1. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1

2. Chapter Objectives Describe the six-step internationalization Identify at least four of the nine cross-cultural competencies of global managers. Explain from a cross-cultural perspective the difference between high-context and low-context cultures. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2

3. Global Organizations for a Global Economy International Management The pursuit of organizational objectives in international and cross-cultural settings The Internationalization Process There are many ways to do business across borders. At one extreme, a company may merely buy goods from a foreign source, or, at the other, it may actually buy the foreign company itself. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3

4. The Internationalization Process Stage 1: Licensing Authorizing companies in foreign countries to produce and/or market a given product within a specified territory in return for a fee Stage 2: Exporting Goods produced in one country are sold to customers in foreign countries. Stage 3: Local warehousing and selling Goods produced in one country are shipped to the parent company’s storage and marketing facilities located in overseas countries. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4

5. The Internationalization Process (cont’d) Stage 4: Local Assembly and Packaging Components, rather than finished products, are shipped to company-owned foreign facilities for final assembly and sales. Stage 5: Joint Ventures (also Strategic Alliances or Strategic Partnerships) A company in one country pools its resources with another foreign company or companies to create and market products and jointly share profits and losses. Stage 6: Direct Foreign Investment The production and marketing of products through a wholly owned subsidiary in a foreign country Example, a Chinese company building a factory in the US in order to tap into the American market would be an example of Chinese foreign direct investment into America. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5

6. Needed: Global Managers with Cultural Intelligence and Cross-Cultural Competencies Cultural Intelligence (CQ) The ability of an outsider to read individual behavior, group dynamics, and situations in a foreign culture Three Components of Cultural Intelligence: Knowledge of culture The practice of mindfulness Development of cross-cultural skills CQ involves: Impression management (a French manager kisses his new secretary in the US) Emotional intelligence © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6

7. Table 4.2: Competencies Needed to Work Effectively Across Cultures © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7

8. Understanding Cultural Diversity High-Context Cultures Cultures in which nonverbal and situational messages convey primary meaning Status of an individual is of tantamount importance in determining relationships. *Japan and business cards (not reading is an insult) Arab, Korean, China – high context! Low-Context Cultures Cultures in which words convey primary meaning Nonverbal messages are secondary to spoken words. The terms of the deal are more important than building a business relationship. Patience is so important! US is low context (Gbrit, Switz, Germ) © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8

9. Other Sources of Cultural Diversity (cont’d) Interpersonal space Some cultures prefer a close rather than wide distance between conversing individuals. Close(Arabs, Middle East) vs Far (American - European) Language skills Language fluency opens insights into another culture. Religion Religion has many effects on personal and professional activities in many cultures. (Saudi – Sat-Wed, Egypt – Sun-Thurs) © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9

10. Cross-Cultural Training A guided experience that helps people live and work in foreign cultures Specific Training Techniques Documentary programs familiarize the manger with assignment destination. Culture assimilator exposes to simulated intercultural incidents and situations. Language instruction builds the conversational skills in a foreign language. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10

11. Ha!

12. Review…..