Item 1 - Score: 100% (1 of 1) c=2
{"score":1,"rejoin
Which of the following is an example of cross-cultural ignorance? Thinking that relationship-building is a waste of time Listening carefully to the needs of the other party Having a long-term orientation Learning about the culture of another country Feedback: Correct (1 of 1) Item 2 - Score: 100% c=0 {"score":1,"rejoin What is the best advice for negotiating a business deal in a cross-cultural setting? Conduct transactions in the same way as in the U.S. Move quickly from topic to topic during negotiations. Avoid a win/lose outcome. Avoid a win/win outcome. Feedback: Correct. Item 3 - Score: 100% (1 of 1) c=2
{"score":1,"rejoin
A good cross-cultural manager does all of the following except Not remain open to compromise Show empathy Focus on people's needs Appreciate different points of view Feedback: Correct
Item 1 - Score: 100% (1 of 1) c=0
{"score":1,"rejoin
Karen is a new manager in a department that has several people from different countries and cultures (including Africa, Australia, and India). Which of the following behaviors would help Karen work effectively with such a diverse group of cultures? Karen understands and appreciates religious beliefs of other cultures. If someone does not understand what Karen is saying, she repeats it louder for clarity purposes. Karen encourages her team to take notes during meetings, in order to not miss any details. In every meeting, Karen cites a company policy as a means of support for her time-off from work policy. Feedback: Correct. Understanding and appreciating religious beliefs of other cultures are traits associated with working well with diverse cultures in the workplace. Item 2 - Score: 100% (1 of 1) c=1
{"score":1,"rejoin
Which of the following is not a trait of high cultural intelligence? Taking pleasure in talking with someone who has limited English. Finding work on a multicultural team to be very satisfying. Shaking hands when meeting with someone from another culture for the first time. Regularly associating with people from different cultures with relative ease. Feedback: Correct. Shaking hands when meeting someone from another culture for the first time is not a trait associated with high cultural intelligence. Item 3 - Score: 100% (1 of 1) c=2
{"score":1,"rejoin
Alfonso is a new manager and several of his employees are from different countries, having recently moved to the U.S. within the last 6 months. Specifically, he has team members from France, India, and Japan, to go along with several U.S. citizens on his team. Which of the following actions would be considered to be an example of high cultural intelligence? Alfonso should share his views on international politics openly and consistently, in order to let his team know where he stands on such issues. Alfonso should be open to changing the way he behaves during a cross-culture situation. Alfonso should communicate the same way with everyone in order to maintain consistency. Alfonso should take his employees to his favorite Chinese restaurant every time they celebrate a team-mate's birthday. Feedback: Correct. Being open to changing the way he behaves when a cross-culture situation seems to require it is a trait associated with high levels of cultural intelligence.
1. Globalization (Connect)
Use your understanding of the current international business environment to complete the sentence.
A result of globalization is
increasing interdependence of
countries, businesses, and people. Points: 1/1 Close Explanation Explanation: With the marked increase in globalization, countries, businesses, and people have experienced increasing interdependence. Trade and investments, information, social and cultural ideas, and political cooperation flow more freely across national boundaries. An organization may have suppliers, employees, and customers in multiple countries. Which of the following are examples of companies operating in a globalized world? Check all that apply. San Francisco–based Airbnb used #OneLessStranger to spark an international social media campaign in which it asked its community of customers to perform random acts of hospitality for strangers, then share a video or photo of themselves with the person they helped. Esurance, a subsidiary of Allstate, sells car insurance online and over the phone to consumers in 40 U.S. states, and it advertises in conjunction with the Super Bowl and Major League Baseball. Dunkin’ Donuts serves dry pork and seaweed donuts in China and grapefruit donuts in Korea. Austria’s Red Bull sponsors extreme sports events across Europe, North and South America, and Asia, making its drinks feel like a local presence while the company maintains a European look to its packaging. Points: 0.75 / 1 Close Explanation Explanation: The examples of Red Bull, Airbnb, and Dunkin’ Donuts show companies that are fluent in the exchange of ideas across national boundaries and cultures. These are globalized companies. Esurance operates entirely in the domestic U.S. market. (Source: Fleishman, H. (2014, July 29). 13 businesses with brilliant global marketing strategies . Retrieved from http://blog.hubspot.com/blog/tabid/6307/bid/33857/10-Businesses-We-Admire-for-Brilliant-GlobalMarketing.aspx)
1. Globalization (Connect)
Use your understanding of the current international business environment to complete the sentence.
