that one worldwide
approach to doing business is key to success• This attitude is wrong; reasons include:
• diversity of worldwide standards
• local customers' demand for differentiated products
• importance of being an insider (buy local)
• difficulty of managing global organizations where local office have different wants and needs
• local offices are closest to the customers and know how to maximize for their specific situations
– MNC success factors include a worldwide view of operations, support overseas activities, pay close attention to political changes and use local nationals whenever possible
Low
Hig
hL
ow
GlobalizationStrategy
National Responsiveness(Differentiation)
1 3
2 4
High
Glo
bal
izat
ion
(In
tegr
atio
n)
MixedStrategy
MixedStrategy
NationalResponsiveness
Strategy
Differences and Similarities Parochialism: Simplification:
• the tendency to view the the process of exhibiting the same world through one's own orientation toward different eyes and perspectives cultural groups
Contingency Approach: • the application of HRM (Human Resource Management) to meet the
specific needs of local workers
Example of Differences and Similarities• Japan
– Relationships are long-lasting and have deep personal involvement
– Communication often implicit, interpretation taught from an early age
– People in authority are personally responsible for subordinates' actions with high level of loyalty on both sides
– Agreements tend to be spoken not written
– Insiders and outsiders easy to distinguish and outsiders do not get into inner group
• American– Relationships between people are short and deep, personal involvement is not valued as important
– Communication is explicit, being taught from young age to say what they mean
– Authority is diffused through a bureaucratic system, with responsibility hard to pin down
– Agreements are written
– Insiders and outsiders are hard to distinguish and outsiders may gain entrance to the inner group
Organizational Cultures in MNCs Family: • strong emphasis on hierarchy and orientation to the person;
the leader is a father figure who looks after employees; people, including real family members, may be chosen for a job even though less qualified than others; in return the person is expected to give full loyalty and support to the mentor
Eiffel tower: • a strong emphasis on hierarchy and task clarification through
the use of organizational structure; tasks are well defined and the organization tends to be tall at the top and wide at the bottom; things go "by the book"
Guided missile: • a strong emphasis on equality in the work place and
orientation to task; usually in project groups, common in high-tech firms; individual expertise is most important with little hierarchy as everyone is equal, thus making the group very flexible and easy to adapt, but it is also hard to control
Incubator: • a strong emphasis on equality and personal orientation; the
role of the organization is to bring out individuals' self development; this culture tend to have no goal, but is instead working on the edge of new discoveries, thus there is no clear goal and the need for creativity, expertise and flexibility eliminate any organizational structure, however this is short-lived until the firm grows and develops need to org. structure
Equity
GuidedMissile
Hierarchy
PersonEmphasis
TaskEmphasis
Incubator
EiffelTower
Family
Case 2 Comtec Corporation Marketing Research & Information Participants:
• Dr. Danil Needham, Comtec Corporation president• Mr. Harry Otto, Comtec Corporation Vice President• Ms. Roberta Malcolm, Computer Consultant
Situation:• Comtec manufactures computers for scientific measurements and
calculations using a proprietary operating system• Sales in both domestic and international markets• Profits low and financial crisis looming• Ms. Malcolm hired to advise on direction• Consultant's recommendation runs counter to VP of sales
marketing's strategy
Marketing Information System (MIS) MIS:
• people, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers
Developing Information Can Come From:• Internal Records
– gathered from sources within the company
• Marketing Intelligence– everyday information about developments in the marketing
environments that helps prepare and adjust marketing plans (can be found for free and purchased)
• Marketing Research– information used to identify and define marketing opportunities and
problems; make, improve and evaluate marketing actions; monitor marketing performance and improve understanding
Process of Marketing Research• Marketing research four steps:
– 1) define the problem and objectives, 2) develop the research plan, 3) implement the research plan, 4) interpret and report the findings
• Managers best understand the decisions• Researcher best understands how to obtain the information• Defining the problem and objective is the hardest step and can lead
the whole process in the wrong direction from the start (as in the New Coke case)
• Problems and objectives can be translated into specific information needs
Primary data can be gathered by observation, survey or experiment• Focus groups: small group of consumers who are observed to find
their thoughts and feelings• CATI: Computer Assisted Telephone Interviewing• Consumer buyer behavior
Consumer Buying Behavior Consumer market: individuals and households who buy
goods and services for personal consumption Consumer behavior model:
Factors influencing consumer behavior:
Marketing &other stinuli
Buyer’sblack box
Buyer’sresponses
EconomicTechnology
PoliticalCulture
Buyer’scharacteristics
& decision process
Product choiceBrand choiceDealer choicePurchase time
Purchase amount
ProductPrice
PlacePromotion
Psychological
MotivationPerceptionLearningBeliefs & attitudes
Culture Social Personal
Culture
Subculture
Social class
Referencegroups
Family
Roles & status
Age/lifecyclestage
OccupationEconomics
LifestylePersonality & self-concept
Buyer
Needs Maslow’s hierarchy of needs:• A person tries to satisfy the most
important need first; when satisfied, it will stop being a motivator and the person will try to satisfy the next most important need.
