MGMT 9th Edition Williams Solutions Manual

MGMT 9th Edition Williams Solutions
Manual
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Chapter 8: Global Management
MGMT9
Pedagogy Map
This chapter begins with the learning outcome summaries and terms covered in the chapter, followed by a
set of lesson plans for instructors to use to deliver the content in Chapter 8.
 Lesson Plan for Lecture (for large sections)

 Lesson Plan for Group Work (for smaller classes)
 Assignments with Teaching Tips and Solutions
 What Would You Do? Case Assignment––Groupon
 Self-Assessment––World-mindedness
 Management Decision––Cultural Backlash in India
 Management Team Decision––A Different Way to Go Global
 Practice Being a Manager––Hometown Culture
 Develop Your Career Potential––Building Cultural Bridges inside American Business
 Management Workplace––Profile on Holden Outerwear
 Review Questions
 Group Activity
 Assignment
 Additional Resources
Highlighted Assignments Key Points
What Would You Do? Case Groupon has grown rapidly, but there are few barriers to
Assignment entry to its market, and it faces stiff competition as it expands
to global markets.
Self-Assessment Students evaluate their level of world-mindedness and are

given a quick plan for increasing their level of this trait.
Management Decision Students are asked to deliberate on how a company should

deal with cultural backlash as it expands to global markets.
Management Team Decision Can social entrepreneurship work in the fast-food industry?
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Practice Being a Manager Students consider the cultural variety in their hometown.
Develop Your Career Potential The cultural issues presented in the chapter are reframed in
the context of the United States alone.
Video Assignment: Management Holden is a US-based company but has manufacturing
Workplace facilities in China. For any company that sources materials
and labor overseas, shipping is a vital concern.
Supplemental Resources
4LTR Press supplements and online assets include PowerPoint Lectures, Test Banks, Executive Profiles,
What Would You Do Cases, Management Workplace Videos, Key Exhibits, and Self-Assessment
Activities. Within the exposition (narrative), students will experience interactive problems that include
matching and fill-in-the-blank problems. Also, they will encounter the second half of the WWYD Case
and the Self-Assessment content.
Learning Outcomes
8.1 Discuss the impact of global business and the trade rules and agreements that govern it.
Today, there are roughly 103,000 multinational corporations, more than fourteen times as many as in
1970, and 9,692, or 9.4 percent, are based in the United States. Direct foreign investment occurs when a
company builds a new business or buys an existing business in a foreign country. Of course, companies
from many other countries also own businesses in the United States. Overall, foreign companies invest
more than $2.5 trillion a year to do business in the United States and US companies invest more than $4.6
trillion a year to do business in other countries. Historically, governments have actively used trade
barriers to make it much more expensive or difficult (or sometimes impossible) for consumers to buy or
consume imported goods.
The second major development that has reduced trade barriers has been the creation of regional trading
zones, or zones in which tariff and nontariff barriers are reduced or eliminated for countries within the
trading zone. The largest and most important trading zones are in Europe (the Maastricht Treaty), North
America (the North American Free Trade Agreement, or NAFTA), Central America (Dominican
Republic-Central America Free Trade Agreement, or CAFTA-DR), South America (Union of South
American Nations, or USAN), and Asia (the Association of Southeast Asian Nations, or ASEAN, and
Asia-Pacific Economic Cooperation, or APEC). Although some US industries, such as textiles, have been
heavily protected from foreign competition by trade barriers, for the most part, American consumers (and
businesses) have had plentiful choices among American-made and foreign-made products.
8.2 Explain why companies choose to standardize or adapt their business procedures.
Global business requires a balance between global consistency and local adaptation. Global consistency
means that a multinational company with offices, manufacturing plants, and distribution facilities in
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different countries uses the same rules, guidelines, policies, and procedures to run all of those offices,
plants, and facilities. Managers at company headquarters value global consistency because it simplifies
decisions. By contrast, a company following a policy of local adaptation modifies its standard operating
procedures to adapt to differences in foreign customers, governments, and regulatory agencies. Local
adaptation is typically preferred by local managers who are charged with making the international
business successful in their countries. If companies lean too much toward global consistency, they run the
risk of using management procedures poorly suited to particular countries’ markets, cultures, and
employees. If, however, companies focus too much on local adaptation, they run the risk of losing the
cost effectiveness and productivity that result from using standardized rules and procedures throughout
the world.
8.3 Explain the different ways that companies can organize to do business globally.
Besides determining whether to adapt organizational policies and procedures, a company must also
determine how to organize itself for successful entry into foreign markets. Historically, companies have
generally followed the phase model of globalization, in which a company makes the transition from a
domestic company to a global company in the following sequential phases: exporting, cooperative
contracts, strategic alliances, and wholly owned affiliates. Some companies do not follow the phase
model of globalization. Some skip phases on their way to becoming more global and less domestic.
Others don’t follow the phase model at all. These are known as global new ventures.
8.4 Explain how to find a favorable business climate.
The most important factor in an attractive business climate is access to a growing market. Two factors
help companies determine the growth potential of foreign markets: purchasing power and foreign
competitors. Rather than focusing on costs alone, companies should consider both qualitative and
quantitative factors. When conducting global business, companies should attempt to identify two types of
political risk: political uncertainty and policy uncertainty.
Several strategies can be used to minimize or adapt to the political risk inherent in global business. An
avoidance strategy is used when the political risks associated with a foreign country or region are viewed
as too great. Control is an active strategy to prevent or reduce political risks. Another method for dealing
with political risk is cooperation, which involves using joint ventures and collaborative contracts, such as
franchising and licensing.
8.5 Discuss the importance of identifying and adapting to cultural differences.
National culture is the set of shared values and beliefs that affects the perceptions, decisions, and behavior
of the people from a particular country. The first step in dealing with culture is to recognize meaningful
differences such as power distance, individualism, masculinity and femininity, uncertainty avoidance, and
short-term/long-term orientation. After becoming aware of cultural differences, the second step is
deciding how to adapt your company to those differences. One problem is that different cultures will
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probably perceive management policies and practices differently.
8.6 Explain how to successfully prepare workers for international assignments.
Expatriates who receive pre-departure language and cross-cultural training make faster adjustments to
foreign cultures and perform better on their international assignments. Three methods can be used to
prepare workers for international assignments: documentary training, cultural simulations, and field
experiences. Evidence clearly shows that how well an expatriate’s spouse and family adjust to the foreign
culture is the most important factor in determining the success or failure of an international assignment. A
number of companies, however, have found that adaptability screening and intercultural training for
families can lead to more successful overseas adjustment.
Terms
Asia-Pacific Economic Cooperation (APEC) Maastricht Treaty of Europe
Association of Southeast Asian Nations Multinational corporation
(ASEAN) National culture
Central America Free Trade Agreement Nontariff barriers
(CAFTA-DR) North American Free Trade Agreement
Cooperative contract (NAFTA)
Customs classification Policy uncertainty
Direct foreign investment Political uncertainty
Dominican Republic-Central America Free Protectionism
Trade Agreement (CAFTA-DR) Purchasing power
Expatriate Quota
Exporting Regional trading zones
Franchise Strategic alliance
General Agreement on Tariffs and Trade Subsidies
(GATT) Tariff
Global business Trade barriers
Global consistency Union of South American Nations
Global new ventures (UNASUR)
Government import standard Voluntary export restraints
Joint venture Wholly owned affiliates
Licensing World Trade Organization (WTO)
Local adaptation
Lesson Plan for Lecture (for large sections)

Pre-Class Prep for You: Pre-Class Prep for Your Students:
 Review the chapter and determine what  Bring the book.

points to cover.
 Bring PPT slides.
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Warm Up Begin Chapter 8 by asking students the following series of questions:

 “Without looking, which of you knows (or is confident that you know) where
your backpack was made? Where?” [Students can shout out answers.]
 “Ok, who thinks they know where their backpack was made? Where?” [Students
can shout out answers.]
 “Who cares where their backpack was made?” [For students who raise their hand
to the last question, push them to answer why.]
 Segue into the lecture on global business.
Content Lecture slides: Make note of where instructors stop so that they can pick up at the next
Delivery class meeting. Slides have teaching notes on them to help instructors deliver the lecture
Topics PowerPoint Slides Activities
8.1 Global Business, 1: Global Management

Trade Rules, and 2: Learning Outcomes
Trade Agreements 3: Learning Outcomes
8.1a The Impact of 4: Impact of Global
Global Business Business
8.1b Trade Barriers 5: Trade Rules
8.1c Trade Agreements 6: Trade Agreements
8.1d Consumers, Trade 7: Regional Trading Zones
Barriers, and Trade
Agreements
8.2 Consistency or 8: Global Consistency and An issue around which to
Adaptation? Local Adaptation spark discussion is the
choice between adaptation
and consistency.
8.3 Forms for Global 9: Forms of Global
Business Business
8.3a Exporting 10: Forms of Global
8.3b Cooperative Business
Contracts 11: Forms of Global
8.3c Strategic Alliances Business
8.3d Wholly Owned
Affiliates (Build or Buy)
8.3e Global New
Ventures
8.4 Finding the Best 12: Finding the Best If instructors have an
Business Climate Business Climate electronic classroom,
8.4a Growing Markets 13: Finding the Best consider doing a free
8.4b Choosing an Business Climate geography game offered
Office/Manufacturing by Sheppard’s software at
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Location Sheppardssoftware.com
8.4c Minimizing Have students shout out
Political Risk answers that you enter into
the map. Games have time
limits of a couple of
minutes. Instructors will
get a collective score for
their class.
8.5 Becoming Aware of 14: Becoming Aware of
Cultural Differences Cultural Differences
8.6 Preparing for an 15: Preparing for an

International International Assignment
Assignment
8.6a Language and
Cross-Cultural Training
8.6b Spouse, Family,
and Dual-Career Issues
Summary 16: Summary
Key Terms 17: Key Terms

18: Key Terms
19: Key Terms
Adjust the lecture to include the activities in the right column. Some activities should be
done before introducing the concept, some after.
Special Spark a debate among the students by asking them to respond to the following statement:
Items “If given a choice, Americans will buy American-made goods rather than foreign-made
goods.”
Conclusion Possible assignments:

and 1. Assign students to work a solution to the What Would You Do? Case Assignment
Preview on Groupon.
2. Assign students to review Chapter 8 and read the next chapter on the syllabus.
Remind students about any upcoming events.
Lesson Plan for Group Work (for smaller classes)