Globalization has dramatically shifted the environment for managers, with a decreasing number of large international corporations located in
the United States
. Points: 1/1 Close Explanation Explanation: Globalization and an increasing interdependence have dramatically shifted the environment for managers, with a decreasing number of large international corporations in the United States. Looking at the geographical locations of Fortune Global 500 companies, you can see that the number of companies in the Americas has declined while the number of companies in Europe and Asia are increasing. Great Place to Work Institute named Microsoft as the best globalized company to work for. What characteristics could have qualified the company as a global company? Check all that apply. Microsoft’s corporate headquarters is in Redmond, Washington, and it employs many people there. Microsoft has employees in many countries. Microsoft sells its products and services around the world. Microsoft’s supply chains for its products include shipping raw materials, parts, and finished manufactured goods across national borders. Points: 1/1 Close Explanation Explanation: Microsoft has employees all over the world. In fact, one of the policies that made Microsoft number one on this list was the fact that the company modifies its parental leave policies to be generous relative to the standards of the many countries in which it operates. In Norway, for example, where parental leave policies are already mandated to be generous, Microsoft hosts lunches for parents on leave and their children, allowing them to reconnect with their colleagues. Microsoft also sources raw materials and parts and manufactures finished goods in many countries, and Microsoft sells its software and services around the globe. (Source: Leahey, C. (2011, October 28). 25 best global companies to work for. Fortune. Retrieved from http://archive.fortune.com/galleries/2011/fortune/1110/gallery.best_companies_global.fortune/)
1. Globalization (Connect)
Use your understanding of the current international business environment to complete the sentence.
Technology, especially the Internet, and international trade agreements have facilitated
globalization
, which includes the flow of trade and ideas across national borders. Points: 1/1 Close Explanation Explanation: Globalization refers to the extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries. This has been greatly facilitated by technology and international trade agreements. Managers need to have a global mindset to work effectively in the diverse environment of globalization. Franchising, or licensing the organization’s brand name and systems to others, is one way to enter both d omestic and international markets. Which of the following are ways in which globalization impacts companies? Check all that apply. Divisional headquarters may be in more than one country. A company can take advantage of an expanding foreign market when its domestic market is not growing. Coworkers in the same office or on the same team tend to be from the same country. Products can be manufactured in countries where labor costs are less and then sold at a more competitive price. Points: 0.75 / 1 Close Explanation Explanation: Due to globalization, companies may have headquarters in multiple countries, and they can take advantage of market opportunities and lower-cost supplies in various countries. Also because of globalization, people are crossing borders more than ever, and one’s immediate coworkers are more likely to be from other countries.
2. Global mindset (Connect, Perform)
Read the scenario and then answer the questions that follow.
Carly is applying for a position at a multinational corporation that will require her to work with people in other countries. Fortunately, she has experience doing this. To prepare for her interview, she is reviewing instances when she demonstrated a global mindset at her previous job. She knows that she will show the interviewer she has a global mindset by telling about times she has appreciated and influenced individuals, groups, organizations, and systems with different social, cultural, political, institutional, intellectual, and psychological characteristics. Carly is eager to tell the interviewer about the team she led of product managers from the United States, Latin America, and Europe. At first, team members were unsure of how to relate to each other, but she was able to find common ground and relate in a culturally sensitive way with each one. Which dimension of her global mindset would this experience show the interviewer? Cognitive dimension Social dimension Psychological dimension Points: 1/1 Close Explanation Explanation: Carly’s story about leading an international team would demonstrate the social dimension of her global mindset, because it would show that she can build trusting relationships with people of other cultures. The psychological dimension relates to how much someone enjoys culturally diverse situations, and the cognitive dimension concerns how much someone knows about other business environments and cultures. Carly’s friend Brian says that he admires her ability to interact confidently with people in other countries, and he asks for her advice. How could Brian improve his global mindset? Check all that apply. Attending cultural events, such as with musical groups and guest speakers from other countries, that attract a diverse audience Studying how the most successful U.S. companies became successful Interacting on social media with people he can communicate easily with because they share a common background and language Learning another language and practicing it regularly with native speakers Points: 1/1 Close Explanation Explanation: One can develop a global mindset by learning and by doing. Both are easier when one has had exposure to different cultures and languages. Examples of learning include the following:
• Having a genuine curiosity about other people and cultures • Studying world affairs and international business • Keeping an open mind about different viewpoints
Examples of learning by doing include these activities: • Cultivating relationships with people across cultural and national boundaries • Participating in social media exchanges with people around the world • Traveling and studying in other countries • Learning a foreign language
The following activities will not help someone develop their global mindset: • Assuming that one’s own culture’s or country’s viewpoint is more correct than others’ views • Communicating in one’s own language • Learning more about one’s home country • Interacting with other people like oneself • Traveling only within one’s own country
3. Changing international landscape (Connect, Perform)
Recently, foreign companies have invested more in business in
China
than they spent anywhere else in the world. Points: 1/1 Close Explanation Explanation: For the past several years, foreign companies have spent more in China than they have spent anywhere else in the world. China’s large population makes it a prime market for a variety of products and services. As a manager for a company that is looking to expand to India, what should your company focus on? Check all that apply. Employing translators to help break down the language barrier Information technology Research and development opportunities Manufacturing processes Points: 0.5 / 1 Close Explanation Explanation: India is quickly becoming a leader in information technology, software design, services, and precision engineering. India is home to scientifically trained, highly skilled workers which has attracted companies’ research and development centers. The large population of English speaking people is encouraging for companies to outsource service-related parts of their business there. In the table below, read the description and determine if it is referring to China or India.
