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Case%201%20Fitzburg%20Tire%20Company

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Title: Case%201%20Fitzburg%20Tire%20Company


1
Case 1 Fitzburg Tire Company
  • Management Across Culture
  • Participants
  • Max Bierman, construction manager (first time
    working outside U.S.)
  • Leopodo Sanchez Garcia, chief engineer for
    Fitzburg in Mexico
  • Situation
  • Fitzburg Tire Co. is building a plant in
    Cuernavaca, Mexico
  • Construction three months behind schedule
  • Costs over budget
  • Last three weeks must be redone
  • Max Bierman has strong views on specific reasons
    for the problems
  • Leopodo Sanchez Garcia has no clear reasons for
    the problems and does not think the problem is
    serious

2
Culture Characteristics
  • Learned culture is learned and experienced
  • Shared culture is not specific to single
    individuals
  • Transgenerational culture is cumulative, passed
    down
  • Symbolic culture is based on using one thing to
    represent another thing
  • Patterned culture has an interdependent
    structure
  • Adaptive culture matches human ability to adapt

3
Values
  • Values
  • basic convictions that people have regarding what
    is right and wrong, good and bad, important or
    unimportant
  • Different cultures have different values
  • Some values are similar across cultures
  • Management success factors (values) include
  • pragmatic, dynamic, achievement-oriented, active
    role in interaction with other individuals who
    are instrumental to achieving the manager's
    organizational goals.
  • Values can change over time and over geographic
    location

4
Cultural Dimensions (Hofstede, p8)
  • Power distance
  • the extent to which less powerful members of
    institutions and organizations accept that power
    is distributed unequally
  • Uncertainty avoidance
  • the extent to which people feel threatened by
    ambiguous situations, and have created beliefs
    and institutions that try to avoid these (need
    for security)
  • Individualism
  • the tendency of people to look after themselves
    and their immediate family only
  • Masculinity
  • the degree to which the dominant values in
    society are success, money and things.
  • Moving to a culture near your own makes
    management transition easier (p17)

5
Cultural Dimension (Trompenaars)(p18)
  • Universalism Vs. Particularism
  • Individualism Vs. collectivism one rule applied
    everywhere/special case
  • Neutral Vs. affective emotions held back/showing
    feelings
  • Specific Vs. diffuse public and private space
    treated differently/public and private space are
    nearly the same and guarded (entry to public
    space is also entry to private space)
  • Achievement Vs. ascription status is based on
    performance of function/status based on who or
    what a person is
  • Time sequential Vs. synchronous (p22)

6
Globalization Vs. National Responsiveness (p35)
  • Integration comes from economies of scale
  • Differentiation comes from local needs
  • Most firms today belief that one worldwide
    approach to doing business is key to success
  • This attitude is wrong reasons include
  • diversity of worldwide standards
  • local customers' demand for differentiated
    products
  • importance of being an insider (buy local)
  • difficulty of managing global organizations where
    local office have different wants and needs
  • local offices are closest to the customers and
    know how to maximize for their specific
    situations
  • MNC success factors include a worldwide view of
    operations, support overseas activities, pay
    close attention to political changes and use
    local nationals whenever possible

National Responsiveness (Differentiation)
Low
High
3
1
High
Globalization Strategy
Mixed Strategy
Globalization (Integration)
4
2
Low
National Responsiveness Strategy
Mixed Strategy
7
Differences and Similarities
  • Parochialism Simplification
  • the tendency to view the the process of
    exhibiting the same world through one's own
    orientation toward different eyes and
    perspectives cultural groups
  • Contingency Approach
  • the application of HRM (Human Resource
    Management) to meet the specific needs of local
    workers
  • Example of Differences and Similarities
  • Japan
  • Relationships are long-lasting and have deep
    personal involvement
  • Communication often implicit, interpretation
    taught from an early age
  • People in authority are personally responsible
    for subordinates' actions with high level of
    loyalty on both sides
  • Agreements tend to be spoken not written
  • Insiders and outsiders easy to distinguish and
    outsiders do not get into inner group
  • American
  • Relationships between people are short and deep,
    personal involvement is not valued as important
  • Communication is explicit, being taught from
    young age to say what they mean
  • Authority is diffused through a bureaucratic
    system, with responsibility hard to pin down
  • Agreements are written
  • Insiders and outsiders are hard to distinguish
    and outsiders may gain entrance to the inner group

