Comp Exam Study Guide - Dr. Reza

What are some similarities between Hofstede’s culture dimensions and the 7d cultural dimensions? Which of the 7d cultural dimensions are unique compared to Hofstede’s model?

1.  Hofstede – 5 dimensions of basic cultural values

  1. Power Distance
  2. expectations regarding equality among people
  3. Uncertainty avoidance
  4. typical reactions to situations considered different and dangerous
  5. Individualism/Collectivism
  6. relationship between individual & the group in society
  7. Masculinity
  8. expectations regarding gender roles
  9. Long-term orientation
  10. basic orientation towards time

2.  7d Cultural Dimensions Model – 5 dimensions deal with relationships among people

a.  Universalism vs. particularism

  1. Rules vs. relationships (exceptions ok for friends,family, etc)

b.  Collectivism vs. individualism

i.  We vs. Me

c.  Neutral vs. affective

i.  Do not reveal thoughts/feelings vs. all forms of emotion in almost every situation

d.  Diffuse vs. specific

  1. Blunt & precise communication; principled moral reasoning vs ambiguous, evasive communication; situation-based moral decisions

e.  Achievement vs. ascription

i.  Status based on performance or heritage

3.  7d - 2 dimensions deal with time and how it deals with nature

a.  Past, present & future, or a mixture

  1. do we do tasks in sequence or several tasks at once?
  2. do we glorify the past
  3. Life is pre-ordained, history is honored, stability revered
  4. enjoy the moment
  5. planning does not lead to execution
  6. plan for the future?
  7. A static organization is a dying organization

b.  Control of vs. “accommodation with” nature

  1. nature viewed as something to be controlled vs. something to be accepted
  2. compromise, harmony & adjustment
  3. patience/win-win relationships
  4. Beliefs regarding whether one controls one’s own fate
  5. Dominate environment & subordinates
  6. Emphasize authority

Compare & contrast ethical relativism & ethical universalism. What are some of the dangers of adopting either ethical relativism or ethical universalism when making decisions? 155

1.  Ethical relativism

  1. Each society’s view of ethics must be considered legitimate & ethical
  2. Can become “convenient relativism” – companies use as an excuse to behave badly, citing cultural differences

2.  Ethical universalism

  1. Basic moral principles transcend cultural/national boundaries.
  2. How do you agree on which morals are universal?
  3. Particularly dangerous with large MNC in developing world
  4. Mgrs assume they know the correct, ethical behaviors
  5. Can view those of developing countries as inferior, immoral
  6. ethnocentrism /cultural imperialism

Discuss the conditions when a transnational or international firm is likely to out-compete a multi-domestic or regional strategist. Contrast this with the opposite situation where the multi-domestic is most likely to be successful.

1.  Transnational/international more competitive

  1. Majority of company’s competitive advantages come from upstream in value chain
  2. Low-cost or high-quality design, engineering or mfg (Toyota)
  3. Company can often generalize these advantages worldwide

2.  Multi-domestic more competitive

  1. Majority of company’s value generated downstream
  2. Marketing, sales, service
  3. Better for multi-domestic strategy
  4. Serves each market individually
  5. Co offers products/services designed for local/cultural needs/expectations

Discuss some of the key questions multinationals need to ask when picking an alliance partner. Pick 2 questions and describe how answering these questions can help the alliance succeed.(427-428)

A.” Make-or-break” questions – avoid alliance if the partner answers “no” to any of them

1.  can the partner deliver as required to make the alliance successful?

2.  Can both partners agree on clear goals & objectives for the strategic alliance?

3.  Have there been attempt to minimize potential for competition and friction with the partner? Does the potential partner have any alliances with your competitors?

4.  Does the potential partner share with you a vision about how the cross-border strategic alliance might evolve?

5.  Is the partner willing and able to contribute the necessary skills & resources to ensure that the alliance is successful?

6.  Does the partner have a history of success with previous strategic alliances?

7.  Have you compared the potential partner with other partners in terms of value creation?

8.  Does the cross-border alliance fit with your vision of your alliance network in the future?

B. key criteria

  1. strategic complementarity
  2. Have a good understanding of each others strategic objectives for the venture
  3. what do you hope to achieve from the venture? ST & LT
  4. not necessary to have same objectives; they can be complementary
  5. complementary skills, products or markets
  6. enhance but don’t duplicate
  7. partners must contribute more than $$
  8. typical: one contributes technical skills, one contributes marketing skills
  9. compatible management styles
  10. balanced dependency
  11. Each partner relied upon to contribute to relationship (like marriage)
  12. Partners feel mutual need to supply their unique gifts to the alliance
  13. Both see their contribution as critical to the success of relationship/alliance
  14. Avoid the “anchor” partner
  15. Can’t or won’t provide share of funding.
  16. Potential partners should study carefully each other’s financial position/investment plan
  17. Partner with weak division/expansion in other areas could drain $$ from alliance
  18. “elephant and ant” complex – Co’s greatly unequal in size
  19. Larger firm likely to dominate smaller
  20. Control mgt/strategies
  21. Different cultures
  22. Bureaucratic vs. entrepreneurial
  23. Assess operating-policy differences with potential partners
  24. Accounting/HR/financial/reporting, etc.
  25. Closing during national holidays
  26. Respect age hierarchy of mgt
  27. Assess difficulty of cross-cultural comm. With a likely partner
  28. Expect slower comm. & more errors of understanding

