im1. international management course objectives upon completion of the course the student should be...
TRANSCRIPT
IM 1
INTERNATIONAL MANAGEMENT COURSE OBJECTIVES
Upon completion of the course the student should be able to: analyze the basic legal, political and economic features associated with the external
business environment of international management and apply that knowledge to an internationalization project;
describe the concept of “culture” and using the typologies of Hofstede and Trompenaars, show how the culture of one group of people can be distinguished from that of another;
explain why “national” culture should or should not be the driving force in designing HR programs such as performance management or compensation systems;
name and locate on a map dominant trading countries and trading blocs in Europe, Africa, Latin America and Asia;
compare and contrast the modes of entry available to a firm evolving into a multinational enterprise and apply that knowledge to an internationalization project;
compare and contrast the basic strategic planning choices of international business organizations;
describe methods used to analyze and assess political risk, and explain how MNCs attempt to manage the level of political risk in less developed countries;
compare and contrast the basic choices for organizing firms involved in international business;
describe how using ethical principles in decision-making is affected by the internationalization of an organization.
DEFINE THEPROBLEM
CONTENT PROCEDURE
“SHOULD”
Gap = The Problem
“ACTUAL”Something’sWrong
CAUSE AND EFFECTCHAINS, AS FAR ASKNOWN
INTERIM ACTION, IFNEEDED
DEFINE:- WHAT IS/ARE THE GAP (S)?
- IMPORTANCE?
PROBLEM ANALYSIS
A World Put In Perspective.... Rotary International Newsletter, 1999
If we could shrink the earth's population to a village of precisely 100 people with all existing human ratios remaining the same, it would look like this:
There would be 57 Asians, 21 Europeans, 14 from the western hemisphere, and 8 Africans;
51 would be female, 49 would be male; 70 would be non-white, 30 white; 70 would be non-Christian, 30 Christian; 50 percent of the entire world's wealth would be in the hands of only 6
people, and all 6 would be U.S. citizens; 80 would live in substandard housing; 70 would be unable to read; 50 would suffer from malnutrition; 1 would be near death, 1 would be near birth; Only 1 would have a university education; No one would own a computer.
WHICH COMPANIES OR BRANDS ARE NOT FOREIGN OWNED?
1. NORELCO (ELECTRIC SHAVERS) 2. CHESEBROUGH-POND (VASELINE) 3. ELECTROLUX (HOUSEHOLD APPLIANCES) 4. LEVER BROTHERS (LUX, WHISK, CLOSE-UP) 5. PEARLE EYECARE (GLASSES) 6. DEL MONTE 7. BF GOODRICH 8. REEBOK 9. BURGER KING10. HOLIDAY INN 11. NABISCO12. SCOTT PAPER (KLEENEX)13. CBS RECORDS14. GENERAL TIRE (TIRES)15. A & W BRANDS (ROOT BEER)16. MOTEL 617. PILLSBURY
WHICH COMPANIES OR BRANDS ARE NOT FOREIGN OWNED?
1. NORELCO (ELECTRIC SHAVERS)
PHILIPS - DUTCH
2. CHESEBROUGH-POND (VASELINE) UNILEVER-DUTCH/ENGLISH
3. ELECTROLUX (HOUSEHOLD APPLIANCES)
ELECTROLUX-SWEDISH
4. LEVER BROTHERS (LUX, CLOSE-UP)
UNILEVER-DUTCH/ENGLISH
5. PEARLE EYECARE (GLASSES)
GRAND METROPOLITAN-ENGLISH
6. DEL MONTE
POLLY PEAK-ENGLISH
7. BF GOODRICH
MICHELIN-FRENCH
8. REEBOK
9.BURGER KING
BASS PLC-ENGLISH
10. HOLIDAY INN
BASS PLC-ENGLISH
11. NABISCO
12. SCOTT PAPER (KLEENEX)
13. CBS RECORDS
SONY
14.GENERAL TIRE (TIRES)
CONTINENTAL-GERMAN
15. A & W BRANDS (ROOT BEER)
CADBURY SCHWEPPE-ENGLISH
16. MOTEL 6
ACCOR-FRENCH
17. PILLSBURY
GRAND METROPOLITAN-ENGLISH
INTERNATIONAL MANAGEMENT
The acquisition, allocation, and utilization of resources to achieve and maintain organizational effectiveness in a global business environment
Globalization (1990, Kenichi Ohmae)
”...isle emerging bigger than a continent, it is an INTERLINKED ECONOMY OF THE TRIAD (US, EU, Japan).
Strategic managers must master five concerns (five "C"s)
Globalization (Ohmae)
Ohmae’s “Five C’s”
– CUSTOMERS
– COMPETITION
– COMPANY
– CURRENCY
– COUNTRY
ENVIRONMENTAL FORCES
CONTROLLABLE- FACTORS OF PRODUCTION (CAPITAL, RAW MATERIALS, EMPLOYEES)- FUNCTIONS OF A FIRM MARKETING FINANCE PRODUCTION PERSONNEL
UNCONTROLLABLE- COMPETITIVE AND DISTRIBUTIVE- PHYSICAL AND ENVIRONMENTAL- FINANCIAL- TECHNOLOGICAL- LABOR MARKETS- SOCIOCULTURAL- ECONOMIC- LEGAL- POLITICAL
SELECTED FORCES IN THE INTERNATIONAL ENVIRONMENT
LEGAL ENVIRONMENT ECONOMIC ENVIRONMENT POLITICAL ENVIRONMENT CULTURAL ENVIRONMENT
LEGAL ENVIRONMENT
LEGAL TRADITIONS EFFECTIVENESS OF LEGAL SYSTEM TREATIES PATENT AND COPYRIGHT LAWS LAWS AFFECTING BUSINESS FIRMS AND
COMMERCE
POLITICAL ENVIRONMENT
FORM OF GOVERNMENT POLITICAL IDEOLOGY STABILITY OF GOVERNMENT STRENGTH OF OPPOSITION PARTIES AND
GROUPS SOCIAL UNREST POLITICAL STRIFE GOVERNMENT ATTITUDES TOWARDS FOREIGN
FIRMS FOREIGN POLICY
NON TARIFF BARRIERS
Any government regulation, policy, or procedure other than a tariff that has the effect of impeding international trade
Examples
– quotas
– numerical export controls embargoes voluntary export restraint (VER’s)
– product and testing standards
– restricted access to distribution networks
– public-sector procurement policies
– local-purchase requirements
– regulatory controls
– currency controls
– investment controls
LEGAL ENVIRONMENT OF IM
INTERNATIONAL LAW
A COLLECTION OF TREATIES, CONVENTIONS, AND AGREEMENTS BETWEEN / AMONG NATIONS THAT HAVE, ESSENTIALLY, THE FORCE OF LAW
LEGAL ENVIRONMENT OF IM
FRIENDSHIP, COMMERCE & NAVIGATION TREATIES (FCN)
TAX TREATIES IMF GATT ISO NAFTA PATENT, TRADEMARK & COPYRIGHT
AGREEMENTS UN COMMISSION ON INT’L TRADE LAW
(UNCITRAL) REGULATED REGIONAL GROUPINGS
LEGAL ENVIRONMENT OF IM
DIFFERING LEGAL SYSTEM TRADITIONS:– COMMON LAW [26]– CIVIL / CODE LAW [70]– ISLAMIC LAW [27]
