Unit 2: International Management and Cultural Diversity

Objectives

 Importance of sensitivity to cultural differences

 Identify major challenges facing global managerial worker

 Success factors in the global market place and positives and negatives of globalization

Cultural sensitivity

Awareness and use of local and national customs and their importance in effective interpersonal
relationships

Multicultural worker

An individual who is aware of and values other cultures

Challenges faced the global managerial worker

Developing global leadership skills

 The ability to effectively lead people of other cultures

 This is a combination of cultural sensitivity and general leadership skills

 A welcoming attitude towards other cultures is the most important in becoming an

effective global leader

 Their main roles are,

 Inspiring

 Envisioning

 Culturally sensitive

Currency fluctuations

 If the currency gains in value, difficult for exports but easy for imports

 If the currency weakens in value, difficult for imports, but easy for exports

 These affect marketing and production in MNCs

Balance of Trade Problems

 The difference between exports and imports in both goods and services

 Deficit and surplus effects

Human rights violations, corruptions, and violence

 Should the manager use,

 Child labor

 Free labor from political prisoners

 Undocumented employees

 Unfair treatments for indigenous people

Culture shock

 A group of physical and psychological symptoms that may develop when a person is
abruptly placed in a foreign culture

 Understanding of,

 Values, beliefs, attitudes, ideas, religious beliefs, myths, colors, education,

symbols, and so on

 Time zones

Differences in negotiating style

 Negotiation is a process where each party involved in bargaining, tries to gain an

advantage for themselves by the end of the process. Negotiation is intended to aim at
compromise.

 American managers will have to be;

 Patient

 Use team approach

 Avoid being too informal

Piracy of intellectual property rights and other merchandise

 Intellectual property rights – software

 Copy rights – publications

Methods of entry into world markets

International Business Entry Strategies

 Licensing- A contractual agreement in which one firm permits another to produce and
market its products and use its brand name in return for royalty or other compensation

 Exporting- organization manufactures in the home country to export to other countries

 Joint venture- a partnership between two entities for a business operation in a country
(guest country)

 Totally owned facility- with total ownership of the business

 Strategic Alliance- partnership formed to create competitive advantage on a worldwide

business

 Trading company- These companies provide a link between the international buyer and
the seller

 Counter Trade- International barter transactions

 Multinational Firms- A firm that operates on a worldwide scale without ties to any
specific nation or region

 Global startup- a small firm that comes into existence by serving an international market

How to Succeed in the Global Marketplace

• Think globally, act locally

• Diversify into similar product markets

• Be familiar with local business concepts, laws, and customs

• Recruit talented nationals

• Research and assess potential markets

• Hire or develop multicultural workers

• Adopt Environmentally Friendly Policies

• Understand your

• Competitors

• Potential partners
• Members of the management team