What are some of the major factors a company needs to take into consideration when setting up a global e-business? Why do companies with already established international brick and mortar units have an advantage in setting up global e-business compared to firms with no international presence? (pg 463)
A. Major Factors

1.  Leadership

a.  Requires dynamic & strong leadership

i.  CEO & senior execs should strongly believe in benefits of e-commerce

1.  Also should have expertise to objectively assess co’s position in order to craft most appropriate e-commerce strategy

2.  Build on current business models & experiment with new e-commerce models

a.  Search for ways to use e-commerce business to reduce costs or enhance services offerec by traditional business

i.  E-commerce can be cheap yet add value to customers

1.  Ex: timely updates such as American Airlines alert

3.  Meet challenge of developing an e-commerce org

a.  Basic choice:

i.  Separate autonomous entity for e-commerce business or

ii. Seamless integration into current model

1.  Best when separation from traditional would confuse customer

2.  requires commitment from senior mgt to using internet aggressively

4.  allocate resources to the e-commerce business

a.  must commit financial, human & technological resources to developing e-commerce capabilities

i.  can be outsourced to 3rd parties or strategic alliance partners

5.  build a superior e-commerce infrastructure as a basis of a differentiation strategy

a.  Examples:

i.  superior online experiences

ii. personalize interaction to each customer

iii.  streamline & simplify transactions

6.  have an e-commerce strategy

a.  use strategic management techniques to implement strong e-commerce plan

i.  well-positioned brand name is critical for repeat purchases

ii. reliable customer service

iii.  not always necessary to offer same products as in physical stores

7.  develop appropriate e-commerce systems

a.  cultural transformation in the way information flows through organization

i.  work hard to remove traditional barriers to ensure increased coordination & information flows among various functional areas (mfg, sales, service, shipping)

ii. align HR policies & compensation with desired e-commerce goals

8.  measure success

a.  have metrics in place

i.  web site hits

ii. # of new e-commerce customers

iii.  E-commerce revenue

iv.  # of customers learning about new products available through other channels

B. Brick & Mortar Advantages

i.  Cross-promotion

ii. shared information

iii.  increased quantity purchases

iv.  use of same distribution channels

Compare and contrast appraisal and compensation system in the US and more collective cultures. Discuss legal and cultural problems multinational managers might face using a collective approach to these systems in the US and using a US approach in more collective cultures (585)

A. Appraisals

  1. US/Individualistic cultures – reflect cultural values
  2. meritocracy
  3. Performance-based systems = rational/fair solutions
  4. provides mgt data on employee performance that is
  5. objective
  6. honest
  7. fair
  8. can be used as basis for HR decisions (pay, promotion)
  9. 4 elements
  10. Performance standards = Work-related
  11. knowledge
  12. quality
  13. volume
  14. initiative
  15. Performance measures
  16. Techniques for objective & comparative assessment

b. ex: teacher evaluation by students;

peer evaluation by classmates on group projects

  1. Performance feedback
  2. Formal superior/subordinate interview
  3. Tell-and-sell method
  4. Supervisor explains evaluation
  5. Tell-and-listen
  6. Supervisor listens to employee feedback
  7. Problem-solving
  8. Supervisor/subordinate work together to identify problems & propose solutions
  9. Human-resource decisions
  10. Most common: performance appraisals
  11. US legal requirements for appraisals (pg 587)
  12. Performance evaluations must relate clearly to job & performance
  13. Performance standards must be provided in writing
  14. Supervisors must be able to measure the behaviors they rate
  15. Supervisors must be trained to use evaluation measures
  16. Supervisors and subordinates must discuss appraisals openly
  17. Appeals procedures must be in place
  18. Around the World/Collectivistic Societies
  19. Appraisals often not seen as important/useful
  20. Direct performance appraisal feedback often avoided by mgrs
  21. Mgrs may work through intermediaries or by withdrawing favors
  22. Maintaining group harmony & reducing managerial competition more important than identifying/developing high-performers
  23. Members of work groups may subtly praise or punish workers based on performance
  24. HR decisions more based on age, in-group membership
  25. “Easier to use seniority to make promotion decisions than to rely on imprecise personnel evaluation methods”

B. Compensation

1. U.S.

  1. External Factors
  2. national/local wage, legislation, unions

a.  Internal Factors

  1. Job importance
  2. Co’s willingness to pay
  3. Employee’s worth to company
  4. Raises generally due to merit
  5. External equity= do we pay at or above market level?

