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Working in a MNC

Working in a MNC. S.I. Lee. Hanyang University April 7, 2005. Key Factors to consider to be a successful. Mindset is important differentiation Strategy, Structure, Control systems differ Multiple staffing policies Culture a key variable for success Religion plays important role.

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Working in a MNC

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  1. Working in a MNC S.I. Lee Hanyang University April 7, 2005

  2. Key Factors to consider to be a successful • Mindset is important differentiation • Strategy, Structure, Control systems differ • Multiple staffing policies • Culture a key variable for success • Religion plays important role

  3. Vertical Differentiation Concerned with where decisions are made. • Centralization : • Facilitates coordination. • Ensure decisions consistent with • organization’s objectives. • Top-level managers have means • to bring about organizational • change. • Avoids duplication of activities. • Decentralization : • Overburdened top management. • Motivational research favors • decentralization. • Permits greater flexibility. • Can result in better decisions. • Can increase control. No “right” answer - mix

  4. Strategy and Centralization Multi-domestic Decentralize Global Centralize Transnational Both Centralize And Decentralize International Centralize for core competencies Decentralize for Operating decisions

  5. Strategy, Structure and Control Systems International Strategy

  6. The International Structural Stages Model Worldwide Product Division Global Matrix (“Grid”) Foreign Product Diversity Alternate Paths Of Development International Division Area Division Foreign Sales as a Percentage of Total Sales

  7. A Global matrix Structure Headquarters Area 1 Area 2 Area 3 Product Division A Product Division B Manager here Belongs to Division B And area 2 Product Division C

  8. Matrix Structure Attempts to meet needs of transnational strategy. Doesn’t work as well as theory predicts. “Flexible” matrix Structures. Conflict and power struggles.

  9. Interdependence, Performance Ambiguity, and the Costs of Control for the Four International Business Strategies

  10. Ethnocentric Polycentric Geocentric Types of Staffing Policy Key management positions filled by parent-country nationals Host-country nationals Manage subsidiaries, parent Company Nationals hold key Headquarter positions Key management positions filled by parent-country nationals

  11. World’s Religions

  12. Religion and Economic Implications • Christianity • “Protestant Work Ehich” and “The Spirit of Capitalism”. • Catholicism • Salvation in next life • Islam • Favors market-based systems. • No payment or receipt of interest. • Hinduism • Asceticism may have an impact. • Caste system plays a role. -> Promotion • Spritrial growth & development • Weak work ethic • Buddhism • Little emphasis on entrepreneurial behavior. • Confucianism • Loyalty, reciprocal obligations, and honesty in dealings.

  13. Language • Allows people to communicate. • Structures the way the world is perceived. • Directs attention to certain features of the world rather than others. • Helps define culture. • Creates separatist tendencies?

  14. Nonspoken Language • Nonverbal cues: • Eyebrows • Fingers/thumbs • Hand gestures • Feet • Personal space • Body gestures • Dining Etiquette

  15. Hofstede • Study(IBM) is a general way to look at differences between cultures. • 4 dimensions : • Power distance • Individualism versus collectivism. • Uncertainty avoidance. • Masculinity versus femininity. • But : • Assumption of one-to-one relationship between culture and nation-state. • Research may be culturally bound. • Respondents worked within a single company. • Work is beginning to look dated(1967-1973)

  16. Work Related Values for Selected Countries

  17. Culture and Competitive Advantage • The connection suggests : • Which countries are likely to be the most viable competitors. • Which countries in which to locate production facilities and do business. • Need to develop cross-cultural literacy • Regular rotation & transfer • Beware of ethnocentric behavior

  18. Determinants of Culture Economic Philosophy Political Philosophy Education Social Structure Language Religion

  19. Social Structure Hard to Build teams Individual Western Mobile Managers Entrepreneurship Group Two or more individuals with a shared sense of identity Lack of Loyalty Nonmobile Managers Group Lack of Entrepreneurship Eastern Lifetime Employment Identity

  20. Successful Behaviors required in international conferences • Participate • Be decisive • Aggressive • Follow up

  21. Cultural Sensitivity • Socialization is critical • Eating habits • Drinking habits – especially wine • Get to know personal facts • If not sure, watch!

  22. What MNC’s Look For in Korea • Flexibility • Smarts • Attitude • Functional expertise • Leadership • Communication

  23. Challenge for you • What is your 5 and 10 year goal with regard to career? • How will you get there? • Be specific • Provide background • Clearly articulate your rationale

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