Pre-Class Prep for You: Pre-Class Prep for Your Students:
 Review the material to cover and modify Bring the book.
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the lesson plan to meet the instructor’s

needs.
 Set up the classroom so that small
groups of 4 to 5 students can sit together.
Warm Up Begin Chapter 8 by asking students the following questions:

 “Without looking, which of you knows (or is confident that you know) where
your backpack was made? Where?” [Students can shout out answers.]
 “Ok, who thinks they know where their backpack was made? Where?” [Students
can shout out answers.]
 “Who cares where their backpack was made?” [For students who raise their hand
to the last question, push them to answer why.]
Content The first section of the chapter has a lot of content that instructors can use to spark
Delivery debate among students. For this reason, instructors may want to hold off lecturing on
“Global Business, Trade Rules, and Trade Agreements” until after instructors can do the
group activity “World Trade and You.”
Lecture on What Is Global Business? (Section 8.1).
Break for the following group activity:
“World Trade and You”
Divide the class into small groups of 3 to 5 students. Before beginning the activity,
ask students if anyone can describe the function of the World Trade Organization
(WTO). Ask if anyone can explain why the WTO is so controversial (cite the
inevitable protests and violence that accompany any meeting of the WTO). Assign
each group to either assemble arguments for free trade or against free trade. Come
together as a class and do a point–counterpoint debate. Begin by having one of the
students assigned to an “against” group give an argument that his or her group came
up with against free trade. Then have a “for” student give an argument. Continue until
no new arguments are proffered. Determine if one side had stronger, more convincing
arguments or if it was even. Ask if any students changed their point of view
subsequent to hearing all of the arguments.
If instructors didn’t lecture on Section 8.1 prior to the activity they can do so now.
Instructors can segue into the next section by asking students, “So if we postulate that
global business is good for consumers and companies alike, what’s the best way to go
global? Perhaps before we can answer that, we should consider the choices a company
has when going global.”
Lecture on How to Go Global? (Sections 8.2 and 8.3) and Finding the Best Business
Climate (Section 8.4).
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Break for the following activity:
“Around the World”
If instructors have an electronic classroom, consider doing a geography game at

http://www.sheppardsoftware.com/Geography.htm#Games or another free online
geography game provider. Choose a continent and have students fill in the map
according to the game directions. (In general, players are asked to type the first three
letters of the highlighted country on the map and are given a set period of time to
complete the continent.) Create a distribution of scores using PowerPoint or Excel. If
instructors want students to practice, divide them into geography study groups,
encourage them to play online geography games, or work geography puzzles. At the
instructor’s next class meeting, do the game again and take a new distribution.
Introduce the sections on culture by asking if any of the students have ever lived,
worked, or studied abroad and where. If they have, ask them what they considered the
biggest difference between the host culture and the student’s culture of origin.
Lecture on Becoming Aware of Cultural Differences and Preparing for an International

Assignment (Sections 8.5 and 8.6).
If time allows, consider showing the BizFlix clip from Lost in Translation. Teaching
notes follow.
Conclusion Assignments:
and 1. To follow up on the discussion of where and how to go global, assign students to
Preview complete the Management Decision on dealing with cultural backlash issues in
India.
2. If instructors have finished covering Chapter 8, assign students to review Chapter 8
and read the next chapter on the syllabus.
Remind students about any upcoming events.
Assignments with Teaching Tips and Solutions
What Would You Do? Case Assignment
Groupon
Chicago, Illinois
From 400 subscribers and 30 daily deals in 30 cities in December 2008 to 35 million subscribers and 900
daily deals in 550 markets today, Groupon got to $1 billion in sales faster than any other company.
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Starbucks CEO Howard Schultz, who was an eBay board member and is now a Groupon investor and
board member, said, “Starbucks and eBay were standing still compared to what is happening with
Groupon. I candidly haven’t witnessed anything quite like this. They have cracked the code on a very
significant opportunity.” Eric Lefkofsky, who chairs Groupon’s board said, “The numbers got crazy a
long time ago, and they keep getting crazier.” So, what is propelling Groupon’s astronomical growth?
How does it work?
Groupon sends a daily email to its 35 million subscribers offering a discount to a restaurant, museum,
store, or service provider in their city. This “coupon” becomes a “groupon” because the company offering
the discount specifies how many people (i.e., a group) must buy before the deal “tips.” For example, a
local restaurant may require 100 people to buy. If only 90 do, then no one gets the discount. Daily deals
go viral as those who buy send the discount to others who might be interested. When the deal tips (and 95
percent do), the company and Groupon split the revenue.
Why would companies sign up, especially since half of the money goes to Groupon? Nearly all of
Groupon’s clients are local companies, which have few cost effective ways of advertising. Radio,
newspapers, and online advertising all require upfront payment (whether they work or not). By contrast,
local companies pay Groupon only after the daily deal attracts enough customers to be successful.
Another problem with traditional ads is that they are broadcast to a wide group of people, many of whom
have little interest in what’s being advertised. The viral nature of Groupon’s coupons, however, along
with tailoring deals based on subscribers’ ages, interests, and discretionary dollars, lets companies target
Groupon’s daily deals to customers who are more likely to buy. Groupon’s CEO, Andrew Mason, said,
“We think the Internet has the potential to change the way people discover and buy from local businesses.
Because there are few barriers to entry and the basic web platform is easy to copy, Groupon’s record
growth and 80 percent U.S. market share has attracted start-up competitors like Living Social, Tippr,
Bloomspot, Scoutmob, and BuyWithMe, along with offerings from Google, Facebook, and Walmart.
Globally, Groupon’s business has been copied in 50 countries. China alone has 1,000 Groupon-type
businesses, including one that has copied Groupon’s website down to the www.groupon.com URL.
Likewise, Taobao, which is part of Alibaba Group Holdings, one of China’s largest Internet companies,
has a group buying service call “Ju Hua Suan,” which translates to “Group Bargain.”
So although Groupon has grown to $1 billion in sales faster than any other company, competitors threaten
to take much of that business, especially in international markets, which Groupon is just starting to enter.
As Groupon goes global, should it adapt its business to different cultures? For example, it relies on a large
Chicago-based sales force to build and retain business with merchants, and 70 comedy writers to write ad
copy. Similarly, who should make key decisions—managers at headquarters or managers in each
country? In short, should Groupon run its business the same way all around the world? How should
Groupon expand internationally? Should it license its web services to businesses in each area, form a
strategic alliance with key foreign business partners (it rejected Google’s $6 billion offer in the United
States), or should it completely own and control each Groupon business throughout the world? Finally,
deciding where to go global is always important, but with so many foreign markets already heavy with
competitors, the question for Groupon isn’t where to expand, but how to expand successfully in so many
different places at the same time.
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If you were in charge at Groupon, what would you do?
Sources:
L. Chao, “Taobao to Launch Local Deals on Group-Buying Website,” Wall Street Journal, 23 February 2011,
http://online.wsj.com/article/SB10001424052748703775704576161340839989996.html [accessed 19 January 2015]; B. Stone &
D. MacMillan, “Groupon's $6 Billion Snub,” Bloomberg Businessweek, 13 December 2010, 6-7; B. Stone & D. MacMillan, “Are
Four Words Worth $25 Billion?” Bloomberg Businessweek, 21 March 2011, 70-75.
What Really Happened? Solution
In the opening case, you learned that Groupon, the “daily deal” coupon company had grown from 400
subscribers and 30 daily deals in 30 cities in December 2008 to 35 million subscribers and 900 daily deals
in 550 markets today, thus getting to $1 billion in sales faster than any other company. Local companies
flock to Groupon because it helps them attract new customers in a cost effective way. Because of low
barriers to entry and an easy-to-copy web platform and business model, however, domestic and
international competitors could take much of Groupon’s business, especially in international markets,
which Groupon was just starting to enter. Let’s find out what happened at Groupon and see what steps
CEO Andrew Mason took to replicate Groupon’s amazing success in the U.S. around the world.
As Groupon goes global, should it adapt its business to different cultures? Or, is it likely to find that the
daily deals that are successful in the U.S. will be popular throughout the world? Also, since humor is a
key part of its advertising approach, should Groupon continue to rely on its 70 Chicago-based comedy
writers to write copy for ads in China, Chile, and Germany?
National culture is the set of shared values and beliefs that affects the perceptions, decisions, and behavior
of the people from a particular country. The first step in dealing with culture is to recognize meaningful
cultural differences, such as power distance, individualism, masculinity, uncertainty avoidance, and short-
term/long-term orientation.
After becoming aware of cultural differences, the second step is deciding how to adapt your company to
those differences. The biggest mistake that companies make at this point is not changing their products or
services or their management practices and procedures when they do business abroad. This is a common
mistake among global franchisors, 65 percent of which make absolutely no change in their business for
overseas franchisees when they first go global.
So, given that it just offers daily deals, can Groupon have a standard set of products or should they be
different in each market and culture? Not surprisingly, Groupon has found that people in different
countries and cultures don’t respond to the same offers. For example in India, the most popular daily
deals aren’t restaurants and beverages (which are popular in many global cities), but traveling, mobile
phones, and wellness products. Ananya Bubna, managing director of Groupon India, said, “A beverage
deal that we thought would have huge takers didn't sell.” Furthermore, “We have realized that something
like balloon rides, which got massive response in the U.K., may not get the same reaction here. Product
deals, mobile phones, and wellness products work best in India. India has a large number of travel lovers;
this is what we are looking at pursuing, aggressively.”
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Finally, in a nod to the importance of culture, especially with humor, which can differ tremendously
across cultures, Groupon now realizes that its 70 Chicago-based ad writers, some of whom have comedy
backgrounds linked to Chicago’s famous Second City comedy troupe, may not be able to write persuasive
ad copy for other parts of the world. A case in point (though Groupon employed an advertising agency
here) was Groupon’s Super Bowl commercial, which featured actor Timothy Hutton proclaiming, “The
people of Tibet are in trouble … but they still whip up an amazing fish curry. And since 200 of us bought
at Groupon.com, we're each getting $30 of Tibetan food for just $15.” The commercial was criticized
roundly, not just as ineffective, but insensitive.
Similarly, who should make key decisions, managers at headquarters or managers in each country?
Likewise, should Groupon continue to use its large Chicago-based sales force to build and retain
business with merchants, and In short, should Groupon run its business the same way all around the
world?
One of the key issues in global business is determining whether the way you run your business in one
country is the right way to run that business in another. In other words, how can you strike the right
balance between global consistency and local adaptation? Global consistency means that when a company
like Groupon has offices and facilities in different countries, it will use the same rules, guidelines,
policies, and procedures to run them all. Managers at company headquarters value global consistency
because it simplifies decisions. In contrast, a company with a local adaptation policy modifies its standard
operating procedures to adapt to differences in foreign customers, governments, and regulatory agencies.
Local adaptation is typically more important to local managers who are charged with making the
international business successful in their countries.
If companies focus too much on local adaptation, they run the risk of losing the cost efficiencies and
productivity that result from using standardized rules and procedures throughout the world. However, if
companies lean too much toward global consistency, they run the risk of their business being poorly
suited to particular countries’ markets, cultures, and employees (i.e., a lack of local adaptation).
Groupon has discovered that, in part, it must adapt its business as it does business around the world.
While the web side of its business works most places, that is, using email and text, web sites, and
smartphone apps to notify subscribers of daily deals, it doesn’t work everywhere. For example, in Indian,
Groupon is adapting the way that it gets paid. Throughout much of the world, online credit cards facilitate
quick, easy, and trustworthy payment. But, in India, many customers are still reluctant to make online
purchases. Ananya Bubna, managing director of Groupon India says, “We are doing cash-on delivery in
India, which we don't do anywhere else. We have realized that reaching out to Indian customers online is
a big challenge. We have started personal concierge help, especially for Indian customers. A few
customers have given us feedback that while they liked our site, they could not make a purchase. Through
this service, one of our experts would handhold a buyer, helping them in registration and purchase on the
site. We also have our people calling customers informing them about various deals in their area of
interest.”
In other ways, however, Groupon is balancing consistency with local adaptation. While it has local
managers (see more below) to run its businesses in 42 different countries, it brings all of them to Chicago
to learn how to run their offices the way that it’s done in the U.S. Then, it makes sure that those managers
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stay current with its client companies by using Salesforce.com’s relationship management software to
track calls and make sure that its sales force follows up to address potential issues after every daily deal is
completed.
Another part of balancing consistency with local adaptation, at least for now, is maintaining a large call
center in Chicago. Unlike Facebook and Google, which hire software engineers to automate their web
sites, Groupon relies on a call center-based sales force in Chicago to sell and maintain relationships with
client companies. Every time it opens in a new city, its sales force is charged with identifying and then
approaching businesses who could be interested in using Groupon to provide discounts to customers. The
question is whether it makes sense for Groupon to have similar call centers in the other regions or
countries in which it now does business.
Joe Harrow, who manages Groupon’s Chicago call center, says that Groupon will have call centers in
Chicago and in key international locations. But, unlike many multinational companies who have moved
their call centers to lower cost locations like India, he says, “Maybe having a 1,000-person call center in
downtown Chicago is not smart. We haven't done the math yet. When we do, we'll ask how we can make
this economical without costing us our culture.”
How should Groupon expand internationally? Should it license its web services to businesses in each
area, form a strategic alliance with key foreign business partners (it rejected Google’s $6 billion offer in
the U.S.), or should it completely own and control each Groupon business throughout the world?
Determining how to organize your company for successful entry into foreign markets is a key decision in
going global. When companies produce products in their home countries and sell those products to
customers in foreign countries, they are exporting. When an organization wants to expand its business
globally without making a large financial commitment, it signs a cooperative contract with a foreign
business owner who pays the company a fee for the right to conduct that business in his or her country.
There are two kinds of cooperative contracts: licensing and franchising. Another method of international
organizing is for two companies to form a strategic alliance to combine key resources, costs, risks,
technology, and people. The most common strategic alliance is a joint venture, which occurs when two
existing companies collaborate to form a third company. Finally, one-third of multinational companies
enter foreign markets through wholly owned affiliates. Unlike licensing arrangements, franchises, or joint
ventures, wholly owned affiliates are 100 percent owned by the parent company.
As explained in the chapter, each of these methods of "going global" has specific advantages and
disadvantages. Moreover, a common method of going global is to use the phase model of international
expansion in which a company starts by exporting, and then as it grows, switches to cooperative contracts
(i.e., licensing and franchising right), followed by strategic alliances, and then wholly owned affiliates. As
the chapter makes clear, not all companies follow the steps of the phase model in this order.
The challenge for Groupon is that just three years after its startup, it may be the fastest growing startup
company of all time, but it also faces the most quickly established set of global competitors ever
established. So unlike other companies which might take a more measured, slow growth approach to
global expansion, the speed with which competitors and consumers have adopted Groupon’s business
model suggests that Groupon could find itself locked out of key international markets if it doesn’t move
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quickly to establish itself as a multinational company. Groupon chief financial officer, Rob Solomon,
emphasized the need for speed, saying, “We think there will be lots of consolidation in a very short
amount of time, and we want to be the 8,000-pound gorilla in that space.”
Backed with several hundred million dollars in funding, Groupon used an approach in which it combined
strategic alliances and wholly-owned affiliates. In short, just as Google offered a $6 billion buy out to
Groupon, Groupon has offered to buy the market leaders that it has identified in 50 different countries.
Groupon board member Kevin Efrusy says, “To see people copy you is difficult to adjust to. But Groupon
immediately looked at it as an opportunity. You could pick the best that's out there and save a lot of
time.” “The strategy,” he says, is to find the best local teams. Then give them the tools they need to be
successful. One such acquisition was Berlin-based CityDeal. CityDeal, which was started by the Samwer
brothers, who, a decade before had founded eBay Europe, was just 6 months old when purchased by
Groupon. But, in that short time, it had 1 million subscribers, operated in 80 European cities, and had 600
employees. CityDeal co-founder Daniel Glasner commented on being bought by Groupon, saying, “We
have exactly the same understanding of how we need to serve our end customers and partners. Thousands
of businesses out there are looking to attract new customers and are thrilled to leverage the Internet to do
that.” Groupon’s CEO Andrew Mason said, “We wanted to find entrepreneurs [like CityDeal] to work
with that were excellent operators and also understood the local culture.”
Groupon repeated this acquisition strategy, buying similar companies in Chile, Russia, Japan, China, and
other locations. One year, after deciding to go global, Groupon is in 42 different countries.
Self-Assessment
World-mindedness
Are You Nation-Minded or World-Minded?

