Chapter 3
Organizational
Behavior in a
Global Context
Michael A. Hitt
C. Chet Miller
Adrienne Colella
Slides by Ralph R. Braithwaite
3-1
McDonald’s
Thinks Globally and
Acts Locally
• What are your thoughts on McDonald’s approach to
international business?
• What about their concept of thinking globally but acting
locally. Why is it a good idea?
• What can other businesses learn from McDonald’s
example?
Exploring Behavior in Action
3-2
Knowledge Objectives
1. Define globalization and discuss the forces that
influence this phenomenon.
2. Discuss three types of international involvement by
associates and managers and describe problems that
can arise with each.
3. Explain how international involvement by associates
and managers varies across firms.
4. Describe high-involvement management in the
international arena, emphasizing the adaptation of this
management approach to different cultures.
5. Identify and explain the key ethical issues in
international business.
3-3
Forces of Globalization
Globalization – The trend toward a unified global
economy involving free trade and a free flow of
capital between countries
• Products, services, people, technologies, and financial
•
•
capital move relatively freely across national borders
Tariffs, currency laws, travel restrictions, immigration
restrictions, and other barriers to these international
flows become less difficult to manage
Unified world market in which to sell products and
services, and acquire resources
3-4
Culture
Shared values and taken-for-granted assumptions
that govern acceptable behavior and thought
patterns in a country and that give a country
much of its uniqueness.
“Many fear that unique cultures around the world will
disappear over time if the world becomes one unified
market for goods and services.”
Thoughts?
3-5
Opportunities and Challenges
Political
Risks
Growth
Diversification
of Risk
Economic
Risks
Challenges
Opportunities
Economies
of Scale
Managerial
Risks
Location
Advantages
Exhibit 3-1: Opportunities and Challenges for Firms with International Involvement
3-6
Risks
Political Risks
Economic Risks
Managerial Risks
3-7
Internationally Focused Jobs
Well suited to associates who thrive on
challenge
Typically member of geographically
dispersed teams
Individual Issues
Virtual Teams
Swift Trust
3-8
Learning About a
Counterpart’s Culture
• Don’t attempt to identify another’s culture too quickly
• Beware of the Western bias toward taking actions
• Avoid the tendency to formulate simple perceptions of
•
•
•
others’ cultural values
Don’t assume that your values are the best for the
organization
Recognize that norms for interactions involving
outsiders may differ from those for interactions
between compatriots
Be careful about making assumptions regarding
cultural values and expected behaviors based on the
published dimensions of a person’s national culture
Adapted from Exhibit 3-2: Learning about a Counterpart’s Culture
3-9
Foreign Job Assignments
Expatriates
Culture Shock
Ethnocentrism
Building Relationships
Effectiveness
Spousal
at
Adjustment
Adjusting to Local Culture
Developing a Feeling of
Being at Home
3-10
Training for Expatriates
• Train the entire
family, if there is one
• Departure orientation
• Key cultural
information
• Conversational
language training
• Convince busy
families of need for
training
3-11
After Arrival
•
•
•
•
Additional training
Continued language training
Social support
Reintegration process
3-12
Glass Border
• Historically, fewer international assignments
•
•
for women
Results in issues of development and
knowledge for higher-level jobs
Impact on human capital
3-13
Are Asian Women Breaking the
Glass Border?
• What role do cultural values and traditions still
•
•
play in the Asian business world?
Are more Asian women taking on leadership
roles? How will this impact business in the
future?
What are the potential negative consequences
for Asian companies that do not make the best
use of all their human capital?
