chapter 5

Question 1

What are the 4 distinct strategic dispositions toward doing things in a particular way?

Answer 1

1. ethnocentric
2. polycentric
3. regiocentric
4. geocentric

Question 2

what is ethnocentric predisposition

Answer 2

a nationalistic philosophy of management whereby the values and interests of the parent company guide strategic decisions

Question 3

what is polycentric predisposition

Answer 3

a philosophy of management whereby strategic decisions are tailored to suit the cultures of the countries where the MNC operates

Question 4

what is regiocentric predisposition

Answer 4

a philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis

Question 5

what is geocentric predisposition

Answer 5

a philosophy of management whereby the company tries to integrate a global systems approach to decision making

Question 6

What are the orientations of the firms?

Answer 6

Ethnocentric: profitability, top-down, global integration, hierarchical product divisions

Polycentric: public acceptance, bottom-up, national responsiveness, hierarchical area divisions w/ autonomous units

Regiocentric: both profitability & public acceptance, mutually negotiated between region & subsidiaries, product and regional organization tied through a matrix

Geocentric: same as regiocentric, mutually negotiated at all levels of the corporation, global integration and national responsiveness, a networkd of organizations

Question 7

what is the globalization imperative?

Answer 7

belief that one worldwide approach to doing business is key to efficiency and effectiveness

Question 8

what are 3 major challenges for MNCs to adjust strategies for local markets?

Answer 8

• stay abreast of local market conditions; don’t assume that all markets are basically the same
• know the strengths and weaknesses of MNC subsidiaries; assist them in addressing local demands
• give the subsidiary more autonomy; let it respond to changes in local demand

Question 9

Define parochialism and simplification

Answer 9

parochialism: the tendency to view the world through one’s own eyes and perspectives
simplification: the process of exhibiting the same orientation toward different cultural groups

Question 10

high context culture

Answer 10

relatively long-lasting relationships, deep personal involvement, implicit communication, those in authority feel personally responsible for actions of subordinates, spoken agreements over written, distinguishable insiders and outsiders; typically don’t move to enter inner group

Question 11

low-context culture

Answer 11

relatively short relationships; deep personal involvement not valued greatly, explicit communication, diffused authority, personal responsibility hard to pin down, written agreements preferred