Attitudes about global business are as varied as managers are numerous. It seems that the business press
can always find someone who is for globalization and someone who is against it. But regardless of your
opinion on the subject, managers will increasingly confront issues related to the globalization of the
business environment. It is probable that, as a manager, you will need to develop global sensibilities (if
you don’t already have them). Understanding your own cultural perspective is the first step in doing so.
This assessment has three parts: Step 1, complete the questionnaire shown below; Step 2, determine your
score; Step 3, develop a plan to increase your global managerial potential.
Step 1: Use the 6-point rating scale to complete the 32-question inventory shown below.
Rating Scale
1. Strongly disagree
2. Disagree
3. Mildly disagree
4. Mildly agree
5. Agree
6. Strongly agree
1. Our country should have the right to prohibit certain racial and religious groups from entering it to live.
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1 2 3 4 5 6
2. Immigrants should not be permitted to come into our country if they compete with our own workers.
1 2 3 4 5 6
3. It would set a dangerous precedent if every person in the world had equal rights that were guaranteed
by an international charter.
1 2 3 4 5 6
4. All prices for exported food and manufactured goods should be set by an international trade committee.
1 2 3 4 5 6
5. Our country is probably no better than many others.

1 2 3 4 5 6
6. Race prejudice may be a good thing for us because it keeps many undesirable foreigners from coming
into this country.
1 2 3 4 5 6
7. It would be a mistake for us to encourage certain racial groups to become well educated because they
might use their knowledge against us.
1 2 3 4 5 6
8. We should be willing to fight for our country without questioning whether it is right or wrong.
1 2 3 4 5 6
9. Foreigners are particularly obnoxious because of their religious beliefs.

1 2 3 4 5 6
10. Immigration should be controlled by a global organization rather than by each country on its own.
1 2 3 4 5 6
11. We ought to have a world government to guarantee the welfare of all nations irrespective of the rights
of any one.
1 2 3 4 5 6
12. Our country should not cooperate in any global trade agreements that attempt to better world
economic conditions at our expense.
1 2 3 4 5 6
13. It would be better to be a citizen of the world than of any particular country.
1 2 3 4 5 6
14. Our responsibility to people of other races ought to be as great as our responsibility to people of our
own race.
1 2 3 4 5 6
15. A global committee on education should have full control over what is taught in all countries about
history and politics.
1 2 3 4 5 6
15
16. Our country should refuse to cooperate in a total disarmament program even if some other nations
agree to it.
1 2 3 4 5 6
17. It would be dangerous for our country to make international agreements with nations whose religious
beliefs are antagonistic to ours.
1 2 3 4 5 6
18. Any healthy individual, regardless of race or religion, should be allowed to live wherever he or she
wants to in the world.
1 2 3 4 5 6
19. Our country should not participate in any global organization that requires that we give up any of our
national rights or freedom of action.
1 2 3 4 5 6
20. If necessary, we ought to be willing to lower our standard of living to cooperate with other countries
in getting an equal standard for every person in the world.
1 2 3 4 5 6
21. We should strive for loyalty to our country before we can afford to consider world brotherhood.
1 2 3 4 5 6
22. Some races ought to be considered naturally less intelligent than ours.
1 2 3 4 5 6
23. Our schools should teach the history of the whole world rather than of our own country.
1 2 3 4 5 6
24. A global police force ought to be the only group in the world allowed to have armaments.
1 2 3 4 5 6
25. It would be dangerous for us to guarantee by international agreement that every person in the world
should have complete religious freedom.
1 2 3 4 5 6
26. Our country should permit the immigration of foreign peoples, even if it lowers our standard of living.
1 2 3 4 5 6
27. All national governments ought to be abolished and replaced by one central world government.
1 2 3 4 5 6
28. It would not be wise for us to agree that working conditions in all countries should be subject to
international control.
1 2 3 4 5 6
29. Patriotism should be a primary aim of education so that our children will believe our country is the
best in the world.
1 2 3 4 5 6
30. It would be a good idea if all the races were to intermarry until there was only one race in the world.
1 2 3 4 5 6
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31. We should teach our children to uphold the welfare of all people everywhere, even though it may be
against the best interests of our own country.
1 2 3 4 5 6
32. War should never be justifiable, even if it is the only way to protect our national rights and honor.
1 2 3 4 5 6
Step 2: Determine your score by entering your response to each survey item below, as follows. In blanks
that say regular score, simply enter your response for that item. If your response was a 4, place a 4 in the
regular score blank. In blanks that say reverse score, subtract your response from 7 and enter the result.
So if your response was a 4, place a 3 (7 - 4 = 3) in the reverse score blank.
1. reverse score ————
2. reverse score ________
4. regular score ————
Scoring
Total your scores from items 1–16 _____
Total your scores from items 17–32 _____
Add together to compute TOTAL ______
You can find an interpretation of your score at: login. cengagebrain.com
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Sources: R. W. Boatler, “Study Abroad: Impact on Student Worldmindedness,” Journal of Teaching in