Description
China
Indi a
The medical diagnostics and device manufacturing sectors, as well as the pharmaceutical sector, are growing rapidly.
This country is home to the fastest-growing middle class in history, which makes it a huge market for a variety of products and services.
Points: 1/1 Close Explanation
Explanation: China India China This country is home to the fastest-growing middle class in history, which makes it a huge market for a variety of products and services. Explanation China has the fastest-growing middle class in history and is the largest or second-largest market for many products and services. China is a frequent site for the offshoring of manufacturing. Foreign companies must contend with a sometimes hostile regulatory environment, so actively building positive relationships with the public and local officials is important. Companies doing business in China sometimes have trouble getting paid and increasingly encounter competition from domestic Chinese companies.
3. Changing international landscape (Connect, Perform) India
has the second largest population in the world and is a major source of technological and scientific brainpower. Points: 1/1 Close Explanation Explanation: India has the second largest population in the world behind China. Its strong educational system provides exceptional training in science and technological areas. As a manager for a company that is looking to expand to China, what should your company focus on? Check all that apply. Building relationships with suppliers and business partners Marketing products to the Chinese elite and upper class Manufacturing processes Ensuring that contracts are signed before any business partnerships begin Points: 1/1 Close Explanation Explanation: In China, relationship building is an important part of doing business. It is not uncommon for Chinese business people to begin business before any contracts are signed. In the Chinese culture, the relationship is the contract. Additionally, China is strong in manufacturing. Their manufacturing processes are so efficient that some Chinese brands are becoming market leaders. China is home to the fastest-growing middle class. Products geared towards this group will perform well. In the table below, read the description and determine if it is referring to China or India.
Description
China
Indi a
Foreign companies often offshore their manufacturing here.
The large English-speaking population makes it ideal for outsourcing from U.S. companies.
Points: 1/1 Close Explanation
Explanation: China India China Foreign companies often offshore their manufacturing here. Explanation China has the fastest-growing middle class in history and is the largest or second-largest market for many products and services. China is a frequent site for the offshoring of manufacturing. Foreign companies must contend with a sometimes hostile regulatory environment, so actively building positive relationships with the public and local officials is important. Companies doing business in China sometimes have trouble getting paid and increasingly encounter competition from domestic Chinese companies.
3. Changing international landscape (Connect, Perform) India
has the second largest population in the world and is a major source of technological and scientific brainpower. Points: 1/1 Close Explanation Explanation: India has the second largest population in the world behind China. Its strong educational system provides exceptional training in science and technological areas. As a manager for a company that is looking to expand to India, what should your company focus on? Check all that apply. Manufacturing processes Research and development opportunities Information technology Employing translators to help break down the language barrier Points: 1/1 Close Explanation Explanation: India is quickly becoming a leader in information technology, software design, services, and precision engineering. India is home to scientifically trained, highly skilled workers which has attracted companies’ research and development centers. The large population of English speaking people is encouraging for companies to outsource service-related parts of their business there. In the table below, read the description and determine if it is referring to China or India.
Description
China
Indi a
Foreign companies selling their products and services increasingly encounter tough competition from local businesses.
This country is becoming a rising power in software design, services, and precision engineering.
