International Business Dynamics Moduel 1.pptx
- 2. Objectives • Increased Confidence • Career in International Business
- 3. International Business • Unpredictable International Environment • Culture • Language • Political System • Geography • Socio Economic Factors
- 4. Evolution of International Business • 1960s multinational enterprises emerged • by-products of post-World War II • international financial integration • improvements in communications and transport technologies
- 5. Drivers of International Business • Developing markets • Emerging countries offering low cost locational advantage • Changing Demographics • Trade and Investment Barriers crumbled • Technology advancement • Huge money
- 6. Drivers of International Business • Liberalization • MNC’s • Technology • Transportation & Communication • Product Development costs and Efforts • Quality & Costs • Rising Aspirations and Wants • Competition
- 7. Challenges of International Business • Govt. Policies & controls • Social opposition • Near sightedness • Organization culture
- 8. International Business vs Domestic Business • Currency • Interest Rates • Taxation system • Govt. Regulations • Language • Cultural Barriers • Economic Barriers
- 9. Active players in multinational business 1.Public corporation 2.Multinational cooperation 3.Financial institution 4.Vehicle Manufacturing company 5.Education and Training Institutions 6. ?
- 10. Environment of International Business 1. Domestic 2. Foreign 3. Global
- 11. The international business environment 1. Social & Cultural 2. Political 3. Economic 4. Regulatory 5. Natural 6. Technological
- 12. Social & Cultural • Attitudes • Child rearing practices • Cross cultural difference • Cultural deprivation • Cultural identity • Culture change • Discrimination • Ethnic identity • Ethnic values
- 13. Social & Cultural • Face (sociological concept) • Family structure • Power • Race • Regional differences • Religious beliefs • Religious practices • Reputation • Rituals • Taboos
- 14. Economic • Nature of Economy • Economic Resources • Size of the Economy • Economic System capitalism and socialism • Economic Policies • Economic conditions
- 15. Political • Government intervention • Tax policies • Labour law • Environmental Law • Trade restrictions • Political Stability
- 16. Regulatory • The Legal Systems • Categories of Law
- 17. Natural • Ecology and Technology interdependent • Weather Climatic Conditions • Topography
- 18. Technological • Hard Technology & Soft Technology • Reduces cost • Improving Communication • Business increases
- 19. Cross-Cultural Management • Managing work teams in ways that considers the differences in • Cultures, • Practices and • Preferences of consumers • Businesses have to learn to modify or adapt their approaches in order to compete.
- 20. Levels of Culture • International Culture • National Culture • Subculture
- 21. Models to aid International Managers
- 22. Hofstede’s Cultural Dimension • Geert Hofstede 1. Uncertainty Avoidance a) Low uncertainty avoidance society: willing to take risk, appreciate flexibility, informality at work b) High certainty avoidance society: risk averse, like rigidity and formal decision 2. Power Distance: to what extent there is equal distribution of power a) Large power distance culture: power is concentrate at the top and with few people b) Small power distance culture: power is
- 23. Hofstede’s Cultural Dimension 3. Individualism vs Collectivism a) Individualism :extent to which people take care of themselves and family, people seek and protect their own interest over society goal, role in society b) Collectivism : People tend to belong to groups or collectives and look after each other in exchange for loyalty. No freedom and independence which is required for creativity and innovation They don’t like variety, diversity in society
- 24. Hofstede’s Cultural Dimension 4. Masculinity vs Femininity: a) Masculinity: achievement motivation, performance driven society, r&r are primary motivational factors competitive, risk taking, assertive b)Femininity :emphasize is on whole life rather than money, success, social status. Reaching out to the underprivileged, share their wealth, not competitive in nature.
- 25. Hofstede’s Cultural Dimension 5. Confucianism Dynamism: a) Long term Orientation: adaptation of tradition to modern context, high savings ratio, patience, b) Short term Orientation: lower saving rate, quick results, concerned with processing the truth
- 26. Edward T. Hall study of cultural Dimensions 1. Context a) High context cultures: People are more indirect, one needs to listen more, read between the lines b) Low context cultures :will say what they mean, 2. Time a) Monochronic time: doing one task at a time, paying attention to only one task, Time is a tangible thing : something which one can spend, waste, lose or save, time commitments are taken seriously, schedule is top priority and sacred. a) Polychronic time: being involved in many tasks, highly distractible, subject to interruptions, more
- 27. Globe Cultural Dimensions-Professor Robert J House 1. Assertiveness: degree of competitiveness , tough & confrontational 2. Future Orientation: level of importance given to future orientation 3. Performance Orientation: whether people are strived for continued improvement and excellence 4. Human Orientation: societies encourage people to be human, unselfish (altruistic)
- 28. Globe Cultural Dimensions-Professor Robert J House 5. Gender Differentiation: extent to which society resorts gender discrimination 6. In Group Collectivism: sense of belonging in an organization or society 7. Collectivism: extent to which organizational practices encourages collective distribution of resource, action 8. Power Distance: 9. Uncertainty Avoidance: extent to which society or organization strive to avoid uncertainty
- 29. Kluckhohn and Strodtbeck’s Cultural Dimension - 1961 1. Nature of people: what People assume about the basic nature and beliefs about other people 2. Relationship with nature: What do people think about nature and their responsibilities and rights around it. 3. Duty towards others: 4. Mode of activity: 5. Privacy of space: 6. Temporal orientation: Which is more important: past, present or future?
- 30. Trompenaars Cultural Dimension 1. Universalism : emphasise on formal rules contracts versus Particularism: relationship and trust 2. Individualism versus Communitarianism 3. Neutral ( emotions not expressed ) versus Emotional ( emotions are expressed at business situations 4. Specific ( distinction between work and private life) versus Diffuse (work and private life are linked) 5. Achievement ( status is based on achievement, education, experience ) versus Ascription ( status is based on birth, gender, kinship)
- 31. Trompenaars Cultural Dimension 7. Internal direction versus External direction a) Internalistic : people consider nature as a machine which can be controlled b) Externalistic : people do not believe that they can shape their own destiny