International Business 2, no. 2 (1990): 13–17; R. W. Boatler, “Worldminded Attitude Change in a Study
Abroad Program: Contact and Content Issues,” Journal of Teaching in International Business 3, no. 4
(1992): 59–68; H. Lancaster, “Learning to Manage in a Global Workplace (You’re on Your Own),” The
Wall Street Journal, 2 June 1998, B1; D. L. Sampson & H. P. Smith, “A Scale to Measure Worldminded
Attitudes,” Journal of Social Psychology 45 (1957): 99–106.
Interpreting the Score

Here is what your score means.
People who are flexible, adaptable, open to other cultures, and have good relationship skills are more
successful on international assignments. In a sense, we could say that these people have greater
"worldmindedness." Individuals who are strong in worldmindedness look at problems as problems of
humanity rather than American problems, or Japanese problems, or Spanish problems. In contrast, people
who are weak in worldmindedness are "nationminded." They define themselves and others by their
nationalities: German, Chinese, Egyptian, and Venezuelan. Nationmindedness is "us" and "them,"
whereas worldmindedness is simply "us."
Worldmindedness affects global business decision making. Personnel managers who are low in
worldmindedness try to avoid hiring foreign students. Professional buyers, who purchase supplies, raw
materials, and finished goods for their companies, were less likely to purchase foreign products when they
were weak on worldmindedness. Also, CEOs of exporting companies are more worldminded than CEOs
of nonexporting companies.
Worldmindedness is related to gender (females have higher scores), to family income (students from
high income families have lower scores), foreign language ability (fluency in additional languages means
higher scores), and college major (business majors have lower scores than other majors, and finance and
accounting majors have lower scores than marketing and management majors). Worldmindedness may
not be related to international travel (except for longer-term residency in a country) or age.
This survey is based on research presented in R. W. Boatler, “Study Abroad: Impact on Student
Worldmindedness,” Journal of Teaching in International Business 2, no. 2 (1990): 13–17; R.W. Boatler,
“Worldminded Attitude Change in a Study Abroad Program: Contact and Content Issues,” Journal of
Teaching in International Business 3, no. 4 (1992): 59–68; H. Lancaster, “Learning to Manage in a
Global Workplace (You’re on Your Own),” The Wall Street Journal, 2 June 1998, B1; D. L. Sampson &
H. P. Smith, “A Scale to Measure Worldminded Attitudes,” Journal of Social Psychology 45 (1957): 99–
106; R. W. Boatler, “Worldmindedness of International Division Managers,” Southwest Journal of
Business and Economics, 9 (1992): 23.
What follows is a series of grids depicting average worldmindedness (WM) scores for various
groupings of students:
Worldmindedness by Major Average WM Score

Arts and Sciences 104.65
Business 92.94
Fine Arts 100.58
Education 94.43
Social Work 121.25
Undecided 90.00
(From Boatler, 1992)
Except for undecided majors, Business majors have the lowest worldmindedness
scores.
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Worldmindedness by Major Average WM Score

No foreign languages 99.07
One, fair 97.56
One, good/excellent 97.95
Two or more, any level 111.55
Speaking more languages leads to increased worldmindedness.
Worldmindedness by Language and Major
Average WM Score
Business Majors
No foreign language 88.76
One, fair 92.15
All Other Majors
No foreign languages 105.45
One, fair 100.41
Business majors who speak no foreign languages have the lowest worldmindedness scores,
whereas other majors who speak two or more languages have the highest worldmindedness
scores. Whatever major, speaking another language increases worldmindedness.
WM by Major and Gender Average WM Score

Male
Finance 105.35
Accounting 93.78
Marketing 113.80
General 115.22
Female
Finance 116.33
Accounting 111.04
Marketing 109.72
General 116.39
(From Deng & Boatler, 1993)
Male finance and accounting majors have the lowest worldmindedness scores. Female finance and
general majors have the highest worldmindedness scores. Except marketing majors, females have higher
worldmindedness scores than males.
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Your worldmindedness score is not a fixed number. Several activities can help you improve your score,
but to do so, you’ll need to develop a plan, such as the one that follows.
Step 3: Develop a plan to increase your global managerial potential.

People don’t change from being nationminded to worldminded overnight. Below you’ll find the outlines
of a plan to increase your worldmindedness. You need to fill in the details to make it work. This plan is
based on foreign languages, living overseas, global news and television, and your openness to the
different cultural experiences available right where you live!
3A. Language. Research shows that students who speak multiple languages have higher scores
(indicating a greater sense of worldmindedness). How many languages do you speak fluently? If you’re
an average American student, you speak one language, American English. Develop a plan to become
fluent in another language. Specify the courses you would need to take to become conversationally fluent.
A minimum of two years is recommended. Even better is minoring in a language! What courses would
you have to take to complete a minor?
3B. Living overseas. Develop a plan to study overseas. List the facts for two different overseas study
programs available at your university or another university. Be sure to specify how long the program
lasts, whether you would receive language training, where you would live, the activities in which you
would participate, and any other important details.
3C. Global news and television. Another way to increase your worldmindedness is to increase the
diversity of your news sources. Most Americans get their news from local TV and radio or from the major
networks, ABC, NBC, and CBS. Luckily, you don’t have to leave the country to gain access to foreign
news sources. Furthermore, you don’t have to speak a foreign language. Many foreign newspapers and
television and radio shows are presented in English. List the foreign newspapers and television and radio
shows available to you where you live. Hint: Check your university library, CNN, PBS, and the Internet.
Be sure to indicate where you can find the newspapers, the day and time the shows are on, and whether
the newspapers or TV shows are in English or a foreign language.
3D. Local cultural experiences. Many American students wrongly assume that they have to travel
overseas to gain exposure to foreign cultures. Fortunately, many American cities and universities are rich
in such experiences. Ethnic neighborhoods, restaurants, festivals, foreign films, and art displays, along
with ethnic Americans who continue to live and celebrate their heritage, present ample opportunities to
sample and learn about foreign cultures right here in our own backyards. Specify a plan of foreign
restaurants, ethnic neighborhoods, and cultural events that you could attend this year.
Management Decision
Purpose
A company that is looking to do business overseas cannot ignore cultural differences if it is to be

