C17EB –

Management
in a Global
Context
Week 2 – Managing
Internationally:
Models &
Challenges
Previous Session Key points

Explain the five ways in which Detail the 10 management

managers spend their time. roles identified by Mintzberg.
How do managers spend their time?
Emissaries – spent most of their time in external meetings

Writers – spent most of their time reading and writing

Discussers – most of their time with other people and their colleagues

Troubleshooters – Fragmented work pattern lots of brief contacts

Committee members – Internal formal meetings

(Stewart, 1967)
 Ten Management Roles
Monitor Seek & receive information, scan reports, maintain contacts.

Informational Disseminator Forward information to others, make calls, send memos.

Spokesperson Represent the unit to outsiders, reports, speeches.

Figurehead Perform ceremonial and symbolic duties, receive visitors.

Interpersonal Leader Direct and motivate team, train, advise and influence.

Liaison Maintain information links in and beyond the organisation.

Entrepreneur Initiate new projects, spot opportunities, identify areas to develop

Disturbance
Take corrective action during crises, resolve staff conflicts.
Handler
Decisional
Resource allocator Decide who gets resources, schedule, budget, set priorities

Negotiator Represent the unit during negotiations with unions, suppliers etc.

(Mintzberg, 1973)
Session Contents

• The purpose of theories and models

in management
• Comparison of 4 Models
• Competing Values Framework
• Challenges and approaches to
managing internationally
• Legal context
• National cultures
The use of Models in Management

Provide a structure to start to look at a

problem
Can Safe Effort and Time
But…Need to be used in the context of the
problem and environment
4 Types of Model
Rational goal models

Internal process models

Human relations models

Open systems models

https://www.youtube.com/watch?v=d1jOwD-CTLI
 Rational Goal Models
(Scientific Management - Taylor)
Rooted in optimising output

Identify the best way of doing a task rather than the way it was always done

Identify the best person to do the job

Train them in the defined steps to do the job

Provide financial incentives to ensure workers follow the prescribed method

Move responsibility for planning and organising from the worker to the manager

(Taylor, 1917)
Example – Henry Ford

https://www.youtube.com/watch?v=PvbG9Sjp97o
 Internal Process Models
Bureaucratic management– (Max Weber 1867-1920)
Administrative management – (Henri Fayol 1841-1925)

• Division of Work • Centralisation

• Authority & responsibility • Scalar Chain
• Discipline
•
• Order
Unity of command
• Unity of direction • Equity
• Subordination of • Stability of tenure of
individual interest to personnel
general interest
• Remuneration of
• Initiative
personnel • Esprit de corpsFayol, 1949
Context and Comparison

https://www.youtube.com/watch?v=d1jOwD-CTLI
Human Relations Models
Mary Parker Follett Elton Mayo
• Limitations of scientific • Hawthorne Studies (Western
management Electric Company, Chicago,
1924)
• Creativity of the group • Experimented with worker
process conditions, varied hours,
• Democracy where people breaks, refreshments
analysed problems and • e.g. the effects of how well lit
the work area was.
implemented solutions
• Involved employees throughout
• Early thinking on • The ‘Social Man’ concept
empowerment
Hawthorne Studies

https://www.youtube.com/watch?v=W7RHjwmVGhs
 Open Systems Model
External
environment

Organisation

Input Output
- People - Goods
- Finance Transformation - Services
- Materials, etc processes - Reputation
- Waste, etc.

Feedback
 External
environment

Business
processes
subsystem
People Structure
subsystem subsystem

Input Finance Management Objectives Output

subsystem subsystem subsystem

Technology Culture
subsystem subsystem
Power
Subsystem

Subsystems Feedback
Comparison of the four models

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 52
Competing
Values
Framework
 The expanding world
• Management Theories developed when
businesses were local and national
• Expansion into new markets and countries
come with challenges

https://www.youtube.com/watch?v=r4d0ALmGBwg
 Managing Internationally
United States
Power of State Limited state involvement,
freedom for companies
regarding employee benefits
Financial System Stock market driven with
dispersed shareholdings
Education & Labour System Local policies by companies,
decentralised labour relations
Cultural Systems Wary of government, moral
value of capitalism,
philanthropy
Europe
Strong state involvement, e.g.
living wage. State owned
companies
Smaller numbers of large
investors, strong role for non-
shareholders
Collective bargaining, publicly
led training and policies
Representative organisations,
political parties, trade unions
(Whitley, 1999)
Themes in
International
Management