Buyer decision process• Five stages (can skip stages)
Se lf-a c tua liza tio n
Este e m ne e d s
Se lf-d e ve lo p m e nta nd re a liza tio n
Se lf-e ste e m , re c o g nitio n,sta tus
Se nse o f b e lo ng ing ,lo ve
Se c urity, p ro te c tio n
Hung e r, thirst
So c ia l ne e d s
Sa fe ty ne e d s
Physio lo g ic a l ne e d s
Purchasedecision
Needrecognition
Informationsearch
Evaluationof
alternatives
Postpurchasebehavior
Adoption of New Products Five Stage Adoption Process:
• Awareness: knows of product but has no information• Interest: seeks more information• Evaluation: considers to try product• Trial: tries new product on small scale• Adoption: decides to make full & regular use of product
Innovation Adoption Time• Different groups of consumers when adopting innovative products
Case 3 Hanover Public Systems (HPS) Participants:• Howard Wolff: HPS president • Yang Hsiao-shih: previous Taiwan plant president (terminated)• James Fukuda: new Taiwan plant president (second generation Japanese-American)
Situation:• HPS owns eight wholly-owned subsidiaries including one in Taiwan• Taiwan subsidiary losing money and requires cash infusions• President, Yang Hsiao-shih fired and replaced by Fukuda who has
experience in reorganizing the Oakland plant• Before arriving in Taiwan, Fukuda took actions: dispose of some
assets and inventory• After arriving, Fududa shut down heating and cooling manufacture
resulting in layoff of 18 workers and 12 reassignments; new management system
• Plant vice president (Hu) & plant superintendent resigned (Lee)
International Organizational Structure Subsidiaries in Early Stages of Internationalization
• A subsidiary is opened because an on-site presence is required from the start
PersonnelProduction Marketing Finance
ChiefExecutive
Officer
TaiwanFrance Japan Australia
PersonnelProduction Marketing Finance
Asian Vs Western Management Some Basic Features of the Two Management Styles
Ba sic Va lue s
M a na g e m e nt StyleO rg a niza tio n
Asian
Asian
AsianAsian
W esterns
W esterns
W esternsW esterns
Ind ivid ua lLe g a lC o n fro n ta tio nAna lytic
Sho rt Te rmC o ntro lC o nflic tO ne Pro d uc t/Se rvic e fo c use d
Ra tio na lityStruc tu re dD ire c tiveDo in t
Fo rm a lFra g m e nte dHie ra rc h ia lC o m p e titive
G ro upTrustC o m p ro m iseFlu id
Lo ng te rmHum a n Re so urc eC o lla b o ra tiveC usto m e rfo c use d
Re la tio nsh ip sFle xib leAd a p tiveUnd e rsta nd ing
In fo rm a lG e ne ra listIn te g ra te dC o -o p e ra tive
Organizational Characteristics of MNCs Specialization
• U.S. plants tend to have more horizontal specialization while Japanese plants tend to have more vertical specialization
Centralization• Japanese firms tend to have higher centralization while U.S. firms
have more delegation and involvement at lower levels
Characteristics• MNCs tend to keep the structures of the home-based headquarters
even when established overseas for many years (p18)
Organizational Structure Design Growth Stage
• Org. structure changes over the growth of the firm• Young firms tend to be centered around one or few people who are the
founders or entrepreneurs• As staffing and product lines grow, more formal structures are required
to maintain efficiency• Reorganization (or re-engineering) is required when market conditions
change and the firm must change
Organizational Configurations• There are at least 243 distinctly different org. structure types• Five common elements in every org. structure:
– Operating core-employees who perform the basic work related to production of products and services
– Strategic apex- top-level managers who are responsible for overall org.