PRIVATE vs. PUBLIC LAW
LEGAL ENVIRONMENT OF IM
RESOLVING DISPUTES: LITIGATION ARBITRATION
- FASTER, CHEAPER, FORCE OF LAW- UNCITRAL- ICC PARIS- WORLD BANK (ICSID)
ECONOMIC ENVIRONMENT
LEVEL OF ECONOMIC DEVELOPMENT POPULATION GDP/GNP PER CAPITA INCOME LITERACY LEVEL SOCIAL INFRASTRUCTURE NATURAL RESOURCES CLIMATE REGIONAL TRADE BLOCS MONETARY AND FISCAL POLICIES NATURE OF COMPETITION CURRENCY CONVERTIBILITY INFLATION TAXATION INTEREST RATES WAGE AND SALARY LEVELS
CULTURAL ENVIRONMENT
CUSTOMS, NORMS, VALUES, & BELIEFS LANGUAGE ATTITUDES MOTIVATIONS SOCIAL INSTITUTIONS STATUS SYMBOLS RELIGIOUS BELIEFS
Ethical Issues in International Business
Bribery [FCPA, 1977] IPR Piracy Trade Reciprocity Employment Issues Social Responsibility
Four Major Ethical Systems
Utilitarian Theory Universalist Theory
– Positive and Negative Rights Justice
– Distribution of Benefits and Burdens Personal Liberty
– No Basis for Positive Rights
Goodpaster’s “Three Approaches” Method
Who are my stakeholders & what are the issues needing resolution with each?
What are the critical ethical values and assumptions held by each stakeholder?
Context of the Analysis– What actions can be taken giving them the
greatest cost/benefit ratio?– What actions can be taken that most fairly
support their rights– Given my duties to each stakeholder, which
take priority?
LEVI STRAUSSLEVI STRAUSS
Levi Strauss & Company uses contractors around the world to produce its popular jeans. In 1992 Levi Strauss established operating guidelines that detail everything from environmental requirements to health and safety issues. To implement the guidelines the company audited its contractors, discovering that two contractors in Bangladesh were using workers who appeared to be underage. International standards have established age 14 as a reasonable minimum age for factory work.
When the company brought the issue to the attention of the contractors, they replied that there were no birth certificates available, and the youths were contributing to their families income. Further, if the youths were not working under what were the humane conditions in the factory, they would probably be forced into more inhumane begging or prostitution.
NIKE IN INDONESIAGlobally, Nike markets athletic shoes manufactured in factories located in Indonesia. The “contract” factories in Indonesia are not owned or operated by Nike. The shoes, which retail for about $70 in the US, cost about $5.50 to manufacture. The Korean-owned (Lippo bank-financed) factories employ young Indonesian women whose wage rate starts at 15 cents an hour. With mandatory overtime usually resulting in eleven-hour workdays, some experienced workers earn as much as $2 a day, which is above the minimum $1.22 considered by the government necessary to meet basic physical needs. Harsh Korean managers routinely harass and berate those workers who don’t meet quotas, and withhold pay for any acts of defiance. Weak labor unions cannot influence the level of pay, nor can they move the military-dominated government to enforce the relaxed labor laws. Strikes are aggressively suppressed by the army. Michael Jordan was paid $2 million in 1992 for promoting Nike shoes. That was more than the total payroll that year for all of Nike’s Indonesia-based shoe production.
•What, if any, are the ethical or moral issues here for Nike? •How are Nike’s stakeholders affected? What are the potential positive and negative consequences, and the probabilities associated with each?•If you were the general manager for Nike in Indonesia, how would you defend your company to a Wall Street Journal reporter who presented these facts to you while asking about “sweatshops”, “worker exploitation” and the price of shoes in the US? •What can, or should, Nike do about this business arrangement?
What is Culture? A system for... sending, sorting and processing of
information…research reveals that 80-90% of that information is communicated in other means than language
A way of life...developed and communicated by people..to help create standards for people to survive and coexist...
…mental formulae for survival and success that a particular group of people has developed
software for the mind Shared solutions to problems of external adaptation
and internal integration
CULTURAL ENVIRONMENT
CUSTOMS, NORMS, VALUES, & BELIEFS LANGUAGE ATTITUDES MOTIVATIONS SOCIAL INSTITUTIONS STATUS SYMBOLS RELIGIOUS BELIEFS
SPHERES OF CULTURAL INFLUENCE (J. Santos, in Schneider & Barsoux))
NationalNational
IndustryIndustry
ProfessionalProfessional
CompanyCompany
RegionalRegional
FunctionalFunctional
CULTURAL DIMENSIONS-- HERSKOVITS
MATERIAL CULTURE– TECHNOLOGY– ECONOMICS
SOCIAL INSTITUTIONS & CUSTOMS MAN AND THE UNIVERSE
– RELIGION – SUPERSTITIONS
AESTHETICS– ART– FOLKLORE
LANGUAGE– REFLECTS OTHER DIMENSIONS OF CULTURE– DIFFICULTY IN ACHIEVING EFFECTIVE COMMUNICATION
PERSONAL CHARACTERISTICS
Degree of FormalityFORMAL ....MODERATE....
INFORMAL
DirectnessDIRECT....MODERATE....INDIRECT
CompetitivenessHIGH....MODERATE....LOW
Achievement OrientationHIGH....MODERATE....LOW
Degree of IndependenceINDEPENDENT/INDIVIDUAL…
MIXED....GROUP/SOCIAL
Degree of WordinessHIGH...MODERATE....LOW
Degree of PunctualityHIGH....MODERATE....LOW
Personal HygieneHIGH....MODERATE....LOW
PERSONAL CHARACTERISTICSWhat Are Americans Like ?
Degree of Formality– FORMAL ....MODERATE....
INFORMAL Directness
– DIRECT....MODERATE…
INDIRECT Competitiveness
– HIGH....MODERATE....LOW Achievement Orientation
– HIGH....MODERATE....LOW
Degree of Independence– INDEPENDENT/
INDIVIDUAL..MIXED....GROUP/SOCIAL
Degree of Wordiness– HIGH...MODERATE....LOW
Degree of Punctuality– HIGH....MODERATE....LOW
Personal Hygiene– HIGH....MODERATE....LOW
PERSONAL CHARACTERISTICSWhat Are _________Like ?
