Managing Across Borders: Corporate Culture

Corporate culture refers to the beliefs and behaviours that determine how a company's employees and management interact and handle outside business transactions.

Peter Drucker

True

<p>Corporate ethics are a set of principles that guide a company's interactions with business partners, competitors, customers, and employees.</p> Signup and view all the answers

<p>Corporate responsibility is a way of doing business that goes beyond legal, ethical, and commercial expectations by also considering social responsibilities.</p> Signup and view all the answers

<p>The levels of corporate responsibility are economic, legal, ethical, and philanthropic.</p> Signup and view all the answers

<p>Creating shared value involves policies and practices that enhance a company's competitiveness while advancing economic and social conditions in the communities where it operates.</p> Signup and view all the answers

<p>The three ways shared value is created are by: reconceiving products and markets, redefining productivity in the value chain, and enabling local cluster development.</p> Signup and view all the answers

<p>MNE misbehavior refers to instances where multinational enterprises engage in unethical or irresponsible practices in their global operations.</p> Signup and view all the answers

<p>The key challenges for global and ESG strategies are to address ethical and sustainable practices on a global scale, including navigating political and regulatory differences, managing cultural sensitivities, and ensuring ethical sourcing and operations.</p> Signup and view all the answers

<p>The paradox that &quot;Shared Value&quot; intends to resolve is the tension between a company's economic goals and its social responsibilities.</p> Signup and view all the answers

<p>The three main things to consider are: sponsoring events, charity, or exhibitions, offering incentives or discounts to promote your brand, and enhancing your image through emphasizing and presenting your other products and benefits.</p> Signup and view all the answers

<p>The advantages of businesses adopting a &quot;social responsible&quot; approach are: building a positive brand image, increasing customer loyalty, attracting environmentally conscious consumers, and fostering a sense of social responsibility among employees.</p> Signup and view all the answers

<p>Common exit reasons include low sales, profits, or demand, problems with distribution channels or suppliers, competitive pressure, ethical issues, or changes in the economy or government regulations.</p> Signup and view all the answers

<p>AVIVA exited from certain ventures as part of a strategic shift to focus on markets where it had scale and a sustainable competitive advantage to maximize return on capital.</p> Signup and view all the answers

<p>Carrefour's exit from the South Korean market was primarily due to its inability to gain a leading market position, facing competition from larger local retailers.</p> Signup and view all the answers

<p>Best Buy's exit from the UK market was attributed to a number of factors, including a lack of brand recognition, insufficient store numbers, overambitious sales targets, and underestimating the competition.</p> Signup and view all the answers

<p>The five categories of criteria are: financial security, financial opportunity, marketing strategy, social responsibility, and organized intervention.</p> Signup and view all the answers

<p>The six signs are: falling sales, deteriorating prices, declining profitability, increased popularity of substitute products, obsolescence of a product or idea, and an increase in management resources needed to sustain the product's viability.</p> Signup and view all the answers

<p>Kotler's additions to the original model included: considering alternative opportunities, assessing the product's contribution in relation to other products, and evaluating the product's impact on the company's image or sales of other products.</p> Signup and view all the answers

<p>Common barriers include: dedicated assets already invested, contractual obligations, tax incentives owed to government entities, and the costs associated with laying off staff.</p> Signup and view all the answers

<p>The financial costs of exiting a market include: start-up costs not yet amortized, repatriating expatriates, compensating laid off employees, negotiating redundancy terms, legal fees, and tax issues.</p> Signup and view all the answers

<p>The Mendelow power/interest matrix helps companies analyze and prioritize their stakeholders based on their power (influence) and interest (level of engagement) in the company.</p> Signup and view all the answers

<p>Credit Agricole exited the Czech car financing market due to increasing costs of risk, a change in corporate strategy, and a decision to withdraw from other markets, including Slovakia and Hungary.</p> Signup and view all the answers

<p>Potential challenges include: maintaining the financial performance of the business during the transition, managing employee morale and productivity, potential difficulties in finding a buyer for the business, and the potential for unresolved non-performing loans.</p> Signup and view all the answers

<p>Strategic reasons for staying in a low-performing market can include: projected market growth, a lack of competition in the market, a growing consumer base, the potential for future profitability, and establishing a strong brand presence in the market.</p> Signup and view all the answers

<p>Issues often arise from contractual obligations, such as obligatory payments to representatives, guarantees, trademarks, termination of licenses and access to proprietary information, and the need to return leased equipment.</p> Signup and view all the answers

<p>Key issues to consider are: the reasons behind the exit, whether the licensee or licensor initiated the exit, and the potential impact of the exit on both parties.</p> Signup and view all the answers

<p>Issues include: the terms of the franchise agreement, disposal of assets, potential first right to purchase clauses, the possibility of the franchisor taking over the lease, restraint of trade provisions, and the difficulty of withdrawing from the relationship.</p> Signup and view all the answers

<p>Questions to consider include: how to extract or protect value from the joint venture, what options are available, how to negotiate a fair valuation during disputes, and how to ensure ongoing funding or access to technology if a partner exits.</p> Signup and view all the answers

<p>The four key aspects are: determining whether the exit should be easy or hard, considering which partner should have an easy exit, deciding when the exit should be easy or hard, and remembering that getting out of a relationship is often more difficult than getting in.</p> Signup and view all the answers

<p>These blind spots include: a failure to explicitly plan for an exit strategy during the initial alliance formation, rigid strategies related to joint projects, a failure to quantify the value created by the alliance, and the tendency for those who initiate and negotiate the alliance not to be the same individuals managing it day to day.</p> Signup and view all the answers