successful. This exercise asks students to consider how they would deal with critical differences between
cultures as their company seeks to branch out into overseas markets.
Setting It Up
Instructors can introduce this case to students by creating a table that shows the various cultural
differences between the U.S. and a foreign country, ideally one that has been the site of much foreign
investment such as China, India, Brazil, or Russia. Instructors can then ask students how a company
should deal with these differences in order to find success.
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Cultural Backlash in India
As you look at the latest quarterly earnings report of your clothing and accessories company, you think to
yourself “You are a genius!” It was your idea to move manufacturing to India last year, and it was your
idea to partner with a local retail chain to get your products to Indian consumers. So even though your
U.S. sales fell 5 percent, much in part due to the recession, your company’s profits actually rose 35
percent, thanks to all the money you made in India. Almost every day, you walk through the city and you
see young, affluent Indians wearing your jeans, clutching your purses, donning your sunglasses, and you
are unbelievably glad that you decided to come into this dynamic, fast-growing market that really likes
Western fashion styles.
There are many people, however, who aren’t so fond of your styles, and of Western culture in general.
Various religious and political conservative groups have recently been protesting the growing influence of
Western culture in India, sometimes in quite violent ways. During a recent Valentine’s Day, a group of
men publicly beat young couples who were holding hands or having a romantic dinner. In another city, a
group of people attacked women who were at bars and dance clubs. And just the other day, you saw a
crowd of people throwing your jeans, purses, and sunglasses into a big bonfire as a statement against
Western fashion. Even businesses are getting into the anti-American sentiment; a local beverage company
announced that they would take on the popularity of Coke and Pepsi by selling a beverage based on cow
urine, which is considered a holy, medicinal drink by Hindus.
When you came up with the idea of expanding into India, you certainly didn’t think that you would find
yourself in the middle of a cultural clash. “I’m just here to sell jeans,” you think, “not to tell people how
to live.” But clearly, many people view companies like yours as a threat to their culture and heritage.
Source:
Mehul Srivastava, “Business Caught in Middle of India’s Culture War,” Bloomberg Businessweek, February 18, 2009, accessed
September 10, 2010, from http://www.businessweek.com/globalbiz/content/feb2009/gb20090218_783926.htm.
Questions:
1. How would you, as the manager of this company, deal with the risk associated with doing business
in countries that feel threatened by American culture?
Students are likely to respond in one of two ways—either the company must learn how to do deal
with the risk, or the company should cut its losses and terminate its business. In general, students
choosing the former answer should show awareness that it is critical for a company to learn as much
as it can about the foreign culture, so that it can adapt its business practices as necessary. This may
mean that the company hires more Indian staff, who can help train the rest of the staff on how to be
more culturally sensitive. It may also mean giving Western staff extensive cultural and language
training prior to working in India. Students, of course, may come up with other ideas about how to
raise cultural awareness within the company.
Students who choose to cut losses and leave the country should cite the tremendous cost, in terms of
21
money and time, of doing cross-cultural training.
2. How might your company use an alliance with local companies to adapt to local concerns about
American culture?
Companies that look to do business overseas often choose strategic alliances, most commonly in the
form of joint ventures. The advantage of joint ventures is that a domestic company combines key
resources, costs, risks, technology, and most importantly for this case, people, with a foreign
company to do business in a foreign market. In essence, a global joint venture involves a marriage of
four cultures: the country and the organizational cultures of the first partner, and the country and the
organizational cultures of the second partner. In other words, a joint venture gives the domestic
company access to the cultural expertise of the foreign company. Rather than creating something
new, the domestic company can simply rely on what its foreign partner already knows about how to
do business within a particular culture.
Management Team Decision
Purpose
Your company must decide if it will engage in social entrepreneurship as it looks to expand its business
footprint to other countries.
Setting It Up
Instructors can introduce this exercise by asking students “How much responsibility does a company have
to perform well in poor countries?”
A Different Way to Go Global
Exporting, cooperative contracts, licensing, franchising, joint ventures, wholly owned affiliates, global
new ventures... As a management team wanting to take your business to the next level, you have a
smorgasbord of options available to you. But, in addition to these traditional options, there is another
angle you can take, one that is becoming increasingly popular among startup companies like yours: social
entrepreneurship. Social entrepreneurs use business skills to solve social problems. You and the members
of your team, just out of your MBA programs, are excited about the business and want to grow it and
make money. But you are also passionate about making a difference when it comes to problems like
homelessness in the United States or AIDS in Africa.
As your team discusses how and where to go global, you think about the problems you’d like to address
and you look to role models to help you brainstorm and plan. You read about how Pfizer—a
pharmaceutical giant, not a startup—started a program to offer free medicines to recently unemployed
Americans. Other companies are doing the same in Africa. Peet’s Coffee & Tea has been working
recently to develop the economic well-being of coffee farmers in Kenya, Rwanda, Tanzania, and Uganda
by teaching them to grow better quality coffee that Peet’s can market to its customers in coffee-loving
developed economies.
22
As much as your team wants to help others in need, you also recognize that doing good can’t come at the
expense of the bottom line. In fact, Peet’s Coffee’s effort is currently run by a nonprofit and hasn’t started
making Peet’s any money yet. You know that the success of such ventures is untested, but your team is
also aware that any effort at going global involves some type of risk. Thinking it through, you ask
yourselves what’s in it for companies who undertake social entrepreneurship—and what might be in it for
you? Pfizer adopted this program to create customer loyalty, exchanging a brick (something it has) for a
jade (something even more valuable and harder to come by). Customers who drink Peet’s care about
where their coffee comes from and about its quality, so Peet’s establishes relationships with African
farmers partly in response to customer demand and to build its brand.
With all of this in mind, it’s your team’s task to figure out how you can balance your interest in doing
business on a global scale with your interest in making a difference in the world.
Sources:
I. Bodner, “Social Entrepreneurship,” Fast Company, June 2, 2009, accessed January 19, 2015, from
www.fastcompany.com/1723694/social-entrepreneurship-and-the-common-brand; K. Krippendorff, “A Prescription For Doing
Good—Pfizer’s New Ethonomic Treatment Plan,” Fast Company, June 34, 2009, accessed January 15, 2015, from
www.fastcompany.com/blog/kaihan-krippendorff/outthinker-mavericks-out-innovate-competition/prescription-doing-good-pfize;
S. Hamm, “Into Africa: Capitalism from the Ground Up,” Businessweek, May 4, 2009, 60–61.
Questions:
1. What are the advantages of social entrepreneurship as a way to approach doing business in
developing economies outside the United States? What are the disadvantages?
Social entrepreneurship presents both advantages and disadvantages to organizations. First, the
advantages: By showing that they care about social issues, organizations build customer loyalty by
showing that they care about the same social issues that the customer cares about. Additionally, this
type of identification can help attract and retain new customers who are concerned with an
organization’s social stance. An organization’s social actions also help establish a positive public
image and brand identity. Rather than being known just for good products, an organization that
shows concern for social ills presents itself as a responsible global citizen, one that cares for the
people it reaches. An organization’s social stance can also help educate its consumers. Through
various marketing and publicity campaigns, the organization can help the general population realize
the need to address a certain issue, be it homelessness or child illiteracy. And perhaps most
importantly, a company’s social entrepreneurial efforts help resolve significant societal problems.
Businesses have tremendous financial and political resources which they can marshal to improve the
lives of people around the world.
While social entrepreneurship has many advantages, it also presents disadvantages to companies.
First and foremost is the issue of cost. Whether it’s giving away drugs to the poor and homeless or
working with African coffee farmers, social actions require a considerable investment of
organizational resources. What is more, the net impact of social entrepreneurship on a company’s
bottom line is not at all clear, meaning that social actions, while good for the world, may be bad for
profit. Social entrepreneurship may also lead to a public relations nightmare for companies. For
23
example, a company may only claim to be engaged in social actions while not doing anything
substantive. Or, a company could be accused of adopting a social action perspective simply for the
sake of improving sales and profits (e.g., greenwashing). There are also considerable cultural and
political risks in social entrepreneurship. A company that enters a foreign country with grandiose
thoughts of healing the sick and enriching the poor may find itself the target of government officials.
What is more, the organization could be accused of trying to apply Western cultural standards to
non-Western countries. What the company might view as a social ill that needs to be addressed may
be viewed by locals as just the way life is.
2. How might you combine social entrepreneurship with traditional options for going global?
Traditional methods of doing global business include exporting, cooperative contracts and strategic
alliances. Exporting occurs when companies produce products at home and sell them abroad. The
key advantage to exporting is that it makes the organization less dependent on sales in its home
country and provides a high degree of control over research, design, and production decisions. A
cooperative contract allows an organization to enter a foreign market without a large financial
commitment. Either through licensing or franchising, a foreign company pays our organization for
the right to produce and sell products in that country. The biggest advantage of licensing is that it
allows companies to earn profits without additional investments. However, the company must also
give up control over the quality of the product that is sold in foreign markets. Franchising,
meanwhile, is another way to enter a foreign market quickly. For the price of an initial franchise fee
plus royalties, franchisors provide franchisees with training, assistance with marketing and
advertising, and an exclusive right to conduct business in a particular location. However, franchisors
also risk a loss of control. Further, many franchises cannot be generalized due to differences in
lifestyle, values, and even infrastructure, making franchises a risky proposition for going overseas.
3. Can establishing a multinational corporation or a joint venture serve the principles of social
entrepreneurship? Would some options lend themselves better to social entrepreneurship than others?
What might such a business venture look like?
Strategic alliances involve the combination of two organizations’ resources, costs, risks, technology,
and people. A strategic alliance can take the form of a joint venture, in which two existing companies
collaborate to form a third company. The two founding companies remain intact and unchanged,
except that together they now own the newly created joint venture. Joint ventures provide for a
relatively quick way of entering a foreign market without the pressure of tariffs. Further, they reduce
the risk of entry, since both companies have to bear the costs and risks of business. Finally, global
joint ventures can be especially advantageous to smaller local partners that link up with larger, more
experienced foreign firms that can bring advanced management, resources, and business skills to the
joint venture. However, the nature of a joint venture makes it necessary for the two companies to
share profits. Also, managing global joint ventures can be difficult because they represent a merging
of four cultures: the country and the organizational cultures of the first partner, and the country and
the organizational cultures of the second partner. This can lead to power struggles, which in turn can
produce a vacuum in leadership. An alternative form of alliance is a wholly owned affiliate. These
are foreign businesses that are 100 percent owned by the parent company. The primary advantage of
wholly owned businesses is that the parent company receives all of the profits and has complete
24
control over the foreign facilities. The biggest disadvantage is the expense of building new
operations or buying existing businesses.
The issue of how these structures relate to social entrepreneurship depends in large part on the type
of social program that students envision for their organization. On a superficial level, an organization
does not have to establish a foreign office or branch to address social concerns; it can, like Pfizer,
simply use some of its resources (profits) to meet a social need. In that case, any of the traditional
methods of going global would allow a company to be social entrepreneurs. On the other hand, if a
student’s desired social program involves establishing a presence in a foreign country—in order to
get involved, form relationships and empower people in the culture—then there are some methods
that are better than others. Exporting would not be ideal, since it only involves selling goods. More
beneficial are franchising, licensing and wholly owned affiliates, since they involve both a financial
investment into a culture, as well as an investment through training and facilities. Perhaps the most
beneficial method of entry for social entrepreneurs is the joint venture, since it allows both
organizations to assume risk and realize profit. Moreover, joint ventures allow smaller local partners
to gain valuable learning and experience by doing business with larger foreign firms, which can in
turn provide an impetus for growth to other domestic industries. Finally, joint ventures, because they
involve the merger and cooperation of multiple cultures, represents an ideal means by which
organizations in the United States can learn how to span cultures and do social good.
Practice Being a Manager
Hometown Culture
One of the major dilemmas in global management concerns the degree to which a multinational firm
should adapt its business practices to particular locations and cultures versus the degree to which it should
maintain consistency across all its operations. In general, firms prefer consistency because it streamlines
operations and may result in global economies of scale. At the same time, multinational firms cannot
gloss over differences without running the risk of losing a particular market to more responsive (local)
competition. In this exercise, students will interpret their “hometown” culture for a large multinational
company. Suppose that a large multinational equipment company (based outside their country of origin)
is planning to open a major production facility and retail dealership in their hometown. This company has
hired the student as a consultant to help it successfully establish operations in their hometown.
Step 1: Describe your hometown. Write a brief sketch (one or two pages, using bullet points will
suffice) in which students describe the important cultural features of their hometown, including such
aspects as language, dress, courtesy/customs, and attitudes toward “foreignness” and newcomers. Try as
much as possible to capture aspects of the location and culture of the hometown that would be important
for newcomers to recognize and respect.
Step 2: Form a team. Instructors will assign students to small discussion groups of three to five students.
Step 3: Share your description. Take turns in respective discussion groups introducing oneself,
identifying the hometown, and sharing the highlights of the brief sketch of that hometown. Listen for
similarities and differences across other hometowns.
25
Step 4: Make recommendations. As a group, agree on some recommendations to the multinational