Degree of Formality– FORMAL...MODERATE...INFORMAL
Directness– DIRECT...MODERATE... INDIRECT
Competitiveness– HIGH....MODERATE....LOW
Achievement Orientation– HIGH....MODERATE....LOW
Degree of Independence– INDIVIDUAL..MIXED....GROUP
Degree of Wordiness– HIGH...MODERATE....LOW
Degree of Punctuality– HIGH....MODERATE....LOW
Personal Hygiene– HIGH....MODERATE....LOW
Priority of Values1 Authority2 Competition3 Cooperation4 Equality5 Family Security6 Formality7 Freedom8 Group Achievement9 Group Consensus10 Group Harmony11 Material Possessions12 Openness13 Privacy14 Relationships15 Reputation16 Risk-taking17 Self-reliance18 Seniority19 Spirituality20 Time
•Japanese
•US
•Russian
•French
Priority of ValuesJapanese American Russian French
1 Relationships Equality Family Security Self-reliance2 Group Harmony Freedom Freedom Freedom3 Family Security Openness Self-reliance Openness4 Freedom Self-reliance Openness Relationships5 Cooperation Cooperation Material Possessions Time6 Group Consensus Family Security Cooperation Spirituality7 Group Achievement Relationships Spirituality Material Possessions8 Privacy Privacy Equality Equality9 Equality Group Harmony Time Competition
10 Formality Reputation Relationships Group Consensus11 Spirituality Time Reputation Risk-taking12 Competition Competition Authority Authority13 Seniority Group Achievement Formality Group Achievement14 Material Possessions Spirituality Group Harmony Cooperation15 Self-reliance Risk-taking Group Achievement Group Harmony16 Authority Authority Risk-taking Privacy17 Time Material Possessions Seniority Family Security18 Openness Formality Competition Seniority19 Risk-taking Group Consensus Privacy Formality20 Reputation Seniority Group Consensus Reputation
CULTURE
GEERT HOFSTEDE: NATIONAL CULTURE IN FOUR DIMENSIONS:– POWER DISTANCE– UNCERTAINTY AVOIDANCE– INDIVIDUALISM - COLLECTIVISM– MASCULINITY
AFFECTS MANAGEMENT THEORIES:– LEADERSHIP– ORGANIZATION– MOTIVATION
UNIVERSAL VALIDITY OF U.S. DOMINATED THEORIES ?– SUBCULTURES / COUNTER CULTURES WITHIN THE US
POWER DISTANCEPOWER DISTANCE
EXTENT TO WHICH A SOCIETY ACCEPTS THE FACT THAT POWER IN INSTITUTIONS AND ORGANIZATIONS IS DISTRIBUTED UNEQUALLY
SMALL vs....... LARGE POWER DISTANCE MEASURED BY THE DIFFERENCE IN LEVELS OF
INFLUENCE [i(B -> S) - i(S -> B)] REFLECTED IN THE VALUES OF THE LESS
POWERFUL MEMBERS OF SOCIETY AS WELL AS IN THE MORE POWERFUL MEMBERS
U.S. REGIONAL DIFFERENCES
UNCERTAINTY AVOIDANCEUNCERTAINTY AVOIDANCE
EXTENT TO WHICH A SOCIETY FEELS THREATENED BY UNCERTAIN AND AMBIGUOUS SITUATIONS AND TRIES TO AVOID THESE SITUATIONS BY:– PROVIDING GREATER CAREER STABILITY– ESTABLISHING MORE FORMAL RULES– NOT TOLERATING DEVIANT IDEAS AND BEHAVIORS– BELIEVING IN ABSOLUTE TRUTHS– PLACING VALUE ON EXPERTISE
U.S. REGIONAL DIFFERENCES
INDIVIDUALISM -- COLLECTIVISMINDIVIDUALISM -- COLLECTIVISM
INDIVIDUALISM IMPLIES A LOOSELY KNIT SOCIAL FRAMEWORK IN WHICH PEOPLE ARE SUPPOSED TO TAKE CARE OF THEMSELVES AND THEIR IMMEDIATE FAMILIES
COLLECTIVISM IS CHARACTERIZED BY A TIGHT SOCIAL FRAMEWORK IN WHICH PEOPLE DISTINGUISH BETWEEN IN-GROUPS (RELATIVES, CLAN, ORGANIZATION) AND OUT-GROUPS; THEY EXPECT THE IN-GROUPS TO TAKE CARE OF THEM, AND IN EXCHANGE FOR THAT THEY FEEL THEY OWE ABSOLUTE LOYALTY TO THE IN-GROUP
U.S. REGIONAL DIFFERENCES
MASCULINITYMASCULINITY
EXTENT TO WHICH THE DOMINANT VALUES IN SOCIETY ARE ASSERTIVENESS, THE ACQUISITION OF MONEY AND THINGS, AND NOT CARING FOR OTHERS, THE QUALITY OF LIFE, OR PEOPLE
THE MORE AN ENTIRE SOCIETY SCORES TO THE MASCULINE SIDE, THE WIDER THE GAP BETWEEN ITS MEN’S AND WOMEN’S VALUES
LOWLOW 2323 4141 5959 7777 HIGHHIGHMASCULINITY INDEXMASCULINITY INDEX
WEAKWEAK
2929
5656
4040
1919
STRONGSTRONG
8585
7070
100100
SINSIN
HOKHOK
GBRGBR IREIRE
INDIND
USAUSA PHIPHISAFSAF
AULAULNZLNZL
CANCAN
SWESWE
FINFIN
NETNETNORNOR
DENDEN
IRAIRATHATHA
TAITAI
SWISWI
GERGERAUTAUT
JPNJPN
GREGRE
BELBEL
ARGARG
ITAITACOLCOL VENVEN
MEXMEX
PORPOR
SPASPA FRAFRA TURTURPERPER
CHLCHL ISRISRBRABRA
YUGYUG
UUNNCCEERRNNTTAAIIN N TTY Y
AAVVOOIIDDAANNCCEE
COSCOS
PAKPAKARAARA
KORKOR
IDOIDO
WAFWAFEAFEAF
(Weak UA-- Masculine)(Weak UA-- Masculine)
EQAEQA
SMALL PD SMALL PD COLLECTIVISTCOLLECTIVIST
3030 4040 5050 8080Power DistancePower Distance
00
3232
4848
4040
1616
112112
9696
7272
104104
SINSIN
HOKHOK
GBRGBR
IREIRE
INDIND
USAUSA
PHIPHI
SAFSAF
AULAUL
NZLNZL CANCAN
SWESWE
FINFIN
NETNET
NORNOR
DENDEN
IRAIRA
THATHATAITAI
SWISWIGERGER
AUTAUT
JPNJPN
GREGRE
BELBEL
ARGARG
ITAITA
COLCOL VENVEN
MEXMEXPORPOR
SPASPA
PERPER
CHLCHL
ISRISR
BRABRA
YUGYUG
IINNDDIIVVIIDDUUAALLIISSMM
IINNDDEEXX
COSCOS88
8080
8888
6464
5656
1010 2020 6060 7070 9090 100100
FRAFRA
ARAARATURTUR
PAKPAK
LARGE PD LARGE PD INDIVIDUALISTINDIVIDUALIST
WAFWAF
GUAGUA
EAFEAF
URUURU
IDOIDO
EQAEQA
RELATIVE POSITION OF THE U.S. MANAGERS (AMONG 40 NATIONS’ MANAGERS) ON HOFSTEDE’S FOUR
DIMENSIONS
ON POWER DISTANCE: 15 / 40 (MEASURED UP FROM 0=SMALL) -- BELOW AVERAGE
ON UNCERTAINTY AVOIDANCE: 9 / 40 (0=WEAK) -- WELL BELOW AVERAGE
ON INDIVIDUALISM: 40 / 40 -- THE SINGLE MOST INDIVIDUALISTIC COUNTRY, FOLLOWED CLOSELY BY AUSTRALIA AND GREAT BRITAIN
ON MASCULINITY : 28 / 40 -- WELL ABOVE AVERAGE WHAT MIGHT THIS MEAN FOR THE CULTURAL
RELATIVITY OF MANAGEMENT THEORIES ?
