IBS International Business Strategy Workshop Charles Schell http://www.finance-mba.com http://www.finance-mba.com 2 1
The International Environment Why international business is important growth in world trade proliferation of global markets homogenous market segments transportation and distribution trade barriers competitive pressure Factors affecting change economic growth innovation protectionism 3 Domestic vs International Strategy Single language homgeneous unified market effective marketing research political involvement not vital uniform financial environment single currency stable regulatory environment stable labour relations no problem with nationalism Multilingual hetrogeneous diverse markets marketing research difficult & costly political environment often vital political uncertainty uncertain financial climate forex fluctuations regulatory conditions uncertain unstable labour relations nationalism & protectionsim 4 2
Multinational Corporations Definition global opportunities assets invested internationally international production world-wide perspective Impact Criticisms Multidomestic vs Global The Economist 5 Environmental Analysis Environmental analysis resource analysis value analysis uncertainty and complexity societal environment economic sociocultural technological political-legal competitive analysis environmental scanning 6 3
Environmental Analysis Stable Form opinions and make predictions based on past experience Simulation and model building. what if approach Change Dynamic Focus on future projections. Business' with short-sighted management pose unacceptable risk Quality and depth of management. Simple Complexity Complex 7 Route Abroad Why??? access to raw materials equipment markets technology How: indirect exporting licensing franchising management contracts turnkey contracts contract manufacturing wholly-owned subsidiaries strategic alliances 8 4
IBS International Management Policy Charles Schell http://www.finance-mba.com Session Objectives an introduction to international management policy define and discuss values and culture understand the arguments for homogeneity or heterogeneity of culture 10 5
Agenda Define values and culture management policy across cultures barriers to 'globalisation' prepare and present Daewoo case Daewoo debrief 11 Culture "culture consists of specific learned norms based on attitudes, values and beliefs, which exist in every society" define society... define values... 12 6
Values and attitudes Values: The standards by which concepts and behaviours are judged Attitudes formed from beliefs, which are in turn formed from values 13 Values religion attitude towards age/status occupation authority achievement and wealth changes and innovation education 14 7
What do you value? Freedom Justice Equality 15 Needs vary across cultures Self actualisation Self-esteem Social need Safety need Physiological need Maslow's hierarchy High social, low self-actualisation needs 16 8
Cultural pointers language colours punctuality distance body language fatalism 17 Country clusters Other Near Eastern Arab Nordic Germanic Far Eastern Anglo Latin American Latin European 18 9
Culture & enterprise JAM SIN DEN SWE HOK IRE NZL GBR USA CDA SAF IND IDO MAL PHI Uncertainty avoidance ISR SWI FIN GER IRA PAK ITA JPN THA FRA MEX GRE Power distance 19 Corruption in Italy Who paid - Who didn't Gec-Marconi Britain ABB Switz/Sweden Siemens Germany Alcatel France IBM AT&T Exxon Texas Instruments All US 20 10
Is social Darwinism creating a global culture? Ted Levitt claims culture is becoming less relevant... evidence: MacDonald's Coca-Cola Ethnic foods Scotch Whisky Hollywood movies financial services 21 A globalisation model Material culture Social Structure Ideology 22 11
Daewoo Group To what would you attribute Daewoo's rapid growth? How has Daewoo's cultural context influenced its growth? Mr. Kim Selling HRH a new car 23 Summary International managers need to take into account cultural factors culture is based on attitudes, values and beliefs culture is an energy-harnessing system technology(social factor) and globalisation(economic factor) support competing pressures for homogeneity and heterogeneity managers need to account for these differences to avoid ethnocentrism or excessive polycentrism 24 12