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35 Cards in this Set
- Front
- Back
Includes other elements besides national culture that can produce important differences. It's extremly important for better multinational management.
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Institutional Context
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Made up of the respective national cultures and social institutions of any society.
National cultures of any society shape the important norms, values, and beliefs in any society. |
National Context
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What are three key factors affecting social institutions?
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•The economic systems
•The level of industrialization •The religions |
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Constrains behaviors through rules
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Regulative social institution
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Widely shared knowledge regarding how things are done
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Cognitive dimension
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Values and norms promulgated by the social institution
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Normative dimension
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Pressure to follow similar paths in management practices
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Organizational isomorphism
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Forces that coerce organizations to adopt certain practices
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Coercive isomorphism
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Organizations purposefully copy the strategies of the most successful organizations
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Mimetic isomorphism
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Conformance to professional and technical norms
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Normative isomorphism
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Production is decentralized to private owners
Owners perform these activities to make profits |
Capitalist/market economy
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Production resources are owned by the state
Production decisions are centrally coordinated |
Socialist/command economy
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Combines aspects of capitalist and socialist economies
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Mixed economy
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The absence of government coercion or constraint on the production, distribution, or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself
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Index of Economy Freedom
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The index includes 10 indicators ranging from trade policy, taxation policies, and the level of governmental intervention in the economy to property rights and regulation
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True
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Decisions to operate in a country can be made based on the dominant economic type
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Implications
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In mixed economies, multinationals should expect to subordinate its economic goals and respect social objectives
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True
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Multinationals should also expect to develop more formal relations with the government in mixed economies
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True
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Index of economic freedom can be used to determine the extent of governmental intervention
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True
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Changes societies experience as they move from socialism to a market based economy
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Market Transitions
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What are Multinational implications?
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•Need to turn around inefficient formerly state-owned companies to perform business functions
•Motivational issues with workers |
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Transfer of state ownership to private individuals
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Privatization
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Implicatations of privatization?
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•Significant opportunities to invest in companies
•Opportunities to access new markets and cheap labor |
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How production is organized and distributed in society
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Industrialization
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Agriculture dominates the economic environment
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Pre-industrial society
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Dominance of the secondary or manufacturing sectors
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Industrial society
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Emphasis on the service sectors
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Postindustrial society
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Implications of industrialization?
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•Direct correspondence between industrialization and economic development
•Industrial societies favor growth and innovation •Favorable environment for business •Industrial societies present significant market size and growth |
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Characteristics of Postindustrial societies?
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•Emphasis on quality-of-life as opposed to economic achievement
•People more likely to espouse individual expression values and movement toward more humane societies •Post-materialist values |
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Shared set of beliefs, activities, and institutions that have basis upon faith in supernatural forces
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Religion
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Organized networks of socialization experiences which prepare individuals to act in society.
Helps construct competencies, professions and professionals |
Education
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What are the implications of education?
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•Gives an idea of the skills level of workers in any society
•The more educated, the more skills workers have •Multinationals can look at educational attainment scores to determine the nature of the workforce |
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Refers to the degree to which people have privileged access to resources and positions within societies.
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Social inequality
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What are the implications of social inequality?
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•Multinational companies are facing significant criticisms for their operations in countries with high social inequalities
•Many multinational companies are realizing that it is sometimes in their interest to be more socially responsible to mitigate social inequalities •Many multinational companies now actively avoid countries with high inequalities to prevent potential negative publicity |
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Has significant influence on a company’s strategy
Determines the comparative advantage of nations, which ultimately determines which strategies multinational companies choose Also determines the global platform, namely the areas of business that can be performed the best in a country Plays an important role in the human aspect of international management Is a determinant of the nature of the relationship between workers and their superiors |
National context
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