8
Organizational Cultures in MNCs
  • Family
  • strong emphasis on hierarchy and orientation to
    the person the leader is a father figure who
    looks after employees people, including real
    family members, may be chosen for a job even
    though less qualified than others in return the
    person is expected to give full loyalty and
    support to the mentor
  • Eiffel tower
  • a strong emphasis on hierarchy and task
    clarification through the use of organizational
    structure tasks are well defined and the
    organization tends to be tall at the top and wide
    at the bottom things go "by the book"
  • Guided missile
  • a strong emphasis on equality in the work place
    and orientation to task usually in project
    groups, common in high-tech firms individual
    expertise is most important with little hierarchy
    as everyone is equal, thus making the group very
    flexible and easy to adapt, but it is also hard
    to control
  • Incubator
  • a strong emphasis on equality and personal
    orientation the role of the organization is to
    bring out individuals' self development this
    culture tend to have no goal, but is instead
    working on the edge of new discoveries, thus
    there is no clear goal and the need for
    creativity, expertise and flexibility eliminate
    any organizational structure, however this is
    short-lived until the firm grows and develops
    need to org. structure

Equity
Guided Missile
Incubator
PersonEmphasis
TaskEmphasis
Eiffel Tower
Family
Hierarchy
9
Case 2 Comtec Corporation
  • Marketing Research Information
  • Participants
  • Dr. Danil Needham, Comtec Corporation president
  • Mr. Harry Otto, Comtec Corporation Vice President
  • Ms. Roberta Malcolm, Computer Consultant
  • Situation
  • Comtec manufactures computers for scientific
    measurements and calculations using a proprietary
    operating system
  • Sales in both domestic and international markets
  • Profits low and financial crisis looming
  • Ms. Malcolm hired to advise on direction
  • Consultant's recommendation runs counter to VP of
    sales marketing's strategy

10
Marketing Information System (MIS)
  • MIS
  • people, equipment and procedures to gather, sort,
    analyze, evaluate and distribute needed, timely
    and accurate information to marketing decision
    makers
  • Developing Information Can Come From
  • Internal Records
  • gathered from sources within the company
  • Marketing Intelligence
  • everyday information about developments in the
    marketing environments that helps prepare and
    adjust marketing plans (can be found for free and
    purchased)
  • Marketing Research
  • information used to identify and define marketing
    opportunities and problems make, improve and
    evaluate marketing actions monitor marketing
    performance and improve understanding

11
Process of Marketing Research
  • Marketing research four steps
  • 1) define the problem and objectives, 2) develop
    the research plan, 3) implement the research
    plan, 4) interpret and report the findings
  • Managers best understand the decisions
  • Researcher best understands how to obtain the
    information
  • Defining the problem and objective is the hardest
    step and can lead the whole process in the wrong
    direction from the start (as in the New Coke
    case)
  • Problems and objectives can be translated into
    specific information needs
  • Primary data can be gathered by observation,
    survey or experiment
  • Focus groups small group of consumers who are
    observed to find their thoughts and feelings
  • CATI Computer Assisted Telephone Interviewing
  • Consumer buyer behavior

12
Consumer Buying Behavior
  • Consumer market individuals and households who
    buy goods and services for personal consumption
  • Consumer behavior model
  • Factors influencing consumer behavior

Buyers responses
Marketing other stinuli
Buyers black box
ProductPrice PlacePromotion
Product choiceBrand choiceDealer
choicePurchase timePurchase amount
EconomicTechnologyPoliticalCulture
Buyerscharacteristics decision process
Psychological
Culture
Social
Personal
Buyer
Referencegroups Family Roles status
Motivation Perception Learning Beliefs
attitudes
Culture Subculture Social class
Age/lifecyclestage Occupation EconomicsLifestyle
Personality self-concept
13
Needs
  • Maslows hierarchy of needs
  • A person tries to satisfy the most important need
    first when satisfied, it will stop being a
    motivator and the person will try to satisfy the
    next most important need.
  • Buyer decision process
  • Five stages (can skip stages)

