1. Part 4 B – 1 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com 1.Cultural/legal/political environments 2.Economic/financial environments Section Topics Part 4, Section B

2. Part 4 B – 2 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Orientation and Controls Ethnocentric: Home-country-oriented with home-country controls Polycentric: Host-country-oriented with local controls Regiocentric: Host-country-oriented with regional and third-country controls Reference: Howard V. Perlmutter. Geocentric: World-oriented with strong interdependence between home and host countries Part 4, Section B, Topic 1

3. Part 4 B – 3 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Influences and Pressures Political environment Ownership risk Operational risk Transfer risk Terrorism Economic environment Currency exchange rates Business restrictions Investment restrictions Privatization Legal and regulatory environment Legal systems Trade restrictions Accounting standards International auditing concerns Technological environment Varied resources Varied capabilities Information explosion Privacy/security issues Part 4, Section B, Topic 1

4. Part 4 B – 4 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com What are techniques for anticipating and balancing these pressures and influences? Possible answers: Global strategy Risk assessments Country risk profiles Accounting for local technical issues such as transportation, language barriers, etc. Discussion Question Part 4, Section B, Topic 1

5. Part 4 B – 5 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Global Mindset Developing cultural awareness and a global perspective Leadership and management Cultural intelligence Cultural dimensions Cross-cultural communication Employee development Part 4, Section B, Topic 1

6. Part 4 B – 6 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Cultural Dimensions Reference: Hofstede™ Cultural Dimensions. Dimensions (Low to High) Power Individualism Masculinity Uncertainty avoidance Long-term orientation Part 4, Section B, Topic 1

7. Part 4 B – 7 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Assumptions and attitudes Body language Use of space Time Language (high- and low-context) Authority Country profiles Cross-Cultural Communication Part 4, Section B, Topic 1

8. Part 4 B – 8 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com I.A limp handshake and no eye contact II.Interviewee backs off when you move physically closer III.Long periods of silence in interviews and group meetings Discussion Question You are sent to conduct internal audit interviews at the organization’s foreign location. How might you interpret the following interviewee responses? Possible answers: I.These may be normal greetings in the culture. II.In some cultures people like to keep physical space distance. III.Silence may be natural and expected in conversations. Part 4, Section B, Topic 1

9. Part 4 B – 9 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Develop a clear global strategy. Foster a global mindset. Operate as both a centralized and decentralized organization. Sponsor a flexible business structure for adaptability. Disperse knowledge widely. Train international managers well. Hire employees with diverse backgrounds. Managing Complexities Part 4, Section B, Topic 1

10. Part 4 B – 10 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Break down language barriers. Maximize technology for production and service efficiencies. Use cultural informants for understanding, negotiation, and coalition building. Continue to forecast and assess risks. Develop crisis management plans and exit strategies. Foster creativity and innovation. Managing Complexities (continued) Part 4, Section B, Topic 1

11. Part 4 B – 11 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Legitimize differences; build trust. Agree upon values and expectations. Agree on team leadership style. Encourage participation, recognizing status/ authority perceptions. Effective Multicultural Teams Select the best communication modes. Produce the appropriate outcomes. Part 4, Section B, Topic 1

12. Part 4 B – 12 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Answers: 1 = B; 2 = D; 3 = C; 4 = A Discussion Question Strategic Orientation Characteristics 1. International 2. Global 3. Multilocal 4. Multinational A. Centralized and decentralized; high integration and coordination B. Home-country headquarters and value chain with headquarters C. Local products and standards; differentiation D. Standardization, economies of scale, value chains anywhere Match the orientation to the characteristics. Part 4, Section B, Topic 2

13. Part 4 B – 13 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Global strategy readiness Organizational culture readiness Global expansion readiness Global Marketplace Entry Checklist Has the organization met the necessary requirements to enter the global marketplace? Part 4, Section B, Topic 2

14. Part 4 B – 14 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Managing Training and Development in International Organizations Disperse training in home and host countries. Use the Web for distance and 24/7 course access. Use translators and produce materials in the related foreign languages. Assess knowledge and performance gaps to determine training needs. Offer strong orientation programs and acclimation to the related cultures. Sponsor expatriate assignments for managers. Use a variety of learning approaches, such as field experiences, coaching and mentoring, and multicultural team participation. Part 4, Section B, Topic 2

15. Part 4 B – 15 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Reinforcing Activity 4-2 Part 4, Section B, Topics 1 and 2 Global Business Environments Part 4, Section B, Topics 1 and 2

16. Part 4 B – 16 V3.0 THE IIA’S CIA LEARNING SYSTEM TM www.LearnCia.com Questions? End of Section B Part 4, Section B