ch3

• Globalization


  A boundaryless world where goods and services are produced and marketed worldwide
• What it means to be "global"

  • Exchanging goods and services with consumers in other countries (Marketplace globalization)
  • Using managerial and employee talent from other countries (Talent globalization)
  • Using financial sources and resources outside home country (Financial globalization)
• How organizations go global

  1. Exporting

  2. Importing

  3. Licensing

  4. Franchising

  5. Strategic alliance-Joint ventures

  6. Foreign subsidiary
• Multidomestic corporation


  Decisions are decentralized to the local country. Rely on local employees to manage the business. Tailor strategies to each country's unique characteristics.
• Global corporation


  Management and other decisions are centralized in the home country. World market is treated as an integrated whole. Focus on control and efficiency.
• Transnational (borderless) corporation


  Artificial geographical boundaries are eliminated. Country of origin or where business is conducted becomes irrelevant. Increases efficiency and effectiveness in a competitive global marketplace.
• Parochialism


  A narrow focus in which manager see things only through their own eyes and from their own perspective
• Differences managers need to understand in global organizations

  • Values
  • Morals
  • Customs
  • Political systems
  • Economic systems
  • Laws
• Hofstede's 5 dimensions of national culture

  • Power distance
  • Individualism versus collectivism
  • Achievement versus nurturing
  • Uncertainty avoidance
  • Long term versus short term orientation
• GLOBE dimensions of cultural difference

  • Assertiveness
  • Future orientation
  • Gender differentiation
  • Uncertainty avoidance
  • Power distance
  • Individualism/Collectivism
  • In-group collectivism
  • Performance orientation
  • Humane orientation
• Assertiveness


  The extent to which a society encourages people to be tough, confrontational and competitive versus modest and tender
• Future orientation


  The extent to which a society encourages and rewards planning, investing in the future and delaying gratification
• Gender differentiation


  The extent to which a society maximizes gender role differences
• Uncertainty avoidance


  Reliance of social norms and procedures to alleviate the unpredictability of future events
• Power distance


  The degree to which members of a society expects power to be unequally shared
• Gender differentiation


  • High: South Korea, Egypt, and Morocco
  • Moderate: Italy, Brazil and Argentina
  • Low: Sweden, Denmark, and Slovenia
• Uncertainty avoidance


  • High: Austria, Denmark and Germany
  • Moderate: Israel, United States and Mexico
  • Low: Russia, Hungary, and Bolivia
• Power distance


  • High: Russia, Spain and Thailand
  • Moderate: England, Brazil and France
  • Low: Netherland, Denmark, and South Africa
• Individualism/Collectivism


  • The degree to which individuals are encouraged by the society to act as individuals rather than as members of group
• Individualism/Collectivism


  • High: Greece, Hungary, and Germany
  • Moderate: Hong Kong, United States and Egypt
  • Low: Denmark, Singapore, and Japan
• In-group collectivism


  • The extent to which the members of a society take pride in member in small groups such as their family, friends and workplace
• In-group collectivism


  • High: Egypt, China, and Morocco
  • Moderate: Japan, Israel and Qatar
  • Low: Denmark, Sweden, and New Zealand
• Performance orientation


  • The degree to which a society encourages and reward group members for performance improvement and excellence
• Performance orientation


  • High: United States, Taiwan, and New Zealand
  • Moderate: Sweden, Israel, and Spain
  • Low: Russia, Argentina, and Greece
• Humane orientation


  • The degree to which a society encourages and rewards individuals for being fair, altruistic, generous, caring and kind to other
• Humane orientation


  • High: Indonesia, Egypt and Malaysia
  • Moderate: Hong Kong, Sweden, and Taiwan
  • Low: German, Spain, and France
• Society expects organizations and managers to be responsible, ethical, and give something back
• Social responsibility


  Firms intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for the society
• Social obligation


  Activities a business firm engages in to meet certain economic and legal responsibilities
• Social responsiveness


  Characteristic of the business firm that engages in social actions in response to some popular social needs
• Arguments For and Against Social Responsibility

  • Exhibit 3-2
• Social involvement can have a positive, negative, or neutral effect on economic performance
• Sustainability


  A company's ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental, and social opportunities into its business strategies
• Walmart's sustainability achievements


  • 26 percent of locations globally use renewable energy
  • 77 percent of global waste diverted from landfills
  • $200 billion worth of goods sold evaluated for sustainability performance
• Ethics


  A set of rules or principles that defines right and wrong conduct
• Different views of ethics

  • Utilitarian view
  • Rights view
  • Theory of justice view
• What determines ethical behavior

  • Morality
  • Values
  • Personality
  • Experience
  • Organization's culture
  • Issue being faced
• Encouraging ethical behavior


  • Code of ethics
  • Ethical leadership
  • Ethics training
• Code of ethics


  The effectiveness depends on management support, ingrained in corporate culture, and how individuals who break the codes are treated
• Being an ethical leader

  • Be a good role model
  • Tell the truth always
  • Don't hide or manipulate information
  • Be willing to admit failures
  • Share personal values
  • Stress shared values
  • Use reward system to hold everyone accountable