Class 8 (Global Talent Management) Flashcards
what are the 4 types of strategies used by MNEs?
- international
- transnational
- multodomestic
- global
describe international strategy
• International strategy
– leverage a company’s core competencies into foreign
markets
– critical elements of the value chain are centralized at
headquarters
• The strategy can potentially work well when
– the firm has core competencies that foreign rivals lack
– there is low pressure for global integration
– there is low pressure for local responsiveness
describe multidomestic strategy
Multidomestic strategy
– emphasizes responsiveness to the unique circumstances
that prevail in a country’s market
– value added activities are adapted to local markets
• The strategy can potentially work well when
– there is high pressure for local responsiveness
– there is low pressure for global integration
describe global strategy
• Global strategy
– make standardized products that are marketed with little
adaptation to local conditions
– exploit location economies and capture scale economies
• The strategy can potentially work well when
– the MNE is the cost leader
– there is low pressure for local responsiveness
– there is high pressure for global integration
describe transnational strategy
Transnational strategy simultaneously leverages
core competencies worldwide, reduces costs by
exploiting location economics, and adapts to local
conditions
• The strategy can potentially work well when
– global learning and knowledge flows are emphasized
– there is high pressure for local responsiveness
– there is high pressure for global integration
social ranking is determined by:
Social ranking is determined by
– an individual’s achievements and qualifications
– an individual’s affiliation with, or membership in, certain groups
group affiliations can be:
– Ascribed group memberships
• based on gender, family, age, caste, and ethnic, racial, or national origin
– Acquired group memberships
• based on religion, political affiliation, professional association
describe power distance
– high power distance implies little superior-subordinate interaction
• autocratic or paternalistic management style
– low power distance implies consultative style
individualism vs collectivism
– high individualism – welcome challenges
– high collectivism – prefer safe work environment
risk taking behaviour can differ across cultures:
Uncertainty avoidance – handling uncertainty • Trust – degree of trust among people • Future orientation – delaying gratification • Fatalism – attitudes of self-determination
cultures handle information in different ways:
– Perception of cues
– Obtaining information
• low context versus high context cultures
– Information processing
– Monochronic versus polychronic cultures
– Idealism versus pragmatism
cross border communications do not always translate as intended
– Spoken and written language – Silent language • Distance • Time and punctuality • Body language • Prestige
what must managers consider when dealing with other cultures?
• Host society acceptance • Degree of cultural differences – cultural distance • Ability to adjust – culture shock and reverse culture shock • Company and management orientation
3 company and management orientations;
– Polycentrism
• business units abroad should act like local companies
– Ethnocentism
• home culture is considered superior to local culture
• overlook national differences
– Geocentrism
• integrate home and host practices
management staffing policy:
Ethnocentric approach: key management positions
filled by parent-country nationals
• Polycentric approach: host-country nationals
manage subsidiaries, parent-country nationals fill
key HQ roles
• Geocentric approach: key jobs staffed without
consideration of candidate nationality
masculinity-femininity index:
masculinity-femininity index
• high masculinity score prefers “to live to work” than
“to work to live”
what are the 3 management staffing policies?
Ethnocentric approach: key management positions
filled by parent-country nationals
• Polycentric approach: host-country nationals
manage subsidiaries, parent-country nationals fill
key HQ roles
• Geocentric approach: key jobs staffed without
consideration of candidate nationality
describe work motivation
• The motivation to work differs across cultures
• Studies show
– the desire for material wealth is a prime motivation to
work
• promotes economic development
– people are more eager to work when the rewards for
success are high
– masculinity-femininity index
why might fitting too closely with dominant aspects of local culture might not be best strategy?
– Each culture has variation within it (e.g. heroic
entrepreneurs, American collectivists, Chinese
individualists)
– MNC talent management system might attract those
who are different (“cultural misfits”)
– MNCs often want to recruit those who are
individualistic, Westernized and willing to take risks
what are the types of training provided to expatriates?
– Cultural
– Language
– Practical
what are issues in performance appraisal in an international context?
- Host-nation manager bias
– Different cultural frame of reference and expectations
– Diverging ideas: manager-subordinate relations, task
performance
– Divergent culture: power distance, uncertainty avoidance, masculinity-femininity index, individualism-collectivism - Home-nation manager bias
– Distance effects and lack of international sensitivity
– Reliance on hard data (net profit, market share) vs. more
ambiguous contextual & behavioural considerations
what is acculturation?
process of adopting the cultural traits or social
patterns of another group
what are challenges in the context of int. business?
– Compensation practices across borders
– Labour laws and embedded union-company relations
– Acculturation by expatriate managers
what are the 5 parts of the Lincoln Electric Incentive System?
- Piecework
- Annual bonus
- Individual merit ratings
- Guaranteed employment
- Limited benefits (no paid holidays)