Evaluationof alternatives
Purchasedecision
Need recognition
Informationsearch
Postpurchasebehavior
14
Adoption of New Products
  • Five Stage Adoption Process
  • Awareness knows of product but has no
    information
  • Interest seeks more information
  • Evaluation considers to try product
  • Trial tries new product on small scale
  • Adoption decides to make full regular use of
    product
  • Innovation Adoption Time
  • Different groups of consumers when adopting
    innovative products

Time
Latemajority
Earlyadoptors
Earlymajority
Inovators
Laggards
2.5
16
34
34
13.5
15
Financial Statements
  • Balance Sheet
  • AssetsLiabilities Equity
  • Assets
  • Cash
  • Marketable securities
  • Accounts receivable
  • Inventories
  • Current Assets
  • Gross plant and equipment
  • Accumulated depreciation
  • Net plant and equipment
  • Total assets
  • Liabilities (claims on assets)
  • Accounts payable
  • Notes payable
  • Accrued wages
  • Other accruals
  • Current liabilities
  • Deferred taxes
  • Long-term debt
  • Preferred stock
  • Stockholders equity
  • Common stock (Par value)
  • Paid-in capital
  • Retained earnings
  • Total Stockholders equity
  • Total liabilities and equity

16
Financial Analysis Ratios
  • Financial Policy Measures
  • Leverage Ratios
  • Total assets/book value of equity
  • Interest-bearing debt (IBD)/total capital
  • IBD/total capital, market
  • Earnings before interest and taxes
    (EBIT)/interest expense
  • EBITlease expense/fixed charges
  • IBD/funds from operations
  • Liquidity Ratios
  • Current assets/current liabilities (or current
    ratio)
  • Current Assets - inventories/current liabilities
    (or quick ratio)
  • (Increase in retained earnings
    depreciation)/investment

17
Financial Analysis Ratios 2
  • Performance Measures
  • Profitability ratios
  • Net operating income (NOI)/sales
  • NOI/total assets
  • NOI/total capital
  • Net income (NI)/sales
  • NI/equity or (ROE)
  • Changes in NOI/change in total capital
  • Change in NI/Change in equity
  • Growth ratios
  • Sales
  • NOI
  • Net income
  • Earnings per share
  • Dividends per share
  • Operating Efficiency Measures
  • Asset investment management
  • Cost of goods sold/inventories
  • Average collection period
  • Sales/fixed assets
  • Sales/total capital
  • Sales/total assets
  • Cost management
  • Gross profit/sales (or gross margin)
  • Marketing administrative expenses/sales
  • Labor costs/sales
  • Employee growth rate
  • Research development expense (RD)/sales

18
Case 3 Hanover Public Systems (HPS)
  • Participants
  • Howard Wolff HPS president
  • Yang Hsiao-shih previous Taiwan plant president
    (terminated)
  • James Fukuda new Taiwan plant president (second
    generation Japanese-American)
  • Situation
  • HPS owns eight wholly-owned subsidiaries
    including one in Taiwan
  • Taiwan subsidiary losing money and requires cash
    infusions
  • President, Yang Hsiao-shih fired and replaced by
    Fukuda who has experience in reorganizing the
    Oakland plant
  • Before arriving in Taiwan, Fukuda took actions
    dispose of some assets and inventory
  • After arriving, Fududa shut down heating and
    cooling manufacture resulting in layoff of 18
    workers and 12 reassignments new management
    system
  • Plant vice president (Hu) plant superintendent
    resigned (Lee)

19
International Organizational Structure
  • Subsidiaries in Early Stages of
    Internationalization
  • A subsidiary is opened because an on-site
    presence is required from the start

ChiefExecutiveOfficer
Personnel
Production
Marketing
Finance
Taiwan
France
Japan
Australia
Personnel
Production
Marketing
Finance
20
Asian Vs Western Management
  • Some Basic Features of the Two Management Styles

21
Organizational Characteristics of MNCs
  • Specialization
  • U.S. plants tend to have more horizontal
    specialization while Japanese plants tend to have
    more vertical specialization
  • Centralization
  • Japanese firms tend to have higher centralization
    while U.S. firms have more delegation and
    involvement at lower levels
  • Characteristics
  • MNCs tend to keep the structures of the
    home-based headquarters even when established
    overseas for many years (p18)

