Manaorg Reviewer
Chapter 4 – The International Environment
MAINSTREAM APPROACH
How to Internationalize an Organization 1. Exporting and Importing a. Global outsourcing – one or more subcomponents for an org’s products are imported from another country b. Countertrade – products/services are traded for products/services instead of money 2. Licensing and Franchising c. Licensing – sell specific resources d. Franchising – sell complete package 3. Strategic Alliances and Joint Ventures e. Strategic alliance – managers from orgs in at least 2 countries pool org’s resources and “know-how” and share risks & rewards for developing new market/product f. Joint Venture – partnering orgs agree to form a separate, independent, jointly owned org 4. Foreign Subsidiaries g. Purchasing factories in other countries h. Greenfield venture – org builds new plant overseas i. Maquiladora – assembly plants and factories in special regions in Mexico where international corporations can take advantage of low wages; exporting zone
Four Dimensions of the International Environment 1. Sociocultural Environment a. Polycentrism – assumption that managers in a host country know the best way to manage an org in their country b. Ethnocentrism – managers enter a foreign country with the belief that their own home country offers the best way to manage in a foreign country c. National culture – shared values and beliefs d. Self reference criterion – when they use the terms and assumptions of their own culture in order to understand and relate to people from other cultures
5 Dimensions of National Culture Individualism-Emphasis on individual self interests | Collectivism-Emphasis on interest of group | Materialism-Possessions and money | Quality of Life-Relationships and social well-being | Short-Term Orientation-Emphasis on immediate gratification even with long-term cost | Long-Term
MAINSTREAM APPROACH
How to Internationalize an Organization 1. Exporting and Importing a. Global outsourcing – one or more subcomponents for an org’s products are imported from another country b. Countertrade – products/services are traded for products/services instead of money 2. Licensing and Franchising c. Licensing – sell specific resources d. Franchising – sell complete package 3. Strategic Alliances and Joint Ventures e. Strategic alliance – managers from orgs in at least 2 countries pool org’s resources and “know-how” and share risks & rewards for developing new market/product f. Joint Venture – partnering orgs agree to form a separate, independent, jointly owned org 4. Foreign Subsidiaries g. Purchasing factories in other countries h. Greenfield venture – org builds new plant overseas i. Maquiladora – assembly plants and factories in special regions in Mexico where international corporations can take advantage of low wages; exporting zone
Four Dimensions of the International Environment 1. Sociocultural Environment a. Polycentrism – assumption that managers in a host country know the best way to manage an org in their country b. Ethnocentrism – managers enter a foreign country with the belief that their own home country offers the best way to manage in a foreign country c. National culture – shared values and beliefs d. Self reference criterion – when they use the terms and assumptions of their own culture in order to understand and relate to people from other cultures
5 Dimensions of National Culture Individualism-Emphasis on individual self interests | Collectivism-Emphasis on interest of group | Materialism-Possessions and money | Quality of Life-Relationships and social well-being | Short-Term Orientation-Emphasis on immediate gratification even with long-term cost | Long-Term