1. Outside-USA Strategic Planning
Chapter Two
2-1

2. Global/International Issues
The keystones of strategic management(SM) hinge on managers gaining an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, and customers worldwide.
The price and quality of a firm’s products and services must be competitive on a worldwide basis, not just on a local basis.

3. The Five Largest (by revenue) Companies in Nine Countries (2012)

4. Multinational Organizations
Multinational corporations
Organizations that conduct business operations across national borders
The process of SM is identical for MNC as for domestic companies. But the variables and relationships are more diverse which make the process of SM a bit complex
SM should take care of:
Cultural, demographic, environmental, political, governmental, legal, technological and competitive opportunities and treaths

5. Risks of Multinational Organizations
Expropriation of assets
Currency losses through exchange rate fluctuations
Social/political disturbances
Import/export restrictions
Tariffs
Trade barriers
Unfavorable Foreign Court Interpretations

6. Advantages of International Operations
1. Firms can gain new customers for their products. 2. Foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets. 3. Foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials and/or cheap labor.

7. Advantages of International Operations
4. Competitors in foreign markets may not exist, or
competition may be less intense than in domestic
markets.
5. Foreign operations may result in reduced tariffs,
lower taxes, and favorable political treatment.
6. Joint ventures can enable firms to learn the
technology, culture, and business practices of other
people and to make contacts with potential
customers, suppliers, creditors, and distributors in
foreign countries.

8. Advantages of International Operations
7. Economies of scale can be achieved from
operation in global rather than solely domestic
markets.
8. A firm’s power and prestige in domestic
markets may be significantly enhanced if the
firm competes globally.

9. Disadvantages of International Operations
1. Foreign operations could be grabbed by nationalistic groups. 2. Firms threaten by different social, cultural, demographic, environmental, political, governmental, legal, technological, economic, and competitive forces when doing business internationally. 3. Weaknesses of competitors in foreign lands are often overestimated, and strengths are often underestimated.

10. Disadvantages of International Operations
4. Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people. 5. Gaining an understanding of regional organizations is often required in doing business internationally. 6. Dealing with two or more monetary systems can complicate international business operations.

11. Globalization Globalization
process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations

12. Globalization Global strategy
includes designing, producing, and marketing products with global needs in mind, instead of considering individual countries alone
integrates actions against competitors into a worldwide plan

13. Cultural Pitfalls That May Help You Be a Better Manager

14. Cultural Differences between U.S. and Foreign Managers
► Americans place an exceptionally high priority on time, viewing time as an asset. Many foreigners place more worth on relationships.
► Personal touching and distance norms differ around the world. Americans generally stand
about three feet from each other when carrying on business conversations, but Arabs and Africans stand about one foot apart.
Family roles and relationships vary in different countries.
Business and daily life in some societies are governed by religious factors.
Time spent with the family and the quality of relationships are more important in some cultures than the personal achievement and accomplishments espoused by the traditional U.S. manager.
Many cultures around the world value modesty, team spirit, collectivity, and patience much more than competitiveness and individualism, which are so important in the United States.
Punctuality is a valued personal trait when conducting business in the United States, but it is not revered in many of the world’s societies.

15. COMMUNİCATİON DİFFERENCES ACROSS COUNTRİES
► Italians, Germans, and French generally do not soften up executives with approval before they criticize. Americans do soften up folks, and this practice seems manipulative to Europeans. ► Israelis are familiar to fast-paced meetings and have little patience for American informality and small talk.

16. Communication Differences Across Countries
British executives often complain that American executives talk too much. Informality, classlessness, and spontaneity from Americans in business settings jolt many foreigners.
Europeans feel they are being treated like children when asked to wear name tags by Americans.
Executives in India are used to interrupting one another.

17. Communication Differences Across Countries
When negotiating orally with Malaysian or Japanese executives, it is appropriate to allow periodically for a time of silence.
Refrain from asking foreign managers questions such as “How was your weekend?” That is intrusive to foreigners, who tend to regard their business and private lives as totally separate.

18. Mexico-Business Culture
Employers seek workers who are agreeable, respectful, and obedient, rather than innovative, creative, and independent.
Mexican employers are paternalistic, providing workers with more than a paycheck, but in return they expect allegiance.

19. Japan-Business Culture
The Japanese place great importance on group loyalty and consensus, a concept called Wa.
When confronted with disturbing questions or opinions, Japanese managers tend to remain silent.