– Middle line-managers who connect the operating core to the strategic apex
– Technolstructure--analysts who have the responsibility for affecting certain forms of standardization in the organization
– Support staff-people who provide indirect support services for the org.
Organizational Structure Designs Simple Structure
• Strengths: simplicity; fast and flexible; low cost; goals are clear• Weaknesses: limited application (only can be used in small size
standardization; high efficiency; economies of scale; employees in peer groups so easier management; experienced management not required due to high level of standard rules
• Weaknesses: each unit is independent and so does not know what other units are doing; org. goals not well known; unknown or new situations cannot be handled
Dir. PublicRelationsExec. Dir.
ChiefExecutive
Officer
VPManufacturing
VPFinance
VPPersonnel
VPMarketing
ManagerManager Manager Manager
ManagerManager Manager Manager
ManagerManager Manager Manager
ManagerManager Manager Manager
Organizational Structure Designs Professional Bureaucracy Structure
• Combines standardization with decentralization requiring top management to give up power in order to give professional high skill employees more effectiveness. Used in schools, hospitals and firms requiring highly trained employees.
• Strengths: Combines standardization with decentralization requiring top management to give up power in order to give professional high skill employees more effectiveness.
• Weaknesses: same as for professional bureaucracy; highly trained employees may have professional directions and restraints that do not match firm’s goals
Dir. PublicRelationsExec. Dir.
ChiefExecutive
Officer
VPR&D
VPMarketing
Research Strategy Promotions PackagingElectronic Materials
Organizational Structure Designs Divisional Structure• A set of autonomous units, each usually a machine bureaucracy, coordinated by a central
headquarters (a business in a business). This structure gives more power to division managers.
• Strengths: more focus and responsibility given to each division; gives top management more freedom from day-to-day operations; any division can be cut without hurting other divisions; being part of a larger structure gives economies of scale
Dir. PublicRelationsExec. Dir.
ChiefExecutive
Officer
VPAsia
VPEurope
Production
Manager
Manager
Marketing
Manager
Manager
VPPersonnel
Manager
Manager
Production
Manager
Manager
Marketing
Manager
Manager
VPPersonnel
Manager
Manager
•Weaknesses: duplication of effort; conflict between divisions; resentment over lack of division freedom; coordination problems
Organizational Structure Designs Adhocracy Structure• Staffed mostly by professionals with
high levels of experience. Supervision needs are small and behaviors are internalized and management has chosen employees based on well established professional criteria. Unlike the professional bureaucracy, the adhocracy does not make rules for new problems, but each and every problem has a unique solution so standardization and formalization is not needed. Power flows to anyone with expertise, regardless of the position.
• Strengths: ability to respond quickly; adaptivity; creativity; collaboration; can handle complex, highly technical tasks
• Weaknesses: conflict easy to arise due to blurred lines of authority; no economies of scale; inefficient; not long lasting
Dir. PublicRelationsExec. Dir.
ChiefExecutive
Officer
VPR & D
VPOperations
VPMarketing
ManagerManager Manager
ManagerManager Manager
ManagerManager Manager
ManagerManager Manager
Organizational Structure Change Model for Managing Organizational Change
Change
What is tobe changed?