company. Assume that the company is planning to enter all of students’ hometowns simultaneously. To
what degree might the company use a consistent (same) approach in entering their hometowns? Is one or
more of the hometowns likely to require a foreign multinational to make more particular adaptations?
Step 5: Share findings with class. Each group should share its list of hometowns and its
recommendations with the class.
Step 6: Consider challenges. As a class discuss the challenges of entering global markets, particularly in
regard to achieving the appropriate mix of consistency and adaptation.
Teaching Notes––Practice Being a Manager
Exercise Overview and Objective
This exercise uses students’ familiarity with their hometown culture to examine the role of culture in
global business, particularly in the situation of market entry. The objective is to help students recognize
important features of a particular culture and then to consider the role of that such features might play in
successful market entry by a multinational corporation.
Preparation
Students should complete Step 1 (the 1–2-page paper on the major cultural features of their hometown)
prior to the in-class discussion of this exercise. It is important to remind all students that their audience
for these papers is the management of a company outside their own country of origin. For example, a
student whose hometown is Fayetteville, Arkansas, might write her paper to an audience of French
managers. A student whose hometown is Sao Paulo, Brazil, might write his paper to an audience of U.S.
managers. Students should assume that their audience has never been to their hometown and that they
have limited knowledge of their home culture (national/regional/local).
Managers with a wealth of global experience staff most multinational firms, and students may tend to lean
toward assumptions of familiarity. Reinforce that they should assume no familiarity whatsoever. This
will help students to fully engage in the process of communicating to a foreign newcomer. While students
may include a few aspects of national and regional culture, they should make sure that they give primary
attention to their particular hometown. For some students, this local “lens” may even zoom in at the level
of a neighborhood or section of a large city (e.g., the Bronx area of New York City).
Instructors should decide in advance how they would like to group students for the in-class exercise.
Students will discuss their “hometown” papers and then work together to agree on some
recommendations for a multinational that plans to enter their hometowns (see Step 4—company entering
all hometowns simultaneously). One approach for forming groups is to cluster students who are likely to
represent a variety of places of origin.
In-Class Use
26
Students should be organized in small discussion groups (3–5 students). Each group should begin with
Step 3, taking turns to introduce themselves, identifying their hometown (and neighborhood/borough as
appropriate), and sharing some of the highlights from their “hometown” paper. Encourage students to
listen carefully for similarities and differences, ask questions, and make notes.
Once a group has completed Step 3, it should move on to Step 4 without waiting for a signal from the
instructor. Groups are likely to vary in the time required for Step 3, but none should rush through this
step.
Step 4 requires each group to make recommendations to the multinational equipment company on the
assumption that it is entering all of their hometowns simultaneously. This condition forces students to
directly consider similarities, differences, and patterns across their various hometowns.
Step 4 includes the following two questions:

1. “To what degree might the company use consistent (same) approach in entering your hometowns?”
(Exercise, Step 4)
2. “Is one of your hometowns likely to require a foreign multinational to make more particular
adaptations?” (Exercise, Step 4)
These questions should foster discussion around one of the central themes of global management—the
desire to achieve consistency across global markets (i.e., global economies of scale and scope) and the
need for adaptation to local differences (i.e., customer needs and desires that vary by location/culture).
When all groups have completed Step 5, the instructor may begin the class discussion of the challenges of
entering global markets (including the consistency/adaptation issue). It is not necessary for the groups to
speak “as a group” in Step 6. The class discussion should operate at the individual level. Instructors may
want to ask if any individual students found it particularly difficult to describe their “hometown culture.”
Home cultures may be so assumed in some cases that they become invisible to people. Instructors may
also want to see if any groups noticed similarities across national borders—sometimes two places in
different countries may share a number of cultural similarities (e.g., rural culture among cattle ranchers in
a particular area of the United States may be similar in many respects to rural culture among cattle
ranchers in a particular area of Argentina). Finally, instructors may explore some of the hometown
cultures that students identified as requiring extensive adaptation for successful market entry by a foreign
multinational. Why do some cultures require more adaptation than others?
Develop Your Career Potential
Building Cultural Bridges inside American Business
All savvy managers seem to be familiar with the Japanese custom of exchanging business cards, the
French custom of the 2-hour lunch, and the South American custom of getting to know potential business
partners on a personal level before discussing business. But how many managers are aware of the cultural
differences that exist within the United States? For example, how many Manhattanites know that in some
parts of the country, businesses close down on the first day of hunting season?
27
Political rhetoric often refers to “two Americas” and the differences between the heartland and the coasts,
but many other oppositional geographic pairings also represent different sets of cultural norms. Some
other obvious examples are North–South, East–West, and the more general urban–rural. How many
businesspeople know how to be effective in all these American cultures? Much has been made of the
political and cultural implications of these divides, but not enough attention has been paid to what it
means for business.
Cultural differences were addressed in Chapter 3 and will be again in Chapter 15. In the context of this
chapter, however, it is important to note that many of the issues related to global management are
applicable in any geographic context. Deciding whether to locate a firm in Alabama versus Oregon
requires the same due diligence as deciding between Madrid and Madagascar. Managers need to assess
the best business climate, identify and adapt to cultural differences, and prepare workers who will be
transferred to the new location.
Source:
A. Hanft, “Passport to America,” Inc., October 2004, 14.
Activities
1. Think of yourself as a member of a particular geographic cultural group. (In the United States, we
are conditioned to think of cultural groups based on ethnicity and race, but for this exercise, think
in terms of location.) What are the characteristics of this group?
2. Once you have an outline of your geographic culture, try to identify the group most opposite to
your own. For example, if you consider yourself a New Yorker, you may think of a Mississippian
or a Californian.
3. Research regional and local periodicals to learn about the norms in the other culture. You might
also talk with a friend who attends college in a different region or state to get a more personal
understanding of norms in other parts of the country. List some of the norms in the other location,
and compare them with the norms in your area of the country.
Management Workplace
Management Workplace videos can support several in-class uses. In most cases instructors can build an
entire 50-minute class around them. Alternatively, they can provide a springboard into a group lesson
plan. The Management Workplace video for Chapter 8 would be a nice companion to the instructor’s
introduction to the course on the first day teaching this chapter.
Video: Profile on Holden Outerwear
Managing in a Global Environment
Summary:
Like so many other American brands, Holden apparel is made in China. While the company would like to
28
manufacture in the United States, government regulations, labor costs, and high corporate tax rates are too
heavy a burden. Availability of materials is another factor, as many of the pieces that Holden needs, like
buttons, snaps, and fabrics, would still have to be brought in from Asia. For any company that sources
materials and labor overseas, shipping is a vital concern. In the early years, Holden used nearly a dozen
shippers to transport garments from China. To increase efficiency and reduce costs, the company
coordinated shipping through a single distribution hub in China, so that just two companies now handle
all of Holden’s shipping.
Ask your students:
1. Which stage of globalization characterizes Holden Outerwear’s international involvement?
The four stages of globalization include the domestic stage, the international stage, the multinational
stage, and the global (stateless) stage. Students’ answers may vary, but Oregon-based Holden lies
mostly within the international stage of corporate international development. Factors that mark the
company as presently in the international stage of development include the firm’s outsourced China
manufacturing and significant international sales to Japan, Germany, Norway, and Canada. Holden is
a small company, and it does not own factories or fabric mills. To qualify as a multinational
business, Holden needs more than one-third of sales to take place outside of the U.S., and its
marketing and advertising strategies must be standardized and uniform across all regions. Holden
cannot be characterized as a domestic company or a global (stateless) company. The domestic stage
is characteristic of companies that make and sell goods solely within their home countries; the global
(stateless) stage is characteristic of firms that have ownership, management, and manufacturing
dispersed among many nationalities.
2. Identify Holden’s primary approach to entering the international market. What are the benefits of this
entry strategy?
For small businesses that want to “go global,” exporting, global outsourcing, and licensing represent
low-cost ways of conducting business internationally. To reach global consumers and keep
manufacturing costs low, Holden uses an outsourcing strategy. The manufacture of Holden apparel
takes place in factories in China. Owner Mikey LeBlanc states that this strategy slashes the cost of
his products in half. Outsourcing also provides a steady source of skilled labor and textile materials.
Large well-established firms tend to use more costly market entry strategies, such as acquisitions and
greenfield ventures. Although high cost market entry strategies involve significant risk and
resources, they offer maximum control over business processes and profits.
3. What are the challenges of international management for leaders at Holden?
While the four management functions of planning, organizing, leading, and controlling are the same
whether a company operates domestically or internationally, managers experience greater challenges
and risks when performing functions in an international setting. In the video, Mikey LeBlanc
explains that to obtain the benefits of China’s low cost manufacturing, managers had to carefully
oversee 12 different shipping companies. The situation required extensive paperwork and resources.
In addition, garments with multiple components often failed to deliver together at the same time,
creating long delays. Though not discussed specifically in the video, Holden’s managers face
29
additional challenges in the economic, legal-political, and sociocultural environment of business.