20. Japan-Business Culture
► Most Japanese managers are reserved, quiet, distant, and introspective, whereas most U.S. managers are talkative, insensitive, impulsive, direct, and individual oriented. ► Unlike Americans, Japanese prefer to do business on the basis of personal relationships rather than impersonally speaking over the phone or by written correspondence.

21. Germany-Business Culture
Germans are like Americans in that they do not need a personal relationship to do business. They are more interested in a businessperson’s academic credentials and their company’s credentials.
German meetings adhere to strict agendas, including starting and ending times.

22. China-Business Culture
► The Chinese rarely do business with companies or people they do not know. Your position on an organizational chart is extremely important in business relationships. ► Arriving late to a meeting is an insult and could negatively affect your relationship. ► Meetings require patience because mobile phones ring frequently and conversations tend to be boisterous.

23. Sampling of European Countries—Ease-of-Doing-Business Rankings

24. Ethics/Social Responsibility/ Sustainability
Chapter Three
3-24

25. Social Responsibility, Environmental Sustainability
actions an organization takes beyond what is legally required to protect or enhance the well-being of living things
Sustainability
the extent that an organization’s operations and actions protect, mend, and preserve rather than harm or destroy the natural environment

26. Business Ethics Business ethics
principles of conduct within organizations that guide decision-making and behavior

27. Seven Principles of Admirable Business Ethics

28. Code of Business Ethics
To ensure that the code of ethics is read, understood, believed, and remembered, periodic ethics workshops are needed to sensitize people to workplace circumstances in which ethics issues may arise

29. An Ethics Culture Whistle-blowing
refers to policies that require employees to report any unethical violations they discover or see in the firm

30. An Ethics Culture
Ethics training programs should include messages from the CEO or owner of the business emphasizing ethical business practices, the development and discussion of codes of ethics, and procedures for discussing and reporting unethical behavior

31. Bribes
Bribery
the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in discharge of a public or legal duty
is a crime in most countries of the world, including the United States

32. workplace romance ► Workplace romance can be detrimental to
morale and productivity
► favoritism complaints can arise
► confidentiality of records can be breached
► reduced quality and quantity of work
► personal arguments can lead to work arguments
► whispering secrets can lead to tensions
► sexual harassment charges may ensue
► conflicts of interest could arise

33. Social Policy Social policy
concerns what responsibilities the firm has to employees, consumers, environmentalists, minorities, communities, shareholders, and other groups
Firms should strive to engage in social activities that have economic benefits

34. Environmental Sustainability
Employees, consumers, governments, and society are especially resentful of firms that harm rather than protect the natural environment
Conversely people today are especially appreciative of firms that conduct operations in a way that mends, conserves, and preserves the natural environment

35. Managing Environmental Affairs in the Firm
Environmental strategies can include:
developing or acquiring green businesses
divesting or altering environment-damaging businesses
striving to become a low-cost producer through waste minimization and energy conservation
pursuing a differentiation strategy through green-product features

36. Reasons Why Firms Should “Be Green”
1. Consumer demand for environmentally safe products and packages is high. 2. Public opinion demanding that firms conduct business in ways that preserve the natural environment is strong. 3. Environmental advocacy groups now have over 20 million Americans as members. 4. Federal and state environmental regulations are changing rapidly and becoming more complex.

37. Reasons Why Firms Should “Be Green”
5. More lenders are examining the environmental liabilities of businesses seeking loans. 6. Many consumers, suppliers, distributors, and investors shun doing business with environmentally weak firms. 7. Liability suits and fines against firms having environmental problems are on the rise.

38. Be Proactive, Not Reactive
A proactive policy views environmental pressures as opportunities and includes such actions as developing green products and packages, conserving energy, reducing waste, recycling, and creating a corporate culture that is environmentally sensitive.

39. Major Requirements of an EMS
Show commitments to prevention of pollution, continual improvement in overall environmental performance, and compliance with all applicable statutory and regulatory requirements
Identify all aspects of the organization’s activities, products, and services that could have a significant impact on the environment, including those that are not regulated
Set performance objectives and targets for the management system that link back to three policies: (1) prevention of pollution, (2) continual improvement, and (3) compliance

40. Major Requirements of an EMS
Conduct an audit operation of the EMS
Take corrective actions when deviations from the EMS occur
Meet environmental objectives that include training employees, establishing work instructions and practices, and establishing the actual metrics by which the objectives and targets will be measured