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Cultural/legal/political environments


... Authority Country profiles Cross-Cultural Communication Part 4, ... Sponsor a flexible business structure for adaptability. ... negotiation, and coalition ... – PowerPoint PPT presentation

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Title: Cultural/legal/political environments

Section Topics
  1. Cultural/legal/political environments
  2. Economic/financial environments

Part 4, Section B
Orientation and Controls
Ethnocentric Home-country-oriented with
home-country controls
Geocentric World-oriented with strong
interdependence between home and host countries
Polycentric Host-country-oriented with local
Regiocentric Host-country-oriented with
regional and third-country controls
Reference Howard V. Perlmutter.
Part 4, Section B, Topic 1
Influences and Pressures
  • Political environment
  • Ownership risk
  • Operational risk
  • Transfer risk
  • Terrorism
  • Technological environment
  • Varied resources
  • Varied capabilities
  • Information explosion
  • Privacy/security issues
  • Legal and regulatory
  • environment
  • Legal systems
  • Trade restrictions
  • Accounting standards
  • International auditing concerns
  • Economic environment
  • Currency exchange rates
  • Business restrictions
  • Investment restrictions
  • Privatization

Part 4, Section B, Topic 1
Discussion Question
  • What are techniques for anticipating and
    balancing these pressures and influences?
  • Possible answers
  • Global strategy
  • Risk assessments
  • Country risk profiles
  • Accounting for local technical issues such as
    transportation, language barriers, etc.

Part 4, Section B, Topic 1
Global Mindset
Leadership and management
Cultural intelligence
Cultural dimensions
Cross-cultural communication
Employee development
Developing cultural awareness and a global
Part 4, Section B, Topic 1
Cultural Dimensions
Dimensions (Low to High)
Uncertainty avoidance
Long-term orientation
Reference Hofstede Cultural Dimensions.
Part 4, Section B, Topic 1
Cross-Cultural Communication
  • Assumptions and attitudes
  • Body language
  • Use of space
  • Time
  • Language (high- and low-context)
  • Authority
  • Country profiles

Part 4, Section B, Topic 1
Discussion Question
You are sent to conduct internal audit interviews
at the organizations foreign location. How might
you interpret the following interviewee responses?
  1. A limp handshake and no eye contact
  2. Interviewee backs off when you move physically
  3. Long periods of silence in interviews and group
  • Possible answers
  • These may be normal greetings in the culture.
  • In some cultures people like to keep physical
    space distance.
  • Silence may be natural and expected in

Part 4, Section B, Topic 1
Managing Complexities
  • Develop a clear global strategy.
  • Foster a global mindset.
  • Operate as both a centralized and decentralized
  • Sponsor a flexible business structure for
  • Disperse knowledge widely.
  • Train international managers well.
  • Hire employees with diverse backgrounds.

Part 4, Section B, Topic 1
Managing Complexities (continued)
  • Break down language barriers.
  • Maximize technology for production and service
  • Use cultural informants for understanding,
    negotiation, and coalition building.
  • Continue to forecast and assess risks.
  • Develop crisis management plans and exit
  • Foster creativity and innovation.

Part 4, Section B, Topic 1
Effective Multicultural Teams
  • Legitimize differences build trust.
  • Agree upon values and expectations.
  • Agree on team leadership style.
  • Encourage participation, recognizing status/
  • authority perceptions.
  • Select the best communication modes.
  • Produce the appropriate outcomes.

Part 4, Section B, Topic 1
Discussion Question
Match the orientation to the characteristics.
Strategic Orientation Characteristics
1. International 2. Global 3. Multilocal 4. Multinational A. Centralized and decentralized high integration and coordination B. Home-country headquarters and value chain with headquarters C. Local products and standards differentiation D. Standardization, economies of scale, value chains anywhere
Answers 1 B 2 D 3 C 4 A
Part 4, Section B, Topic 2
Global Marketplace Entry Checklist
Has the organization met the necessary
requirements to enter the global marketplace?
Global strategy readiness
Organizational culture readiness
Global expansion readiness
Part 4, Section B, Topic 2
Managing Training and Development in
International Organizations
  • Disperse training in home and host countries.
  • Use the Web for distance and 24/7 course access.
  • Use translators and produce materials in the
    related foreign languages.
  • Assess knowledge and performance gaps to
    determine training needs.
  • Offer strong orientation programs and acclimation
    to the related cultures.
  • Sponsor expatriate assignments for managers.
  • Use a variety of learning approaches, such as
    field experiences, coaching and mentoring, and
    multicultural team participation.

Part 4, Section B, Topic 2
  • Reinforcing Activity 4-2
  • Part 4, Section B, Topics 1 and 2
  • Global Business Environments

Part 4, Section B, Topics 1 and 2
End of Section B
  • Questions?

Part 4, Section B
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