Difficulties include political unrest, government takeovers, tariffs, language and cultural barriers,
poor infrastructure, and even globalization protests. To help manage people, global managers should
understand cultural differences, including Hofstede’s value dimensions: power distance, uncertainty
avoidance, individualism/collectivism, masculinity/femininity, and long-term/short-term orientation.
Workplace Video Quiz
Video Segment 1
Video segment title International Management

Start time (in sec) 0:00
Stop time (in sec) 2:31
Quiz Question 1 Which globalization hotspot has Holden selected to help produce its
Portland, Oregon-based snowboarding apparel?
Option a India
Option b Brazil
Option c China
Option d Mexico
Correct option c: China
Feedback for option a Incorrect. China is the location of Holden’s suppliers and contractors.
Feedback for option b Incorrect. China is the location of Holden’s suppliers and contractors.
Feedback for option c Correct. China is the location of Holden’s suppliers and contractors.
Feedback for option d Incorrect. China is the location of Holden’s suppliers and contractors.
Quiz Question 2 For Holden Outerwear, managing business internationally delivers all the
following advantages except:
Option a Low cost materials
Option b Culture and language differences
Option c Close contact with international fashion trends
Option d Dependable source of skilled labor
Correct option b. Culture and language differences
Feedback for option a Incorrect. Cultural and language differences are two significant
disadvantages to global business.
Feedback for option b Correct. Cultural and language differences are two significant
Feedback for option c Incorrect. Cultural and language differences are two significant
Feedback for option d Incorrect. Cultural and language differences are two significant
Quiz Question 3 The benefits Holden gains by outsourcing the manufacture of its garments
overseas must be weighed against:
Option a Legal and political risks
30
Option b Limited control over international manufacturing partners

Option c Cultural and communication barriers
Option d All of these
Correct option d: All of these
Feedback for option a Incorrect. All of the responses are factors that must be considered in doing
global business.
Feedback for option b Incorrect. All of the responses are factors that must be considered in doing
global business.
Feedback for option c Incorrect. All of the responses are factors that must be considered in doing
global business.
Feedback for option d Correct. All of the responses are factors that must be considered in doing
global business.
Video Segment 2

Quiz Question 1 Holden sells the same line of clothes in North America, Europe, Japan, and
Korea. This model of doing global business is known as:
Option a Local adaptation
Option b International commerce
Option c Global consistency
Option d Standard practices
Correct option Incorrect. Global consistency means that a company sells the same
products and operates with the same procedures in all of its locations.
Feedback for option a Incorrect. Global consistency means that a company sells the same
Feedback for option b Correct. Global consistency means that a company sells the same products
and operates with the same procedures in all of its locations.
Feedback for option c Incorrect. Global consistency means that a company sells the same
Feedback for option d
Quiz Question 2 Which of the following forms of global business should Holden not use if
it wants to maximize delivery speed?
Option a Exporting
Option b Cooperative contracts
Option c Franchise
Option d Joint venture
Correct option a: exporting
Feedback for option a Correct. A significant disadvantage of exporting is the cost and speed of
transportation.
Feedback for option b Incorrect. A significant disadvantage of exporting is the cost and speed of
31
transportation.
Feedback for option c Incorrect. A significant disadvantage of exporting is the cost and speed of
transportation.
Feedback for option d Incorrect. A significant disadvantage of exporting is the cost and speed of
transportation.
Quiz Question 3 Which of the following developments in global trade has the potential to
negatively impact Holden’s international business?
Option a North American Free Trade Agreement (NAFTA)
Option b European Union (EU)
Option c Protectionism
Option d Association of Southeast Asian Nations (ASEAN)
Correct option c: Protectionism
Feedback for option a Incorrect. Protectionism is the use of trade barriers to protect domestic
companies from foreign competition.
Feedback for option b Incorrect. Protectionism is the use of trade barriers to protect domestic
Feedback for option c Correct. Protectionism is the use of trade barriers to protect domestic
Feedback for option d Incorrect. Protectionism is the use of trade barriers to protect domestic
Video Segment 3

Quiz Question 1 The primary criterion for Holden’s decision to create a consolidated
shipping facility in China was:
Option a Availability of a quality work force
Option b Access to rare resources
Option c Government subsidies
Option d More efficiency in shipping
Correct option D: more efficiency in shipping
Feedback for option a Incorrect. Holden created the new shipping facility so that it could reduce
the number of ships it sent from China.
Feedback for option b Incorrect. Holden created the new shipping facility so that it could reduce
Feedback for option c Incorrect. Holden created the new shipping facility so that it could reduce
Feedback for option d Correct. Holden created the new shipping facility so that it could reduce
Quiz Question 2 Holden must deal with customs laws in several countries. Therefore, it
32
faces:
Option a Political uncertainty
Option b Policy uncertainty
Option c Regulatory uncertainty
Option d Commercial uncertainty
Correct option b: policy uncertainty
Feedback for option a Incorrect. Policy uncertainty refers to the risk associated with changes in
laws.
Feedback for option b Correct. Policy uncertainty refers to the risk associated with changes in
laws.
Feedback for option c Incorrect. Policy uncertainty refers to the risk associated with changes in
laws.
Feedback for option d Incorrect. Policy uncertainty refers to the risk associated with changes in
laws.
Quiz Question 3 If Holden needs maximum control over the manufacturing and shipping of
its China-produced garments, it must adopt the following international
strategy:
Option a Outsource to Chinese firms
Option b License Chinese firms to manufacture and sell Holden garments
Option c Partner with Chinese firms to manufacture and sell Holden garments
Option d Acquire Chinese firms to manufacture and sell Holden garments
Correct option d: Acquire Chinese firms to manufacture and sell Holden garments
Feedback for option a Incorrect. By acquiring a Chinese firm as a wholly-owned affiliate, a
company receives all of the profits and has complete control over the
foreign facilities.
Feedback for option b Incorrect. By acquiring a Chinese firm as a wholly-owned affiliate, a
foreign facilities.
Feedback for option c Incorrect. By acquiring a Chinese firm as a wholly-owned affiliate, a
foreign facilities.
Feedback for option d Correct. By acquiring a Chinese firm as a wholly-owned affiliate, a
foreign facilities.
Review Questions
1. What is global business?
Business is the buying and selling of goods or services. Buying this textbook was a business
transaction. So was selling your first car. So was getting paid for babysitting or for mowing lawns.
Global business is the buying and selling of goods and services by people from different countries.
Companies that own businesses in two or more countries are called multinational corporations
(MNCs). In 1970, more than half of the world’s MNCs were headquartered in the United States. In
33
subsequent decades, the economies of other nations grew stronger, such that MNCs can be found by
the thousands all over the world.
2. Describe the impact of global business as it relates to direct foreign investment.
Global business affects the United States in two ways: through direct foreign investment in the
United States by foreign companies, and through U.S. companies’ investment in business in other
countries. Direct foreign investment throughout the world typically amounts to about $4.6 trillion per
year. Between 2003 and 2004, direct foreign investment in the United States and by the United States
soared.
3. List and define the barriers governments erect to control trade.
A tariff is a direct tax on imported goods. It creates a trade barrier by making imported goods more
expensive than domestically produced goods. The five nontariff barriers are:
 Quotas: Limits on the number or volume of imported products.
 Voluntary export restraints: Voluntarily imposed limits on the number or volume of products
exported to a particular country.
 Government import standards: Standards imposed by a government to protect the health and
safety of citizens; in reality these are used to restrict trade.
 Subsidies: Government loans, grants, and tax deferments given to domestic companies to
protect them from foreign competition.
 Customs classifications: Classifications assigned to imported products by government officials
that affect the size of the tariff and imposition of import quotas.
4. Identify the major trade agreements that govern global trade.
GATT is the General Agreement on Tariffs and Trade that many countries signed to increase the
ease of selling products and services around the world. GATT promoted global trade by:
 Cutting tariffs worldwide by 40 percent by 2005
 Eliminating tariffs in ten specific industries
 Putting stricter limits on government subsidies
 Protecting intellectual property rights
 Sending trade disputes to the arbitration panels of the World Trade Organization (WTO)
Starting with the signing of the Maastricht Treaty in 1992, the European Union has changed trade
tremendously among member nations. First, all tariffs and other nontariff barriers have been lifted,
making trade totally free. Second, all member nations have a common external trade policy so that
nonmember nations are trading with an entire bloc of countries rather than with separate countries.
Third, people, capital, and equipment can freely cross EU borders, saving money and time. Fourth,
most of the EU members belong to a single economy, run by a centralized European bank and
adopting a single currency, the Euro. The creation of the European Union has made Western Europe
a more powerful trading bloc.
NAFTA—the North American Free Trade Agreement—is the free trade area of Canada, Mexico, and
34
the United States. It has changed trade tremendously by eliminating most tariff and nontariff barriers
among the member nations (the last set of barriers were eliminated in 2003).
CAFTA—the Central American Free Trade Agreement—is a regional trade agreement between
Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United
States.
ASEAN is the Association of Southeast Asian Nations and consists of the following Southeast Asian
countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines,
Singapore, Thailand, and Vietnam. ASEAN became a free trade area in 2015 for the original six
countries and will become one by 2018 for the remaining countries.
APEC is the Asia-Pacific Economic Cooperation that includes all ASEAN countries except
Cambodia, Lao PDR, and Myanmar, all NAFTA countries, and the following countries: Australia,
Chile, the People’s Republic of China, Hong Kong (China), Japan, New Zealand, Papua New
Guinea, Peru, Russia, South Korea, and Taiwan. It is, thus, a much larger trade agreement that
includes the three largest economies in the world: the United States, China, and Japan. By 2020,
trade barriers will be reduced in all member nations.
5. What are the tradeoffs between global consistency and local adaptation?
Global consistency and local adaptation are two optional strategies that companies can use when they
have worldwide operations. In global consistency, a company would run its offices, plants, and
facilities around the world based on the same universal rules, guidelines, policies, and procedures.
The advantages of global consistency are that it creates cost efficiencies and consistent product
imagery worldwide. In local adaptation strategy, the company would modify its standard operating
procedures to adapt to differences in foreign customers, governments, and regulatory agencies.
Advantages of this strategy are that it addresses specific local needs, such as different consumer
tastes and employee issues.
6. Identify the stages in the phase model of globalization and explain the level of risk inherent in each.
The phase model of globalization says that as companies move from a domestic to a global
orientation, they use these organizational forms in sequence: exporting, cooperative contracts
(licensing and franchising), strategic alliances, and wholly owned affiliates. At each step, the
company grows much larger, uses those resources to enter more global markets, is less dependent on
home country sales, and is more committed in its orientation to global business. The phase model is
linear and sequential. As such, the risks associated with global business increase with each new
stage. In other words exporting is the least risky, and wholly owned affiliates are the riskiest.
 Exporting: Selling domestically produced products to customers in foreign countries.
 Cooperative contracts: Agreements in which a foreign business owner pays a company a fee
for the right to conduct that business in his or her country.
 Strategic alliances: Agreements in which companies combine key resources, costs, risk,
technology, and people.
 Wholly owned affiliates: Foreign offices, facilities, and manufacturing plants that are 100
35
percent owned by the parent company.
7. What is the relationship between the phase model of globalization and global new ventures?
Evidence suggests, however, that some companies do not follow the phase model of globalization.
Some companies skip phases on their way to becoming more global and less domestic. Others don’t
follow the phase model at all. These are known as global new ventures, which are new companies
with sales, employees, and financing in different countries that are founded with an active global
strategy. In other words, global new ventures are global from their inception; they do not start as
exporters and evolve to global new ventures. They are global from the start-up stage.
8. What should companies consider when choosing a global location for doing business?
The first step in deciding where to take your company global is finding an attractive business
climate. Be sure to look for a growing market where consumers have strong purchasing power and
foreign competitors are weak.
When locating an office or manufacturing facility, consider both qualitative and quantitative factors.
Two key qualitative factors are work force quality and company strategy. Work force quality is
important because it is often difficult to find workers with the specific skills, abilities, and experience
that a company needs to run its business. A company’s strategy is also important when choosing a
location. For example, a company pursuing a low-cost strategy may need plentiful raw materials,
low-cost transportation, and low-cost labor. Quantitative factors include the kind of facility being
built, tariff and nontariff barriers, exchange rates, and transportation and labor costs. Those factors
should also be considered when choosing an office and/or manufacturing location.
When conducting global business, companies should attempt to identify two types of political risk:
political uncertainty and policy uncertainty. Political uncertainty is associated with the risk of major
changes in political regimes that can result from war, revolution, death of political leaders, social
unrest, or other influential events. Policy uncertainty refers to the risk associated with changes in
laws and government policies that directly affect the way foreign companies conduct business.
Policy uncertainty is the most common form of political risk in global business and perhaps the most
frustrating.
If the location you choose has considerable political risk, you can avoid it, try to control the risk, or
use a cooperation strategy.
9. Describe Hofstede’s dimensions of national culture.
Hofstede’s cultural dimensions are:

