International Management and Cultural Diversity CHAPTER 2 International Management and Cultural Diversity Andrew J. DuBrin Essentials of Management, 6/e South-Western College Publishing Copyright © 2003 Screen graphics created by: Jana F. Kuzmicki, PhD, Christian Brothers University

After reading this chapter, you should be able to: 2.1 After reading this chapter, you should be able to: Appreciate the importance of multinational corporations markets in international business. Recognize the importance of sensitivity to cultural differences in international enterprise. Identify major challenges facing the global managerial worker. Explain various methods of entry into world markets. Pinpoint success factors in the global marketplace. Explain the importance of valuing demographic and cultural diversity in the workplace. Present an overview of how information technology influences a manager’s job. Explain how the Internet influences the manager’s job. 2

Cultural Mistakes to Avoid 2.2 Cultural Mistakes to Avoid Country Great Britain Spain Scandinavia All Asian countries Japan India Cultural Mistake Asking personal questions. The British protect their privacy. Expecting punctuality. Your appointments will usually arrive 20-30 minutes late. Being overly rank conscious in these countries. Little attention is paid to a person’s place in the hierarchy. Pressuring an Asian employee to brag about his or her accomplishments. They prefer to let the record speak for itself. Shaking hands or hugging in public. Japanese consider the practices to be offensive. Telling Indians you prefer not to eat with your hands. If they are not using cutlery when eating, they expect you to do likewise. Mexico Brazil Latin America Flying into a Mexican city in the morning, expecting to close a deal by lunch. They build business relationships slowly. Attempting to impress them by speaking a few words of Spanish. Portuguese is the official language. Wearing elegant jewelry during a business meeting. They feel people should appear conservative during business meetings. Adapted from Exhibit 2.1 3

Challenges Facing the Global Managerial Worker 2.3 Challenges Facing the Global Managerial Worker Economic crises in other countries Balance of trade problems Collecting money Liability of being a foreigner Differences in negotiating style Human rights violations Culture shock 4

Methods of Entry into World Markets 2.4 Exporting Licensing Methods of Entry into World Markets 1 2 3 4 5 6 7 8 Local warehousing & selling Global startup Local assembly & packaging Global merger Direct foreign investment Strategic Alliance(joint venture) 5

How to Succeed in the Global Marketplace 2.5 How to Succeed in the Global Marketplace Think globally, act locally Diversify into similar product markets Be familiar with local business concepts, laws, and customs Recruit talented nationals Research and assess potential markets Hire or develop multicultural workers Adopt Environmentally Friendly Policies Understand your Competitors Potential partners Members of the management team 6

The Competitive Advantages of Diversity 2.6 The Competitive Advantages of Diversity Facilitates recruiting and retaining talented individuals Leads to better rapport with culturally diverse customers Improves productivity and profits Reduces possible cultural bloopers Improves customer service

Organizational Practices for Improving the Management of Diversity 2.7 Organizational Practices for Improving the Management of Diversity Establish corporate policies favoring diversity Encourage employees to form network groups Conduct “valuing diversity” training programs 8