measuring globalization - texas tech university
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Measuring Globalization
The worlds mosl inlegraled counlries have followed very dilleren poths to globalization As shown Singapore has the highest reloliv composit scar and Slovenia the
lowest SCore Th Iotol score comprises triple weighting on FDI ond double weighting on trode
ECONOMIC INTEGRATION PERSONAL CONTACT POLITICAL ENGAGEMENT Including inlernotionol frode and Including telephone calls IrovI IncludIng foreigo oid treaties foreign direcl investmenl and remillonces organizelions ond peacekeeping
TECHNOLOGICAL CONNECTIVITY
Technological variables and polilicol voriobles are each collapsed inlo ingle equal indicolors
bull bull
Including number of Inlerne users hosts and secure servers
An Open Systems Model
OPERATING ENVIRONMENT
Greatest Risks affecting FDI Decisions As Reported by Global Companies
Government regulation
Country financial risk
Currency risk
political and social disturbances
Absence of rule of low
72
67
63
62
34
Disruption of key supplier customer or portner 33
Corporate governance issues 25
Security threats to employees or assets
Terrorist attacks
Product quolity or safety problems
Thelt of intellectual property
22
21
19
17
IT disruption
Employee fraud or sabotage
Notural disasters
Activist attacks on global or corporatge brands
17
_8
_8
5
0 10 20 30 40 50 60 70 80
Source wwwatkearneycom September 12 2008 Copyright A T Kearney Inc 2007 All
rights reserved Reprinted with permission
MNE and Host Govrmments
Eoonomic sncl dlVclopmentul policies
bull MNfl~ should onsuh wi1 h guvemmenlu authorities and rmrionlll rmployer and wnrke~ lganlLatioSls to ensure thal their inyenexullenls conform lO the economic and social de-velopll1ent pohcles of die host country (ICC~ OECD ItO UNleTC)
bull MNR~ should nOl1clvcrdy disturb the bdiln(e~of-paymcnlS or currenry exchange rntes oftheetlUl1lrieli in which they openlte They should try inconiultallnn With ihe gov(fOment to res(llve lmlancenf-puyments and t~chunge te ifikullles when possible (ICC OECD UNILfC)
MNE should Ltloperale with governmental Jlolidcs reg~rding local equity paticiption (rCC lJNICTC)
MNEgt should not dominate (he cnpihd mllrket~ of the countries in which Ihey openlle (lCe UNCTC)
bull MNEii should provide the informulinn ne(e_o~ary for cOlTcctly assc~ing luxeS to be pltlid to host guvernment ulhorilles (ICC OECO)
MNEs should not engage in Wmsfer pricing policie~ that modify the taK ba~c on which their entities are assessed (OEC) UNILTC)
MNE-s should give ptdc(cncc 10 local S(ltlrces for compunenlS and raw materials if prices and quality are wmpelltlvc (ICC ILO)
MNEs should reinvest some profits in tIle (otlntries in which they bullbullale (ICC)
Laws And regulations
bull MNEs file subject to tbe laws regulatiuns andjurjooicliou of the countries in which they operalt (JCC OEeD UNeTC)
bull MNr shmltd respect rhe right of every country 10 elcnise cOfltrol over it natural resources and to reguJah Ihe activities ot entitles operating within its territory (JCC~ OEeO UNlere) MNEs should usc f1ppmprillte jnlernationaJ dispUlc HUIIIHent IHeChanislns) including lt1rbitnnion to resolve conllicts with the govemmenls of the COUnirics in which they operotc (ICC OECD)
MNEs should resolve dlspmes arising fmm expropriation by h01U govcl mnCllls tln~I the domestic lnw of the host country (UNICTC)
Political involvement
MNEi should rdriin from improper or Illegal involvement in 11Ieui pnlitical a(livitics (OEeD UNILIC)
bull MNEs lihould not pay bfiDeS or renuer improper benefits to lny puntc erbullbull1 (ORC) UNICTC)
MN13s should nUl interfere in iuttrgovernmcntal clatilllls (uNIC1C)
bull MNEs should muintaln the highest standards of safety n~~l-shyhealth and should provide adequute information about work-related healUl hllJtrd bull (ill)
Humanri~bts
bull MNEs should respect humun righfll and fundamentnl freedoms in the CAlOmrie1i in which they (UNeTC)
MNIi~ and Ule Public
Te(hnology Iransler
bull MNBs should cooperute with governmental auUmrilies ill iJsselti$ing the im~ct of transful of Itthnotogy to developing counlrieo lInd should enhance tlu ttchrnllogical cap4tCitt~s of developlng countries (OECI)~ UNeTC) MNEs should develop and adnpt teclmnlogies ttl the needs and chUfoctcri)ttcs of the countries m which they opcratc (ICC OneD ILO)
bull MNEs shoutd condllct reseilrch and devchlpllltnl activities in developing C()unlries using local resource and personnel to the greatc~t txJent possible (ICC UNICTC)
Envirunmtntal prutteliou
bull MNEs should rCiped lhe hiwll fUld regulations COuccHling ellvironmc-Jttnl protection of the countries in which they opcale (OICD UNICTC)
MN6 should cooperate with host governments and wilh intcrnatioufll organizations in the development of nntiunal ilnd intcrnatlonal envilOllmcntal protcction standolds (ICC UNICTC) MNEs lihould ~uppl) to appropriate hmt governmental authuritjes mformation lomtrnins Ihe cnvlfOnmental
impact of the produtts and PWCCSlCS of Ihcir tntJties (ICC lJNICTC)
MNF and I on
Consumer protection
bull MNEs should resptpoundt the luw and regulati~)ns of tht coulltries in which they npemle with ~gard to CUlISlJIlt1
protection (OECD UNILfC) bull MNEs should pre1lcrve the_safety and henlth of
consumers by disc10liure of appropriate informMion plup1Cr laooling and accurate ndvcftising (UNeTC)
Employment pructk plS)
MNEs sh(gtuld cvupcrutc wilh host ampovcrnments efforl~ 111 crt-lle empnyntCnloppotlunitics in ptlrticular localilies (lCCI
bull MNE shoultl try to imrease employment opportunities and stundurds ill lhe cuuntries in Which they Iemt bull (rLO)
bull MNEs should give HI vance notke or planl c(UiUrCtl nnd tnitigate the resultanudverst erfects (lCC OECOILO)
bull MNE- should provide sraodunlx or empluyment equal 10 or better thlln ihnse 01 comparable employerl ill the COtHltres in which they operale (ICC OEC) ILO)
bull MNE~I) should pay at minimum busk hying wages (lLO)
MNEs should nnt dicrimin8lc on the bnsis of race colot gtCx religion language ~ociltl utltionalend etimic origin or politicoI or other opinion (UNleTC)
bull MNEs shoukl feRpeCllhe sociaJ and cullUIal objectivt~ vnlues and uJdirions of the coulltrie in which Ihey operne (UNICTC)
International agenc) sounes
OE(O The Orgafllzation for Economic Cooperation and Development Guldetine5 for MultinationOli EnterlJfises
ILO The lntfrnatlonal Labor Office Tripartrte Dedalations of prindpl_li(onlttrning M~)jtinationl Enterpr~s- and SO(lol policy
ICC The International (h3mber of (omrnerte Guid4linegt for InternltJtionallnvestment
UNleTC The United Natjon~ Univer11 n~rI~ratlon of Human Ri9hts
The UN Code of Conduct nn TransnatiOIlQJ Corp~
Potential Benefits and Costs to Host Countries of MNC Operations There42
IB wti en s
-Broader acc~SsmiddottoolitSide ~apital ECoiJofuicgrowtllmiddot 1~FQreign~exch~g~~arti~pg~ bull - Imp()JtsubstitqUpeffeels 8l1~W govermnentsti)save fureignexchange
forp1Orityptoject~