 Power distance: the extent to which people in a country accept that power is distributed
unequally in society and organizations.
 Individualism: the extent to which societies believe that individuals should be self-sufficient.
 Short- or long-term orientation: whether cultures are oriented to short-term (immediate
gratification) or long-term (defer gratification for greater good).
36
 Masculinity or femininity: the extent to which cultures are highly assertive (masculine) or
nurturing (feminine).
 Uncertainty avoidance: the degree to which people in a country are uncomfortable with
uncertainty or ambiguity.
Companies can use this information in order to formulate strategies in many different areas, such as
how to compensate or motivate global workforces, whether or not to include lower-level employees
in decision-making, and how much direction to give employees.
10. How can companies prepare their managers to be successful expatriate managers?
Companies wanting to send their managers overseas should provide both language and cross-cultural
training to both the managers themselves and to their families (spouse and children). There are many
types of training programs. They are:
 Documentary training focuses on identifying the specific differences between the home
country and the host country, to which the manager will be sent.
 Cultural simulations provide the managers with an opportunity to practice their skills in a
simulated environment, such as a party in the host country.
 Field simulation training allows managers to spend a few hours or days in a neighborhood
with ethnic cultures similar to the ones that will be found in the host country.
Group Activity
Outsource or Not?
Divide the class into groups of three to five students and give each group the following scenario:
Super Sized Cycles specializes in making larger bicycles for overweight riders. Thanks to Internet sales,
the company has increased sales every year. However, profits have been razor thin. The problem is that
the company currently obtains part from U.S. - based companies. Though this allows for individualized
customer service, it is also expensive, as each bike roughly $1,250 to produce. If, however, Super Sized
Cycles were to source materials from Taiwan, it could pay just $400 to $500 for each bike.
Questions:
1. What are the advantages and disadvantages of working with U.S. suppliers? Of working with foreign
suppliers?
Students’ answers may vary, although, advantages of working with foreign companies reduces costs
but matching individualized customer service is not easy for bikes produced overseas and is a
disadvantage. The advantages of having U.S. suppliers is that it allows for individualized customer
service but the disadvantage is that is very expensive.
2. What would be the best option for insuring the continued success of Super Sized Cycles?
37
Students’ answers may vary. Options may include lowering the prices which increases sales or
shifting the manufacturing to Taiwan.
Source:
J. Grossmann, “Make Bikes in the US, or Go Abroad to Cut Costs?” New York Times, June 2, 2010, accessed January 19, 2015,
http://www.nytimes.com/2010/06/03/business/smallbusiness/03sbiz.html.
Assignment
Assign students to audit an introductory foreign language class on campus. Instruct students to attend a
class on a language they do not speak. Instructors may need to create a note that students can give to the
language instructor asking permission to sit in for one or more class sessions as a way to gain exposure to
a new language. Ask students what difficulties they had in being in a foreign language environment. What
tools, resources, or training do they thing would be most helpful for adapting to such situations?
Large Section
Assign the electronic case homework and quiz on Groupon.
Additional Resources
Out-of-Class Project: “Regional Trade Agreements.” Divide the class into groups and assign one
regional trade agreement to each group. Each group should thoroughly research the trade agreement by
using the organization’s website as well as any recent articles published about the organization. The
groups should prepare a five-slide presentation for the class to include the following: (1) member nations
of the trade group, (2) mission and/or major goals of the trade group, (3) key issues that the trade group
currently faces, and (4) upcoming events.
In-Class Activity: “WTO Debate.” The WTO has been the subject of controversy in recent years,
inciting riots in cities such as Seattle. Divide the class into two groups (or four groups if the class is
especially large). One side should be pro-WTO and should carefully study the goals and issues
surrounding the organization. The other side should be anti-WTO and should study the negative effects of
globalization. The instructor should moderate the debates and debrief on the issues raised on both sides.
Supplement to “WTO Debate.” Go to the WTO’s website at http://www.wto.org. Students will find
the ten benefits of the WTO trading system and ten common misunderstandings about the WTO. Read
these and answer the following questions: (1) Do you support the efforts of the WTO? Why or why not?
(2) Why should a country want to join the WTO? (3) What does it take for a country to be accepted into
the WTO? (4) Should China be admitted to the WTO? Why or why not?
“Passports and International Travel.” Poll the students to find out how many have a passport. Of those
who raise their hand, ask how many have traveled to a foreign country. For those students without
international travel experience, instructors will need to approach this activity as a fact-finding exercise.
Instruct students without passports to research what they would need to do to acquire one. Also have them
38
research restrictions (such as both parents need to be present to submit the passport application for
children under 18). If students already have a passport, have them approach the assignment as if they
were writing a guidebook entry for students who need to apply for a passport. Student work should detail
how and where to get a passport and what they need in order to apply for one. An Internet resource for
this exercise is http://travel.state.gov/passport.
“Money and International Travel.” As a companion exercise to “Passports and International Travel,”
ask students to think about and put together some recommendations related to money: “How would you
carry money on an international trip? Besides exchange rates, what other concerns about carrying money
in a foreign country can you think of? How would you handle your finances if you were on a long-term
stay in a foreign country—would you convert to the host country’s money system, or would you keep
converting to and from your home currency?” Again, for this portion, instruct students without
international travel experience to approach the activity as a fact-finding exercise, and students with
international travel experience to approach it as writing an entry in a travel guidebook like Fodor’s or
others by Rick Steves.
“Cross-Cultural Training.” Browse the Internet for different cross-cultural training packages that are
for sale. Select five good packages and provide a summary of what the training encompasses. Would one
buy this package for one’s company’s training program? Why or why not?

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 Lesson Plan for Lecture (for large sections)

Highlighted Assignments Key Points

Self-Assessment Students evaluate their level of world-mindedness and are

Management Decision Students are asked to deliberate on how a company should

8.4 Explain how to find a favorable business climate.

8.5 Discuss the importance of identifying and adapting to cultural differences.

probably perceive management policies and practices differently.

8.6 Explain how to successfully prepare workers for international assignments.

Lesson Plan for Lecture (for large sections)

 Review the chapter and determine what  Bring the book.

Warm Up Begin Chapter 8 by asking students the following series of questions:

Topics PowerPoint Slides Activities

8.1 Global Business, 1: Global Management

8.6 Preparing for an 15: Preparing for an

Summary 16: Summary

Key Terms 17: Key Terms

Conclusion Possible assignments:

Remind students about any upcoming events.

Lesson Plan for Group Work (for smaller classes)

 Review the material to cover and modify Bring the book.

the lesson plan to meet the instructor’s

Warm Up Begin Chapter 8 by asking students the following questions:

Lecture on What Is Global Business? (Section 8.1).

Break for the following group activity:

“World Trade and You”

Break for the following activity:

“Around the World”

If instructors have an electronic classroom, consider doing a geography game at

Lecture on Becoming Aware of Cultural Differences and Preparing for an International

Remind students about any upcoming events.

Assignments with Teaching Tips and Solutions

What Would You Do? Case Assignment

If you were in charge at Groupon, what would you do?

What Really Happened? Solution

Are You Nation-Minded or World-Minded?

5. Our country is probably no better than many others.

9. Foreigners are particularly obnoxious because of their religious beliefs.

You can find an interpretation of your score at: login. cengagebrain.com

Sources: R. W. Boatler, “Study Abroad: Impact on Student Worldmindedness,” Journal of Teaching in

Interpreting the Score

Worldmindedness by Major Average WM Score

(From Boatler, 1992)

Worldmindedness by Major Average WM Score

(From Boatler, 1992)

Speaking more languages leads to increased worldmindedness.

Worldmindedness by Language and Major

(From Boatler, 1992)

WM by Major and Gender Average WM Score

(From Deng & Boatler, 1993)

Step 3: Develop a plan to increase your global managerial potential.

A company that is looking to do business overseas cannot ignore cultural differences if it is to be

Cultural Backlash in India

money and time, of doing cross-cultural training.

Management Team Decision

A Different Way to Go Global

Practice Being a Manager

Step 4: Make recommendations. As a group, agree on some recommendations to the multinational

Teaching Notes––Practice Being a Manager

Exercise Overview and Objective

Step 4 includes the following two questions:

Develop Your Career Potential

Building Cultural Bridges inside American Business