chapter 3 organizational behavior in a global context
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Chapter 3 Organizational Behavior in a Global Context. Michael A. Hitt C. Chet Miller Adrienne Colella. Slides by Ralph R. Braithwaite. McDonald’s Thinks Globally and Acts Locally. Exploring Behavior in Action. What are your thoughts on McDonald’s approach to international business? - PowerPoint PPT PresentationTRANSCRIPT
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Michael A. Hitt
C. Chet Miller
Adrienne Colella
Chapter 3 Organizational Organizational Behavior in aBehavior in a
Global ContextGlobal Context
Slides by Ralph R. Braithwaite
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McDonald’s McDonald’s Thinks Globally andThinks Globally and
Acts Locally Acts Locally• What are your thoughts on McDonald’s approach to
international business?
• What about their concept of thinking globally but acting locally. Why is it a good idea?
• What can other businesses learn from McDonald’s example?
Exploring Behavior in Action
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Knowledge ObjectivesKnowledge Objectives1. Define globalization and discuss the forces that
influence this phenomenon.
2. Discuss three types of international involvement by associates and managers and describe problems that can arise with each.
3. Explain how international involvement by associates and managers varies across firms.
4. Describe high-involvement management in the international arena, emphasizing the adaptation of this management approach to different cultures.
5. Identify and explain the key ethical issues in international business.
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Forces of GlobalizationForces of GlobalizationGlobalization – The trend toward a unified global economy involving free trade and a free flow of capital between countries• Products, services, people, technologies, and financial
capital move relatively freely across national borders
• Tariffs, currency laws, travel restrictions, immigration restrictions, and other barriers to these international flows become less difficult to manage
• Unified world market in which to sell products and services, and acquire resources
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CultureCultureShared values and taken-for-granted assumptions that govern acceptable behavior and thought patterns in a country and that give a country much of its uniqueness.
Thoughts?
“Many fear that unique cultures around the world will disappear over time if the world becomes one unified market for goods and services.”
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Opportunities and ChallengesOpportunities and Challenges
Exhibit 3-1: Opportunities and Challenges for Firms with International Involvement
Diversification of Risk
ChallengesChallenges
Political Risks
Political Risks
Economic Risks
Economic Risks
Managerial Risks
Managerial Risks
GrowthGrowth
Location Advantages
Location Advantages
OpportunitiesOpportunities
Economiesof Scale
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RisksRisks
Political Risks
Economic Risks
Managerial Risks
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Internationally Focused JobsInternationally Focused Jobs
Individual Issues
Virtual Teams
Swift Trust
Well suited to associates who thrive on challenge
Typically member of geographically dispersed teams
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• Don’t attempt to identify another’s culture too quickly
• Beware of the Western bias toward taking actions
• Avoid the tendency to formulate simple perceptions of others’ cultural values
• Don’t assume that your values are the best for the organization
• Recognize that norms for interactions involving outsiders may differ from those for interactions between compatriots
• Be careful about making assumptions regarding cultural values and expected behaviors based on the published dimensions of a person’s national culture
Adapted from Exhibit 3-2: Learning about a Counterpart’s Culture
Learning About a Learning About a Counterpart’s CultureCounterpart’s Culture
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Foreign Job AssignmentsForeign Job Assignments
ExpatriatesExpatriates Culture ShockCulture Shock EthnocentrismEthnocentrism
Spousal Spousal AdjustmentAdjustment
Building RelationshipsBuilding Relationships
Adjusting to Local CultureAdjusting to Local Culture
Developing a Feeling of Developing a Feeling of Being at HomeBeing at Home
Effectivenessat
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Training for ExpatriatesTraining for Expatriates
• Train the entire family, if there is one
• Departure orientation• Key cultural
information• Conversational
language training• Convince busy
families of need for training
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After ArrivalAfter Arrival• Additional training
• Continued language training
• Social support
• Reintegration process
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Glass BorderGlass Border• Historically, fewer international assignments
for women
• Results in issues of development and knowledge for higher-level jobs
• Impact on human capital
3-14ExperiencingStrategic OB
Are Asian Women Breaking the Are Asian Women Breaking the Glass Border?Glass Border?
• What role do cultural values and traditions still play in the Asian business world?
• Are more Asian women taking on leadership roles? How will this impact business in the future?
• What are the potential negative consequences for Asian companies that do not make the best use of all their human capital?
