INTERNATIONAL MANAGEMENT

Transcription

1 THIRD EDITION INTERNATIONAL MANAGEMENT A Cultural Approach CARL RODRIGUES Montclair State University SAGE Los Angeles London New Delhi Singapore

2 Preface xvii PART I INTRODUCTION TO INTERNATIONAL MANAGEMENT 1 1. The International Management Process: An Overview 2 Learning Objectives of the Chapter 2 The International Management Process 3 Culture 4 Practice and Value Aspects of Culture 5 How Culture Is Learned 6 Sources of Cultural Learning 7 The Impact of Culture on International Planning 9 The Impact of Culture on International Organizing 10 The Impact of Culture on International Staffing 10 The Impact of Culture on International Coordinating 11 The Impact of Culture on International Controlling 11 Hofstede's Cultural Dimensions Model 12 The Confucian Dynamism Dimension 12 High- and Low-Context Cultures 20 The African Thought System (Ubuntu) 21 Impact of the Above Cultural Dimensions on Management 22 Other Factors That Affect the Management Process 22 Global Management: A Future Perspective 25 Cross-Cultural Conversion and Technological Advancements 25 Characteristics of the Global Manager 27 Summary 28 Key Terms and Concepts 29 Discussion Questions 29 Exercises 30 Assignment 30 Case 1.1: Globalizing Yourself 31 Case 1.2: Managing in the Constantly Changing Global Environment Cross-National Ethics and Social Responsibility 35 Learning Objectives of the Chapter 35 Cross-National Ethics 36

3 Bribery and Payoffs Abroad 38 Forms of Bribery 39 Extortion 40 To Bribe or Not to Bribe? 41 The U.S. Foreign Corrupt Practices Act of Complaints Made by MNCs Concerning the FCPA Amendments to the FCPA 46 An Alternative Payoff Approach 47 Cross-National Social Responsibility 48 Cultural Relativism 50 Universalism 52 The Normative and the Instrumental Views 54 Human Rights 54 Communicating Corporate Social Responsibility 54 Toward the Globalization of Business Ethics 56 The Impact of Culture on the Business Ethics Visibility Gap 57 Business Ethics and the Internet 58 Summary 59 Key Terms and Concepts 60 Discussion Questions 60 Exercises/Business Ethics Cases 61 Assignment 62 Case 2.1: Merchants of Death 63 Case 2.2: Union Carbide's Entry Into India 64 Case 2.3: Chiquita Bananas in Colombia 64 PART II THE INTERNATIONAL PLANNING PROCESS The Global Environment 68 Learning Objectives of the Chapter 68 The Domestic Environment 69 Domestic Political Climate 69 Domestic Competitive Climate 71 Domestic Economic Climate 71 Domestic Legal System and Government Policies 71 The International Environment 71 The European Union 72 North American Free Trade Agreement (NAFTA) 74 The World Bank 74 International Monetary Fund (IMF) 75 The World Trade Organization (WTO) 75 Organization of the Petroleum Exporting Countries (OPEC) 75 The Foreign Environment 76 Culture 76 Economic Environment 79 Nations' Technological Needs as They Develop 80 Legal and Political Systems 81

4 Competition 89 Cartels 89 Bribery 89 Economic Conditions 89 Government-Owned Enterprises 89 Long-Range Versus Short-Range Orientation 90 A Theory That Aids in Predicting Foreign Competition 90 Trade Barriers 92 Tariffs and Quotas 93 GATT/WTO 94 Monetary Barriers 95 Nontariff Protection 95 Consequences of Trade Barriers 95 Fluctuating Exchange Rates. 96 Labor Relations 97 Differences in Labor Relations Across Nations 98 Labor Unions' Impact on MNCs' Strategies 98 Geography 99 Mother Nature 99 Sources of Information 100 The Internet as a Source of Information 101 Caveat 102 Summary 103 Key Terms and Concepts 103 Discussion Questions 104 Exercises 105 Assignment 105 Case 3.1: Protecting the Pepsi Taste 106 Appendix: An Explanation of the Theory of Comparative Advantage and Currency Exchange Rates International SWOT Analysis 116 Learning Objectives of the Chapter 116 Why Firms Internationalize Their Operations 117 Opportunities and Threats 118 Opportunity Reasons 118 Threat Reasons 123 Why Do Firms Internationalize? 126 Strengths and Weaknesses 126 Foreign Sources of Finance 127 Nature of the Firm's Physical Assets and Personnel Competencies 127 Lead From Strength 128 Types of Corporations 130 Types of International Strategies 131 Ethnocentric Strategy 132 Multidomestic Strategy 132 Global Strategy 133

