Sitkin and Bowen: International Business Revision Tips PDF

Sitkin and Bowen: International Business, 2nd edition Revision tips  Most successful international business is based on factors of clear strategy, cost control, pricing, product quality, meeting customer ne...

Sitkin and Bowen: International Business, 2nd edition Revision tips  Most successful international business is based on factors of clear strategy, cost control, pricing, product quality, meeting customer needs and an understanding of national cultures.  Each MNE operates within internal and external contexts and one of the most significant aspects of the external environment is national culture.  The simplest international form of the impact of national culture is when the MNE comes from one country, is 100 per cent staffed by people from that country and is operating in only one foreign country. Although this might have been true of international activities many decades ago, it is now far more common that any MNE is staffed by nationals of many different countries, that it operates throughout the world and that its ‘original’ country of origin may be hidden behind the international image that it projects to its world-wide customers.  Maslow's ‘Hierarchy of Needs’ is designed to help explain how these needs motivate all humans. It states that people must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself. Only when the lower order needs of physical and emotional well-being are satisfied are people concerned with the higher order needs of influence and personal development. Conversely, if the things that guarantee the satisfaction of lower order needs are removed, people are no longer concerned about the maintenance of the higher order needs.  MNEs, and other firms engaged in international business, realize that they need to go beyond traditional work-related training and development, and abandon the concepts and behavior of old-style autocratic management.  Modern business employers have learnt that ongoing and sustainable success is built on a serious commitment to helping people identify, pursue and reach their own unique potential. The assumption is that when people are encouraged to grow they automatically become more effective and valuable as employees.  Most personal growth is seen as producing new skills, attributes, behaviour and wisdom that are directly, or indirectly, transferable to any sort of job or employment role.  In the most effective national and corporate cultures, the best modern employers recognize this and offer development support to their members of staff so that the person seeks to grow and become more fulfilled.  Religion and language can be both sources of friction and stability for a national culture, or for a region within the world. Their tendency towards friction and conflict arises from the apparently small differences that communities can © Oxford University Press, 2013. All rights reserved.  Sitkin and Bowen: International Business, 2nd edition magnify; the conflict within the Christian or the Islamic world can stem from differences of belief such as those between Catholics and Protestants, or Sunnis and Shiites.  The best international managers and their companies have strategies for overcoming these barriers in the effective conduct of business. More commonly, unity of language, culture and religion can lead to greater political and economic harmony and the development of successful international commerce.  The linkages between some of the predominantly Christian and English- speaking countries of the Commonwealth, such as Canada, Australia, New Zealand and the U.K., have led to major migrations of people and to considerable ease of conducting business between those who share language and culture. In the same way, the influence of Spanish, Portuguese and Italian companies in Latin America is partially a product of cultural and linguistic similarity, as well as historical and commercial ties.  The demographics of nations throughout the world have major impacts on the kinds of products and services that MNEs will decide to provide in each country.  Products for elderly people will clearly have a larger market, both in real terms and in proportion to the population, in Japan than in South Africa.  Attempting to reach a literate public is more different in India than it is in European countries. It is clear that the national determination of what is meant by the ability to ‘read and write’ has differed considerably.  At the heart of the successful conduct of international business is a full understanding of the key determinants of the market, especially the demographic structure of the market.  The size of the market as a whole – as specified by factors such as population, age group and income level – is vital information for any business and successful international companies research the demographic basics very carefully.  There are inherent difficulties in ascribing certain characteristics to specific cultures as though such cultures are homogeneous. It is usually only an average characteristic that is being described. This is the false currency of stereotypes.  A possible advantage of stereotypes and stereotyping is making possible some general comments about peoples, rather than having to keep stating that there are no such things as general types. The view that all Germans or all Indonesians, or even all Bavarians and all Javanese, think, behave or act in a certain way is clearly erroneous but, used carefully, there can be a valid possibility of stating that, in general, when doing business with Germans, Bavarians, Indonesians or Javanese, certain things may be true and distinctive. © Oxford University Press, 2013. All rights reserved.  Sitkin and Bowen: International Business, 2nd edition  A modern view, sometimes hotly debated, suggests that we might be able to abandon the use of stereotypes and to rise above the focus on national cultures; this view is associated with the development of ideas related to ‘world culture.’  Around the world, the variance in national cultures forms (or reflects) different attitudes towards rights of ownership and property.  In the more highly regulated and legalistic cultures (such as northern European or northern American), the legal rights and obligations of land owners, tenants, lease holders and so on are clearly defined. Any disputes to the title of lands are governed by the legal and court system and, in the vast majority of cases, the judgements and rulings of the court authorities are accepted by the participants in the case. This is not always so in the less legalistic cultures, or where the ‘rule of law’ is regarded less highly.  Firms engaged in international business need to know the status of the land that they are occupying – whether it is an office, a factory or processing plant, agricultural land, or land for hotel and leisure facilities. Not only can companies not afford for there to be doubts about their right to carry out business on a particular piece of land, they must have certainty over other legal issues as well, such as laws relating to ecology and environment, health and safety, insurance and security.  For MNEs, the legal culture of nation-states is also revealed in the rules and customs surrounding competition law – an essential element for the successful conduct of international business.  The relationships between employees and MNEs which employ them can be characterized by several different forms of general behaviour and attitude that may be reflective of national cultures. In some cases, these relationships can be viewed through the models of Hofstede or Trompenaars. These observations of culture and the employment relationship are gathered under the headings of identification with the job, attitudes towards technology, business leadership and national culture, and culture’s effect on demand and consumption.  Success in international business comes, therefore, from an ability to adapt to different national cultures and to know the limits of action and operation for the MNE in its conduct of international deals. This applies at the personal level for directors and managers, as well as for the company as a whole. © Oxford University Press, 2013. All rights reserved.