Managing in a Global Environment (2)

HOFSTEDES RESEARCH
•Professor Geert Hofstede conducted research on culture, in particular: •Hypothesized that cultural differences between organizations was reflected by national differences:
•2. Future orientation: The extent to which a society encourages and rewards future-oriented behaviours such as planning, investing in the future and delaying gratification. This is essentially equivalent to Hofstede’s long-term/short-term orientation.
Managing in a global environment
•Cultural environment
–national culture
• Values and attitudes shared by individuals • Strength of national culture over organisational culture • Legal, political and economic influences on culture
– E.g.: Disney; Nike
–franchising
• An organisation gives another organisation the right to use its name and operating methods. (services)
Forms of business ventures
Forms of business ventures •Strategies for internationalisation
–licensing
• An organisation gives another organisation the right to make or sell its products using its technology or product specifications. (Manufacturing)
• e.g. Motorola’s $2 billion investment in manufacturing facilities in Scotland
Managing in a global environment
•Legal-political environment – stability of legal and political systems – differences from country to country •Economic environment – type of economic system • Market or command – currency exchange rates – inflation rates – diverse tax rates
•Understanding national cultures – GLOBE (Global Leadership and organisational behaviour effectiveness) framework •GLOBE extends rather than replaces Hofstede’s work. Leadership and motivation focus built on cultural endorsements •170 researchers, collected data over seven years on cultural values and practices and leadership attributes from 18, 000 managers in 62 countries (Javidan and House, 2001). They surveyed managers were from a wide variety of industries and sizes of organisations globally (Javidan and House, 2001).
Challenges of managing a global workforce
•Openness associated with globalisation – Westernisation •Significant cultural differences •Sustainability – global warming – emission trading schemes and carbon taxes – renewable energy technologies and energy efficiencies – “green washing”
9 Dimensions of GLOBE
•1. Assertiveness: The extent to which a society encourages people to be tough, confrontational, assertive and competitive versus modest and tender. This is essentially equivalent to Hofstede’s achievement dimension.
Chapter 4
Managing in a global environment
Doing business globally
•Types of international organisations – multinational corporation (MNC) • All types of international companies that maintain operations in multiple countries – multidomestic corporation • An MNC that decentralises management and other decisions to the local country – polycentric approach
•strategic alliances
• Partnerships between an organisation and a foreign company partner(s) in which both share resources and knowledge in developing new products or building production facilities.
– E.g. Qantas + other airlines – IBM + Toshiba + Seimans (computer chip)
• joint ventures
• A specific type of strategic alliance in which the partners agree to form a separate, independent organisation for some business purpose.
Doing business globally •Types of international organisations
–global
• An MNC that centralises management and other decisions in the home country – ethnocentric approach
–transnational or borderless corporation
• Reflects a geocentric approach
Forms of business ventures
Initial stage
Global sourcing
Early stages Exporting/ Importing After experience Strategic alliance Joint venture Foreign subsidiary Licensing/ Franchising
•3. Gender differentiation: The extent to which a
9 Dimensions of GLOBE (con’t)
•5. Power distance: As did Hofstede, the GLOBE team defined this as the degree to which members of a society expect power to be unequally shared. •6. Individualism/collectivism: Again, this term was defined, similarly to Hofstede, as the degree to which individuals are encouraged by societal institutions to be integrated into groups within organisations and society. •7. In-group collectivism: In contrast to focusing on societal institutions, this dimension encompasses the extent to which members of a society take pride in membership in small groups, such as their family and circle of close friends and the organisations in which they are employed. •8. Performance orientation: This refers to the degree to which a society encourages and rewards group members for performance improvement and excellence. •9. Humane orientation: This is defined as the degree to which a society encourages and rewards individuals for being fair, altruistic, generous, caring and kind to others. This is similar to Hofstede’s nurturing dimension.