5 Advantages and Disadvantages of the Global Strategy 136 Transnational Strategy 136 International Strategic and Tactical Objectives 137 Areas in Which Objectives Should Be Established 137 Technology and Global Strategy 144 Some Examples of Business Opportunities Seized via the Internet 146 Outsourcing IT Functions 147 Shortcomings of the Internet 147 Summary 147 Key Terms and Concepts 147 Discussion Questions 148 Exercises 149 Assignment 149 Case 4.1: Levi's International Strategies 150 Case 4.2: This E-Biz Early Bird Didn't Get the Worm Internationalization Strategies 157 Learning Objectives of the Chapter 157 Product/Service Strategy 158 The Self-Reference Criterion (SRC) 158 Product Strategy 161 Service Strategy 165 Information Technology and Service Strategy 165 Diffusing Innovations 167 Dualistic Technological Structures 169 Entry Strategy 170 Exporting Strategy 171 Manufacturing in a Foreign Country 174 Joint Ventures/Contractual and Strategic Alliances 176 Wholly Owned Subsidiaries 179 Export or Manufacture Abroad? 181 Think Global, Act Local 182 Price Strategy 183 International Pricing Strategy 183 Foreign National Pricing and International Pricing 185 Fluctuating Exchange Rates and Costs 187 Countertrade 188 Promotion Strategy 189 Why International Promotional Strategies Fail 189 Developing an Effective International Promotional Strategy 192 Want to Go International? 193 Summary 194 Key Terms and Concepts Discussion Questions 195 Exercises 196 Assignment 197 Case 5.1: Keep On Trekking 198

6 PART III ORGANIZING INTERNATIONAL ENTERPRISES International Dimensions of Organizational Structures 206 Learning Objectives of the Chapter 206 Traditional and Contemporary International Structures 207 The Functional Structure 207 Advantages of the Functional Structure 208 Disadvantages of the Functional Structure 208 The International Division 209 Advantages of the International Division 209 Disadvantages of the International Division 211 The Foreign Subsidiary Structure 211 Advantages of the Foreign Subsidiary Structure 212 Disadvantages of the Foreign Subsidiary Structure 213 The Product Division Structure 213 Advantages of the Product Division Structure 214 Disadvantages of the Product Division Structure 215 The Regional Structure 216 Advantages of the Regional Structure 216 Disadvantages of the Regional Structure 217 The Matrix Structure 218 Advantages of the Matrix Structure 218 Disadvantages of the Matrix Structure 218 Contractual Alliance Structure 221 Network Agreements 221 The Mixed (Hybrid) Structure 223 A General Framework for Decision Making 223 Flat Structures _ 224 The Internet's Impact on the Tallness of Organizational Structures 224 Organic Versus Mechanistic Structures 225 Adaptable Management 225 An Example of a Modern Manufacturing Corporation in China 227 Information Technology and Organizational Structure 228 Organization Communication Flow 229 Information Technology and Organizational Communication 230 Summary 230 Key Terms and Concepts 231 Discussion Questions 231 Exercises 232 Assignment 232 Case 6.1: Toys "fl" Us 233 PART IV INTERNATIONAL STAFFING International Managerial Staffing 240 Learning Objectives of the Chapter 240 Three Approaches to Staffing Foreign Subsidiaries 241 Advantages and Disadvantages of Using Expatriates 241 Japanese Expatriates in the U.S. as an Illustration of the Disadvantages 245