HOFSTEDEREVISED DIMENSIONS OF CULTURE
ORIENTATIONS INDIVIDUALISM…….....SOCIAL………….COLLECTIVISM
POWER RESPECT…..…. POWER………POWER TOLERANCE
ACCEPTANCE……...UNCERTAINTY……..AVOIDANCE
AGGRESSIVE……....GOAL-SEEKING……..…..PASSIVE
LONG-TERM……....TIME HORIZON…...…..SHORT-TERM
TROMPENAARS Relationship with Nature Relationship with People
- Universalism ….. vs ..... Particularism- Individualism ….. vs ..... Communitarianism- Affectivity [neutral vs emotional]- Specific …. vs …. Diffuse- Achievement …. vs..... Ascription
Relationship with Time - Sequential / Monochronic…vs…Synchronous /
Polychronic - Past …vs… Future
ORGANIZATIONAL CULTURE
Similar to Culture—patterns of learned behavior that help with adaptation and integration
Observed behavioral regularities; language, rituals
Norms related to productivity, quality Dominant values that people are expected to
share Philosophy toward employees, customers, the
community Organizational climate
MNC ORGANIZATIONAL CULTURE
General relationship between employees and their organization
The hierarchical system of authority The general views that employees hold
about the MNC’s purpose, goals, and their relationship to those aspects
Trompenaars’ continua: Equity vs Hierarchy and Person vs Task Orientations
Dimensions of Corporate CultureHofstede
Motivation– Activities versus Outputs
Relationship– Job-oriented versus Person-oriented
Identity– Corporate versus Professional
Communication [purpose]– Open versus Closed
Control– Tight versus Loose
Conduct– Conventional versus Pragmatic
Four Types of Organizational Culture in MNCs – Fons Trompenaars
Incubator
[fulfillment]
Family
[power]
Guided Missile
[project]
Eiffel Tower
[role]
EQUITY
PER
SO
N
TA
SK
HIERARCHY
Guidelines for Managing Multicultural Teams
Select team members for their task-related abilities and not based solely on ethnicity
Prepare team members to recognize and deal with their differences
Team leaders must help the group identify and define its overall goal
Members must have equal power--distribute power based on ability not ethnicity
Equalize potential for respect by selecting people with relatively equal task-related abilities
Managers must give members positive feedback on their process and outcomes
Problem
Definition
Data
Gathering
Consideration of
Alternative Solutions
Decision
Implementation
CULTURE
Individualism/Collectivism
Locus of Decision-MakingRisk Tolerance Past/Future Orientation
Internal/External Locus of Control
Objective/Subjective Perspective
Utilitarianism/Moral Ideals
SHAREDVALUES
SHAREDPRACTICES
ORGANIZATION
OCCUPATION
NATION
WORKPLACE
SCHOOL
NATURE OF CULTURAL DIFFERENCES
-FROM HOFSTEDE, 1991
FAMILY
LEVEL PLACE OFSOCIALIZATION
“Reading” Others
How do you recognize a person disagrees with a proposal you offer them to solve a work problem?
How do you recognize when a person is embarrassed by something you have said to them in front of others?
How do you recognize when a person is insulted by something you have said to them in front of others?
How do you tell someone they have “failed” on a work assignment?
JOHARI WINDOW (Making Cultural Differences Discussible)
Things I See
Things I Do Not See
Things They See
Things They Do Not See
OPEN FOR OPEN FOR DISCUSSIONDISCUSSION MY BLIND SPOTMY BLIND SPOT
THEIR THEIR BLIND BLIND SPOTSPOT
SHARED BLIND SPOT
Use Self-Disclosure and Feedback
Intercultural Challenges andVerbal Communication Styles
High Context versus Low Context Cultures
Verbal Styles– Indirect versus Direct– Elaborate versus Succinct– Contextual versus Personal– Affective versus Instrumental
VARIABLES IN NEGOTIATING
Basic Conception of Negotiation Process (Distributive, Integrative, Synergistic)
Negotiator Selection Criteria Significance of Type of Issue (Substantive vs Relational) Concern with Protocol (Formal vs Informal) Complexity of Language (High vs Low Context, Non-Verbal) Nature of Persuasive Argument (Logical vs Emotional) Role of Individual’s Aspirations (Personal vs Corporate) Bases of Trust Risk-Taking Propensity Value of Time (Monochronic vs Polychronic) Decision-Making System (Individual vs Group) Form of Satisfactory Agreement (Written vs Oral)
PRINCIPLED NEGOTIATION--Fisher and Ury
HARD vs SOFT vs PN STYLES STAGES
– Analysis (Info Gathering)– Planning (Prioritizing)– Discussion (FTF)
FOUR FACTORS OF PN– People (Separate people from the problem)– Interests (Focus on interests, no positions)– Options (Invent options for mutual gain)– Criteria (Insist on objective criteria)
Preparing to Give Negative Feedback
What am I trying to achieve? How sure am I of my facts? How is the other person likely to react? What are the potential risks and benefits? Can the other person do something about it? How important is the problem? Why do I want to do this? Is it the other person’s problem or mine?