(c)ampts
r bull Risk~apl1g J iJ
0 Incre~coIIipetiijQ~foIj~~sc~cap1tai ~JnC~~~fedit1~rle~u~neS~$~Uplllr~fJ~al
Capltalq~Ctel$eSci lt middotCapitaJs~jc~effectsQfbahlllCe ()fP1Yijl~PtSi c
lt gt ~ _ 1 n _ - _ degPirectcreatlonofneyv jops ~ LimitedsldlldevelopJi)entandpJeationlmiddot (oIntt()ductionofmorehurnaneempl()Ymen~middot Cornp~tiiioQ formiddotsomce ~liUsJ
]-~~~~jtf~Si6jampg~pduSif~an~~~~e~~~1ait~ie~g~~~I~~~~~~al~~js~J~~i(( devel$~ment bull lt Erilpioymetii in~tabUrtYipecaUS~Ofa~l1iij1 i Incornemliltiplieteftects lt to rnbv~ prQiuc46n91i~titi6nsfr(lelY conUrui1itybusinesstooth~tcountrles
Source Adapted from R H Mason and R S Spich Management An International Perspective (202)
(Homewood Il Irwin 1987)
Selected Cultural Dimensions Rankings from the GLOBE Research Project
1
Source Adapted from Mansour Javidan and Robert J House Cultural Acumen for the Global Manager Lessons from Project GLOBE Organizational Dynamics (Spring 2001) 289-305 with permission from Elsevier
Geographic Culture Clusters
Anglo Australia Canodo Englond Ireland New Zealand
Soulh Alnco United Siaies
shy
~loinampb America Argentino Bolivio Brazil Columbia Cosio Rico Ecuodor EI Salvador Gvolemola Mexico Venezuela
~o Letin Europe
Fronce Israel Italy Parlugol Spain Switzerland (French speaking)
bull Eastern Europe
Albania Georgia Greece Hungary Kookhlan Poland Russia Slovenia
bull Germanic Europe
Austria Germany Nelherlands Switzerland (German
i speaking)
-~ordic urope
Denmark Finlood ~Sweden
I
~ Sub-Sahara Africa Arab
Nigeria Eqypl Kuwait
Molawl Zombia
Morocco South Arico Oolar Nomibia Turkey Zimbabwe (Block pats)L--__
Source Data from V Gupta P J Hanes and P Dorfman Journal of World Business 37 no 1 (2002) 13
bull Southern Asia
Indio Indonesia Iron
Philippe Malaysia Thailand
III Confucian Asia
Chino Hong Kong Japan Singopore Taiwan Sauh Korea
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
An Open Systems Model
OPERATING ENVIRONMENT
Greatest Risks affecting FDI Decisions As Reported by Global Companies
Government regulation
Country financial risk
Currency risk
political and social disturbances
Absence of rule of low
72
67
63
62
34
Disruption of key supplier customer or portner 33
Corporate governance issues 25
Security threats to employees or assets
Terrorist attacks
Product quolity or safety problems
Thelt of intellectual property
22
21
19
17
IT disruption
Employee fraud or sabotage
Notural disasters
Activist attacks on global or corporatge brands
17
_8
_8
5
0 10 20 30 40 50 60 70 80
Source wwwatkearneycom September 12 2008 Copyright A T Kearney Inc 2007 All
rights reserved Reprinted with permission
MNE and Host Govrmments
Eoonomic sncl dlVclopmentul policies
bull MNfl~ should onsuh wi1 h guvemmenlu authorities and rmrionlll rmployer and wnrke~ lganlLatioSls to ensure thal their inyenexullenls conform lO the economic and social de-velopll1ent pohcles of die host country (ICC~ OECD ItO UNleTC)
bull MNR~ should nOl1clvcrdy disturb the bdiln(e~of-paymcnlS or currenry exchange rntes oftheetlUl1lrieli in which they openlte They should try inconiultallnn With ihe gov(fOment to res(llve lmlancenf-puyments and t~chunge te ifikullles when possible (ICC OECD UNILfC)
MNE should Ltloperale with governmental Jlolidcs reg~rding local equity paticiption (rCC lJNICTC)
MNEgt should not dominate (he cnpihd mllrket~ of the countries in which Ihey openlle (lCe UNCTC)
bull MNEii should provide the informulinn ne(e_o~ary for cOlTcctly assc~ing luxeS to be pltlid to host guvernment ulhorilles (ICC OECO)
MNEs should not engage in Wmsfer pricing policie~ that modify the taK ba~c on which their entities are assessed (OEC) UNILTC)
MNE-s should give ptdc(cncc 10 local S(ltlrces for compunenlS and raw materials if prices and quality are wmpelltlvc (ICC ILO)
MNEs should reinvest some profits in tIle (otlntries in which they bullbullale (ICC)
Laws And regulations
bull MNEs file subject to tbe laws regulatiuns andjurjooicliou of the countries in which they operalt (JCC OEeD UNeTC)
bull MNr shmltd respect rhe right of every country 10 elcnise cOfltrol over it natural resources and to reguJah Ihe activities ot entitles operating within its territory (JCC~ OEeO UNlere) MNEs should usc f1ppmprillte jnlernationaJ dispUlc HUIIIHent IHeChanislns) including lt1rbitnnion to resolve conllicts with the govemmenls of the COUnirics in which they operotc (ICC OECD)
MNEs should resolve dlspmes arising fmm expropriation by h01U govcl mnCllls tln~I the domestic lnw of the host country (UNICTC)
Political involvement
MNEi should rdriin from improper or Illegal involvement in 11Ieui pnlitical a(livitics (OEeD UNILIC)
bull MNEs lihould not pay bfiDeS or renuer improper benefits to lny puntc erbullbull1 (ORC) UNICTC)
MN13s should nUl interfere in iuttrgovernmcntal clatilllls (uNIC1C)
bull MNEs should muintaln the highest standards of safety n~~l-shyhealth and should provide adequute information about work-related healUl hllJtrd bull (ill)
Humanri~bts
bull MNEs should respect humun righfll and fundamentnl freedoms in the CAlOmrie1i in which they (UNeTC)
MNIi~ and Ule Public
Te(hnology Iransler
bull MNBs should cooperute with governmental auUmrilies ill iJsselti$ing the im~ct of transful of Itthnotogy to developing counlrieo lInd should enhance tlu ttchrnllogical cap4tCitt~s of developlng countries (OECI)~ UNeTC) MNEs should develop and adnpt teclmnlogies ttl the needs and chUfoctcri)ttcs of the countries m which they opcratc (ICC OneD ILO)
bull MNEs shoutd condllct reseilrch and devchlpllltnl activities in developing C()unlries using local resource and personnel to the greatc~t txJent possible (ICC UNICTC)
Envirunmtntal prutteliou
bull MNEs should rCiped lhe hiwll fUld regulations COuccHling ellvironmc-Jttnl protection of the countries in which they opcale (OICD UNICTC)
MN6 should cooperate with host governments and wilh intcrnatioufll organizations in the development of nntiunal ilnd intcrnatlonal envilOllmcntal protcction standolds (ICC UNICTC) MNEs lihould ~uppl) to appropriate hmt governmental authuritjes mformation lomtrnins Ihe cnvlfOnmental
impact of the produtts and PWCCSlCS of Ihcir tntJties (ICC lJNICTC)
MNF and I on
Consumer protection
bull MNEs should resptpoundt the luw and regulati~)ns of tht coulltries in which they npemle with ~gard to CUlISlJIlt1
protection (OECD UNILfC) bull MNEs should pre1lcrve the_safety and henlth of
consumers by disc10liure of appropriate informMion plup1Cr laooling and accurate ndvcftising (UNeTC)
Employment pructk plS)
MNEs sh(gtuld cvupcrutc wilh host ampovcrnments efforl~ 111 crt-lle empnyntCnloppotlunitics in ptlrticular localilies (lCCI
bull MNE shoultl try to imrease employment opportunities and stundurds ill lhe cuuntries in Which they Iemt bull (rLO)
bull MNEs should give HI vance notke or planl c(UiUrCtl nnd tnitigate the resultanudverst erfects (lCC OECOILO)
bull MNE- should provide sraodunlx or empluyment equal 10 or better thlln ihnse 01 comparable employerl ill the COtHltres in which they operale (ICC OEC) ILO)