b.  Benefits

  1. Pension, healthcares, vacation, insurance, sick leave, holidays

2.  Around the World

  1. Convergence = managers from all national cultures turning towards meritocracy rather than seniority (pg 592)

3.  Japan

  1. Seniority

1.  Declining rate

a.  More $$ req’d early in life (kids, etc), responsibilities decline after middle age

  1. Attitudes & performance

4.  MNC Implications = the search for harmony

  1. Union-membership density = % of workers belonging to unions

1.  Many countries : over 50%

  1. Organizations must consider countries’ labor relations
Summarize the major findings of the Meaning of Work Study. What are some implications for motivation in different cultures? (689-90, 695)
A.  Findings
  1. Work centrality
  2. Importance of work in a person’s life when compared with other activities (leisure, family, community, religion)
  3. Uncertainty avoidance & masculinity = negative effects on work centrality
  4. Individualism = positive effects on work centrality

B.  Implications

  1. Post-industrialized societies – people more concerned with quality-of-life issues & individual self-expression
  2. People from countries with more avg work hours have higher work centrality
  3. Less-developed societies may also have high work centrality
  4. Money isn’t everything. Benefits people hope to get from their job vary by national context
  5. MNC’s must understand motivating factors for different countries

As a professional management consultant working for a new international venture you have been asked to design the appropriate training seminars for a cadre of expatriate managers who are about to embark on their first 5-year assignments to manage one of the subsidiaries strategically located in Vancouver, Sao Paulo, Dublin and Bombay. Describe the type of leadership training you would provide to the prospective expatriates and the reason for such training. Why is the understanding of subordinate expectations crucial to effective leadership?

1.  Typical reasons for expatriate failure (est cost can be >$1 million)

  1. Individual
  2. Personality of manager
  3. Lack of technical proficiency
  4. No motivation for int’l assignment
  5. Family
  6. Spouse and/or family members don’t adapt to local culture or environment or don’t want to be there
  7. Cultural
  8. Mgrs don’t adapt to local culture or environment
  9. Mgr fails to develop relationship with key people in new country due to complexities of cultivating networks with diverse people
  10. Organizational
  11. Excess of difficult responsibilities of international assignment

ii. Co fails to provide cultural training for language, cultural acquisition

  1. Co fails to pick the right person for the job
  2. Co fails to provide tech support that domestic mgrs receive
  3. Co fails to consider gender equity when considering candidates

2.  Training and development

  1. Cross cultural training
  2. Increases relational abilities of future expatriates
  3. Sometimes includes spouses/families
  4. Family situations a major cause of expat failure
  5. Survey: 63% of MNC’s have cross cultural training prior to expat assignments
  6. Training Rigor
  7. Low = Short period
  8. Techniques
  9. Lectures, videos on local culture
  10. Reading background material
  11. Objectives
  12. Background info on host country
  13. Business & national cultures
  14. Basic info on co. operations
  15. High = 1 month or longer
  16. Techniques
  17. Field trips to host country
  18. Meetings
  19. mgrs experienced in host country
  20. Host country nationals
  21. Extensive language training
  22. Objectives = Develop comfort with host country
  23. national culture
  24. Business culture
  25. Social institutions

a.  Contingency theory of Leadership = assumption that different styles and different leaders are more appropriate for different situations (pg 740)

i.  Characteristics of subordinates

ii. Nature of work setting

iii.  National context

1.  Leader behavior/traits

a.  Sao Paulo

i.  Power Distance = 75 (pg 65)

ii. Traditional Latin American leader = el patron

1.  Autocratic and directive/highest power distance

a.  Seldom delegating work or using teams

2.  Formal top-down org hierarchy

3.  Relationship-oriented

4.  Aggressive and assertive

iii. 

b.  Bombay = Southern Asian - Collectivist culture

i.  Power Distance = 82 (pg 65)

ii. Collaborative & diplomatic leader

iii.  Humane-oriented leader

1. 

c.  Vancouver, Dublin = Anglo – Individualistic culture

i.  Power Distance = 28,30 (pg 65)

ii. Participative leaders

1.  Subordinates encouraged to have a say in decision making

2.  Subordinates’ expectations = what leaders “should” do and what they should may or may not do

a.  The classic contingency view of leadership and the national-context contingency model of leadership can provide multinational managers a guide as to when and how to adapt leadership styles to different national context

b.  All levels of culture influence what leader behavior is considered appropriate or fair by subordinates

c.  Hofstede

i.  cultural value of power distance has profound effects on subordinates’ expectations regarding leaders (text pg 756)

ii. Strong masculinity norms often lead to acceptance of more authoritarian leadership

iii.  Strong uncertainty-avoidance norms may cause subordinates to expect the leader to provide more detail in directions

From Ch 11 – Expatriate Managers

1.  Key success factors for expatriate assignments

a.  Motivation

b.  Technical/managerial skills

i.  More tasks/greater responsibilities than at home