HOW TO ENTER FOREIGN MARKETS
EXPORTING
MANUFACTURING
HOW TO ENTER FOREIGN MARKETS: EXPORTING
INDIRECT– MANUFACTURING EXPORT AGENT– EXPORT COMMISSION AGENTS– EXPORT MERCHANTS– INTERNATIONAL FIRMS
DIRECT– EXPORT DEPARTMENT– SALES COMPANY
GLOBAL BUSINESS ENVIRONMENT POPULATION
– SIZE, CONCENTRATIONS, AND GROWTH RATES
– SKILLS COUNTRIES
– RECENT PROLIFERATION
– DIVERSITY ECONOMIC DEVELOPMENT
– Group of 7 Countries: [US, UK, Japan, RF, FRG,Canada, Italy]
– GNP / GDP -- GROWTH RATES TRADE
– ANALYSIS
– TRENDS
– FDI FLOWS ENVIRONMENTAL PROTECTION
HOW TO ENTER FOREIGN MARKETS: MANUFACTURING
WHOLLY-OWNED SUBSIDIARY– GREENFIELD– PURCHASE A GOING OPERATION– PURCHASE DISTRIBUTION, BUILD MANUFACTURING
JOINT VENTURE LICENSING AGREEMENT FRANCHISING CONTRACT MANUFACTURING
Modes Of Entry AnalysisMOE Costs and Benefits
Licensing Exporting JV WOSCosts [ 1 = highest, 4= lowest ]
Financial Investment Required 1 2 3 4
Managerial Investment Required 1 2 3 4
Constraints on Operating Flexibility 3 2 4 1
Potential Loss to Co. Reputation 4 3 2 1
Benefits [ 1 = highest, 4= lowest ]
Total Percent of Profits Received 4 2 3 1
Stability of Income 4 2 3 1
Contribution of New Knowledge 4 2 1 3
Contribution to Co. Reputation 4 2 3 1[Lowest Score Is Best] Total 25 17 22 16
rank preference vs factor
Modes Of Entry AnalysisWEIGHT 1 =
most important Licensing Exporting JV WOS
Costs [1 = highest 4= lowest ]Financial Investment Required 4 4 8 12 16
Managerial Investment Required 3 3 6 9 12
Constraints on Operating Flexibility 2 6 4 8 2
Potential Loss to Co. Reputation 1 4 3 2 1
Benefits [ 1 = highest, 4= lowest ]
WEIGHT 1 = most
important
Total Percent of Profits Received 1 4 2 3 1
Stability of Income 2 8 4 6 2
Contribution of New Knowledge 4 16 8 4 12
Contribution to Co. Reputation 3 12 6 9 3
Total 57 41 53 49
STAGE MODEL OF INTERNATIONAL EXPANSION
FOREIGN INQUIRY EXPORT MANAGER EXPORT DEPARTMENT AND DIRECT SALES SALES BRANCHES AND AFFILIATES ASSEMBLY ABROAD PRODUCTION ABROAD
– CONTRACTING– LICENSING– INVESTMENT IN MFG
INTEGRATION OF FOREIGN AFFILIATES
DETERMINANTS OFNATIONAL COMPETITIVEADVANTAGE -- MICHAEL PORTER
FIRM STRATEGY,STRUCTURE, &
RIVALRY
RELATED & SUPPORTINGINDUSTRIES
FACTOR CONDITIONS
DEMAND CONDITIONS
FACTOR CONDITIONS
CLASSICAL
– FACTORS OF PRODUCTION LABOR, LAND, NATURAL RESOURCES, CAPITAL,
INFRASTRUCTURE A NATION WILL EXPORT THOSE GOODS THAT MAKE
MOST USE OF THE FACTORS WITH WHICH IT IS RELATIVELY WELL ENDOWED
PORTER (“Competitive Advantages of Nations”)
SOPHISTICATED INDUSTRIES REQUIRES FACTORS THAT ARE CREATED -- NOT INHERITED -- SUCH AS SKILLED HUMAN RESOURCES AND A SCIENTIFIC BASE
NATIONS SUCCEED IN INDUSTRIES WHERE THEY ARE PARTICULARLY GOOD AT FACTOR CREATION ...OR...
NATIONS SUCCEED WHEN SELECTED DISADVANTAGES PROD FIRMS TO INNOVATE AND UPGRADE
DEMAND CONDITIONS IMPORTANCE OF “HOME” DEMAND
- SIZE IS LESS IMPORTANT THAN THE CHARACTER OF
HOME DEMAND
- SOPHISTICATED, DEMANDING BUYERS
NATIONS GAIN COMPETITIVE ADVANTAGE WHEN THE HOME DEMAND GIVES THEIR FIRMS A CLEARER OR EARLIER PICTURE OF EMERGING BUYER NEEDS AND WHERE DEMANDING CONSUMERS PRESSURE FIRMS TO INNOVATE FASTER AND ACHIEVE MORE SOPHISTICATED COMPETITIVE ADVANTAGES THAN THEIR FOREIGN RIVALS
EASIER TO ANTICIPATE GLOBAL TRENDS IF THE NATION’S VALUES ARE SPREADING -- THE MEDIA, TRAINING FOREIGNERS, POLITICAL INFLUENCE
RELATED AND SUPPORTING INDUSTRIES
HOME BASED COMPETITIVENESS IN RELATED INDUSTRIES FACILITATE NEW SKILL DEVELOPMENT, INFORMATION FLOW AND TECHNICAL INTERCHANGE
SUPPORTING FIRMS CREATE ADVANTAGES IN DOWNSTREAM INDUSTRIES – COST-EFFECTIVE INPUTS IN AN EFFICIENT, EARLY,
RAPID AND SOMETIMES PREFERENTIAL WAY– PROXIMITY FACILITATES MUTUALLY SUPPORTED
INNOVATION AND UPGRADING
FIRM STRATEGY, STRUCTURE AND RIVALRY
NATIONAL CIRCUMSTANCES, VALUES AND CONTEXT CREATE TENDENCIES IN HOW FIRMS ARE CREATED, ORGANIZED, AND MANAGED, AS WELL AS WHAT THE NATURE OF DOMESTIC RIVALRYWILL BE:
– ITALY : SMALL, MEDIUM-SIZED FIRMS, PRIVATELY OWNED, STRATEGIES EMPHASIZING FOCUS, CUSTOMIZED PRODUCTS, NICHE MARKETING, RAPID CHANGE AND FLEXIBILITY
– GERMANY: LARGER, STRICTLY HIERARCHICAL IN ORGANIZATION AND MANAGEMENT PRACTICES, CEO’S WITH TECHNICAL BACKGROUNDS, FIT TECHNICAL OR ENGINEERING ORIENTED INDUSTRIES WHERE COMPLEX PRODUCTS DEMAND CAREFUL DEVELOPMENT, PRECISION MANUFACTURING, PROCESS, AFTER-SALE SERVICE
LONG vs. SHORT TERM RETURNS ORIENTATION RIVALS: US, SWITZERLAND, JAPAN DOMESTIC RIVALRY IS THE MOST IMPORTANT POINT THE MODEL -- A
STRONG STIMULANT
ROLE OF GOVERNMENT
ESSENTIAL HELPER OR “HANDS-OFF” APPROACH ?