bull MNE~I) should pay at minimum busk hying wages (lLO)
MNEs should nnt dicrimin8lc on the bnsis of race colot gtCx religion language ~ociltl utltionalend etimic origin or politicoI or other opinion (UNleTC)
bull MNEs shoukl feRpeCllhe sociaJ and cullUIal objectivt~ vnlues and uJdirions of the coulltrie in which Ihey operne (UNICTC)
International agenc) sounes
OE(O The Orgafllzation for Economic Cooperation and Development Guldetine5 for MultinationOli EnterlJfises
ILO The lntfrnatlonal Labor Office Tripartrte Dedalations of prindpl_li(onlttrning M~)jtinationl Enterpr~s- and SO(lol policy
ICC The International (h3mber of (omrnerte Guid4linegt for InternltJtionallnvestment
UNleTC The United Natjon~ Univer11 n~rI~ratlon of Human Ri9hts
The UN Code of Conduct nn TransnatiOIlQJ Corp~
Potential Benefits and Costs to Host Countries of MNC Operations There42
IB wti en s
-Broader acc~SsmiddottoolitSide ~apital ECoiJofuicgrowtllmiddot 1~FQreign~exch~g~~arti~pg~ bull - Imp()JtsubstitqUpeffeels 8l1~W govermnentsti)save fureignexchange
forp1Orityptoject~
(c)ampts
r bull Risk~apl1g J iJ
0 Incre~coIIipetiijQ~foIj~~sc~cap1tai ~JnC~~~fedit1~rle~u~neS~$~Uplllr~fJ~al
Capltalq~Ctel$eSci lt middotCapitaJs~jc~effectsQfbahlllCe ()fP1Yijl~PtSi c
lt gt ~ _ 1 n _ - _ degPirectcreatlonofneyv jops ~ LimitedsldlldevelopJi)entandpJeationlmiddot (oIntt()ductionofmorehurnaneempl()Ymen~middot Cornp~tiiioQ formiddotsomce ~liUsJ
]-~~~~jtf~Si6jampg~pduSif~an~~~~e~~~1ait~ie~g~~~I~~~~~~al~~js~J~~i(( devel$~ment bull lt Erilpioymetii in~tabUrtYipecaUS~Ofa~l1iij1 i Incornemliltiplieteftects lt to rnbv~ prQiuc46n91i~titi6nsfr(lelY conUrui1itybusinesstooth~tcountrles
Source Adapted from R H Mason and R S Spich Management An International Perspective (202)
(Homewood Il Irwin 1987)
Selected Cultural Dimensions Rankings from the GLOBE Research Project
1
Source Adapted from Mansour Javidan and Robert J House Cultural Acumen for the Global Manager Lessons from Project GLOBE Organizational Dynamics (Spring 2001) 289-305 with permission from Elsevier
Geographic Culture Clusters
Anglo Australia Canodo Englond Ireland New Zealand
Soulh Alnco United Siaies
shy
~loinampb America Argentino Bolivio Brazil Columbia Cosio Rico Ecuodor EI Salvador Gvolemola Mexico Venezuela
~o Letin Europe
Fronce Israel Italy Parlugol Spain Switzerland (French speaking)
bull Eastern Europe
Albania Georgia Greece Hungary Kookhlan Poland Russia Slovenia
bull Germanic Europe
Austria Germany Nelherlands Switzerland (German
i speaking)
-~ordic urope
Denmark Finlood ~Sweden
I
~ Sub-Sahara Africa Arab
Nigeria Eqypl Kuwait
Molawl Zombia
Morocco South Arico Oolar Nomibia Turkey Zimbabwe (Block pats)L--__
Source Data from V Gupta P J Hanes and P Dorfman Journal of World Business 37 no 1 (2002) 13
bull Southern Asia
Indio Indonesia Iron
Philippe Malaysia Thailand
III Confucian Asia
Chino Hong Kong Japan Singopore Taiwan Sauh Korea
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Greatest Risks affecting FDI Decisions As Reported by Global Companies
Government regulation
Country financial risk
Currency risk
political and social disturbances
Absence of rule of low
72
67
63
62
34
Disruption of key supplier customer or portner 33
Corporate governance issues 25
Security threats to employees or assets
Terrorist attacks
Product quolity or safety problems
Thelt of intellectual property
22
21
19
17
IT disruption
Employee fraud or sabotage
Notural disasters
Activist attacks on global or corporatge brands
17
_8
_8
5
0 10 20 30 40 50 60 70 80
Source wwwatkearneycom September 12 2008 Copyright A T Kearney Inc 2007 All
rights reserved Reprinted with permission
MNE and Host Govrmments
Eoonomic sncl dlVclopmentul policies
bull MNfl~ should onsuh wi1 h guvemmenlu authorities and rmrionlll rmployer and wnrke~ lganlLatioSls to ensure thal their inyenexullenls conform lO the economic and social de-velopll1ent pohcles of die host country (ICC~ OECD ItO UNleTC)
bull MNR~ should nOl1clvcrdy disturb the bdiln(e~of-paymcnlS or currenry exchange rntes oftheetlUl1lrieli in which they openlte They should try inconiultallnn With ihe gov(fOment to res(llve lmlancenf-puyments and t~chunge te ifikullles when possible (ICC OECD UNILfC)
MNE should Ltloperale with governmental Jlolidcs reg~rding local equity paticiption (rCC lJNICTC)
MNEgt should not dominate (he cnpihd mllrket~ of the countries in which Ihey openlle (lCe UNCTC)
bull MNEii should provide the informulinn ne(e_o~ary for cOlTcctly assc~ing luxeS to be pltlid to host guvernment ulhorilles (ICC OECO)
MNEs should not engage in Wmsfer pricing policie~ that modify the taK ba~c on which their entities are assessed (OEC) UNILTC)
MNE-s should give ptdc(cncc 10 local S(ltlrces for compunenlS and raw materials if prices and quality are wmpelltlvc (ICC ILO)
MNEs should reinvest some profits in tIle (otlntries in which they bullbullale (ICC)
Laws And regulations
bull MNEs file subject to tbe laws regulatiuns andjurjooicliou of the countries in which they operalt (JCC OEeD UNeTC)
bull MNr shmltd respect rhe right of every country 10 elcnise cOfltrol over it natural resources and to reguJah Ihe activities ot entitles operating within its territory (JCC~ OEeO UNlere) MNEs should usc f1ppmprillte jnlernationaJ dispUlc HUIIIHent IHeChanislns) including lt1rbitnnion to resolve conllicts with the govemmenls of the COUnirics in which they operotc (ICC OECD)
MNEs should resolve dlspmes arising fmm expropriation by h01U govcl mnCllls tln~I the domestic lnw of the host country (UNICTC)
Political involvement
MNEi should rdriin from improper or Illegal involvement in 11Ieui pnlitical a(livitics (OEeD UNILIC)
bull MNEs lihould not pay bfiDeS or renuer improper benefits to lny puntc erbullbull1 (ORC) UNICTC)
MN13s should nUl interfere in iuttrgovernmcntal clatilllls (uNIC1C)
bull MNEs should muintaln the highest standards of safety n~~l-shyhealth and should provide adequute information about work-related healUl hllJtrd bull (ill)
Humanri~bts
bull MNEs should respect humun righfll and fundamentnl freedoms in the CAlOmrie1i in which they (UNeTC)
MNIi~ and Ule Public
Te(hnology Iransler
bull MNBs should cooperute with governmental auUmrilies ill iJsselti$ing the im~ct of transful of Itthnotogy to developing counlrieo lInd should enhance tlu ttchrnllogical cap4tCitt~s of developlng countries (OECI)~ UNeTC) MNEs should develop and adnpt teclmnlogies ttl the needs and chUfoctcri)ttcs of the countries m which they opcratc (ICC OneD ILO)
bull MNEs shoutd condllct reseilrch and devchlpllltnl activities in developing C()unlries using local resource and personnel to the greatc~t txJent possible (ICC UNICTC)
Envirunmtntal prutteliou
bull MNEs should rCiped lhe hiwll fUld regulations COuccHling ellvironmc-Jttnl protection of the countries in which they opcale (OICD UNICTC)
