1. Welcome to Class 14 Qualitative Domain Research:
1st Term Secretary’s Report Due today
Chapter 7

2. Qualitative performance data is information associated with an organization's:
1. Tactical and Strategic planning processes
2. Decision-making
3. Behaviors
4. Interaction with each of its stakeholders
Qualitative performance is a window into a firm's personality and character.

3. Resources (2) Qualitative resources
Corporations have two major classes of crucial valuables: (1) Quantitative resources
(2) Qualitative resources
The techniques and competence with which TMTs corral, coalesce, and utilize these can determine whether a corporation achieves its goals and objectives.
The focus of this lecture is on qualitative resources however quantitative resources are highlighted for comparison purposes.

4. 1. Quantitative Resources $$$
Quantitative resources are the tangible and intangible assets of a corporation.
These resources can be measured and managed in numerical terms.
Tangible assets = facilities, equipment, inventories, receivables, investments, financial resources, etc.
Intangible assets = patents, copyrights, goodwill, etc.
(Intangibles lack physical substance and are classified as
– noncurrent – items on the firm's balance sheet)

5. 2. Qualitative Resources
Qualitative resources are sometimes referred to as intangible resources.
These resources offer great value to an organization but their precise worth cannot be measured or managed in the same way as quantitative resources.
Although it is impossible to establish a precise value for qualitative resources, they contribute significantly to a firm’s long-term viability.

6. Qualitative resources coalesce to form a company’s core capabilities
Qualitative resources include such things as:
The Knowledge, Skills, and Abilities of all of its employees
The Reputation of the firm
The Positive Relationships the firm has established
Its record of positive and productive –
Decision-making,
Actions, and
Behaviors
Its Infrastructure –
Communication Networks,
Operational systems and procedures, etc.
Scenario and strategic planning expertise
Actions = what you do
Behaviors = how you do it

7. Qualitative Performance
Sustainable success by any corporation is correlated with its qualitative performance
There are two primary areas of qualitative performance:
Both OC and SP are propelled by unique performance drivers and among these drivers none is more significant than
(1) Organizational Citizenship (OC)
(2) Strategic Positioning (SP)
"culture."

8. Organizational Citizenship
Employees
Environment
Customers
Community/
Culture
Competitors
Stockholders
Directors
Communication
Government
Public Persona
Vendors (Suppliers)

9. A significant influence on OC is the firm’s
Organizational Citizenship
Organizational Citizenship (OC) = a category of specific corporate behaviors and relationships.
OC reveals the firms
PERSONALITY and CHARACTER.
A significant influence on OC is the firm’s
corporate culture.

10. Create a database for Organizational Citizenship by:
Examining Organizational Citizenship = investigating a series of behaviors, actions, and decisions that reflect a firm’s:
Core personality –
(how key personnel act and react to situations, conditions, and people)
Core character –
(how they are likely to act and react to changing situations and conditions)
Create a database for Organizational Citizenship by:
Identifying strategic and tactical decisions by TMTs
Examining the associated actions and behaviors

11. Create a list of questions to guide the investigation
Does the company seem to be sensitive to local communities?
Is it responsive to local concerns?
Does it have publicized or well-known difficulties with governmental agencies, customers, competitors, or its own board of directors?
Does the firm encourage its employees to be culturally sensitive?
Does the firm appear to appreciate and respect its employees?
 What type of relationship does the firm maintain with its competitors?
(Competitors do not have to be enemies.)
See your textbook for an extensive list of questions

12. Strategic Positioning
Innovative
Creative
Visionary
Anticipate Change
Adaptability
Retain Human Capital
Plan wisely
Effective Execution of Plans
Balance long/short term Goals

13. Strategic Positioning
Strategic Positioning (SP) = a category of a firm’s creative and planning processes.
This area of examination sheds light on the firm's commitment to:
(1) Being innovative, creative, and visionary
(2) Predicting and adapting to environmental changes
(3) Recruiting, developing, and retaining talented employees
(4) Executing strategic and tactical plans effectively

14. Competitive viability is dependent upon TMTs
who can craft strategically sound plans.
There are two types of TMTs:
(1) strategically incompetent
(2) strategically competent
It is important to identify which type is leading your target company
(1) Strategic Incompetence = Those who simply point out strategic alternatives but fail to pursue these or do so erratically and inconsistently (talkers and pointers)
(2) Strategic Competence = Those who actually take the appropriate actions to strategically position the firm as it moves continuously closer to its primary goals and objectives (the doers)
Strategically competence leaders think BIG, they think globally.