BOTH EXTREMES INCORRECT -- LEAD TO THE PERMANENT EROSION OF A COUNTRY’S COMPETITIVE ADVANTAGES:
– CREATE DEMAND FOR MORE “HELP”
– FAIL TO CREATE THE STIMULATING ENVIRONMENT FOR INNOVATION
GOVERNMENTS SHOULD BE A CATALYST AND CHALLENGER
GOVERNMENTS CANNOT CREATE COMPETITIVE INDUSTRIES -- ONLY COMPANIES CAN DO THAT
COMPETITIVE TIME HORIZONS OF FIRMS vs. GOVERNMENTS -- A DECADE OR AN ETERNITY ?
TYPES OF INTERNATIONAL STRATEGIESGlobal Grand Strategies
Global – Low Cost, Differentiation, Focus– Core competency leveraging– Counterattack– Glocalization
Multidomestic
Market Entry Strategies Export Manufacture
– Wholly-owned Subsidiary– Greenfield– Joint Venture [Strategic Alliances]– Licensing Agreement– Franchising– Contract Manufacturing
PRESSURES FOR GLOBALIZATION
Increasingly common consumer tastes Cost reduction (in some industries) Successful global competitors Declining tariffs and emerging trade blocs Telecommunications facilitating
international management
PRESSURES FOR LOCALIZATION
Distinct differences in consumer tastes Differences in traditional practices Non tariff barriers Resurgent nationalism New production technologies reduce
benefits of scale economies Some organizations reluctant to change
ORGANIZATIONAL CONSEQUENCES OF INTERNATIONALIZATION
GLOBAL STRATEGY
MULTIDOMESTIC STRATEGY
H
H
L
LPR
ES
SU
RES
FO
R
GLO
BA
LIZ
ATIO
N
PRESSURES FOR LOCALIZATION
AIRCRAFTCAMERASCONSUMER ELECTRONICSCOMPUTERS
AUTOS
PHARMACEUTICALS
AEROSPACE
TELECOMMUNICATIONS
STEEL
CEMENT
SYNTHETIC FIBERS
PACKAGED FOODS
CLOTHING
(HEDLUND; BARLETT & GHOSHAL)
MOTIVES FOR INTERNATIONAL JOINT VENTURES
MARKETS
NEW EXISTING
PRODUCTS
NEW
EXISTING
DIVERSIFY INTOA NEW BUSINESS
TO BRING FOREIGNPRODUCTS TOLOCAL MARKETS
TO TAKE EXISTING PRODUCTS TOFOREIGN MARKETS
TO STRENGTHENTHE EXISTINGBUSINESS
IJV Instability Inter Partner Conflict in Co-management
– Founding Goals, Corporate Cultures
Cross-Cultural Differences Control/Ownership Structures
– Domination vs. Balanced Power
Characteristics of Parents– Financial Problems, Policy Changes in MNE partners
External Environments Inter Partner Competitive Learning
– Skills, Competencies, Resources
CRITICAL SUCCESS FACTORS FOR STRATEGIC ALLIANCES
Complementary Strengths: Synergy
Cooperative Cultures: Compatibility
Commensurate Risks: Fairness
Compatible Objectives: Goal Congruence
Sharing Responsibility – One Key to JV Effectiveness
Responsibility is more likely to be shared when there is: Delegation of responsibility and employee ownership of
this responsibility Expatriates who are “know-how partners” and share
expertise with local managers Continued staff development Bilingual communication Intensive management training for all executives Continued involvement with organized labor groups A report-oriented organizational structure Local input decision-making Long-term commitment by both partners [resources]
STAGES IN PLANNING, NEGOTIATING, & MANAGING JOINT VENTURES (Woodside & Pitts,
1996)
Joint Venture Objectives– Establish strategic objectives of the JV
and specify time period for achieving objectives
Cost/Benefit Analysis– Evaluate advantages and disadvantages
of JV compared with other MOE’s financial commitment, synergy,
management commitment, risk reduction, control, long-run market penetration, etc.
Selecting Partner(s)– Profile of desired features, identify/screen
candidates and draw up short list, initial contact, choice of partner
Develop Business Plan– Achieve broad agreement on partners’
inputs, venture outputs, management style, decision-making processes, reporting relationships, performance evaluation system, marketing policies, production and procurement policies, HRM policies, R&D policies
Negotiation of JV Agreement
– Final agreement on business plan
Contract Writing– Incorporation of agreement in legally
binding contract allowing for subsequent modifications to the agreement
Performance Evaluation– Establish control system, accounting
and financial controls, for measuring JV performance
PLANNING A JV
Feasibility Study Selection of the Right Partner Coordination of Investment Objectives Foreign Exchange Balance Management Organizational Structure
JV FEASIBILTY STUDY-World Bank
Market Study Calculation of the
Investment Volume Type of Investment Financing Stock-sharing Choice of the
Manufacturing System Supply of Materials Supply of Energy
Analysis of the Location Analysis of the Partner Lifecycle of the JV ROI Calculation Risk Analysis Organization of the
Company Influence of JV on Western
Partner
PRINCIPAL ELEMENTS OF A JV AGREEMENT
Definitions Scope of operations Management (Roles and Staffing)
– Shareholders and supervisory roles regarding board– Executive board– Arrangements in the event of deadlock– Operating management
Arbitration Representations and warranties of each partner Organization & capitalization Financial arrangements Contractual links with parents Rights & obligations regarding intellectual property Termination agreements Force majeure Covenants
IJV Leadership Team Effectiveness[Li, Jiatao & Tsui, Anne, 1999]
Composition: demographic characteristics, national cultural background
Processes: communication flows, decision making process, interpersonal dynamics, and normative behaviors
Structure: roles of the managers (i.e., team members) and relationships among those roles, including issues such as task interdependence, role ambiguity and role conflict
Incentives: characteristics of the compensation structure and the career opportunities
Leadership: style and behavior of the leader in setting goals and the agenda for the joint venture and his/her ability to develop the team and the culture of the venture.