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Foreign Nationals as ColleaguesForeign Nationals as ColleaguesSome issues involve different:
ValuesValues Ways of ThinkingWays of Thinking
NormsNorms Thought PatternsThought Patterns
Working StylesWorking Styles Decision StylesDecision Styles
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Context CulturesContext CulturesHigh-context culture• Value personal
relationships
• Develop agreements based on trust
• Favor slow, ritualistic negotiations
Low-context culture• Value performance and
expertise
• Develop formal agreements
• Engage in efficient negotiations
Japan South Korea GermanyUnited States
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Time OrientationTime OrientationMonochronic
• Prefer to do one task in a give time period
• Dislike multi-tasking
• Prefer to do one task without interruption
• Prompt, schedule driven and time-focused
Polychronic • Comfortable doing more
than one task at a time
• Not troubled by interruptions
• Time is less of a guiding force
• Plans are flexible
Latin America
Southern Europe
South Asia
Southeast Asia
North America
Northern Europe
Many Japanese
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Cultural IntelligenceCultural Intelligence
The ability to separate the aspects of behavior that are based in culture as opposed to unique to the individual or all humans in general.
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Opportunities for International Opportunities for International ParticipationParticipation
Multi-domestic strategy
Global strategy
Transnational strategy
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Local ResponsivenessLocal Responsiveness
Local Multi-domestic Global Transnational
Production High Low Medium
R&D High Low Medium
Product Modification
High Low Medium/High
Adaptation of Marketing
High Low/Medium Medium/High
Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics
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Organizational DesignOrganizational DesignMulti-domestic Global Transnational
Delegation of power to local units
High Low Medium/Low
Inter-unit resource flows between and among local units
Low Low/ Medium High
International resource flows from and/or controlled by corporate HQ
Low High Low/ Medium
Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics
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International ParticipationInternational Participation
Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics
Multi-domestic Global Transnational
Opportunities for Associates and Managers
Low High High
3-23Exhibit 3-4: Dimensions of National Culture
Dimensions of National CultureDimensions of National Culture
National Culture
National Culture
Power Distance
Power Distance IndividualismIndividualism
Assertiveness
Assertiveness
Humane Orientation
Humane Orientation
Performance Orientation
Performance OrientationFuture
Orientation
Future Orientation
Gender Egalitarianism
Gender Egalitarianism
In-group Collectivism
In-group Collectivism
Uncertainty Avoidance
Uncertainty Avoidance
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National CulturesNational Cultures
Adapted from Exhibit 3-5: National Culture in India, Germany, and the United States
Culture Dimension India Germany United States
Uncertainty avoidance M H M
Power distance M/H M M/L
Individualism M H M
Assertiveness L/M H H
In-group collectivism H L/M M/L
Gender egalitarianism L M/L M
Future orientation M M M
Performance orientation M M H
Humane orientation H/M L M
L – Low M – Medium H – High
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Managing Diverse CulturesManaging Diverse Cultures
Geert Hofstede
What are your thoughts about Hofstede’s studies on culture?
What are your thoughts about the cultural issues in the companies mentioned?
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National Culture and National Culture and High-Involvement ManagementHigh-Involvement Management
• Power-distance
• Uncertainty avoidance
• Individualism
• Assertiveness
Must be implemented according to a country’s cultural characteristics. Information sharing and decision power can be adapted to different levels of:
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National Culture and National Culture and High-Involvement ManagementHigh-Involvement Management
InformationInformationSharingSharing
Decision Power andDecision Power andIndividual AutonomyIndividual Autonomy
Decision Power andDecision Power andSelf-Managing TeamsSelf-Managing Teams
What are your thoughts regarding AES’s process?
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Ethics in the International Ethics in the International ContextContext
Principles of proper conduct focused on issues such as:
CorruptionCorruption ExploitationExploitationof Laborof Labor
EnvironmentalEnvironmentalImpactImpact
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Absence of Corruption RankingsAbsence of Corruption Rankings
Adapted from Exhibit 3-6: Absence of Corruption in Select Countries
Top Five Bottom Five
1. Iceland
2. Finland
2. New Zealand
4. Denmark
5. Singapore
155. Turkmenistan
155. Myanmar
155. Haiti
158. Bangladesh
158. Chad
United States
17
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Caux Round Table: Ethical Caux Round Table: Ethical Principles for BusinessPrinciples for Business
ResponsibilitiesResponsibilitiesResponsibilitiesResponsibilities
ManagerialAdvice
Economic and Economic and Social ImpactSocial Impact
Economic and Economic and Social ImpactSocial Impact
Support forSupport forMultilateral TradeMultilateral Trade
Support forSupport forMultilateral TradeMultilateral Trade
BusinessBusinessBehaviorBehavior
BusinessBusinessBehaviorBehavior
RespectRespectfor Rulesfor RulesRespectRespectfor Rulesfor Rules
Respect for the Respect for the EnvironmentEnvironment
Respect for the Respect for the EnvironmentEnvironment
Avoidance of Avoidance of Illicit OperationsIllicit OperationsAvoidance of Avoidance of
Illicit OperationsIllicit Operations
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The Strategic LensThe Strategic Lens
1. Given the complexity and challenges in operating in foreign countries, why do organizations enter international markets?
2. How can understanding and managing cultural diversity among associates contribute positively to an organization’s performance?
3. How can being knowledgeable of diverse cultures enhance an individual’s professional career?
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QuestionsQuestions