MN6 should cooperate with host governments and wilh intcrnatioufll organizations in the development of nntiunal ilnd intcrnatlonal envilOllmcntal protcction standolds (ICC UNICTC) MNEs lihould ~uppl) to appropriate hmt governmental authuritjes mformation lomtrnins Ihe cnvlfOnmental
impact of the produtts and PWCCSlCS of Ihcir tntJties (ICC lJNICTC)
MNF and I on
Consumer protection
bull MNEs should resptpoundt the luw and regulati~)ns of tht coulltries in which they npemle with ~gard to CUlISlJIlt1
protection (OECD UNILfC) bull MNEs should pre1lcrve the_safety and henlth of
consumers by disc10liure of appropriate informMion plup1Cr laooling and accurate ndvcftising (UNeTC)
Employment pructk plS)
MNEs sh(gtuld cvupcrutc wilh host ampovcrnments efforl~ 111 crt-lle empnyntCnloppotlunitics in ptlrticular localilies (lCCI
bull MNE shoultl try to imrease employment opportunities and stundurds ill lhe cuuntries in Which they Iemt bull (rLO)
bull MNEs should give HI vance notke or planl c(UiUrCtl nnd tnitigate the resultanudverst erfects (lCC OECOILO)
bull MNE- should provide sraodunlx or empluyment equal 10 or better thlln ihnse 01 comparable employerl ill the COtHltres in which they operale (ICC OEC) ILO)
bull MNE~I) should pay at minimum busk hying wages (lLO)
MNEs should nnt dicrimin8lc on the bnsis of race colot gtCx religion language ~ociltl utltionalend etimic origin or politicoI or other opinion (UNleTC)
bull MNEs shoukl feRpeCllhe sociaJ and cullUIal objectivt~ vnlues and uJdirions of the coulltrie in which Ihey operne (UNICTC)
International agenc) sounes
OE(O The Orgafllzation for Economic Cooperation and Development Guldetine5 for MultinationOli EnterlJfises
ILO The lntfrnatlonal Labor Office Tripartrte Dedalations of prindpl_li(onlttrning M~)jtinationl Enterpr~s- and SO(lol policy
ICC The International (h3mber of (omrnerte Guid4linegt for InternltJtionallnvestment
UNleTC The United Natjon~ Univer11 n~rI~ratlon of Human Ri9hts
The UN Code of Conduct nn TransnatiOIlQJ Corp~
Potential Benefits and Costs to Host Countries of MNC Operations There42
IB wti en s
-Broader acc~SsmiddottoolitSide ~apital ECoiJofuicgrowtllmiddot 1~FQreign~exch~g~~arti~pg~ bull - Imp()JtsubstitqUpeffeels 8l1~W govermnentsti)save fureignexchange
forp1Orityptoject~
(c)ampts
r bull Risk~apl1g J iJ
0 Incre~coIIipetiijQ~foIj~~sc~cap1tai ~JnC~~~fedit1~rle~u~neS~$~Uplllr~fJ~al
Capltalq~Ctel$eSci lt middotCapitaJs~jc~effectsQfbahlllCe ()fP1Yijl~PtSi c
lt gt ~ _ 1 n _ - _ degPirectcreatlonofneyv jops ~ LimitedsldlldevelopJi)entandpJeationlmiddot (oIntt()ductionofmorehurnaneempl()Ymen~middot Cornp~tiiioQ formiddotsomce ~liUsJ
]-~~~~jtf~Si6jampg~pduSif~an~~~~e~~~1ait~ie~g~~~I~~~~~~al~~js~J~~i(( devel$~ment bull lt Erilpioymetii in~tabUrtYipecaUS~Ofa~l1iij1 i Incornemliltiplieteftects lt to rnbv~ prQiuc46n91i~titi6nsfr(lelY conUrui1itybusinesstooth~tcountrles
Source Adapted from R H Mason and R S Spich Management An International Perspective (202)
(Homewood Il Irwin 1987)
Selected Cultural Dimensions Rankings from the GLOBE Research Project
1
Source Adapted from Mansour Javidan and Robert J House Cultural Acumen for the Global Manager Lessons from Project GLOBE Organizational Dynamics (Spring 2001) 289-305 with permission from Elsevier
Geographic Culture Clusters
Anglo Australia Canodo Englond Ireland New Zealand
Soulh Alnco United Siaies
shy
~loinampb America Argentino Bolivio Brazil Columbia Cosio Rico Ecuodor EI Salvador Gvolemola Mexico Venezuela
~o Letin Europe
Fronce Israel Italy Parlugol Spain Switzerland (French speaking)
bull Eastern Europe
Albania Georgia Greece Hungary Kookhlan Poland Russia Slovenia
bull Germanic Europe
Austria Germany Nelherlands Switzerland (German
i speaking)
-~ordic urope
Denmark Finlood ~Sweden
I
~ Sub-Sahara Africa Arab
Nigeria Eqypl Kuwait
Molawl Zombia
Morocco South Arico Oolar Nomibia Turkey Zimbabwe (Block pats)L--__
Source Data from V Gupta P J Hanes and P Dorfman Journal of World Business 37 no 1 (2002) 13
bull Southern Asia
Indio Indonesia Iron
Philippe Malaysia Thailand
III Confucian Asia
Chino Hong Kong Japan Singopore Taiwan Sauh Korea
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
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middotM()rhl~pf()bleros
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middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
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T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
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middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
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Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
MNE and Host Govrmments
Eoonomic sncl dlVclopmentul policies
bull MNfl~ should onsuh wi1 h guvemmenlu authorities and rmrionlll rmployer and wnrke~ lganlLatioSls to ensure thal their inyenexullenls conform lO the economic and social de-velopll1ent pohcles of die host country (ICC~ OECD ItO UNleTC)
bull MNR~ should nOl1clvcrdy disturb the bdiln(e~of-paymcnlS or currenry exchange rntes oftheetlUl1lrieli in which they openlte They should try inconiultallnn With ihe gov(fOment to res(llve lmlancenf-puyments and t~chunge te ifikullles when possible (ICC OECD UNILfC)
MNE should Ltloperale with governmental Jlolidcs reg~rding local equity paticiption (rCC lJNICTC)
MNEgt should not dominate (he cnpihd mllrket~ of the countries in which Ihey openlle (lCe UNCTC)
bull MNEii should provide the informulinn ne(e_o~ary for cOlTcctly assc~ing luxeS to be pltlid to host guvernment ulhorilles (ICC OECO)
MNEs should not engage in Wmsfer pricing policie~ that modify the taK ba~c on which their entities are assessed (OEC) UNILTC)
MNE-s should give ptdc(cncc 10 local S(ltlrces for compunenlS and raw materials if prices and quality are wmpelltlvc (ICC ILO)
MNEs should reinvest some profits in tIle (otlntries in which they bullbullale (ICC)
Laws And regulations
bull MNEs file subject to tbe laws regulatiuns andjurjooicliou of the countries in which they operalt (JCC OEeD UNeTC)
bull MNr shmltd respect rhe right of every country 10 elcnise cOfltrol over it natural resources and to reguJah Ihe activities ot entitles operating within its territory (JCC~ OEeO UNlere) MNEs should usc f1ppmprillte jnlernationaJ dispUlc HUIIIHent IHeChanislns) including lt1rbitnnion to resolve conllicts with the govemmenls of the COUnirics in which they operotc (ICC OECD)
MNEs should resolve dlspmes arising fmm expropriation by h01U govcl mnCllls tln~I the domestic lnw of the host country (UNICTC)
Political involvement
MNEi should rdriin from improper or Illegal involvement in 11Ieui pnlitical a(livitics (OEeD UNILIC)
bull MNEs lihould not pay bfiDeS or renuer improper benefits to lny puntc erbullbull1 (ORC) UNICTC)
MN13s should nUl interfere in iuttrgovernmcntal clatilllls (uNIC1C)
bull MNEs should muintaln the highest standards of safety n~~l-shyhealth and should provide adequute information about work-related healUl hllJtrd bull (ill)
Humanri~bts
bull MNEs should respect humun righfll and fundamentnl freedoms in the CAlOmrie1i in which they (UNeTC)