Sustaining satisfactory joint venture relationshipsLin, Xiaohua & Germain, Richard, JIBS (1998)
POLITICAL RISK[Simon, 1982]
Governmental or Societal actions and policies, originating within or outside the host country, and negatively affecting either a select group of, or the the majority of, foreign business operations and investments
POLITICAL RISK
Macro - Micro (Who it affects) Special Nature of Investment
– Economic Sector / (Level of Risk) Primary (+++) Industrial (---) Service (+/-)
– Technological Sophistication Not Available if Government Expropriates (--) R & D Present in Host Country (++)
– Pattern of Ownership Wholly-owned (++) Partial FDI (--)
SOURCES OF POLITICAL RISK Expropriation Confiscation Campaign Against Foreign Goods Mandatory Labor Benefit Laws Kidnapping, Terrorism Civil Wars Inflation Currency Devaluation Increased Taxation Import license restrictions Contract non-compliance Profit Repatriation Laws
NON TARIFF BARRIERS Any government regulation, policy, or procedure other than a tariff
that has the effect of impeding international trade Examples
– quotas
– numerical export controls embargoes voluntary export restraint (VER’s)
– product and testing standards
– restricted access to distribution networks
– public-sector procurement policies
– local-purchase requirements
– regulatory controls
– currency controls
– investment controls
ASSESSING POLITICAL RISK[Dichtyl & Koglmayr, 1986]
Political and Economic Environment
– Stability
– Public Administration
– Internal / External Conflicts Domestic Economic Conditions
– Growth
– Inflation
– Infrastructure External Economic Relations
– Trade
– FDI
– Brand Protection
– Currency Exchange
POLITICAL RISK ASSESSMENT[Alon & Martin, 1998]
INTERNAL
GOVERNMENT Degree of elite repression Degree of elite illegitimacy Likelihood that regime change will affect policy
SOCIETY Degree of fragmentation Potential for social conflict Sense of nationalism, xenophobia, alienation or
fundamentalism
POLITICAL RISK ASSESSMENT
ECONOMIC [INTERNAL] GDP per capita growth Income distribution Likelihood that economic goals will be met
POLITICAL RISK ASSESSMENTEXTERNALGOVERNMENT Likelihood of political violence Degree of involvement in international
organizations Possibility of restriction on investment, capital, or
tradeSOCIETY World public opinion Disinvestment pressure Regional diversity and incongruent interests
POLITICAL RISK ASSESSMENT
ECONOMIC [EXTERNAL] Future economic policies regarding foreign direct
investment Likelihood of balance of payments problems Likelihood of currency inconvertibility/instability
MANAGING POLITICAL RISK
Integrative Strategies– Good Relations– Local Business– Joint Ventures– Local R & D– Labor-Management Relations
Protective / Defensive Strategies– Minimize Local Production– Limit use of HCN Managers– Raise Capital from Local Banks– Diversify Production Across Several Countries
Aspects of International Organizational Design
Structure Coordinating Mechanisms Geography
Basic Organizational Structures
Initial structure for firms internationalizing– Exporting
– WOS
International Division Global Structures
– Product
– Area
– Function
– Mixed / Matrix
– Transnational
International Division
Usually an early [second] step in international organizational design
Separate from domestic activities Organized around product, function, area Consolidate activities to support global
business activities Conflict with domestic divisions
Global Structures
Functional– Integrate foreign operations to gain functional
specialization and economies of scale– Small firms with highly centralized authority – Products using similar technology, narrow
market focus Product
– Different technologies aimed at different markets
– SBU’s– Fits rapid growth and dynamic environments
Area / Geographic– Regional focus– Market dissimilarities addressed– Coordination and cost issues across regions
Mixed / Matrix– Combine product and area [or functional]
expertise– Expensive to operate– Complex to staff and manage
Global Structures
Global Structures
Transnational– Horizontal integration of “equals”– Retain local flexibility and global integration – Coordinate across borders– Horizontal Communication– Organizational Culture as control mechanism
MANAGERIAL CONTROL PROCESS
SETTING OF STANDARDS
DEVELOPMENT AND APPLICATION OF MONITORING TECHNIQUES
COMPARISON OF PERFORMANCE MEASURES OBTAINED TO PLANNED OUTCOMES
EMPLOYMENT OF CORRECTIVE ACTIVITIES
PROBLEMS OF CONTROL AND INFORMATION FLOW IN MNCs
TRANSFER PRICING LEGAL SYSTEM CURRENCY EXCHANGE RATE FLUCTUATIONS GEOGRAPHIC DISTANCE LANGUAGE BARRIERS COMMUNICATION HABITS CULTURAL DISTANCE FRAME OF REFERENCES
DIRECT vs. INDIRECT CONTROLS
DIRECT– PERIODIC MANAGEMENT MEETINGS– VISITS TO FOREIGN AFFILIATES– STAFFING FOREIGN AFFILIATES WITH PARENT COUNTRY
NATIONALS (PCNs)– ORGANIZATIONAL STRUCTURE
INDIRECT– PERFORMANCE REPORTS
ROI AND PROFIT– BUDGETS– FINANCIAL STATEMENTS
HOST COUNTRY ACCOUNTING STANDARDS PARENT COUNTRY ACCOUNTING STANDARDS HOST COUNTRY CONSOLIDATED FINANCIAL STATEMENTS
WHO GOT THE PROFITS ?
Germany
Item is manufactured at a cost of $80. It isthen sold to an Irish subsidiary for $80.
TAX RATE: 48%TAX PAID: $ 0
Ireland
The subsidiary turns around and resells the item at $150 to a U.S. subsidiary, and earns a $70 profit.
TAX RATE : 4%TAX PAID: $2.80
U.S.A.
The U.S. subsidiary sells the item at cost, for $150.No profit is earned.The Irish subsidiary then lends money to the U.S. Co. for futureexpansion.
TAX RATE: 34%TAX PAID: $ 0
USING TAX HAVENS AND PRICING ABUSES, A MNC CAN SLASH ITS U.S. TAX BILL BY TRANSFERRING PROFITS TO LOW TAX COUNTRIES. (Martz & Thomas, Newsweek, 4/15/91)
Control Mechanisms in MNC Structures
Multinational Output Bureaucratic Decision Making Organizational Structures Control Control Control Control
Intl Division ProfitFollow Co. Policies
Some centralization
Treated Like Other Divisions
Global Area Profit
Some Co. Policies Necessary
Local Units Autonomous
Local Subsidiary Culture Often More Important
Global Product
Sales Volume or Units Output for Supply
Tight Process Controls for Quality
Centralized at Product Div. Hqs
Possible for Some Co. but Not Always Necessary
Transnational
Supply Output; Some Independent Profit Centers Less Important
Few Centralized Decisions; Most in Key Network Nodes Organizational Culture
HR ROLES IN BUILDING A COMPETITIVE ORGANIZATION -Ulrich, 1997
FUTURE/STRATEGICFOCUS
PROCESSES PEOPLE
DAY-TO-DAY/OPERATIONALFOCUS
Management of Strategic HR
Management of Firm's Infrastructure
Management of Employee Contribution
Management of Transformation and Change
THE “DELIVERABLES”GUARANTEED OUTCOMES -Uhlrich, 1997
FUTURE/STRATEGICFOCUS
PROCESSES PEOPLE
DAY-TO-DAY/OPERATIONALFOCUS
Executing Strategy(Strategic Partner)
Building an Efficient Infrastructure
(Administrative Expert)
Increasing Employee Commitment and Capability
(Employee Champion)
Creating a Renewed Organization(Change Agent)
HRM FUNCTIONS AND ACTIVITIESHR PLANNING HR PLANNING AND
FORECASTING JOB ANALYSIS
ORGANIZATIONAL ENTRY FAIR EMPLOYMENT PRACTICES RECRUITING SELECTION
– DECISION MAKING ISSUES
– DEVICES AND METHODS
STRATEGIC HRM ISSUES STRATEGIC HUMAN
RESOURCES PLANNING TRENDS AND CHALLENGES
DEVELOPING HR EFFECTIVENESS TRAINING AND DEVELOPMENT PRODUCTIVITY ENHANCING
INTERVENTIONS PERFORMANCE APPRAISAL COMPENSATION SYSTEMS
DEVELOPMENT PERFORMANCE-BASED
REWARDS AND BENEFITS
MAINTAINING HUMAN RESOURCES HEALTH AND SAFETY LABOR RELATIONS ORGANIZATIONAL EXIT
ORGANIZATIONAL RE-DESIGN JOB DESIGN RE-ENGINEERING
Variables Affecting IHRM Approaches
Approach to Staffing– Ethnocentric,
Polycentric, Geocentric Firm-Specific Issues
– Stage in Internationalization
– Type of Industry– Strategy and Structure– Organization
Contextual Issues– Legal System– Cultural Distance
Situation Variables– Staff Availability– Location of
Assignment– Need for Control– Locus of Decision
IHRM Activities– Planning– Staffing– Development– Maintaining– Repatriation
GLOBAL HR ISSUES
What are the unique skills and perspectives necessary to be a successful global competitor?