Change process
Org.effectiveness
Forcesinitializingchange
Changeagent
Unfreeze-Move-Refreeze
Structure?Technology?
Org. process?Implementation tactics
InterventionParticipationPersuasion
Edict
FeedbackDeterminants
Org. Initiator
Interventionstrategies
Implementation
Results
Case 4 International Carpet Wholesalers Participants:• James McHenry: buyer for International Carpet Wholesalers, New
York, USA• Mr. Abdelhadi Hachad: managing director of SOMART• Ms. Paula Feldman: president of International Carpet Wholesalers
Situation:• McHenry has made a tentative agreement to purchase handmade
rugs from Mr. Hachad• The deal called for Mr. Hachad to purchase raw wool from
McHenry’s firm (this importation usually requires a heavy import tax, however, if the wool is used only for making rugs for export the tax is canceled)
• Both sides seemed to get mutual benefit from the agreement• The problem is that McHenry has some reservations about the
method used for producing the rugs
DEFINE & REVIEW External
• Outside of company’s control• Not influenced by company
Internal• Inside company
Explicit Communication• Very clear (“This must be done by the 30th.”)
Implicit Communication• Not very clear (“This should be done soon.”)
Message Interpretation• Idea understood in wrong way (“Everyone did a good job.” VS “You
did a good job.”)
Communication Between Humans Communication Process
ANALYZE FLOW Downward Flow
• Work Related• Personal
Upward Flow• New ideas• Feedback
EXAMINE PROBLEMS Language
• English is international language?
Perception• We see things in a different way
Culture• We do things in a different way
Body language• Give the wrong idea
– Use of hands
– Face/head movement
– Clothing
– Distance
– Time
PRESENT STEPS Feedback Language/Culture Training
DEFINE
DEFINE
BUSINESS ETHICS Law tells us what we should NOT do Ethics tell us what we SHOULD do
JAPAN Money
• From business to government• Stock tips & buy backs• Unfair market practices
Sexism & Racism• Women in Japan are now fighting back against sexism• Women working for Japanese MNCs in the U.S. are also fighting
sexism• Japanese MNCs in U.S. avoid hiring black workers
Women Managers• 2.2% of management positions in companies 1,000 up employees
EUROPE French & German Managers Are Less Concerned With
Ethics• “The price of doing business.”
Women Managers• France: about 8% women• Germany: 7.8% women
CHINA MNCs in China Get Low Wages but at What Social Price? Intellectual Property Problems
• Products are copied or sold out the backdoor
Business People in China May Like Better Laws to Stop These Problems
UNITED STATES Law to Stop Corruption
• FCPA (FOREIGN CORRUPT PRACTICES ACT)• Payments for contracts may be normal practice in some countries• Some business people like FCPA because it makes the situation
more clear
Social Help• Aid to other countries
CASE STUDY Internaltional Carpet
Wholesalers (U.S.)• Mr. James McHenry (buyer)
SOMARTA (Morocco)• Mr. Abdelhadi Hachad (Managing
Director)
----------------------------------- Purchase Handmade Rugs 10-12 Year Old Girls Working ------------------------------------ What Would You Do?
Case 5 Assan Motors Participants:• Mr. Korihito: president of American manufacturing division of Assan
Motors• Mr. Satomoto: president of Assan Motors, based in Tokyo• Hunt Stevenson: previously foreman in auto manufacturing factory
when owned by U.S. firm, now appointed employee liaison for Assan Motors in the U.S. factory
Situation:• See Film Gung Ho
Managing Conflict Conflict• Normally, we think of conflict as
hindering the achievement of the organization’s goals, but another view of conflict is that it improves effectiveness by stimulating change and improving the decision-making process.
Traditional View• All conflict is BAD and must be
resolved quickly
Interactionist View• An org. with no conflict is static
and does not adapt
SurvivalConflict Change Adaptation
Conflict-Survival Model
Hig hs
Hig hsLo w Level of conflictorga
niza
tion
al e
ffect
iven
ess
Ap a the ticSta g na ntN o nre sp o nsiveLa c k id e a s