<p>The possible exit options include: selling the project or division, spinning it off as a separate entity, merging it with another company, conducting a management buyout, liquidating the project or division, and entering receivership, where the company deals with an official receiver.</p> Signup and view all the answers

<p>The advantages include: quickly jettisoning a product or division, generating capital that can be reinvested in more profitable ventures, potentially maintaining employment for existing staff, and maintaining existing contracts with suppliers.</p> Signup and view all the answers

<p>Key considerations include determining whether to sell for cash or shares, choosing whether to sell the entire business or a portion of it, determining who the potential buyers might be, identifying the buyer who will offer the highest price, and assessing the strategic implications of the buyer on the company.</p> Signup and view all the answers

<p>The two main categories are: unilateral analysis and bilateral comparison.</p> Signup and view all the answers

<p>Examples of tools used in unilateral market analysis are: PESTEL analysis, Porter's Five Forces Model, and competitive analysis.</p> Signup and view all the answers

<p>The key areas are: the market's size and growth rate, the institutional context of the country or region, and the competitive environment within the market.</p> Signup and view all the answers

<p>The CAGE framework, a tool for international market analysis, helps companies assess the cultural, administrative, geographical, and economic distances between markets based on various factors like language, legal systems, transportation costs, and consumer buying patterns.</p> Signup and view all the answers

<p>Porter's Five Forces Model is a framework for evaluating the competitive structure of a market.</p> Signup and view all the answers

<p>Elements include: barriers to entry, bargaining power of suppliers, rivalry among existing competitors, bargaining power of buyers, and threat of substitute products.</p> Signup and view all the answers

<p>Barriers to entry can include: capital requirements, economies of scale, product differentiation, access to distribution channels, government restrictions, and the expectation of retaliation from existing companies.</p> Signup and view all the answers

<p>The different levels are: monopoly (one company), oligopoly (a few companies), monopolistic competition (many companies, slightly different products), and perfect competition (many companies, identical products).</p> Signup and view all the answers

<p>Steps include: designing a system for conducting the analysis, collecting data, analyzing the data, and drawing conclusions.</p> Signup and view all the answers

<p>Key principles include: taking the time to understand competitors by becoming a customer or shareholder, interviewing competitors’ customers, attending trade fairs, and diligently studying market trends.</p> Signup and view all the answers

<p>Research has shown that the model may overemphasize the role of industry structure and underestimate the impact of firm-specific factors.</p> Signup and view all the answers

<p>The 6-Forces Analysis builds on Porter’s model. By including a sixth force – the impact of complementary products – companies can better assess the full scope of their market by considering the interdependence of different product categories.</p> Signup and view all the answers

<p>The industry life-cycle progresses through five stages: introduction, growth, maturity, decline, and eventual termination.</p> Signup and view all the answers

<p>Typically, during the introduction stage, there is low rivalry, a focus on innovation and product differentiation, high barriers to entry for new competitors, weak bargaining power for buyers, and weak bargaining power for suppliers.</p> Signup and view all the answers

<p>The growth stage is characterized by increasing rivalry, a focus on differentiation and competitive pricing, lower barriers to entry as the market grows, and increasing bargaining power of buyers along with suppliers.</p> Signup and view all the answers

<p>The International Product Life Cycle (IPLC) analysis is useful for understanding the evolution of a product's production, consumption, and trade patterns across different stages of its life cycle.</p> Signup and view all the answers

<p>The phases of a &quot;International Product Life Cycle&quot; include: production in the home market and exports to developing countries, production in other developed countries and exports to developing countries, production and export from developed economies to developing countries, production in developing countries and exports to developed countries, and ultimately, production in developing countries and exports to the home market.</p> Signup and view all the answers

<p>The CAGE framework is a tool for analyzing international market differences based on cultural, administrative, geographical, and economic distances.</p> Signup and view all the answers

<p>Examples of cultural distance include: differences in languages, ethnic groups, religions, values, and cultural norms.</p> Signup and view all the answers

<p>Examples include: the presence or absence of colonial relations, political associations, common currencies, and differences in legal systems.</p> Signup and view all the answers

<p>Examples include: physical remoteness, lack of common borders, inadequate transportation infrastructure, different climatic conditions, and distances related to value-to-weight ratios.</p> Signup and view all the answers

<p>Economic distance includes: variations in consumer incomes, differences in the costs and quality of natural resources, human resources, and infrastructure.</p> Signup and view all the answers

<p>Companies can address these challenges by: carefully selecting their target markets, investing in local knowledge and partnerships, and adapting their products to meet local needs.</p> Signup and view all the answers

<p>Key factors include: a lack of cultural understanding, difficulties adapting to the local market landscape, and a poor understanding of Chinese consumer preferences.</p> Signup and view all the answers

<p>Hofstede's 6D Model is a framework for understanding and analyzing cultural differences across nations.</p> Signup and view all the answers

<p>The &quot;Hassle Factor&quot; refers to the level of difficulty or inconvenience associated with conducting business in a particular location.</p> Signup and view all the answers

<p>The steps include: defining &quot;no-go&quot; criteria for unacceptable market conditions, developing a multi-criteria analysis framework, collecting data, normalizing data, scoring each criterion using weighted scores, and ranking the markets.</p> Signup and view all the answers

<p>A &quot;multi-criteria comprehensive analysis&quot; is a structured approach to evaluating and ranking market options based on various criteria, such as financial factors and labor force availability.</p> Signup and view all the answers