What percent of the existing management team has those global competencies?
What percent are sensitive to the subtle differences in global markets and products?
What percent could adequately represent the firm's interest to a broad global audience? What percent are comfortable with global issues?
What percent could comfortably have a dinner conversation with key customers from other countries?
What percent understand and could explain major cultural and religious differences around the work and how these impact the market for the firm's goods and services?
How does the organization share information globally?
What incentive systems will encourage employees to move around the world and to share ideas worldwide?
How can employees gain global experience without the liabilities of expatriates?
How can the company create a mindset that respects local conditions while leveraging global thinking?
-Uhlrich, 1997
Selecting for Overseas Employment
Age, experience, education Language training Motivation & leadership Family considerations Adaptability to change Independence, self-reliance Physical & emotional health
FACTORS AFFECTING ORGANIZATIONAL EFFECTIVENESS
ORGANIZATION, GROUP & INDIVIDUAL LEVELS
ORGANIZATION– Environment– Technology– Strategic Choices– Structure– Systems and Processes– Culture
FACTORS AFFECTING ORGANIZATIONAL EFFECTIVENESS
GROUP– Cohesiveness– Leadership– Structure– Status– Roles– Norms
FACTORS AFFECTING ORGANIZATIONAL EFFECTIVENESS
INDIVIDUAL– Ability– Skill– Knowledge– Attitude– Motivation – Stress
MOTIVATIONWhat Energizes, Channels, Sustains Human
Behavior? Static-Content
– Maslow– Alderfer– McClelland– Herzberg
Process– Expectancy– Path-Goal– Goal-Setting
Environmentally-Based
– Behavioral (Operant, Classical, Behavior Modification)
– Social Comparison– Equity– Exchange– Social Learning
MOTIVATIONRelation Between Static-Content
Models
Basic Needs Higher-Order Needs
Satisfiers Motivators
Physiological
SecuritySocial
EsteemSelf-Actualization
n Aff
n Pwr
n Ach
Existence
Relatedness
Growth
MOTIVATIONEXPECTANCY THEORY
p(E P) x [ p(P O) x V ]
ORGANIZATIONAL REWARDSMONETARY REWARDS, STATUS SOCIAL INTRINSICINCLUDING FRINGE BENEFITS SYMBOLS REWARDS REWARDS
Pay Medical PlanOffice Size and Location Friendly Greeting Interesting Work
Pay Raise Company AutoOffice With Window Informal Recognition Sense of Achievement
Stock OptionsPension Contributions Carpeting Praise Job of More Importance
Bonus Plan Product Discounts Drapes Smile Job Variety
Christmas Bonus Vacation Trips Paintings Evaluative Feedback Job-performance FeedbackHome Purchase Assistance
Theater and Sports Tickets Watches Compliments Self-recognition
Deferred Compensation
Personal Loans at Favorable Interest Rate Rings Nonverbal Signals Self-praise
Pay and Time Off to Attend Training Recreation Facilities
Formal Awards and Recognition Pat on the Back
Choice of Geographical Location
Work BreaksClub Memberships and Privileges Wall Plaque
Invitations to Coffee or Lunch Working Hours
Free Personal Financial Planning Advice
Reserved Company Parking
After-hours Social Gatherings
Participation in New Organizational Venture
Sabbatical Leaves Moving Expenses Autonomy in JobProvision and use of Company Facilities Free Legal Advice
Opportunities to Schedule Own Work
LOW 23 41 59 77 HIGHMASCULINITY INDEX
WEAK
29
56
40
19
STRONG
85
70
100
SIN
HOK
GBR IRE
IND
USA PHISAF
AULNZL
CAN
SWE
FIN
NETNOR
DEN
IRATHA
TAI
SWI
GERAUT
JPN
GRE
BEL
ARG
ITACOL VEN
MEX
POR
SPA FRA TURPER
CHL ISRBRA
YUG
UNCERNTAIN TY
AVOIDANCE
COS
PAKARA
KOR
IDO
WAFEAF
(Weak UA-- Masculine)
EQA
SMALL PD COLLECTIVIST
30 40 50 80Power Distance
0
32
48
40
16
112
96
72
104
SIN
HOK
GBR
IRE
IND
USA
PHI
SAF
AUL
NZL CAN
SWE
FIN
NET
NOR
DEN
IRA
THATAI
SWIGER
AUT
JAP
GRE
BEL
ARG
ITA
COL VEN
MEXPOR
SPA
PER
CHL
ISR
BRA
YUG
INDIVIDUALISM
INDEXE
COS8
80
88
64
56
10 20 60 70 90 100
FRA
ARATUR
PAK
LARGE PD INDIVIDUALIST
WAF
GUA
EAF
URU
IDO
EQA
PERFORMANCE MANAGEMENT
ORGANIZATIONAL LEVEL– Accounting and Control Systems
GROUP LEVEL– Departmental / Team Outcome Measures
INDIVIDUAL LEVEL– Performance Appraisal– Compensation / Reward Systems
PERFORMANCE MANAGEMENTIndividual Level
FUNCTIONS OF PERFORMANCE APPRAISAL
– DEVELOPMENTAL Reinforce and sustain performance Improve performance Determine career progression goals Determine training needs
– ADMINISTRATIVE Link reward to performance
– compensation
– promotion / transfer / demotion
– discipline Evaluate HRM policies and programs