Points: 1/1 Close Explanation Explanation:
China India China Foreign companies selling their products and services increasingly encounter tough competition from local businesses. Explanation China has the fastest-growing middle class in history and is the largest or second-largest market for many products and services. China is a frequent site for the offshoring of manufacturing. Foreign companies must contend with a sometimes hostile regulatory environment, so actively building positive relationships with the public and local officials is important. Companies doing business in China sometimes have trouble getting paid and increasingly encounter competition from domestic Chinese companies.
4. Multinational corporations (Connect, Perform)
Use your knowledge of multinational corporations (MNCs) to complete the following sentence.
Because they can move assets and jobs from country to country, MNCs typically
have influence
over the economies, politics, and culture of the countries in which they do business. Points: 1/1 Close Explanation Explanation: MNCs are conduits of foreign cultures to the countries in which they do business. They also have the power to move cash and other investments, jobs, and skilled workers from country to country, potentially giving them clout with the countries in which they do business. Talia lives in Houston, Texas. She has traveled to India several times and is interested in working for a multinational corporation (MNC) with a presence there. She hopes that by working for such a company, she’ll first have an opportunity to transfer to a position in India and live there for an extended time and then be able to parlay that international experience into opportunities in other countries. Her research shows that MNCs with a significant presence in India include Nestlé, headquartered in Switzerland; PepsiCo, headquartered in the United States; Sony, headquartered in Japan; and Sun Pharmaceutical Industries, headquartered in India itself. Talia wants to do a lot more research on how these companies operate in India and on the nature of MNCs in general. As Talia researches MNCs, she will find that they: Check all that apply. Expect their executives to look at the business environment globally—as one market for strategy, sourcing, production, and sales and marketing Transfer capital, technology, and people among their affiliates in various countries Ultimately integrate their diverse activities in a centralized headquarters function, which may be physically located in one or more countries Expect their executives to look at each of the business environments they operate in separately —with knowledge on each as a separate market for strategy, sourcing, production, and sales and marketing Points: 1/1 Close Explanation Explanation: In an MNC, capital, technology, and people are transferred among country affiliates. The activities of these affiliates are ultimately integrated in a centralized headquarters function, where managers view the company’s operations from a global perspective. Finally, managers must exercise a global perspective by look at the entire world as one market for strategic decisions, resource acquisition, location of production, advertising, and marketing efficiency. Researchers have found that multinational corporations can be characterized based on their orientation to the different countries in which they do business. Complete the following sentence with the correct term.
A company that treats its resources, products, and people as transcending national boundaries is
a geocentric
company, and it will hire and transfer people for key positions without regard to nationality. Points: 1/1 Close Explanation Explanation: Multinationals can be described in three ways: • Ethnocentric companies emphasize their home country culture. Even as they do business worldwide, they are still identifiably an American,
British, German, etc. company, and their home market may take priority. • Polycentric companies are oriented toward the cultures and markets of the individual countries in which they do business, so their operations
have different characteristics from country to country. • Geocentric companies have a truly global orientation and do not prioritize individual national cultures or markets. The number of such companies
is growing.
5. Bottom of the pyramid (Connect, Perform)
Management in the News In India, the Swiss pharmaceutical company Novartis International AG is using its Arogya Parivar initiative to increase trust in conventional medicine among the very poor, thereby cultivating a market for its products. Novartis employs health educators to teach laypeople about disease, treatment, and prevention, and it also sends supervisors to assess each local area’s needs and provide education to health care providers. Novartis has accompanied this education effort with a different pricing structure and selling medications in smaller packages with smaller price tags. By cultivating this untapped market in a socially entrepreneurial way, Novartis seeks to increase its profits. The effort has been successful enough in India that the company has started similar programs in Kenya and Vietnam and has plans for Indonesia. Source: Clinton, L. (2014, May 12). Building new marketplaces at the bottom of the pyramid. The Guardian. Retrieved from http://www.theguardian.com/sustainable-business/novartis-cemex-sustainability-microensure-pyramid Which concept is Novartis’s marketing initiative based on? Bottom of the pyramid (BOP) Multinationalism Direct investing Points: 1/1 Close Explanation Explanation: Novartis’s Arogya Parivar initiativeprofits is based on simultaneously the bottom of the pyramid poverty (BOP) concept, which proposes that to the corporations can make significant while alleviating and other social ills by selling world’s 4 billion poorest people. By seeing these people as potential consumers, not just recipients of charity, companies can tailor their products to the needs of this historically underserved market.
6. Outsourcing and market entry strategies (Connect, Perform)
Place the letter next to each description in the space next to the market entry strategy described. Answer
Market Entry
Description
Strategy
A
Exporting
A.