MNIi~ and Ule Public
Te(hnology Iransler
bull MNBs should cooperute with governmental auUmrilies ill iJsselti$ing the im~ct of transful of Itthnotogy to developing counlrieo lInd should enhance tlu ttchrnllogical cap4tCitt~s of developlng countries (OECI)~ UNeTC) MNEs should develop and adnpt teclmnlogies ttl the needs and chUfoctcri)ttcs of the countries m which they opcratc (ICC OneD ILO)
bull MNEs shoutd condllct reseilrch and devchlpllltnl activities in developing C()unlries using local resource and personnel to the greatc~t txJent possible (ICC UNICTC)
Envirunmtntal prutteliou
bull MNEs should rCiped lhe hiwll fUld regulations COuccHling ellvironmc-Jttnl protection of the countries in which they opcale (OICD UNICTC)
MN6 should cooperate with host governments and wilh intcrnatioufll organizations in the development of nntiunal ilnd intcrnatlonal envilOllmcntal protcction standolds (ICC UNICTC) MNEs lihould ~uppl) to appropriate hmt governmental authuritjes mformation lomtrnins Ihe cnvlfOnmental
impact of the produtts and PWCCSlCS of Ihcir tntJties (ICC lJNICTC)
MNF and I on
Consumer protection
bull MNEs should resptpoundt the luw and regulati~)ns of tht coulltries in which they npemle with ~gard to CUlISlJIlt1
protection (OECD UNILfC) bull MNEs should pre1lcrve the_safety and henlth of
consumers by disc10liure of appropriate informMion plup1Cr laooling and accurate ndvcftising (UNeTC)
Employment pructk plS)
MNEs sh(gtuld cvupcrutc wilh host ampovcrnments efforl~ 111 crt-lle empnyntCnloppotlunitics in ptlrticular localilies (lCCI
bull MNE shoultl try to imrease employment opportunities and stundurds ill lhe cuuntries in Which they Iemt bull (rLO)
bull MNEs should give HI vance notke or planl c(UiUrCtl nnd tnitigate the resultanudverst erfects (lCC OECOILO)
bull MNE- should provide sraodunlx or empluyment equal 10 or better thlln ihnse 01 comparable employerl ill the COtHltres in which they operale (ICC OEC) ILO)
bull MNE~I) should pay at minimum busk hying wages (lLO)
MNEs should nnt dicrimin8lc on the bnsis of race colot gtCx religion language ~ociltl utltionalend etimic origin or politicoI or other opinion (UNleTC)
bull MNEs shoukl feRpeCllhe sociaJ and cullUIal objectivt~ vnlues and uJdirions of the coulltrie in which Ihey operne (UNICTC)
International agenc) sounes
OE(O The Orgafllzation for Economic Cooperation and Development Guldetine5 for MultinationOli EnterlJfises
ILO The lntfrnatlonal Labor Office Tripartrte Dedalations of prindpl_li(onlttrning M~)jtinationl Enterpr~s- and SO(lol policy
ICC The International (h3mber of (omrnerte Guid4linegt for InternltJtionallnvestment
UNleTC The United Natjon~ Univer11 n~rI~ratlon of Human Ri9hts
The UN Code of Conduct nn TransnatiOIlQJ Corp~
Potential Benefits and Costs to Host Countries of MNC Operations There42
IB wti en s
-Broader acc~SsmiddottoolitSide ~apital ECoiJofuicgrowtllmiddot 1~FQreign~exch~g~~arti~pg~ bull - Imp()JtsubstitqUpeffeels 8l1~W govermnentsti)save fureignexchange
forp1Orityptoject~
(c)ampts
r bull Risk~apl1g J iJ
0 Incre~coIIipetiijQ~foIj~~sc~cap1tai ~JnC~~~fedit1~rle~u~neS~$~Uplllr~fJ~al
Capltalq~Ctel$eSci lt middotCapitaJs~jc~effectsQfbahlllCe ()fP1Yijl~PtSi c
lt gt ~ _ 1 n _ - _ degPirectcreatlonofneyv jops ~ LimitedsldlldevelopJi)entandpJeationlmiddot (oIntt()ductionofmorehurnaneempl()Ymen~middot Cornp~tiiioQ formiddotsomce ~liUsJ
]-~~~~jtf~Si6jampg~pduSif~an~~~~e~~~1ait~ie~g~~~I~~~~~~al~~js~J~~i(( devel$~ment bull lt Erilpioymetii in~tabUrtYipecaUS~Ofa~l1iij1 i Incornemliltiplieteftects lt to rnbv~ prQiuc46n91i~titi6nsfr(lelY conUrui1itybusinesstooth~tcountrles
Source Adapted from R H Mason and R S Spich Management An International Perspective (202)
(Homewood Il Irwin 1987)
Selected Cultural Dimensions Rankings from the GLOBE Research Project
1
Source Adapted from Mansour Javidan and Robert J House Cultural Acumen for the Global Manager Lessons from Project GLOBE Organizational Dynamics (Spring 2001) 289-305 with permission from Elsevier
Geographic Culture Clusters
Anglo Australia Canodo Englond Ireland New Zealand
Soulh Alnco United Siaies
shy
~loinampb America Argentino Bolivio Brazil Columbia Cosio Rico Ecuodor EI Salvador Gvolemola Mexico Venezuela
~o Letin Europe
Fronce Israel Italy Parlugol Spain Switzerland (French speaking)
bull Eastern Europe
Albania Georgia Greece Hungary Kookhlan Poland Russia Slovenia
bull Germanic Europe
Austria Germany Nelherlands Switzerland (German
i speaking)
-~ordic urope
Denmark Finlood ~Sweden
I
~ Sub-Sahara Africa Arab
Nigeria Eqypl Kuwait
Molawl Zombia
Morocco South Arico Oolar Nomibia Turkey Zimbabwe (Block pats)L--__
Source Data from V Gupta P J Hanes and P Dorfman Journal of World Business 37 no 1 (2002) 13
bull Southern Asia
Indio Indonesia Iron
Philippe Malaysia Thailand
III Confucian Asia
Chino Hong Kong Japan Singopore Taiwan Sauh Korea
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Potential Benefits and Costs to Host Countries of MNC Operations There42
IB wti en s
-Broader acc~SsmiddottoolitSide ~apital ECoiJofuicgrowtllmiddot 1~FQreign~exch~g~~arti~pg~ bull - Imp()JtsubstitqUpeffeels 8l1~W govermnentsti)save fureignexchange
forp1Orityptoject~
(c)ampts
r bull Risk~apl1g J iJ
0 Incre~coIIipetiijQ~foIj~~sc~cap1tai ~JnC~~~fedit1~rle~u~neS~$~Uplllr~fJ~al
Capltalq~Ctel$eSci lt middotCapitaJs~jc~effectsQfbahlllCe ()fP1Yijl~PtSi c
lt gt ~ _ 1 n _ - _ degPirectcreatlonofneyv jops ~ LimitedsldlldevelopJi)entandpJeationlmiddot (oIntt()ductionofmorehurnaneempl()Ymen~middot Cornp~tiiioQ formiddotsomce ~liUsJ
]-~~~~jtf~Si6jampg~pduSif~an~~~~e~~~1ait~ie~g~~~I~~~~~~al~~js~J~~i(( devel$~ment bull lt Erilpioymetii in~tabUrtYipecaUS~Ofa~l1iij1 i Incornemliltiplieteftects lt to rnbv~ prQiuc46n91i~titi6nsfr(lelY conUrui1itybusinesstooth~tcountrles
Source Adapted from R H Mason and R S Spich Management An International Perspective (202)
(Homewood Il Irwin 1987)
Selected Cultural Dimensions Rankings from the GLOBE Research Project
1
Source Adapted from Mansour Javidan and Robert J House Cultural Acumen for the Global Manager Lessons from Project GLOBE Organizational Dynamics (Spring 2001) 289-305 with permission from Elsevier
Geographic Culture Clusters
Anglo Australia Canodo Englond Ireland New Zealand
Soulh Alnco United Siaies
shy
~loinampb America Argentino Bolivio Brazil Columbia Cosio Rico Ecuodor EI Salvador Gvolemola Mexico Venezuela
~o Letin Europe
Fronce Israel Italy Parlugol Spain Switzerland (French speaking)
bull Eastern Europe
Albania Georgia Greece Hungary Kookhlan Poland Russia Slovenia
bull Germanic Europe
Austria Germany Nelherlands Switzerland (German
i speaking)
-~ordic urope
Denmark Finlood ~Sweden
I
~ Sub-Sahara Africa Arab
Nigeria Eqypl Kuwait
Molawl Zombia
Morocco South Arico Oolar Nomibia Turkey Zimbabwe (Block pats)L--__
Source Data from V Gupta P J Hanes and P Dorfman Journal of World Business 37 no 1 (2002) 13
bull Southern Asia
Indio Indonesia Iron
Philippe Malaysia Thailand
