Conflict Management & Ethics in IBM

INTERNATIONAL BUSINESS
MANAGEMENT –

UNIT – V
ANNA UNIVERSITY SYLLABUS
Disadvantages of international
business
Adverse effects on economy
Competition with developed countries
Rivalry among nations
Exploitation
Legal problems
Publicity of undesirable fashions
Language problems
Dumping policy
Complicated technical procedure
Shortage of goods in the exporting country
Adverse effects on home industry
Conflicts in International Business

 Business and financial institutions have an

important role to play in avoiding or resolving
conflicts that are associated with economic
production.
 International conflict is the clash of interest
between the host country, home country and
MNC or the firm related to these two countries.
Nature of Conflict
 Functional versus Dysfunctional Conflicts
 Competition and Cooperation Conflicts
 Social, Ethnic, and Racial Differences Conflicts
Types of Conflict

Types

Organizational
Individual Level Group Level
level

Intra Inter Intra Inter

Intra Org. Inter Org.
Individual Individual Group Group
Individual Level Conflict
 Human behaviour is need motivated. A person
joins any organization to satisfy his needs.
 An employee faces a conflict within himself
when he perceives that organization is not
satisfying his needs in accordance with his
perceived standards.
Individual Level Conflict - Types
 Intra Individual Conflict
 Conflict
due to frustration
 Goal Conflicts

 Role Conflicts

 Inter Individual Conflict

 Personal differences
 Information Deficiency

 Role Incompatibility

 Environmental Stress
Group Level Conflict
 Intra Group (Within the Group Itself)
 Facing New Problem
 New values imported from Society
 People from different socio economic background

 Inter Group (Between Groups)

 Competition from resources
 Task interdependence
 Jurisdictional Ambiguity
 Status Struggles
Organizational Conflict
 Intra Organizational Conflict
 Horizontal Conflict
 Vertical Conflict

 Line & Staff Conflict

 Inter Organizational Conflict

 Between Organizations pursuing similar
objectives
 Between Govt. Agency & Organizations

 Between Head Office & a Mfg Unit

Sources of Conflict in International
Business

Host Country Factors

Home Country Factors

Combined Factors
 Host country factors
Size & Equity

Sovereignty

Information Disclosure

Visibility

Regulation & Competition

Employment

Technology

Balance of Payment

Taxation

Specific concerns of the Least Developed Countries

Home Country Factors

National
Security

Local
Dumping
Jobs

Embargos
Local
&
Industry
Sanctions

Balance Export &

of Import
Payment Control
Combined Factors
Conflict Prevention Strategies

Participative
Decision Making

Collaboration &
Team Building
Conflict Resolution Actions in IB

Contracts

Resolving Disputes

Local Courts & Local Remedies

Principle of Comity

Litigation
 Negotiation in International
Business
 Negotiation is face to face decision making
process between parties concerning specific
products. – J.L. Graham
 Negotiation is any form of meeting or discussions
in which you and/or the persons you are in contact
with use argument and persuasion to achieve an
agreed decision or action. – Alan Fowler
 Negotiation can be between home and host
Government, foreign company and local company,
foreign company and host country Government
and the company with its home Government
Role of Negotiations
 Persuade Opponents to revise their BATNAs
 (Best Alternative To Negotiated Agreement)
 Determine the other Party’s Interests
 Re-Assessing one’s own BATNA
 Building Trust
Factors Affecting Negotiations
 Language Variation
 Trust
 Cultural differences
 Professional Conflict
 Negotiated Goal
 Protocol
 communications
 Risk taking propensity
 View of time
 Decision making system
 Form of agreement
 Power distance
 Personal style
Negotiation Process
Planning

Impersonal Relationship Building

Exchanging Task-Related Information

Persuasion

Agreement
 Role of International Agencies in
Negotiation
Role of International Finance Corporation in conflict resolution
(IFC)

Role of Multilateral Investment Guarantee Agency in Negotiation

(MIGA)

Role of International Centre for Settlement of Investment Disputes

in Negotiation (ICSID)

Role of International Chamber of Commerce in Negotiation (ICC)

Role of World Trade Organization in Negotiation

Ethics in International Business
Importance
 Ethical Values

Utilization of Natural resources of the host country

Utilization of Natural resources of the home country

Enter the foreign country through joint venture

Transfer of technologies to the developing country

Develop the managers and human resources of host country.

Discharge the responsibilities to various social segments of the host country.

 Ethical Issues
Sexual & Racial Discrimination

Human Rights

Price Discrimination

Bribery

Ethical dimensions of Labour conditions

Harmful products

Environmental Issues

Telecommunications issues

Intellectual Property Protection

W.T.O
Ethical Decision Making

Recognizing an issues as an ethical one

Making the ethical judgment

Resolving to do the ethical thing

Actually acting ethically

Problems in Ethical Decision
Making
Rigid Rules and Regulations

Individual Values vs Organizational

Goals

Managers look for shortcut routes

Competitive Pressure

Poor Decisions

Ambiguous Situations

Budget