22
Organizational Structure Design
  • Growth Stage
  • Org. structure changes over the growth of the
    firm
  • Young firms tend to be centered around one or few
    people who are the founders or entrepreneurs
  • As staffing and product lines grow, more formal
    structures are required to maintain efficiency
  • Reorganization (or re-engineering) is required
    when market conditions change and the firm must
    change
  • Organizational Configurations
  • There are at least 243 distinctly different org.
    structure types
  • Five common elements in every org. structure
  • Operating core-employees who perform the basic
    work related to production of products and
    services
  • Strategic apex- top-level managers who are
    responsible for overall org.
  • Middle line-managers who connect the operating
    core to the strategic apex
  • Technolstructure--analysts who have the
    responsibility for affecting certain forms of
    standardization in the organization
  • Support staff-people who provide indirect support
    services for the org.

23
Organizational Structure Designs
  • Simple Structure
  • Strengths simplicity fast and flexible low
    cost goals are clear
  • Weaknesses limited application (only can be used
    in small size organizations) too much power with
    single person

Owner
Manager
Manager
Manager
Manager
24
Organizational Structure Designs
  • Machine Bureaucracy Structure
  • Strengths standardization high efficiency
    economies of scale employees in peer groups so
    easier management experienced management not
    required due to high level of standard rules
  • Weaknesses each unit is independent and so does
    not know what other units are doing org. goals
    not well known unknown or new situations cannot
    be handled

ChiefExecutiveOfficer
Dir. PublicRelations
Exec. Dir.
VP Manufacturing
VPFinance
VP Personnel
VP Marketing
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
25
Organizational Structure Designs
  • Professional Bureaucracy Structure
  • Combines standardization with decentralization
    requiring top management to give up power in
    order to give professional high skill employees
    more effectiveness. Used in schools, hospitals
    and firms requiring highly trained employees.
  • Strengths Combines standardization with
    decentralization requiring top management to give
    up power in order to give professional high skill
    employees more effectiveness.
  • Weaknesses same as for professional bureaucracy
    highly trained employees may have professional
    directions and restraints that do not match
    firms goals

ChiefExecutiveOfficer
Dir. PublicRelations
Exec. Dir.
VP RD
VPMarketing
Research
Strategy
Promotions
Packaging
Electronic
Materials
26
Organizational Structure Designs
  • Divisional Structure
  • A set of autonomous units, each usually a machine
    bureaucracy, coordinated by a central
    headquarters (a business in a business). This
    structure gives more power to division managers.
  • Strengths more focus and responsibility given to
    each division gives top management more freedom
    from day-to-day operations any division can be
    cut without hurting other divisions being part
    of a larger structure gives economies of scale

ChiefExecutiveOfficer
  • Weaknesses duplication of effort conflict
    between divisions resentment over lack of
    division freedom coordination problems

Dir. PublicRelations
Exec. Dir.
VP Asia
VP Europe
VP Personnel
VP Personnel
Marketing
Marketing
Production
Production
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
27
Organizational Structure Designs
  • Adhocracy Structure
  • Staffed mostly by professionals with high levels
    of experience. Supervision needs are small and
    behaviors are internalized and management has
    chosen employees based on well established
    professional criteria. Unlike the professional
    bureaucracy, the adhocracy does not make rules
    for new problems, but each and every problem has
    a unique solution so standardization and
    formalization is not needed. Power flows to
    anyone with expertise, regardless of the
    position.
  • Strengths ability to respond quickly
    adaptivity creativity collaboration can handle
    complex, highly technical tasks
  • Weaknesses conflict easy to arise due to blurred
    lines of authority no economies of scale
    inefficient not long lasting

ChiefExecutiveOfficer
Dir. PublicRelations
Exec. Dir.
VP R D
VP Operations
VP Marketing
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
28
Organizational Structure Change
  • Model for Managing Organizational Change