15. Think global, think International Trade
What is International Trade?
Why is it important to strategic positioning?
International trade = The exchange of products and services between countries.
International trade = The potential for unimaginable opportunities that can ensure corporate growth and prosperity.

16. Corporate Sensitivity & National Culture

17. National cultures occasionally clash with
National culture is:
The mental programming of a group of people
Comprised of the values, customs, and belief systems shared by a group of people
National cultures occasionally clash with
Corporate cultures
Clashes usually occur when employees of one nation work in another nation.

18. National Culture
&
Corporate Culture: 
Potential Clash!
Cultural CLASHES can cause irreparable damage to a firm’s reputation.
National cultures alien to the corporation can present formidable challenges.
They require flexibility and creative management thinking.
Challenges include understanding the value systems of:
1. New customers; and
2. New employees from the local culture.

19. TMTs should understand the characteristics and subtleties of national culture of the “new” country in which they wish to compete.
A technique for corralling the characteristics and subtleties of national cultures was developed by Dr. Geert Hofstede.
He organized national cultures into “dimensions”
or categories of predispositions.

20. Hofstede’s Cultural Dimensions
Five dimensions:
Power Distance
Individualism
Uncertainty Avoidance
Masculinity
Short and long-term orientation
The following slides are directly from Hofstede’s data

21. Power Distance Index (PDI)…
Power Distance Index (PDI)… The degree of equality, or inequality, between people in a country’s society High Power Distance The imbalances of power and wealth that have been allowed to grow within the society. (Rich are powerful)  These are more likely to follow a caste system that does not allow significant upward mobility of its citizens Low Power Distance A society de-emphasizes the differences between citizen’s power and wealth.  In these societies equality and opportunity for everyone is stressed.

22. Uncertainty Avoidance Index (UAI)…
Uncertainty Avoidance Index (UAI)… The level of tolerance for uncertainty and ambiguity within the society – i.e. unstructured situations High Uncertainty Avoidance Indicates the country has a low tolerance for uncertainty and ambiguity.  A rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty Low Uncertainty Avoidance Indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions.  A society that is less rule-oriented, more readily accepts change, and takes more and greater risks.

23. Individualism (IDV)… The degree society reinforces individual or collective achievement and interpersonal relationships High Individualism Indicates that individuality in these societies may tend to form a larger number of looser relationships Low Individualism Typifies societies of a more collectivist nature with close ties between individuals.  Reinforced extended families and collectives where everyone takes responsibility for group members

24. Masculinity (MAS)… The degree the society reinforces – or – does not reinforce the traditional masculine work role model of male achievement, control, and power High Masculinity Indicates the country experiences a high degree of gender differentiation.  Males dominate a significant portion of the society and power structure, with females being controlled by male domination Low Masculinity Indicates the country has a low level of differentiation and discrimination between genders.  Females are treated equally to males in all aspects of the society.

25. Long-term Orientation (LTO)…
Long-term Orientation (LTO)… The degree to which a society respects cultural traditions and the value it places on long-term commitments High Long-Term Orientation Indicates the country prescribes to the values of long-term commitments and respect for tradition.  Supportive of a strong work ethic where long-term rewards are expected as a result of hard work. Business may take longer to develop in this society, particularly for an “outsider.” Low Long-Term Orientation Indicates the country does not reinforce the concept of long-term traditional orientation.  Change can occur more rapidly as long-term traditions and commitments do not become impediments to change.

26. Organizational Citizenship Strategic Positioning
Performance Grading Scale 1 to 5
Organizational Citizenship
Strategic Positioning

27. Grading Scale 1 to 5
1 = Really Bad
2 = Bad
3 = Do not know
4 = Good
5 = Excellent

28. Summary…
Qualitative performance should be the everyday concern of every manager.
Culture, both corporate and national, plays a significant role in a firm’s qualitative performance.
The global nature of business increases the risk of clashes between corporate cultures and national cultures.

29. Review Appendix B of your text (pages 170 – 172)
End: Research: Qualitative Domain
Very Important: PREPARE FOR CLASS 17
Bring your computers, flash drives, financial statements for both companies to our
LAB DAY – Class 17
Review Appendix B of your text (pages 170 – 172)
“Hofstede’s Cultural Dimensions.”
You are responsible for this information and
IT WILL BE ON THE TEST!
If you do not own a PC borrow one from the library. DO NOT BRING A MAC!