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International Strategy > 1.3 Competitive Advantage in a Globalized World > Flashcards

1.3 Competitive Advantage in a Globalized World Flashcards

1
Q

Culture

A

The integrated pattern of human knowledge, belief and behavior
Consists of language ideas, beliefs, customs, taboos, codes, insitutiitions, tools, techniques, art, rituals, ceremonies
Implies that rituals, climate, values and behaviors bind together into a coherent whole
Collective programming of the mind

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2
Q

Cultural iceberg: 3 sections

A

High culture: visual
Folk culture: visual
Deep culture: unseen (role, rituals)

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3
Q

Different grouping within cultures

A

Individual
Group
Organizational (different department)
National (region grouping)
Global culture

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4
Q

Different determinants of culture

A

Culture is formed through interactions, norms, values, and systems. Elements that interlink with that are:
Religion
Social structure
Language
Political philosophy
Economic philosophy
Education

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5
Q

Different functions of culture

A

Culture created meaning and structure, togetherness and community
Aids in setting boundaries (we vs. them)
Gives explanations to what is right/wrong/good/bad

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6
Q

Cultural frameworks - Hofstede

A

Power distance index
Uncertainty avoidance index
Individualism vs collectivism
Masculinity vs. femininity
Short vs long term orientation
Indulgence vs. restraint

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7
Q

Power distance index

A

Extent to which the less powerful members of an organization accept and expect that power is distributed unequally
Represents inequality
Suggests that a society’s level of inequality is endorsed by followers as much as by leaders

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8
Q

Small power distance

A

Inequality is so wrong and should be reduced as much as possible
There are hierarchies but it doesn’t mean that superiors are almighty
Power should be used legitimately, everyone is under the same laws
Independence is very important
Ex. Australia, US, Germany

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9
Q

Large power distance

A

Inequality is considered a normal part of society
Superiors are superior begins
Power comes first
Respect is very important
Ex. Russia, China

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10
Q

Uncertainty avoidance index

A

Deals with a society’s tolerance for uncertainty and ambiguity
Relates to levels of anxiety and distrust in the face of the unknown
Habits or rituals and need to know the truth

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11
Q

Weak/tolerant Uncertainty avoidance index

A

Uncertainty is normal and accepted
Less stress and anxiety
Controlled aggression and emotions
Different is curious
Don’t like rules that much, rules bend - deregulation
Change jobs easily
More open
Ex. US, South Africa

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12
Q

Strong/avoidant Uncertainty avoidance index

A

Uncertainty avoiding
Uncertainty is a threat that must be fought
Aggression and emotions are vented
Different is dangerous
There must be rules - regulation
Dont change jobs
Ex. Russia, Greece, Argentina

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13
Q

Individualism vs. collectivism

A

The extent to which people feel independent, as opposed to interdependent as members of larger wholes

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14
Q

Individualism

A

I identity
Competition is between individuals
Task comes first, relationship after
Excessive communication, need to know every detail
More press freedom
High divorce rates
Ex. USA, Western Europe

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15
Q

Collectivism

A

We identity
Competitions between groups
Family first, task second
High content communication
Lower press freedom
Low divorce rates
Ex. China, India, Japan

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16
Q

Masculinity vs. femininity

A

Extent to which the use of force is endorsed socially
Masculine society: men are tough, women are soft, big is beautiful and quantity is important
Feminine society: genders are closer and more equal, no competition, sympathy for one another

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17
Q

Masculinity

A

Work is more important than family
Father is on facts, mother on feelings
Admire the strong
Disgust for the weak
Boy fight and do not cry, girls opposite
God is important
Ex. China, Venezuela

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18
Q

Femininity

A

Balance family and work
Both mother an father should be with facts and feelings
Jealous of high flyers
Sympathy for the weal
Boys and girls cry but don’t fight
Religion not that important
Ex. Norway, Sweden, Finland

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19
Q

Short vs. long term orientation

A

Deals with change
Long time oriented: prepares for the future
Short term oriented: world is based on now, past is used as a moral compass, more religious

20
Q

Short term orientation

A

Good and evil are absolute, always the same
Superior person is always the same individual
Proud of their own country
Traditions are sacred
2 truths cannot oppose each other
Fundamentalism and more extreme solutions to problems
Ex. North Africa, Nigeria, Egypt

21
Q

Long term orientation

A

Good and evil are relative
Superior persons is someone who known what to do in different circumstances
Seek positive information, inspiration, and improvement by looking at other countries
Traditions can change over time
If two truths oppose each other a new truth is created
Important to compromise to solve problems
Rewards will be given more likely in long term performance
Ex. Russia, china
Inbetweeners: USA, Canada, Spain

22
Q

Indulgence vs restraint

A

Indulgent cultures: good to be free and do what you want, friends are important
Restored cultures: makes it feel like life is hard and you have more duties than freedom
Subjectiveness of happiness

23
Q

Indulgence culture

A

People tend to eel healthier and happier
Perception of personal life control, masters of their own life
Leisure ethic
Optimist positive attitude
Extraverted personalities
Friends are important
Participate in more sports
Less moral discipline
Ex. Australia, Mexico, Argentina