7 Advantages and Disadvantages of Using Host-Country Locals 246 Advantages and Disadvantages of Using Third-Country Personnel 247 Factors Influencing the Choice 249 Top Management's Staffing Outlook 249 Ethnocentric < 249 Polycentric 249 Regiocentric 250 Geocentric 250 Top Management's Perceived Needs 251 Company's Characteristics 251 Host-Country Characteristics 254 Why Expatriates Fail 255 The Physical and Social Environments 255 Varying Technical Sophistication 256 MNC Country's Conflicting Objectives and Policies 257 Overcentralization 257 Gender 258 Repatriation 258 Pitfalls in the Human Resource Planning Function 259 Technology and Expatriation 264 Summary 266 Key Terms and Concepts 267 Discussion Questions 267 Exercises 268 Assignment 268 Case 7.1: Deep in the Republic of Chevron 269 Effective International Human Resource Management 275 Learning Objectives of the Chapter 275 The International HRM Function 276 Additional Functions and Activities 276 Broader Perspective 278 More Involvement in Employees' Lives 278 Changes in HRM Emphasis as the Workforce Mix Varies 278 Risk Exposure 279 More External Influences 281 Aiding Managers in Staffing Foreign Operations 281 Japanese MNCs' Expatriation Practices 281 European MNCs' Expatriation Practices 283 Implications of U.S., Japanese, and European MNCs' Expatriation Practices 284 Selecting and Training the Right Person 285 Selecting the Right Expatriate 285 Finding and Developing Global Expatriates 289 Expatriate Preparation Programs 295 The Corporation's International Environment 295 Pre-Expatriation 296 Cultural Briefing 296

8 Assignment Briefing 297 Relocation Requirements 297 Language Training 297 Expatriation 297 Repatriation 298 Expatriate Compensation 299 Expatriate Base Salary 301 Taxation 302 Benefits 302 Allowances 304 Countries' Labor Laws and International HRM 304 Organizational Culture and Developing Multicultural Teamwork 307 Technology and Cross-National HRM 308 Summary 309 Key Terms and Concepts 309 Discussion Questions 310 Exercises 311 Assignment 311 Case 8.1: Trouble Abroad 312 Case 8.2: DaimlerChrysler: Steering Around Culture Clashes 313 PART V CROSS-CULTURAL COMMUNICATION, BUSINESS PRACTICES, AND NEGOTIATIONS Cross-Cultural Communication Learning Objectives of the Chapter The Cross-Cultural Communication Process The Ideation Stage Realistic Objective Realistic Time Frame,.=- The Encoding Stage Language Letters and Characters Expression and Nonverbal Communication The Role of Formality and Informality in Communication How Much Information Is Needed? Language Translation The Translator's Role The Effective Translator Identify the Right Audience Appeal to Receivers' Motivations English as the Language of Communication in Global Business Identifying the Right Transmission Channel Stage Written or Spoken Message? Format of Messages Body Language Transmission of Messages Through Mediators Communication Principles

9 The Receiving-Decoding Stage 342 The Nature of Received Signals 342 Developing Cross-Cultural Communication Competence 345 Acknowledging Diversity 345 Organizing Information According to Stereotypes 346 Posing Questions to Challenge the Stereotypes 346 Analyzing Communication Episodes 347 Generating "Other-Culture" Messages 348 Information Technology and Global E-Communication 348 Summary 349 Key Terms and Concepts 350 Discussion Questions 350 Exercises 351 Assignment 351 Case 9.1: The Efficient Cross-Cultural Communicator 352 Case 9.2: The Elusive System Cross-Cultural Business Practices and Negotiations 357 Learning Objectives of the Chapter 357 Cross-Cultural Business Practices 358 The Impact of Culture on Business Practices 359 High-Context Versus Low-Context Cultures 364 Business Customs in China, Japan, and South Korea 365 Cross-Cultural Generalizations: A Caveat 369 Cross-Cultural Adaptation: A Caveat 369 Cross-Cultural Negotiations 370 How to Avoid Failure in International Negotiations 371 How Much Must One Know About the Foreign Culture? 372 Strategic Planning for International Negotiations 375 Preparation for Face-to-Face Negotiations 377 Determining a Settlement Range 378 Technological Forms of Negotiation 378 Where Should Negotiations Take Place? 378 Individual or Team Negotiations? 379 What Are the Country's Views on Agreements/Contracts? 379 Tactical Planning For International Negotiations 380 Leverage 380 Delay 380 Emotions 381 Ethical Constraints 382 Conflict Resolution 382 Summary 382 Key Terms and Concepts 383 Discussion Questions 383 Exercises 383 Assignment 384 Case 10.1: The Impatient American Sales Manager 385 Case 10.2: A Failed Cross-Cultural Negotiation Attempt 386