III Confucian Asia
Chino Hong Kong Japan Singopore Taiwan Sauh Korea
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Selected Cultural Dimensions Rankings from the GLOBE Research Project
1
Source Adapted from Mansour Javidan and Robert J House Cultural Acumen for the Global Manager Lessons from Project GLOBE Organizational Dynamics (Spring 2001) 289-305 with permission from Elsevier
Geographic Culture Clusters
Anglo Australia Canodo Englond Ireland New Zealand
Soulh Alnco United Siaies
shy
~loinampb America Argentino Bolivio Brazil Columbia Cosio Rico Ecuodor EI Salvador Gvolemola Mexico Venezuela
~o Letin Europe
Fronce Israel Italy Parlugol Spain Switzerland (French speaking)
bull Eastern Europe
Albania Georgia Greece Hungary Kookhlan Poland Russia Slovenia
bull Germanic Europe
Austria Germany Nelherlands Switzerland (German
i speaking)
-~ordic urope
Denmark Finlood ~Sweden
I
~ Sub-Sahara Africa Arab
Nigeria Eqypl Kuwait
Molawl Zombia
Morocco South Arico Oolar Nomibia Turkey Zimbabwe (Block pats)L--__
Source Data from V Gupta P J Hanes and P Dorfman Journal of World Business 37 no 1 (2002) 13
bull Southern Asia
Indio Indonesia Iron
Philippe Malaysia Thailand
III Confucian Asia
Chino Hong Kong Japan Singopore Taiwan Sauh Korea
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Geographic Culture Clusters
Anglo Australia Canodo Englond Ireland New Zealand
Soulh Alnco United Siaies
shy
~loinampb America Argentino Bolivio Brazil Columbia Cosio Rico Ecuodor EI Salvador Gvolemola Mexico Venezuela
~o Letin Europe
Fronce Israel Italy Parlugol Spain Switzerland (French speaking)
bull Eastern Europe
Albania Georgia Greece Hungary Kookhlan Poland Russia Slovenia
bull Germanic Europe
Austria Germany Nelherlands Switzerland (German
i speaking)
-~ordic urope
Denmark Finlood ~Sweden
I
~ Sub-Sahara Africa Arab
Nigeria Eqypl Kuwait
Molawl Zombia
Morocco South Arico Oolar Nomibia Turkey Zimbabwe (Block pats)L--__
Source Data from V Gupta P J Hanes and P Dorfman Journal of World Business 37 no 1 (2002) 13
bull Southern Asia
Indio Indonesia Iron
Philippe Malaysia Thailand
III Confucian Asia
Chino Hong Kong Japan Singopore Taiwan Sauh Korea
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Comparison of Negotiation Styles-Japanese North American and latin American 22
Japanese North American Latin American - -
Emotiltgtnalsensitivity highly Emotional sensitivity not Emotional sensiti~ity I valued highly valued Valued
j
iEliding of emotions Dealing straightforwardly EmotionaJ+y passionate 11
or Impersonally
~ubtle power plays Litigation not so much Great poweqjlays ~onciliatLon as conciliation use ofweakness
alty to employer Lack of commitment to Loyalty to eniployer loyer takescare employer breaking of ties (who is often family) mployees by either if necessary
Pace-saving cmcialdecisions Decisions made on acostshy Face~sav~ng crucial in fien on basis of savjng someshy benefit basis face-saving decision making to ~~
lne from embarras9ment does not always matter preserve honor dignity
iDeclsJOl1 makers openly Decision makers influenced Execution-ofspeciltl iilfluencedby special by special interests but interestsofdecision interests often not considered ethical expected ltondoneci
~N6t argulTlentative quiet Argumentativemiddot when right Argumentative when right vhenRight or wrong but impersonal or wrong passionate
IWhat is dowoin writing Greatimportance given to Impatient with ~must be accurate valid documentation as evidential documentation as
proof obstacle to understanding general principles
iJStep-by~stepapproach to Methodically organized Impulsive spontaneous idecision making decisionmaking decision making
Good of group is the Profit motive or good of What is good for group ultimate aim individualis the ultimate aim is good fortllfeindividual
iltcUltiVate it good emotional Decision making impersonal Personalism necessary for isocial setting for decision avoid involvements conflict good de6islon making imaking get to know of interest ~ decislon makers
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Factors Affecting Choice of International Entry Mode123
li~ctorcent~tcentg()rY p-
lD16roatJotuil experience Core competencies Corecapabilities
NaUbl1aloulture ofhome countly bull (otp()(ate cuItue
Finn strategy goalsand rnotivatiOli Ind~strYglobalizatio~
IndusttYgrowthrate gtTe~hnkaf intensity of industry
J3~~tltbfScale and]ocation e~onomies C(j~ntfyrisk
Cll1turtldistance Knowledgebfocalmarket Potentialof local market
Cbntpetition in lOCal market
Vaiueoffirmassets risked inforeign JocatioJ1 bull Extentto wliichknowho-iil1yolved in venture is informal (tacit) Costs ofmiddot maJdngoi eofotcing can ~racts wi th local partners
Stzeofp1annedforeign venture Itltentto conduct research and development withlocal partners
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Alternative Modes of Entry
Alternative Modes of Entry
~ o ~ o
~] D
~== o I -tile4j I 0Ou
U 41 Qc- iiIshy41 I 41 ~ E 0shy_0 ot 41 41 410 til 41 o
Champion Internationals paper
exports through independent brokers
100 Exports
8ridgestones acquisition 01
US-based Firestone
Ford-Mazda Genentech-Hoffman
LaRoche
100 local
Exports versus Local Production
Source Anil K Gupta and Vijay Govindarajan Managing Global Expansion A Conceptual Framework Business Horizons MarchApril 2000 45-54
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Strategies for Dancing with Gorillas
l)-aditionalM()del~ MN~sEartii~rhig i
witbEacb Other Giv()ij~~)ltrUncenttrY Qfmiddot
acbessandatteDtiClujilie middotdlte~tapprOa~hislilltely
middot to fail sQuseiruitre()t rJ1e~~olac~~rs -
middotUs~lbi81~aili~smiddotgud )1 - - t - -- -_)
~~ ill$titl1~OijS prpttttn ii~PtQgxazP~~middotni~~YQPP~Uc~~qymiddot shy middotmiddotmiddotmiddotCQnvertiTlglow~keYirimiddott~tactioP$i middotmiddotintoc()nc~~te leliitiQn~hlpslt bullbull Ulleth~MNCsrepQtaonali gtstiengt~togs~pportthrollgh wn~enQmmiontantt
middotmiddotmiddotmiddotmiddotii lking~gt~ beltIi$()G~ru sanccloDS -- -
OiY~asytlill1~ttYo( i~Capiti4izeotlpoint8Qf middotres()urq~$ an4lQQ~ternt 7~techljo~ogy lgty lln~actively QbjectiVesthe~6~middot H demonstratingslQusaJid ()cesse~dQritapI)lY8Q i i bull creating opportUnities planjott~eshorrte11l1 BnsurerriodulruOrdiscrete wit1taneyepn 1helcmg( ltknowled~e trahsfetto~nsur~
tangiqle outcomes (ega P()chict prototype) lithe partnershipisprematurelymiddotmiddot terriUmt~d
Givenasy~centbyimd Poa6tivelybuilti netWorlcs middotmiddotthereforedispensl~iUtybf within theMNCandadd value
imall enterprisestherejs bull i (egextendingfrOm bull greatl unpe1tainy visaVl~ ~hl1010gJcalto commercial MNcs ownpl~sfIIld bullbull activ~ties~d f~()m local to
prio1itiess()be1tag~eby rjnternationalbuampin~sS) bull designwithaneyeort theY~Ad6ptanambiguolisapproach
biggerprize iiby designpgrs1e ()bliq~tgoals middotmiddotmiddotmiddotgtw~thout $hoWillg~tcards ii in~tiallyandkeep open
foras t10SSlbLe
