1. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 1 Chapter 3 Globalization Learning Objectives After completing Chapter 3, you should be able to: Define What is meant by globalization Describe What cross-cultural management study attempts to extend Discuss The global skills managers must learn, practice, and refine to deal with a changing world Compare How the characteristics of culture can influence the behavior and attitudes of employees Identify Hofstede’s original cultural dimensions

2. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 2 Chapter Outline u Global Strategy u Culture u Cultural Dimensions u Cross-Cultural Research Findings u Cross-Cultural Transitions u The Global Theme for Organizations: Behavior, Structure, and Process

3. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 3 Globalization The interdependency of transportation, distribution, communication, & economic networks across international borders. Cross-Cultural Management The study of behavior of individuals in organizations around the world.

4. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 4 CORPORATE AND CROSS-CULTURAL EVOLUTION Phase I Domestic Phase II International Phase III Multinational Phase IV Global Primary orientation Importance of world affairs Product/service R&D/sales Competitors Production location Structure Cultural sensitivity Strategic assumption Product/serviceMarketPriceStrategy MarginalImportantVery important Dominant New, uniqueMore standardized Completely standardized Mass-customized HighDecreasingVery lowVery high None FewManySignificant (few or many) Domestic Domestic & primary markets Multinational, least cost Global, least cost Functional divisions Functional with int’l divisions Multinational line of business Global alliances Marginally important Very importantSomewhat important Critically important One best way Many good waysOne least-cost way Many good ways simultaneously

5. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 5 SKILL REQUIREMENTS FOR THE NEW GLOBAL MANAGER Global strategic skills Team- building skills Organization skills Communication skills Transfer of knowledge skills

6. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 6 DIMENSIONS THAT DIFFERENTIATE CULTURES 4People’s relationship to nature 4Individualism vs. collectivism 4Time orientation 4Activity orientation 4Informality 4Language 4Religion

7. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 7 HOFSTEDE’S CULTURAL DIMENSIONS Uncertainty avoidance Masculinity- femininity Individualism- collectivism Power distance Degree to which people are comfortable with ambiguity & uncertainty. Assertiveness, dominance, independence vs. compassion, interdependence, & openness. Emphasis on individual goals, needs, & success vs. group needs, satisfaction, & performance. Degree to which people accept power & status differences in society.

8. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 8 TABLE 3-2: SCORES FOR SELECTED COUNTRIES ON HOFSTEDE DIMENSIONS National Culture Uncertainty Avoidance Masculinity- Femininity Individualism- Collectivism Power Distance Argentina Australia Canada Denmark Greece Israel Italy Japan Mexico Pakistan USA 86 51 48 23 112 81 75 92 82 70 46 56 61 52 16 57 47 70 95 69 50 62 46 90 80 74 35 54 76 46 30 14 91 49 36 39 18 60 13 50 54 81 55 40

9. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 9 FIGURE 3-4: COUNTRY CLUSTERS BASED ON EMPLOYEE ATTITUDES Near Eastern Turkey Iran Greece Nordic Finland Norway Denmark Sweden Germanic Austria Germany Switzerland Arab Bahrain Abu-Dhabi United Arab Emirates Kuwait Oman Saudi Arabia Argentina Venezuela Chile Mexico Latin America Peru Columbia France Belgium Italy Latin European Spain USA Australia Canada Anglo New Zealand UK Ireland South Africa Malaysia Singapore Hong Kong Taiwan Far Eastern South Vietnam Philippines Indonesia Brazil Japan India Israel Independent

10. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 10 MULTINATIONAL CORPORATION (MNC) Headquartered in one country, with operations in different nations. Each operation is viewed as a separate enterprise, pursuing a specialized market with a particular product.

11. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 11 GLOBAL CORPORATION (GC) u Corporate headquarters & operations are located throughout the world. u National boundaries are blurred; the world is its market & source of labor.

12. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 12 TYPES OF GLOBAL EMPLOYEES uHost Country Nationals: Workers from the local population uParent Country Nationals: Individuals sent from the country in which the firm is headquartered. Often called expatriates. uThird Country Nationals: Employees from a country other than where the parent company is headquartered.

13. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 13 FIGURE 3-6: FACTORS IN EXPATRIATE MANAGERS’ SUCCESS & FAILURE Characteristics of the expatriate manager 4 Strong technical skills 4 Good language skills 4 Strong desire to work overseas 4 Specific knowledge of overseas culture 4 Well-adjusted family situation 4 Complete support of spouse 4 Behavioral flexibility 4 Adaptability & open-mindedness 4 Good relational ability 4 Good stress management skills 4 Uncertain technical competency 4 Weak language skills 4 Unsure about going overseas 4 Family problems 4 Low spouse support 4 Behavioral rigidity 4 Unadaptability--closed to new ideas 4 Poor relational ability 4 Weak stress management skills 4 Lack of knowledge of host culture High probability for successLow probability for success

14. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 14 THREE PHASES OF THE CULTURE SHOCK CYCLE 4Fascination & interest 4Frustration & confusion 4Adaptation

15. Organizations Behavior Structure Processes Tenth Edition Gibson Ivancevich Donnelly Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc. 2000 15 FIGURE 3-8: PHASES OF AN EXPATRIATE MANAGER TRAINING PROGRAM 4 Language skills 4 Nation & culture orientation 4 Personal & family orientation 4 Career planning 4 Language skills 4 Local mentoring 4 Stress training 4 Business issues 4 Financial management 4 Reentry shock 4 Career management OVERSEAS ASSIGNMENT PREDEPARTURE REPATRIATION