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 89
Conducting Business
Internationally
• Offshoring – contracting out activities to
other countries
• Exporting & Importing – physically moving
products/materials
• Foreign Direct Investments – Build or
acquire facilities in another country and
manage them directly
• Licensing – production of goods or services
to a company in another country to deliver
under licence
• Joint Ventures - Where two organisations
share the risks and resources
• Wholly Owned subsidiary – A stand alone
company but directly owned/operated by a
holding company
Alternative business
structures
• Multinational companies
• Based in one country, operate in many (Intel)
• Transnational companies
• Operate in many, but decentralise (while
maintaining consistent image) (Coca-Cola)
• Global companies
• Closely integrated operations across many
countries (Nestlé)
PESTEL
Analysis

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 93
PESTEL Analysis – Economic factors
Why do nations trade with each other, rather than be self-
sufficient?
The theory of absolute advantage – this theory states that there is an economic
advantage for countries to specialize in the production of good and services that they
can produce more cheaply than other countries.

Examples:

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 94
PESTEL Analysis – Political factors
Political factors include:

• Level of state intervention in the economy

• Political openness to foreign companies
• Political rules on foreign ownership
• Policy on employment practices

Corruption – the use of power for private gain.

Pervasiveness vs. Arbitrariness

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 94-96
PESTEL Analysis – Technological factors
Technological factors include all aspects of infrastructure – ports, airports, surface
transport, electricity, telecommunications, and internet.

NEOM VIDEO

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 96
PESTEL Analysis – Environmental factors
Environmental factors generally refer to natural resources – oil, coal, minerals, land,
climate, and water.

Aluminum in Canada video

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 97
PESTEL Analysis – Socio-cultural
Socio-cultural factors recognize that different societies have different social practices and
understandings.

Managers working internationally must be aware of cultural difference.

Cultural intelligence – when a person is skilled and flexible about understanding a culture and learns
when they interact with it.

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 99
PESTEL Analysis – Socio-cultural
High-context cultures are cultures where information is implicit and can only be fully understood by
those with a shared experience of that culture (Hall, 1976).

Low-context cultures are cultures where people are more psychologically distinct so that cultural
information needs to be more explicit for people to understand it (Hall, 1976).

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 100
PESTEL Analysis – Socio-cultural
Hofstede’s 5 dimensions of national culture (Geertz Hofstede)

High Low
Power distance Accept inequality of power Less acceptance of power inequality

Uncertainty avoidance Not comfortable with ambiguity Happy with ambiguity

Individualism /collectivism Focus on individualism Focus son collectivity

Masculinity / femininity Gender roles are clearly defined Gender roles overlap

Long-term and short- term Concern about future More short-term oriented
orientation

Boddy, D. (2020), Management: Using Practice and Theory to Develop Skill, 8th ed, Harlow: Pearson, p. 100
 A synthesis of country clusters

Source: Ronen and Shenkar (1985).

 • Environmental (natural)
• Natural resources available in an economy
• Pollution and its regulation
Environmental • Conflicts between business and communities over water
and/or air quality
and legal • Legal
• Trade agreements and trade groupings
• GATT and WTO, European Union (more about
these on companion website)
Summary – Key
Points

• Compare and contrast the 4

models of management
• Describe and explain the
competing values framework
• Explain with examples the methods
of conducting business
internationally
• Detail and provide examples of the
5 dimensions of Hofstede’s
national cultures
References Used
• Boddy, D. (2020), Management: Using Practice and Theory to
Develop Skill, 8th ed., Pearson: Harlow. (Chapters 2 & 4)
• Fayol, H. (1949), General and Industrial Management, Pitman:
London.
• Hofstede, G. and Hofstede, G.J. (2005), Cultures and Organisations:
Software of the Mind, McGraw-Hill: London.
• Quinn, R.E., Faerman, S.R., Thompson, M.P. and McGrath, M.R.
(2003), Becoming a Master Manager, 3rd ed., Wiley: New York.
• Taylor, F.W. (1917), The Principles of Scientific Management,
Harper: New York.
• Whitley, R. (1999), Divergent Capitalisms: The Social Structuring
and Change of Business Systems. Oxford University Press: Oxford.
Themes further explored in:
• Year 2
– C18MT: Management Theories in Practice
– C18CL: Commercial Law
• Year 3
– C19CA: Critical Approaches to Management
– C19EL: Employment Law
• Year 4
– C10HM: International Law of HRM
– C10IB: International Business
Questions