Source Shameen Prashantham and Julian Birkinshaw Dancing with Gorillas How Small Companies can Partner Effectively with MNCs California Management Review Fall 2008
Copyright copy2008 by The Regents of the University of California Reprinted from the California Management Review 51 no 1 By permission of The Regents_
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Value Creation and Value Capture in Allian(e Portfolios
ValueCleatltiJlt lt VaJllepapture PortfoJioManagement
~~t~a~~i~~f0iSttategies middotmiddotPr~dices 1 bull etne~fitrlfYQoopetiti~n bull Interdependellcies gt
i~Jgtarhier~thatoffermiddotWatcj)6litf()r9Pp(jrt1mistic middotmiddotmiddotConsjderho~eachmiddot~
~I(~~~~)i ~t~~~~Y ~~~ ~~bl(~j ~EfiriC1Ulu~ntS~lltegy pattnersliip bull Separation i~~verageIlyen~wotkmiddot naigai~ibg Strat~gy Set organizationaland
))~tes~Urctsto~e1tt~miYour Seekpart1ier~thathavemiddotmiddot tectino)ogkalbllffer~ middotmiddoti mtt~tQPpOltrii~~smiddotgtM~suuceiny6utj6iht betweeomiddot competlflg
~amp1~~~~~St~s ~iij~~J~~ middotmiddototeate~yneIgiesmiddotmiddot ~iAv9ldpartnersthatcOmpetemiddoti marketOPportunIties
~$amp~i middotmiddotmiddotmiddotmiddotE~poundi=cfmiddotmiddott~~pound1E~~ ~ldlbftid~apbi1ies Allywithrnultiplepartner$ eachpartnir
irlpatticularltld~stries to neutrtUzeeach partners
i baigainiogpower
~ ~ lt
Source reprinted from Dovev Lavie Capturing Value from Alliance Portfolios Organizational Dynamia 38 no 1 (2009) 26-36 copyright Elsevier used with permission of Elsevier wwwelseviercom
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Global Strategy-Structure Relationships39
Multidomestic International Globalization Transnational Strategy Strategy Strategy Strategy
Low IE----------J Need for Coordination IE--------------J High Low Bureaucratic Costs High
~ntralization of Decentralized to Core competencies Centralized at optimal Simultaneously ~thority national unit centralized others global location Centralized and
decentralization to Decentralized national units
Global area International division Global product group Global matrix structure structure structure Structure
Matrix in the Mind Low Medium High Very High
Not important Quite important Important Very important
i
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
Lows of Decision Making in an International Organization41
Subsidiarylocal unit -------------------------------shy Authority
HQ management HQ management HQ management HQ and local Local managers Local managers local managers makes deci~ion makes decision make~ decision manawers present problem make deci~ion make decision
and inform~ and sells to and recommends consu t on and solution to and sell to ond inform local managers subsidiary 10 local managers decisions HQ for decision HQ HQ
managers
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
EXHIBIT 9-4 Expatriate Performance Management from MNEs of Five National Origins
Source Adapted from His-An Shih Yun-Hwa Chiang In-Sook Kim Expatriate Performance Management from MNEs of Different National Origins International Journal of Manpower 26 no 2 (2005) 161-62 Reprinted with permission of Emerald Group Publishing Ltd
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
The Dual Role of Strategic Alliances
C90p~f~~~y~~gt~fi bull CQmpetitive ~ Ecmiddot onQpu~i-~stm~~$C iinMltftap---gfip1eas-middotsetbullmiddotmiddot-- bull middotmiddot~O-pmiddotp~orctll-nT-tyt-o-J~eru-middot-n~n-ew-middot--in-t-a-ng--i~b-le-s-ki-middotl-ls-+M-~ s
(egrplihf~~litpri)etltfr frompartjlel oftelltacit Or orgahizatior middotYX~~ltIImiddot il fbull embedded
ttp~~atxi4iQWn~tr~ailrdivisiQn1qUabOr A~Qelerafemiddotdjffusionof industry standards Atn~igtJatthyenfS- ) gti middotandi1eW technologies to erectbarriers to
lt-_lt ~gtgtltgt(ltlt~ ( ltgt t~ritry - middotmiddotI bull Fil1~utlfW~ettipe(~ithc()tn~ottentsoreridD~nYteqhnoiogi0aJand learninginitiativetb
middotptodu~tsmiddot middot(j~bull~1~upplier~ middot paItJlerYiaoutsourcingmiddot andlong-teim middotmiddoti~
gtjii~tlt )~ middotmiddotsupplyattangemeots Linu~in~ttn~~S~i~l1ttl~~I~rl1gMW bullbullbullbull Bno~cle~istingcompetitors andpreernpt matjC~~()tlIqe1ftij1ttWhJl~lctgiCaIfi~tdsYia thedseof tleWCbmpetitors -lith aUiance
middotmiddotShlit~~~silii~~~fy~middotmiddotmiddotmiddotmiddotJ p3lin~rSiJiproxywars to contro market
1ltgtgt j~ acce~sectdistdbutiOf and acoeSs to new ltehnoj6gie~middot
s~e~t~~f~~~~~~middotrt~1~arn~1dev~16p Fornvclu~tetsoflean1ing among suppliersbull lleW~~~~~~~s~p~~q~~9~~$tj91 andi~lat~dfirtns to avpi4ot rtduceJoreiin~ sttat~gi~i1)dUs~ell)j middotmiddotdepefde)ce fo(criticaljllPtts and skills )
bullbullbull ~ssiStbull~~~ft~~~~~r~sttu~turi~gsllY middotmiddotmiddotbullmiddotAHianeessetve$eXperietltialmiddotplatfotmstd~ middot10WerlngeX1~barfjit8inmatutePtpecijning dem~tiutmiddotgtatld transfomiexisfing middotf1lahiJemiddotmiddot~ ifidp~tfi~~t(middot~~~ middotmiddotindtlstrJ~svianew componehts 1
~i tecbnojogiesor skillstoenh~ocemiddot the value~ ~ bullj~gt middotoffuturegtowthoptlons
~
Source David lei Offensive and Defensive Uses of Alliances in Heidi Vernon-Wortzel and L H Wortzel Strategic Management in Global Economy 3rd ed (New York John Wiley amp Sons 1997)
When Is Change Needed40
ACharigeinih~ampizeofthC cQrporationrylle tqmiddotgrowthlc6~s9lidatjoporr~~UctiOll bull middot middotA Ghange~~eYindividuhlS~which~ay altelmanagementoojcentCtives i interest~ bull
atldlbilidesllt
middottn~nabWtYtQg~t~ibgsdone0ntj~e
middotM()rhl~pf()bleros
U13ltagetneint bull bull
middot
amptanilatd6pefatifigprocedures
( -- - -
accordanc~with plab$andexpectations
bullthefie14 i
middot middotfustartAe$Whereitlcel1tJalizatiOn1e~ds 1Q a flood IndetSt6~~ilot~prqperl~uSed~y headquarters
bull Ptlpllcati~nof~dm~p1strativep~r$~nl1el and services
middot orgePgf~P~car~a
- An increase( itrliwersefisclStotper setVic~col11plaints
T6~ponsibiLitiesmiddotmiddot
bull bull bull bull -Afai1Uret9middotWee~middotg6i4~i~apitali~~v~~RPorttioi~esfo~lgteihnovative
bullbull bullbull bull bullbullAconsistehtlyqv~9rk~toPlf1n~gementth~Spetlds~cessect~eboursmiddot9Iltnej9b -A1Xlieftltatco~~satfj eXtravaganto~tliatb)1dgetsate n()tbeing met
~le11gthy~~arctllesitl1at inllibitilie~xerciseQf strategiccQntr~l middotPl~nnlngiili4rlUI~beeOmeincreasinglystafpounddriVenandi~thusdivorced from line
InnovatiolTtllatisstifl~ by tQotUuchadrhinisttation and In6nitotingo(details
bull i Unif6qnsolQtion~~atareappliedtGnollunifonn sit~ationslhe e~ tteneoppositeofthls COllcUti011bull Whe~ihingsthatsb9uld(itcent()uldfuncti()nina tqutine manpound1erdo bullriot~snOU]d aIsobebeedMalQwarrling In othel-wordS martagetnentbY exception hasreplaeed bull
middotThef()11()wi~gareaf6WSPecificindicatOrSOfintematiOnctl6Igil1iZaUonal IlHllaisetmiddot middotAshifqnth~b~~tiotla1sc9P~pethapsfrQmdirectingexpott~ctiviiiestocontrollihg ibvelS~Slfta~utaetbtingiridttiark~dhglJnitsaCba1ige in the size of oPerations ona i bullbull
~buttjre~otIa1ol~p~Wid~b~Sis9daIlllre offq~elgpQl~r~ltiltnst()gr()vl ~ bull bull
middot -CI asbesamongdivisious su~sidiaries orind1vidualsoverterritoriesorcustomers ill