10 Case 10.3: The Long Printed Contract 387 Case 10.4: Profitable Genuineness 387 Appendix 10.1: Negotiating in Europe 388 Appendix 10.2: Asian Bargaining Tactics 390 PART VI CROSS-CULTURAL COORDINATION Cross-Cultural Decision Making 400 Learning Objectives of the Chapter 400 The Decision-Making Process: A Cross-Cultural Perspective 402 The Programmed Decision-Making Process 402 The Nonprogrammed Decision-Making Process 402 The Rational Decision-Making Process 402 The Impact of Culture on Nonprogrammed Decision Making 403 Problem Recognition 403 Criteria 403 Information Gathering 403 Choice and Implementation 404 Decision-Making Behavior: Authoritative or Participative? 404 Decision-Making Behavior: Two Contingency Frameworks 406 The Country-Related Cultural Factors Framework 407 The Universal Factors Model 413 Which Framework Is Correct? 416 Implications of the Two Frameworks for Cross-Cultural Decision Making 418 Group Decision Making and Information Technology 419 Summary 419 Key Terms and Concepts * 420 Discussion Questions 420 Exercises 421 ^*~ Assignment 421 Case 11.1: A Dutchman Abroad 422 Case 11.2: Cultural Traditions 422 Case 11.3: From Napa Valley, California, to Paris, France Cross-Cultural Leadership and Motivation 428 Learning Objectives of the Chapter 428 Cross-Cultural Leadership 429 American-Based Management Theories 429 Relationship-Oriented and Task-Oriented Leadership 430 Initiating Structure and Consideration 432 Japanese PM Theory of Leadership 432 Cross-Cultural Leadership Traits, Abilities, and Behavior 432 Innovator, Implementer, and Pacifier Leadership 432 Managerial Strategy and Application of the Three Leader Types 436 Cross-Cultural Motivation 436 A Comparison of Western and Southeast Asian Motivation Theories 440

11 Theory X and Theory Y 440 Theory T and Theory T+ 440 Chinese Social Motivation Versus Western Individual Motivation 441 I-Ching: Beyond Self-Actualization 444 Stage 6: Social Awareness 446 Stage 7: Social Contribution 447 Stage 8: Social Altruism 447 Stage 9: Multidimensional Development 447 Cross-Cultural Behavior Modification 448 Total Quality Management and Empowerment 449 Work Goals and Values Vary Across Cultures 449 Variation of Work Goals Across Cultures 452 The Full Appreciation of Work Done 456 Work Values: A Study of a Chinese Factory Flexibility in Cross-Cultural Leadership and Motivation 459 Leadership and Motivation Approaches in Four Countries 459 The Impact of Information Technology on Changing Values Across Cultures 461 Summary 463 Key Terms and Concepts 463 Discussion Questions 463 Exercises 464 Assignment 464 Case 12.1: Putting on the Ritz 465, Case 12.2: The Rewarded Chinese Olympic Stars 467 Case 12.3: Volvo's Enriched Job Strategy 468 PART VII INTERNATIONAL CONTROL Headquarters-Foreign Subsidiary Control Relationships 472 Learning Objectives of the Chapter 472 Global Controls: Centralization and Decentralization 473 Headquarters-Foreign Subsidiary Governance Mechanisms 478 The National Culture Scheme 480 Power Distance 481 Individualism 481 Uncertainty Avoidance 482 Confucianism 482 Masculinity 482 The Situational Scheme 483 The Subsidiary's Local Context 483 Size of the Organization 485 Type of Organizational Function 485 Organizations Under Crisis Conditions 487 Management's Preference 487 Government Involvement 488 Information Technology: Communication Costs 489 International Managers Must Consider Both Schemes 489

12 A Framework for Attaining a Balanced HSR 489 Due Process as a Means of Attaining Balanced HSRs 490 Global Corporate Culture and Core Values as a Means of Attaining Balance 493 Nurturing Balance 494 Selling Issues 495 Summary 497 Key Terms and Concepts 497 Discussion Questions 497 Exercises 498 Assignment 498 Case 13.1: Electrolux 499 Case 13.2: See Jack. See Jack Run Europe 501 PART VIII COURSE INTEGRATIVE ASSIGNMENT 507 This section presents instructions for preparing a project aiming to integrate the entire textbook a sort of mini course thesis. Index 511 About the Author 535