24
Q

Restraint culture

A

Less happy and healthy
Feel like many things are not their own doing
Work ethic
Pessimistic and cynical attitude
Introverted societies
Friends are not important
Fewer sports, you watch but do not participate
More moral discipline
Ex. China, Russia, Ukraine

25
Q

World value survey

A

Different values, what do people find most or least important
10 basic values that connect and correlate
Also contradict each other

26
Q

10 basic values

A

Benevolence (welfare of close others)
Conformity (obey rules/norms)
Tradition
Security
Power (wealth, control)
Achievement
Hedonism (pleasure)
Stimulation (excitment)
Self direction (freedom)
Universalism (welfare of all)

27
Q

Cross cultural literacy

A

Important for companies to succeed internationally
Be informed about the culture
Do not believe yours is better
Understand and participate fluently in another culture
Key to achieving competitive advantage

28
Q

Ethnocentrism

A

Evaluating other cultures based on your cultures norms and standards
Belief that your culture is the “correct” one

29
Q

Why do countries trade goods

A

Countries specialize in the production and export of goods that they produce most efficiently
They import goods that they cannot produce efficiently

30
Q

New trade theory

A

Has an emphasis on the role of economies of scale
Larger production volumes reduce the cost of production due to learning effects and spread fixed capital over high number of units
Create gains for trade through lower consumer prices and higher product variety
First mover advantages explain national advantages in the production of goods

31
Q

Theorists about trade theory

A

Adam Smith - absolute advantage
David Reicardo - comparative advantage
Hecksher-ohlin - role of factor endowments

32
Q

National competitive advantage: Porter Diamond - different elements

A

Firm strategy, structure and rivalry
Factor endowments
Demand conditions
Related and supporting industries
Government
Chance

33
Q

Porter diamond - firm strategy, structure and rivalry

A

Domestic rivalry is instrumental to international business as if forces companies to develop unique and sustainable strengths and capabilities
The more intense the rivalry is, the more companies are pushed to be innovative and maintain/gain competitive advantage

34
Q

Porter diamond - factor endowments

A

Natural, capital and human resources available
Porter argues that created factor conditions such as skilled labour force, good infrastructure and scientific knowledge are more important instead of natural factors (such as oil)

35
Q

Demand conditions

A

Refer to how favorable industries within a nation are
Larger markets mean more challenges but also created opportunities to grow and become better as a company
Ideally, good demand conditions not only has local customers who are sophisticated but also push the company to grow, innovate and improve quality

36
Q

Porter diamond - related and supporting industries

A

The foundation on which the focal industry can excel
Companies are reliant on alliances and partnerships to create additional value fro customers and be more competitive
Suppliers are crucial to enhancing innovation through more efficient and high quality inputs
If the suppliers are global competitors its good

37
Q

Porter diamond - government

A

Government is a catalyst and challenger here
Porter believes hat the government is not an essential helper and support to create competitive industries, only companies can do that
Governments should encourage and push companies to raise their aspirations and move to even higher levels of competitiveness through infrastructure, education systems, good health sector, promoting rivalry, by enforcing antitrust laws and encourage change

38
Q

Porter diamond - chance

A

Chance of world events might lead to advantages for some companies: war, natural disasters, covid..
These factors cannot change, but they should be monitored so that you can make decisions as necessary to adapt to the changing market conditions

39
Q

HRM has the following components

A

Humans resource acquisition
Human resource development
Compensation
Design of work systems
Labour relations
- in an international context these might look a bit different as they might need to have staffing policies

40
Q

Staffing policies

A

Selecting individuals who have the skills required to do particular jobs
A tool for developing and promoting the desired corporate culture of the firm
New employees also need to have a good connection or match well with the company’s culture

41
Q

3 types of staffing policies

A

Ethnocentric staffing policy
Poly centric staffing policy
Geocentric staffing policy

42
Q

Ethnocentric staffing policy

A

Key management positions are filled by parent-country nationals
Adopt because the firm may
Believe the host country law qualified people to fill these roles
Feel this is the best way to maintain a unified corporate culture
Relive that the best way to transfer core competencies is to transfer parent country nationals who have knowledge of that competency to the foreign operation

43
Q

Polycentric staffing policy

A

Host country nationals are recruited to manage subsidiaries, while parent country nationals occupy key positions at corporate headquarters
Pros/cons:
local knowledge and understanding
Less expensive than ethnocentric approach
Host country nationals have limited opportunities to gain experience outside their own culture and thus cannot process

44
Q

Geocentric staffing policy

A

Seeks the best people for key jobs through the organization, regardless of nationality
Pros/cons:
makes best use of firms human resources
International executives
Firms better able to create value
Reduce one culture overshadowing, enhance local responsiveness
Expensive and complex

45
Q

Future of HRM and staffing

A

Globalization has required firms to adopt more geocentric approach
More important to build diverse workforces
Shift toward greater economic nationalism might affect HR strategy
Tougher policies toward legal migration will make it more difficult to move talent around the world

International Strategy (4 decks)

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