middotmvisiveconftictsmiddot~tweenQver~eastinltS anddome$ticdivis(oh staffmiddototcorp6T~testaffmiddotmiddot bull ofdetailed data that is MithetfuIIy bull lt lt
bull U~derptili~5ltioti~fqy~r~ea~m~ufacturiryg~rdistqbltionJa6iHUes -t)uplicatiotipfsaJeSmiddotofficesatldspeciaUzedsalesaccountmiddotexeGutives bullbull Prolifetatiortft~1ativelysmaU1egit1iePtitiesioroperati~gunits witbln a BOll ntry
(
Bt~doWl1~ingonmiuniCatiQtlswithin ~ci aqlolg organizations ~ Tinc~line$~fr~portinR anddo~ted~linerelati)l1s111Ps andJU~definedexectltive
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
When Is Change Needed40
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Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
bull-
Successful Negotiators Around the World
Following are ~electeltl profiles of whlt1t it takes to he a ~uccessrul negotiator as per(eived hy people in their home countries These arc protiits of American Indian Ar~h Swedish anti ltali~n negotiators according to Pierre CMse and give ~ol11e insight inlo what 10 expect from different egotiator~ and what they expect frol11 othergt2
AMERICAN NEGOTIATORS AcconJing 10 CMoSe a successful AmeritHn negoliator nct as fonows
I Knows when tocompmmise 2 Takes a tirm stand at the heginning of the flcgoliation 3 Refuses tn make concessions bcforehanu 4 Keeps his or her eards clost to his or hcr chest S Accepts compromises only when the negoliation is de~lIocked (i Sets up the general principh and delegMes the deail work to a~~ociales 7 Keeps a m~ximlllll of options open before ngoliation It Operates ill good faith 9 Respects the opponents
HI Slates his or htr position as clearly liS pohle 11 Knows when he or she wishes negotiation to move on 12 I fully briefed about the negotillted isnes 13 Ha a good sense of timing and is consistenl l4 Makes the other pmty reveal his or her posit inn while keping his 111 111 own position
hiuden as long as possible 15 Lets tl other negotiator come forward first and looks for the hest cle1
INDIAN NEGOTIATORS Indians says Cilsse often follow Gandhis Hpprollch In negotiation which Gandhi called xlitYlIJrtlhtJ Iimne~s in n goou calise This appnch cnrnbines strenglh with the love of tmlh The slIccessful Indian neg(ltiator thus act 15 follows
1 Looks for and says the truth 2 Is not afraiu of speaking up and has no fears 3 Exerci$e~ self-control (The wenpons of the sat)ogmiw are within hin) 4 Seeks solutions thllt will please nil Ihe parties involved (SaYlIglaw ais In exalt
both sids) 5 Re~pects the other pnrty (The opponent must he weancel from erlllr by patience I
sympathy WCllned nol crushcd converted not ilnnihillteel) 6 Ncither uses violence nor insults
7 Is ready to dmngc his or her mind and differ with himself or her$lf OIl the risk I heillg Stcn aS illconsistent Hnd ullpredictllble
II Puts things into perspective lind switches easily from the sl11all picture to the big one 9 Is humble and trusts the opponent
III Is able to withdraw lise silence and learn from within II Rdi 011 himself Of herself his or her own resources lind strengths 12 Appeals to the (Jtlier party~ spiritual identity (To communicnte rhe West moves or talks
The East sit$ contcmplatcs slIffers) 13 I lenaious patient lind penistent 14 Learns flOl11 the opponent nd avoids the lise of secrets 15 Goes beyolld logical rea~ol1il1g and tnlsts his or her instinct as well ns Inith
ARAB NEGOTIATORS Many Arab negotiators following IslHll1ic tradition use medial()r 10
seUle disputes A sucltssr1 Arab mediator acts in the following wny
J Protects all the pmties h(lnor self-respect and uignity 2 Avoids direct confronfltltions between opponents 3 Is respeaed and trusted by all 4 Docs 110t put the parties involved in n situMioll where they have 1ltgt show weakness or
ad il it defeat 5 Has the necessnry prestige to be listened 10
6 1$ (rcative enough to come up with honorable solutiol1s fm all parti 7 Is impartial and can ulldershlnd the positions of Ihe various pari ie withfgtl)l leaning towrt
one or the Other 8 Is able to resist any kind of pressure that the opponents could try to exercise on him 9 Uses relerences to people who me highly respected by the opponents to persuade them In
dngc their minds on some issues (Do it for the sake of your fHher) to Can keep ~cercts and ill so doing gains the confidence of the negotiating parties 11 Controls hi~ temper and emotions (or loses it when and whee necessary) 12 Call lise conferences as l1Iediating devices 13 Knows that the opponenl~ will have pwblcll1s in currying out the decisions de dming
Ihe negotiation 14 Is ablt tu upe wilh the Arab disregard for tione 15 UntrslltnuR tlie ipact of Islam on the opponents who believe that they possess the trllth
lllOw lh~ Right Plh nd are going to win because their cause is just
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
SWEDISH NEGOTIATORS Swedish negotiators according to Cassc arc
1 Very quiet and thoughtful 2 Punctual (concerned with time) 3 Etrelllely polite 4 Straightforward (they get stmight down to business) 5 Eager to be productive and efficient 6 Heavy going 7 Down to earth and overcautious 8 Rather flexible 9 Able to and quite good at holding emotions and feelings
111 Slow at reacting to new (unexpected) proposals 11 Inrormal and fmlliliar 12 Conceited 13 Perrediolli~t
l4 Ahaid of confrontations lS Very private
ITALIAN NEGOTIATORS italians says Casse yalue a negotiator who acts as follows
1 Has 11 sense of drama (acting is a main part of th~ culture) 2 Does not hide his or her emotions (which are partly sincere ami partly lelgned)
3 Heads facial expressions and gesturcs very well 4 Has a feeling rur history S Does not trust anyhndy 6 Is c()m~rncu aboulthc belaigur(I-the good impression-he or she cun ltrte atllong
those who walch his or her behavior 7 Believ~s in the individuals initiatives not so much in telllnwork II Is good at being obliging and simpatico at all times 9 I always on the qui Ijve-the lookout
HI Never emhraltes uehnite opinions 11 Is ahle to ltome up with new ways to immobilize mel eventually deslrny his or her opponents 12 Handles confrnnlalioM of power with subtlety and tact 13 Has a nair for intrigue 14 Knows how tO lise Ilallery 15 Can involve olher negotiators in complex combinations
COMPARING PROFILES Comparing slILh profiles is useful Indian negotiator for example are humble patient respeltlfol or the other parties and very willing to COml)mmise cornpared with Americans who are lirmer aboul taking stands An important difference between Arab negotiatols and those from most other countries is that the negotiators are mediators not Ihe parties themselves hence direct confrontation is made impossible Successful Swedish negoshytiators arc conservative lind careful dealing with factual and detailed information This profile contfllsts with Italian negotiators who are expressive and eXllbcmnt but less straightforward than their Swedish counterparts
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