Forcesinitializingchange
Determinants
Feedback
Changeagent
Org. Initiator
What is tobe changed?
Interventionstrategies
Structure?Technology?Org. process?
Implementation tactics
Change process
InterventionParticipationPersuasionEdict
Implementation
Unfreeze-Move-Refreeze
Change
Results
Org.effectiveness
29
Case 4 International Carpet Wholesalers
  • Participants
  • James McHenry buyer for International Carpet
    Wholesalers, New York, USA
  • Mr. Abdelhadi Hachad managing director of SOMART
  • Ms. Paula Feldman president of International
    Carpet Wholesalers
  • Situation
  • McHenry has made a tentative agreement to
    purchase handmade rugs from Mr. Hachad
  • The deal called for Mr. Hachad to purchase raw
    wool from McHenrys firm (this importation
    usually requires a heavy import tax, however, if
    the wool is used only for making rugs for export
    the tax is canceled)
  • Both sides seemed to get mutual benefit from the
    agreement
  • The problem is that McHenry has some reservations
    about the method used for producing the rugs

30
DEFINE REVIEW
  • External
  • Outside of companys control
  • Not influenced by company
  • Internal
  • Inside company
  • Explicit Communication
  • Very clear (This must be done by the 30th.)
  • Implicit Communication
  • Not very clear (This should be done soon.)
  • Message Interpretation
  • Idea understood in wrong way (Everyone did a
    good job. VS You did a good job.)

31
Communication Between Humans
  • Communication Process

32
ANALYZE FLOW
  • Downward Flow
  • Work Related
  • Personal
  • Upward Flow
  • New ideas
  • Feedback

33
EXAMINE PROBLEMS
  • Language
  • English is international language?
  • Perception
  • We see things in a different way
  • Culture
  • We do things in a different way
  • Body language
  • Give the wrong idea
  • Use of hands
  • Face/head movement
  • Clothing
  • Distance
  • Time

34
PRESENT STEPS
  • Feedback
  • Language/Culture Training

35
DEFINE
36
DEFINE
37
BUSINESS ETHICS
  • Law tells us what we should NOT do
  • Ethics tell us what we SHOULD do

38
JAPAN
  • Money
  • From business to government
  • Stock tips buy backs
  • Unfair market practices
  • Sexism Racism
  • Women in Japan are now fighting back against
    sexism
  • Women working for Japanese MNCs in the U.S. are
    also fighting sexism
  • Japanese MNCs in U.S. avoid hiring black workers
  • Women Managers
  • 2.2 of management positions in companies 1,000
    up employees

39
EUROPE
  • French German Managers Are Less Concerned With
    Ethics
  • The price of doing business.
  • Women Managers
  • France about 8 women
  • Germany 7.8 women

40
CHINA
  • MNCs in China Get Low Wages but at What Social
    Price?
  • Intellectual Property Problems
  • Products are copied or sold out the backdoor
  • Business People in China May Like Better Laws to
    Stop These Problems

41
UNITED STATES
  • Law to Stop Corruption
  • FCPA (FOREIGN CORRUPT PRACTICES ACT)
  • Payments for contracts may be normal practice in
    some countries
  • Some business people like FCPA because it makes
    the situation more clear
  • Social Help
  • Aid to other countries

42
CASE STUDY
  • Internaltional Carpet Wholesalers (U.S.)
  • Mr. James McHenry (buyer)
  • SOMARTA (Morocco)
  • Mr. Abdelhadi Hachad (Managing Director)
  • -----------------------------------
  • Purchase Handmade Rugs
  • 10-12 Year Old Girls Working
  • ------------------------------------
  • What Would You Do?

43
Case 5 Assan Motors
  • Participants
  • Mr. Korihito president of American manufacturing
    division of Assan Motors
  • Mr. Satomoto president of Assan Motors, based in
    Tokyo
  • Hunt Stevenson previously foreman in auto
    manufacturing factory when owned by U.S. firm,
    now appointed employee liaison for Assan Motors
    in the U.S. factory
  • Situation
  • See Film Gung Ho

44
Managing Conflict
  • Conflict
  • Normally, we think of conflict as hindering the
    achievement of the organizations goals, but
    another view of conflict is that it improves
    effectiveness by stimulating change and improving
    the decision-making process.
  • Traditional View
  • All conflict is BAD and must be resolved quickly
  • Interactionist View
  • An org. with no conflict is static and does not
    adapt

Conflict Org. Effectiveness
Conflict-Survival Model
Survival
Conflict
Change
Adaptation
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