Management Chapter 3 Homework These Things Will Mean Little Countries With

2. An attitude called ethnocentrism means that people have a tendency to regard their

3. Other factors include social organization, such as status systems, kinship and families,

social institutions, and opportunities for social mobility.

a. American managers are regularly accused of an ethnocentric attitude that assumes

D. Developing Cultural Intelligence

1. Working in a foreign country makes the need for personal learning and growth

2. Cultural intelligence (CQ) refers to a person’s ability to use reasoning and

observation skills to interpret unfamiliar gestures and situations and devise

appropriate behavioral responses. CQ enables a person to ferret out clues to a

culture’s shared understandings and respond in culturally appropriate ways, and

includes three components that work together:

a. The cognitive component involves a person’s observational and learning skills

3. Culture shock refers to the frustration and anxiety that result from constantly being

New Manager Self-Test: Are You Culturally Intelligent?

The job of a manager demands a lot, and before long students will encounter situations that will

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VIII. INTERNATIONAL TRADE ALLIANCES

INSTRUCTOR’S NOTES___________________________________________________________

______________________________________________________________________________

A. GATT and the World Trade Organization

1. The General Agreement on Trade and Tariffs (GATT), signed by 23 nations in

2. GATT and its successor, the World Trade Organization (WTO), primarily use tariff

3. The World Trade Organization (WTO) was established by the 1986 to 1994

B. European Union

Exhibit 3.10: The Nations of the European Union

1. European Economic Community, now called the European Union (EU), was

2. The most significant aspect is the EU’s monetary revolution and the introduction of

the euro, the single European currency that replaced 16 European currencies. The

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C. North American Free Trade Agreement (NAFTA)

1. NAFTA went into effect on January 1, 1994, and merged the U.S., Canada, and

2. As of 2004, opinions remained divided over the benefits of NAFTA; some call it a

success and others refer to it as a dismal failure. Advocates say that it has increased

1. Ten countries make up the Association of Southeast Asian Nations (ASEAN), a

IX. INTERNATIONAL ISSUES

INSTRUCTOR’S NOTES___________________________________________________________

______________________________________________________________________________

A. The Globalization Backlash

1. As the world becomes increasingly interconnected, a backlash over globalization is

2. Activists charge that globalization not only hurts Americans who lose their jobs but

Discussion Question #6: Why do you think many people are so frightened by globalization?

Based on what is occurring in the world today, do you expect the globalization backlash to grow

stronger or weaker over the next decade?

B. Serving the Bottom of the Pyramid

1. Although large, multinational organizations are accused of many negative

contributions to society, they also have the resources needed to do good things in the

2. Although the BOP concept has gained significant attention recently, the basic idea is

Benchmarking: Reality TV Afghanistan

After visiting her international-aid-worker father in Afghanistan in 2007 as a college student,

Anna Elliot was inspired to launch a Donald Trump-like reality business competition there. She

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Answers to Discussion Questions

1. What specifically would the experience of living and working in another country contribute

to your skills and effectiveness as a manager in your own country?

Generally speaking, the global exposure of working in another country helps people develop

skills and networks that will grow over time and instills a greater level of sensitivity to

2. Do you think it is realistic that bottom of the pyramid business practices can have a positive

effect on poverty and other social problems in developing countries? Discuss.

The bottom of the pyramid (BOP) concept proposes that corporations can alleviate poverty and

other social ills, as well as make significant profits, by selling to the world’s poorest people. The

3. What do you think is your strongest component of cultural intelligence? Your weakest? How

would you go about shoring up your weaknesses?

With regard to shoring up weaknesses, a first, most important step is to develop sensitivity to

foreign cultures. To the extent possible, managers should try to understand the important

4. What opportunities are available to you and your classmates to increase your cultural

intelligence and your ability to function in another country?

The best way for students to increase cultural intelligence is to participate in study abroad

5. What steps could a company take to avoid making product design and marketing mistakes

when introducing new products into Brazil?

The basic need is an understanding of the culture in Brazil and how the product will relate to it.

6. Why do you think many people are so frightened by globalization? Based on what is

occurring in the world today, do you expect the globalization backlash to grow stronger or

weaker over the next decade?

Generally, it may be that people who are afraid of globalization think they will somehow come

out on the losing end as globalization runs its course. They may be frightened by the sheer size

7. Two U.S. companies are competing to take over a large factory in the Czech Republic. One

delegation tours the facility and asks questions about how the plant might be run more

efficiently. The other delegation focuses on ways to improve working conditions and produce

a better product. Which delegation do you think is more likely to succeed with the plant?

Why? What information would you want to collect to decide whether to acquire the plant for

your company?

Students will disagree on which delegation is likely to succeed with the plant. As a former

communist country and a newly emerging democratic economy, people in the Czech Republic

8. Which style of communicating do you think would be most beneficial to the long-term success

of a U.S. company operating internationally—high-context or low-context communications?

Why?

It should be rather obvious that a single communicating style would not be beneficial in all

9. How might the social value of low versus high power distance influence how you would lead

and motivate employees? What about the value of low versus high performance orientation?

Power distance refers to the extent to which accept inequality in power among institutions,

organizations, and people. Low power distance means that people expect equality in power. In

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TEACHING NOTES FOR LEARNING EXERCISES

Self-Learning: Rate Your Global Management Potential

The world is truly shrinking and the number of companies doing business abroad increases each

year. In coming years it will become harder and harder to find medium- and large-sized

companies that do not have some international interactions, whether that be importing or

exporting parts and supplies, needs for assembling abroad, or international subsidiaries, joint

ventures or strategic alliances.

