Chapter 3 Organizational Behavior in a Global Context

1. Chapter 3Organizational Behavior in aGlobal Context Michael A. Hitt C. Chet Miller Adrienne Colella Slides by Ralph R. Braithwaite

2. McDonald’s Thinks Globally and Acts Locally Exploring Behavior in Action • 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?

3. Knowledge Objectives • Define globalization and discuss the forces that influence this phenomenon. • Discuss three types of international involvement by associates and managers and describe problems that can arise with each. • Explain how international involvement by associates and managers varies across firms. • Describe high-involvement management in the international arena, emphasizing the adaptation of this management approach to different cultures. • Identify and explain the key ethical issues in international business.

4. Forces of Globalization Globalization – 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

5. Thoughts? Culture Shared 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. “Many fear that unique cultures around the world will disappear over time if the world becomes one unified market for goods and services.”

6. Growth Political Risks Diversification of Risk Economic Risks Opportunities Challenges Economiesof Scale Location Advantages Managerial Risks Opportunities and Challenges Exhibit 3-1: Opportunities and Challenges for Firms with International Involvement

7. Political Risks Economic Risks Managerial Risks Risks

8. Well suited to associates who thrive on challenge Typically member of geographically dispersed teams Individual Issues Virtual Teams Swift Trust Internationally Focused Jobs

9. Learning About a Counterpart’s Culture • 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

10. Building Relationships Adjusting to Local Culture Developing a Feeling of Being at Home Spousal Adjustment Effectiveness at Foreign Job Assignments Expatriates Culture Shock Ethnocentrism

11. Train the entire family, if there is one • Departure orientation • Key cultural information • Conversational language training • Convince busy families of need for training Training for Expatriates

12. After Arrival • Additional training • Continued language training • Social support • Reintegration process

13. Glass Border • Historically, fewer international assignments for women • Results in issues of development and knowledge for higher-level jobs • Impact on human capital

14. Are Asian Women Breaking the 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? ExperiencingStrategic OB

15. Foreign Nationals as Colleagues Some issues involve different: Values Ways of Thinking Norms Thought Patterns Working Styles Decision Styles

16. High-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 United States Germany Context Cultures

17. Monochronic 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 Time Orientation Latin America Southern Europe South Asia Southeast Asia North America Northern Europe Many Japanese

18. Cultural 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.

19. Multi-domestic strategy Global strategy Transnational strategy Opportunities for International Participation

20. Local Responsiveness Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics

21. Organizational Design Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics

22. International Participation Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics

23. Dimensions of National Culture Power Distance Individualism Uncertainty Avoidance Assertiveness National Culture Humane Orientation In-group Collectivism Gender Egalitarianism Performance Orientation Future Orientation Exhibit 3-4: Dimensions of National Culture

24. National Cultures L – Low M – Medium H – High Adapted from Exhibit 3-5: National Culture in India, Germany, and the United States

25. Managing 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? ExperiencingStrategic OB

26. National Culture and High-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:

27. What are your thoughts regarding AES’s process? National Culture and High-Involvement Management InformationSharing Decision Power andIndividual Autonomy Decision Power andSelf-Managing Teams

28. Ethics in the International Context Principles of proper conduct focused on issues such as: Corruption Exploitationof Labor EnvironmentalImpact

29. Top Five Bottom Five United States 17 Absence of Corruption Rankings 1. Iceland 2. Finland 2. New Zealand 4. Denmark 5. Singapore 155. Turkmenistan 155. Myanmar 155. Haiti 158. Bangladesh 158. Chad Adapted from Exhibit 3-6: Absence of Corruption in Select Countries

30. ManagerialAdvice Caux Round Table: Ethical Principles for Business Responsibilities Economic and Social Impact BusinessBehavior Respectfor Rules Support forMultilateral Trade Respect for the Environment Avoidance of Illicit Operations

31. The Strategic Lens • Given the complexity and challenges in operating in foreign countries, why do organizations enter international markets? • How can understanding and managing cultural diversity among associates contribute positively to an organization’s performance? • How can being knowledgeable of diverse cultures enhance an individual’s professional career?

32. Questions