Unit 2

International
Management and
Cultural Diversity
2.1
* Identify major challenges
facing the global managerial
worker.
* Pinpoint success factors in the
global marketplace.
Objectives:
Cultural Mistakes to Avoid
Country
Great
Britain
Spain
Scandinavia
All Asian
countries
Japan
India
Cultural Mistake
Asking personal questions. The British protect their privacy.
Expecting punctuality. Your appointments will usually arrive 20-30
minutes late.
Being overly rank conscious in these countries. Little attention is
paid to a person’s place in the hierarchy.
Pressuring an Asian employee to brag about his or her
accomplishments. They prefer to let the record speak for itself.
Shaking hands or hugging in public. Japanese consider the practices
to be offensive.
Telling Indians you prefer not to eat with your hands. If they are not
using cutlery when eating, they expect you to do likewise.
Mexico
Brazil
Latin
America
Flying into a Mexican city in the morning, expecting to close a deal
by lunch. They build business relationships slowly.
Attempting to impress them by speaking a few words of Spanish.
Portuguese is the official language.
Wearing elegant jewelry during a business meeting. They feel
people should appear conservative during business meetings.
Adapted from Exhibit 2.1
2.2
Challenges Facing the
Global Managerial Worker
Economic
crises in
other
countries
Balance of
trade
problems
Collecting
money
Liability of
being a
foreigner
Differences
in
negotiating
style
Human
rights
violations
Culture
shock
2.3
Exporting Licensing
Local
warehousing
& selling
Local
assembly &
packaging
Strategic
Alliance(joint
venture)
Direct
foreign
investment
Global
startup
Global
merger
Methods of
Entry into
World
Markets
1
2
3
4
5
6
7
8
2.4
How to Succeed in the Global Marketplace
• Think globally, act locally
• Diversify into similar product markets
• Be familiar with local business concepts, laws, and
customs
• Recruit talented nationals
• Research and assess potential markets
• Hire or develop multicultural workers
• Adopt Environmentally Friendly Policies
• Understand your
• Competitors
• Potential partners
• Members of the management team
2.5
Cultural diversity
 Cultural diversity refers to the mix of
cultures and subcultures to which the
organization’s workforce belongs.
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The Competitive Advantages of Diversity
Leads to better
rapport with
culturally diverse
customers
Improves
productivity and
profits
Improves
customer service
Reduces possible
cultural bloopers
2.6
Facilitates
recruiting and
retaining talented
individuals
9
Competitive Advantage of
Diversity
1. Marketing advantage including more
sales and profits
2. Reduced costs (less turnover)
3. Recruit additional talent
4. Useful ideas for publicity/advertising
5. Fewer cultural bloopers
6. Creativity advantage (diverse ideas)
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Potential Problems with
Diversity
1. Diverse group members may not
work harmoniously with each
other.
2. Potential for conflict is high if
group members
a. do not support each other,
b. do not share knowledge.
3. Groups may be less cohesive.
Organizational Practices for Improving
the Management of Diversity
2.7
Establish corporate policies
favoring diversity
Encourage employees to
form network groups
Conduct “valuing diversity”
training programs
Glossory
 Balance of trade: The difference between exports
and imports in both goods and services.
 Cultural sensitivity: Awareness of local and
national customs and their importance in effective
interpersonal relationships.
 Culture shock: A group of physical and
psychological symptoms that may develop when a
person is abruptly placed in a foreign culture.
 Diversity: A mixture of people with different group
identities within the same work environment.
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Glossory
 Diversity training: Training that attempts to bring
about workplace harmony by teaching people how to
get along better with diverse work associates.
 Employee network groups: A group composed of
employees throughout the company who affiliate on
the basis of group characteristics such as race,
ethnicity, gender, sexual orientation, or physical
ability status.
 Global leadership skills : The ability to effectively
lead people of other cultures.
 Global start-up: A small firm that comes into
existence by serving an international market.
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Glossory
 Multicultural worker: An individual who is
aware of and values other cultures.
 Multinational corporation (MNC): A firm
with operating units in two or more countries
in addition to its own.
 Offshoring: Global outsourcing.
 Outsourcing: The practice of hiring an
individual or another company outside the
organization to perform work.
 Transnational corporation: A special type
of MNC that operates worldwide without
having one national headquarters.
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Essay
 Differences between countries
become less evident each year.
Nowadays, all over the world
people share the same fashions,
advertising, brands, eating habits
and TV channels. Do the
advantages outweigh the
disadvantages of this?
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Essay
 Some people believe that visitors to
other countries should follow local
customs and behaviour. Others
disagree and think that the host country
should welcome culture differences.
Discuss both these views and give your
own opinion
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