Professionals incapable of being flexible in their work and interpersonal approaches will have a

difficult time adapting in this new environment and can therefore be the cause of the loss of

millions of dollars for their companies.

Other cultures may value things differently than Americans. These sometimes include

socializing before deal making rather than rushing right into the business negotiations. This is

because in some other cultures relationships are more important than contracts (which are more

important here), and therefore the relationships must be solid. Trustworthiness is determined

there by knowing the person rather than relying on words written in papers. Some other cultures

are more patient and introspective than the American one. Therefore, they see Americans as too

pushy and impatient. If you want to work in such an environment, you must learn to be more

patient and to allow for silence at times.

One of the best ways to begin to prepare yourself for this world of globalized business is to begin

reading about events in other parts of the world, studying other cultures, learning a language,

traveling without being merely a “tourist,” and seeking out foreign restaurants, as well as foreign

students. Look at the differences as something new and fascinating. The people who fail in

international assignments are often those who are “ethnocentric” and cannot see the beauty in

other cultures, but tend to constantly compare them in terms of how deficient they are compared

to the U.S. Successful American expatriates, though, view new cultures with an attitude of

curiosity and a sense of wonder.

Group Learning: Test Your Global IQ

This exercise asks students to complete a test of ten questions about the world in which they will

be working. They should complete the test as a group without looking up the answers. Once

they complete the test, they should look up the answers to see how they did as a group.

Answers:

2. Netherlands

4. Most: Zimbabwe and least (at 0.7 percent) in U.S.

6. Peru

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8. Peru and Chile

10. Chile, Argentina

Action Learning: Try Being a Minority

This exercise asks students to find a place to be a minority, either singly or together with one

TEACHING NOTE FOR ETHICAL DILEMMA

AH Biotech

1. Do the clinical trials in Albania. You’ll be able to bring the drug to market faster and

cheaper, which will be good for AH Biotech’s employees and investors and good for the

millions of people who suffer from anxiety attacks.

2. Do the clinical trials in the United States. Even though it will certainly be more expensive

and time consuming, you’ll feel as if you’re living up to the part of the Hippocratic Oath that

instructed you to “prescribe regimens for the good of my patients according to my ability

and my judgment and never do harm to anyone.”

This option may be best if Hassan’s primary concern lies in not violating his own values with

3. Do the clinical trials in Albania, and if the drug is approved, use part of the profits to set up

a compassionate use program in Albania, even though setting up a distribution system and

training doctors to administer the drug, monitor patients for adverse effects, and track

results will entail considerable expense.

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CASE FOR CRITICAL ANALYSIS

Shui Fabrics

1. How would you characterize the main economic, legal-political, and sociocultural

differences influencing the relationship between the partners in Shui Fabrics? What GLOBE

Project dimensions would help you understand the differences in Chinese and American

perspectives illustrated in the case?

Many of the local Chinese authorities viewed profits made by Western companies on Chinese

soil as just one more instance of exploitation in a long history of foreign attempts at domination.

As a result, Shui Fabrics needs to watch its profit levels very carefully so that they can still make

GLOBE Project dimensions that might help in understanding the differences in Chinese and

American perspectives in this case include:

• Assertiveness – a high level of assertiveness in the U.S. contributes to the competitive

• Uncertainty avoidance – the Chinese have low uncertainty avoidance, suggesting that they

• Societal collectivism and individual collectivism – China has collectivist values, both and

2. How would you define Shui’s core problem? Are sociocultural differences the main

underlying cause of this problem? Why or why not? How would you handle the conflict with

your boss back in the United States?

Students will differ in their answers to this question. The Chinese view of Western profits on

Chinese soil as exploitation represents a significant sociocultural difference that is likely to be

3. If you were Ray Betzell, what other options to the 50-50 joint venture would you consider for

manufacturing textiles in China? Make the argument that one of these options is more likely

to meet Rocky River’s expectations than the partnership already in place.

Licensing would mean Rocky River would have to sell its ownership in Shui to Shanghai Fabrics

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ON THE JOB VIDEO CASE

Holden Outerwear: Managing in a Global Environment

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. Answers may vary, but Oregon-based

2. Identify Holden’s primary approach to entering the international market. What are the

benefits of this entry strategy?

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

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BIZ FLIX VIDEO CASE

Lost in Translation

Video Case Synopsis

Jet lag conspires with culture shock to force the meeting of Charlotte (Scarlett Johansson) and

Bob Harris (Bill Murray). Neither can sleep after their Tokyo arrival. They meet in their luxury

hotel’s bar, forging an enduring relationship as they experience Tokyo’s wonders, strangeness,

and complexity. Based on director Sophia Coppola’s Academy Award winning screenplay, this

film was shot entirely on location in Japan. It offers extraordinary views of various parts of

Japanese culture that are not available to you without a visit.

This BizFlix video case is an edited composite taken from different parts of Lost in Translation.

It shows selected aspects of Tokyo and Kyoto, Japan. Charlotte has her first experience with the

complex, busy Tokyo train system. She later takes the train to Kyoto, Japan’s original capital city

for more than ten centuries.

Video Case Discussion Questions and Suggested Answers

1. While watching this scene, pretend you have arrived in Tokyo and you are experiencing what

you are seeing. Do you understand everything you see?

2. Is Charlotte bewildered by her experiences? Is she experiencing some culture shock?

3. What aspects of Japanese culture appear in this scene? What do you see as important values

of Japanese culture?