Professional Documents
Culture Documents
International Business: Management
International Business: Management
UL
OD
M
International Business
Management
International Business
m a n a g e m e n t
Module V
Strategy:
actions that managers must take to
attain the goals of the firm
A Testable Framework of Product and Promotion Adaptation
Product and Industry
Technology
Cultural Specificity
Orientation of Product Uniqueness Type of Product
of Product
Industry
EXPORT MARKET
COMPANY
Source: S.T. Cavusgil, Shaoming Zou, and G.M. Naidu. “ Product and Promotion Adaptation in Export Venturs: An Empirical Investigation,”
Journal of International Business Studies 24, no 3, (1993,485.
The View from
International Business
m a n a g e m e n t
---Nobuhiko Kawamoto
President and CEO, Honda Motor Company
Production Strategy International Business
m a n a g e m e n t
Differentiation
Differentiation
Focus
Focus
Capacity Planning International Business
m a n a g e m e n t
Economic
Economicbenefits
benefits Centralized
Centralizedproduction
production Decentralized
Decentralizedproduction
production
derived
derivedfrom
fromlocating
locating tends
tendstotobe
bewell-suited
well-suited tends
tendstotobe
bewell-suited
well-suited
production
productionactivities
activities totoglobal
globalstrategy
strategy totomultinational
multinationalstrategy
strategy
ininoptimal
optimallocations
locations
Process Planning
Deciding the process that a company will
use to create its product
Standardization
• Suits low-cost leadership
Adaptation
• Suits differentiation and focus
Facilities Layout Planning
Deciding the spatial arrangement of
production processes within
facilities
Reasons to make
Lower cost
Greater control
Decision to Buy
Outsourcing
Outsourcing Reasons
Reasons to
to buy
buy
Lower
Lowerrisk
risk
Buying
Buyingfrom
fromanother
another
company
companyaagood
goodoror Greater
Greaterflexibility
flexibility
service
servicethat
thatis
isnot
not
central
centralto
toaacompany’s
company’s Market
Marketpower
power
competitive
competitiveadvantage
advantage
Barriers
Barriersto
tobuying
buying
Quality Improvement
Total Quality
ISO 9000
Management (TQM)
International Standards
Continuous quality improvement
Organization 9000 is a
to meet or exceed customer
certification a firm gets when
expectations through
it meets the highest quality
quality-enhancing processes
standards in its industry
Other Production Issues
Just-in-time
Shipping Inventory
(JIT)
costs costs
manufacturing
Decision to Reinvest or Divest
Reinvest Divest
• Promising outlook
• Unprofitable outlook
• Growing market
• Social unrest
• Highest return
Financing Business Operations
Financial resources needed to:
Pay operating expenses
Expand production capacity
Enter new geographic markets
Develop and reward employees
Invest in new projects
and much more…
Borrowing
Difficulties:
Exchange-rate risk
Currency inconvertibility
No currency-conversion fees
No minimum purchase amounts
Attractive to U.S. mutual funds
Emerging Stock Markets
Hot money:
Liquid
Liquid investments
investments that
that
Extreme can
can be
be quickly
quickly withdrawn
withdrawn
Poor equipment,
equipment, and
cannot
cannot be
and land
be quickly
land that
that
quickly withdrawn
withdrawn
regulation
Internal Funding
Equity,
Equity, debt,
debt, Revenue
Revenue from
from
and
and fees
fees operations
operations
Subsidiaries
Subsidiariesfinanced
financedby by Money
Moneyearned
earnedfromfrom
parents,
parents,who
whoarearelater
later sales
salesisisthe
thelifeblood
lifeblood
rewarded
rewardedfinancially
financially ofofevery
everycompany
company
Capital Structure
Mix of equity, debt, and internal funds used to finance activities
Small Business Financing
Tips for entrepreneurs to find funds:
Contact business schools with strong international programs
Consult your country’s commerce department
Leverage your contacts
Attend industry events in other countries
Consider hiring an intermediary
International Business
m a n a g e m e n t
Three approaches to IHRM
• Cross-cultural management approach
– Examines human behaviour within organisations from an
international perspective.
• Comparative HRM
– Seeks to describe, compare and analyse HRM systems in various
countries.
• HRM in multinational enterprises (MNEs)
– Explores the implications of the process of internationalisation
on HRM activities and policies.
Figure 14.1 Model of IHRM
Source: Adapted from P.V. Morgan, ‘International human resource management: Fact or fiction?’, Personnel Administrator, 31(9),
1986, p.44.
International Business
m a n a g e m e n t
Types of employees in an MNE
• Parent-country nationals (PCNs)
– Employees who were born and live in a parent country.
A parent (or home) country: the country in which a company’s corporate
headquarters is located.
• Host-country nationals (HCNs)
– Employees born and raised in a host country.
Host country: a country in which the MNE seeks to locate or has already
located a facility.
• Third-country nationals (TCNs)
– Employees born in a country other than a parent or host country.
International Business
m a n a g e m e n t
Types of international work
• Expatriates
– An employee sent by his/her company in one country
to work in a different country.
• Short-term assignments
– Sending employees on assignments, such as a three-month assignment, to a foreign location.
• Virtual assignment.
– Assignments requiring employees in different locations
to use information technology to communicate on job projects and tasks.
International Business
m a n a g e m e n t
• More HR activities
• The need for a broader perspective
• More involvement in employees' personal lives
• Changes in emphasis with variable mix of expatriates and
locals in workforce
• Risk exposure
• More external influences
Variables that moderate differences between domestic and
international HRM
Geography Level of
Economic climate Technology
and
Infrastructure 4
5
Structure of
distribution
International Business
m a n a g e m e n t
• need ofsize
market control
and growth
• risk
company objectives
• government
internal resources,
regulation
assets and capabilities
• competitive environment
• local infrastructure
International Business
m a n a g e m e n t
LEVELS OF SEGMENTATION
• macrosegmentation
(grouping the countries)
• microsegmentation
(develop segments at country level
- derived microsegmenation
- cross-country segmentation)
International Business
m a n a g e m e n t
Psyhographic Behavioural
* social class * buying occasions
* lifestyle * benefits sought
* personality * user status
* usage rate
* loyalty status
* attitudes towards product
Segmentation variables for industrial markets