Experiencing
Strategic OB
3-14
Foreign Nationals as Colleagues
Some issues involve different:
Values
Ways of Thinking
Norms
Thought Patterns
Working Styles
Decision Styles
3-15
Context Cultures
High-context culture
• Value personal
Low-context culture
• Value performance and
relationships
• Develop agreements
based on trust
• Favor slow, ritualistic
negotiations
expertise
• Develop formal
agreements
• Engage in efficient
negotiations
Japan
South Korea
United States
Germany
3-16
Time Orientation
Monochronic
Polychronic
• Prefer to do one task in
• Comfortable doing more
a give time period
• Dislike multi-tasking
• Prefer to do one task
without interruption
• Prompt, schedule
driven and timefocused
than one task at a time
• Not troubled by
interruptions
• Time is less of a guiding
force
• Plans are flexible
North America
Northern Europe
Many Japanese
Latin America
Southern Europe
South Asia
Southeast Asia
3-17
Cultural Intelligence
The ability to separate the aspects of behavior
that are based in culture as opposed to unique to
the individual or all humans in general.
3-18
Opportunities for International
Participation
Multi-domestic strategy
Global strategy
Transnational strategy
3-19
Local Responsiveness
Local
Multi-domestic
Global
Transnational
Production
High
Low
Medium
R&D
High
Low
Medium
Product
Modification
High
Low
Medium/High
Adaptation of
Marketing
High
Low/Medium
Medium/High
Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics
3-20
Organizational Design
Multi-domestic
Global
Transnational
Delegation of
power to local
units
High
Low
Medium/Low
Inter-unit
resource flows
between and
among local
units
Low
Low/ Medium
High
International
resource flows
from and/or
controlled by
corporate HQ
Low
High
Low/ Medium
Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics
3-21
International Participation
Opportunities
for Associates
and Managers
Multi-domestic
Global
Transnational
Low
High
High
Adapted from Exhibit 3-3: International Approaches and Related Organizational Characteristics
3-22
Dimensions of National Culture
Power
Distance
Individualism
Uncertainty
Avoidance
In-group
Collectivism
Gender
Egalitarianism
Assertiveness
National
Culture
Future
Orientation
Exhibit 3-4: Dimensions of National Culture
Humane
Orientation
Performance
Orientation
3-23
National Cultures
Culture Dimension
India
Germany
United States
M
H
M
M/H
M
M/L
Individualism
M
H
M
Assertiveness
L/M
H
H
In-group collectivism
H
L/M
M/L
Gender egalitarianism
L
M/L
M
Future orientation
M
M
M
Performance orientation
M
M
H
H/M
L
M
Uncertainty avoidance
Power distance
Humane orientation
L – Low
M – Medium
Adapted from Exhibit 3-5: National Culture in India, Germany, and the United States
H – High
3-24
Managing Diverse Cultures
What are your thoughts about
Hofstede’s studies on culture?
Geert Hofstede
What are your thoughts about the cultural
issues in the companies mentioned?
Experiencing
Strategic OB
3-25
National Culture and
High-Involvement Management
Must be implemented according to a country’s
cultural characteristics. Information sharing and
decision power can be adapted to different levels
of:
•
•
•
•
Power-distance
Uncertainty avoidance
Individualism
Assertiveness
3-26
National Culture and
High-Involvement Management
Information
Sharing
Decision Power and
Individual Autonomy
Decision Power and
Self-Managing Teams
What are your thoughts regarding
AES’s process?
3-27
Ethics in the International
Context
Principles of proper conduct focused on issues
such as:
Corruption
Exploitation
of Labor
Environmental
Impact
3-28
Absence of Corruption Rankings
Top Five
Bottom Five
1. Iceland
155. Turkmenistan
2. Finland
155. Myanmar
2. New Zealand
155. Haiti
4. Denmark
158. Bangladesh
5. Singapore
158. Chad
United States
17
Adapted from Exhibit 3-6: Absence of Corruption in Select Countries
3-29
Managerial
Advice
Caux Round Table: Ethical
Principles for Business
Responsibilities
Economic and
Social Impact
Business
Behavior
Respect
for Rules
Support for
Multilateral Trade
Respect for the
Environment
Avoidance of
Illicit Operations
3-30
The Strategic Lens
1. Given the complexity and challenges in
operating in foreign countries, why do
organizations enter international markets?
2. How can understanding and managing
cultural diversity among associates
contribute positively to an organization’s
performance?
3. How can being knowledgeable of diverse
cultures enhance an individual’s professional
career?
3-31
Questions
3-32