• 1. International Management
  • Chapter 11

2. management decision and control

• by:

• Austin, Scott, Andy, Jay

3. Decision-Making process and challenges

• Decision making

• • • The process of choosing a course of action among alternatives.

4. Stage Process 1 Problem perception 2 Problem identification 3 Problem formulation 4 Search for alternatives 5 Evaluation of alternatives 6 Choice of alternatives 7 Start of Operation 8 Implementation 9 Control 5. Factors affecting decision -making authority

• Encourage Centralization

• • large size

• • large capital investment

• • relatively high importance to MNC

• • highly competitive environment

• • strong volume-to-unit-cost relationship

• • high degree of technology

6. Factors affecting decision-making authority

• Encourage Decentralization

• • small size

• • small capital investment

• • relatively low importance to MNC

• • stable environment

• • weak volume-to-unit-cost relationship

• • moderate to low degree of technology

7. cultural differences

• Culture, whether outside or within the organization, has an effect on how individuals and businesses perceive situations and subsequently react.

8. Cultural Differences

• Do decision-making philosophies and practices differ from country to country?

9. Cultural Differences

• Research shows that to some extent they do, although there also is evidence that many international operations, regardless of foreign or domestic ownership, use similar decision-making norms.

10. Total quality management decisions

• An organizational strategy and the accompanying techniques that result in the delivery of high-quality products or services to customers

11. Empowerment

• the process of giving individuals and teams the resources, information, and authority they need to develop ideas and effectively implement them

12. Decision and Control linkages

• controlling

• • the process of evaluating results in relation to plans or objectives and deciding what action, if any, to take.

13. The controlling process

• evaluating results in relation to plans or objectives and deciding what action to take

14. TraditionalModel based on sales forecasts, a manufacturer orders parts for the PCs the parts are warehoused until they are needed by the manufacturer The manufacturer builds the PCs and stores them in the warehouse the units are ordered by the distributors and shipped to the latters warehouse Orders are then received from retailers and the PCs are shipped to them by the distributors Customers buy the PCs from the retailers and receive assistance in setting up the entire system. Direct-Sales Model the manufacturer orders a small number of parts from its suppliers business and individual customers place orders by phone or over the internet the manufacturer builds computers to customers exact specifications the manufacturer ships the computer directly to the customer Hybrid Model the computer manufacturer builds shells: a case, power supply, floppy disc, basic circuitry. the shells are shipped to the distributors, and component suppliers establish a parts inventory with, or near, that of the distributor the customer orders a computer through a retailer or directly from the manufacturer, and the order is forwarded to the distributor. the distributor gathers the parts to assemble the computer to the customers specifications on the dealers behalf, the distributor ships the computer directly to the customer. the dealer then provides setup and additional services for a separate fee 15. Types of control

• Internal and External Control

• Direct Controls

• Indirect Controls

16. APPROACHES TO CONTROL

• SOME MAJOR DIFFERENCES

• EVALUATING APPROACHES TO CONTROL

17. PERFORMANCE EVALUATION AS A MECHANISM OF CONTROL

• Financial Performance

• Quality Performance

• Personnel Performance

18. 50 most-admired global companies 19. Case study

• Since the mid 80s Microsoft has progressively moved throughout China. However, throughout the years Microsoft has faced significant challenges, such as the widespread piracy of its products, Chinese government pressures to transfer its technology, host government promotion for competitor products, discriminatory procurement practices by subnational authorities, and strong encouragement to enter into joint ventures (JVs) with local firms.Microsofts executives have built relationships with top Chinese leaders and have heavily invested in China and built alliances with Chinese technology companies.Even though China committed itself to honor the IPR, the software piracy rates are still extremely high.

20. Questions

• 1. What are the risks that Microsoft has faced in operating in China and dealing with the Chinese government? Do you see these risks as increasing, diminishing, or changing in the future? Are these risks unique to China or present in other developing countries?

• 2. What approaches did Microsoft take to manage its political risks in China? Why might it have favored some of these techniques versus others? Which do you feel worked best? What should Microsoft do going forward?

• 3. In its dealings with China, Microsoft frequently had to deal with lower levels of government. What special types of challenges and opportunities did this present?

• 4. Do other firms have the same risk management options as Microsoft? Why or why not?

• 5. Is Microsoft creating serious risks by supporting, financing, and transferring technology to local Chinese software firms? How might Microsoft manage these risks?

21. International Management

• Chapter 11