A German company finds that they can save money by hiring a Japanese company to handle
B B A A
their employees’ technical support issues.
Outsourcing
B.
The owner of an athletic clothing retailer would like to sell her products in Europe. She has created websites in several languages which allow for online ordering.
C C
Partnership
C.
General Mills would like to sell their cereals in China. They realize they may need to adjust the flavors to suit local tastes. The easiest and quickest way for General Mills to do this would be to work with a local company, Bright Foods, to develop flavors and distribute the products.
Points: 1/1 Close Explanation Explanation: Exporting Outsourcing Partnership B: Exporting The owner of an athletic clothing retailer would like to sell her products in Europe. She has created websites in several languages which allow for online ordering. Explanation Exporting involves a company selling a product in a foreign country while maintaining the production facilities in their home country. Exporting is a low risk and relatively low cost way for companies to sell their products abroad. The owner of the athletic clothing store is participating in exporting because she will accept online orders from other countries. A: Outsourcing A German company finds that they can save money by hiring a Japanese company to handle their employees’ technical support issues. Explanation Outsourcing or offshoring occurs when a company moves a division of labor to another country. Many companies choose to outsource manufacturing to China where labor is less expensive. The internet and lower telecommunications costs have allowed companies to outsource higher levels of work, such as software development, as well. Technology support is another department that often gets outsourced to other countries.
C: Partnership General Mills would like to sell their cereals in China. They realize they may need to adjust the flavors to suit local tastes. The easiest and quickest way for General Mills to do this would be to work with a local company, Bright Foods, to develop flavors and distribute the products. Explanation A partnership is often the fastest, least risky, and cheapest way to sell products internationally. A joint venture is a type of partnership in which a company shares costs and risks with another company in the host country. General Mills would likely engage in a joint venture where costs and profits are shared. Suppose you are a manager for an athletic shoe manufacturer, Kutsu. Your company was founded two years ago, by a young entrepreneur from Japan, Shinzo Bannai. His family moved to the United States when he was a young teenager and earned a degree in design from a college in California. Shinzo, with a loan from his father, purchased manufacturing equipment and rented a factory space in San Francisco. Kutsu’s products sell moderately well in the U.S, with just under $2 million in sales last year. Shinzo was able to pay back his father for the loan and hire an additional designer to help with new products for next year. Kutsu has a high concentration of sales in Los Angeles, New York City, and Hawaii which, coincidentally, have large populations of Japanese-Americans. As a result, Shinzo would like to sell Kutsu shoes in Japan and has asked you to determine the best market entry strategy. Given the information above, what is the best market entry strategy for this company? Partnership Outsourcing Exporting Points: 0/1 Close Explanation Explanation: Many companies first get involved internationally by exporting. This is the best option for Kutsu at this point for several reasons. Although Kutsu products sell well with Japanese-Americans, there is no guarantee that consumers in Japan will react as favorably. Exporting is a low risk way to sell Kutsu products in Japan and “test the market” instead of making a large investment in a Japanese factory or distribution system. In addition, exporting requires little financial investment and it seems from the scenario that Kutsu’s financial situation would not allow for a significant investment at this time. The scenario gives no mention of companies or investors that may be interested in a partnership or joint venture and without proven sales in Japan, this is not an attractive option.
6. Outsourcing and market entry strategies (Connect, Perform)
Place the letter next to each description in the space next to the market entry strategy described. Answer
Market Entry
Description
Strategy
A
Exporting
A.
A California winery produces seven varieties of wine at their vineyard and sells them in 20
A A C C
countries across the globe.
Outsourcing
B.
Coca Cola manufactures and sells concentrates and syrups to bottling companies in many countries. The bottling companies then manufacture, package and distribute the Coca Cola
B B
branded products to customers and vendors. Partnership
C.
Many U.S. companies base their call centers in India where there is a high English speaking population.
Points: 1/1 Close Explanation Explanation: Exporting Outsourcing Partnership A: Exporting A California winery produces seven varieties of wine at their vineyard and sells them in 20 countries across the globe. Explanation Exporting involves a company selling a product in a foreign country while maintaining the production facilities in their home country. Exporting is a low risk and relatively low cost way for companies to sell their products abroad. The California winery produces the wine in California and exports the final product to 20 countries. C: Outsourcing Many U.S. companies base their call centers in India where there is a high English speaking population. Explanation Outsourcing or offshoring occurs when a company moves a division of labor to another country. Many companies choose to outsource manufacturing to China where labor is less expensive. The internet and lower telecommunications costs have allowed companies to outsource higher levels of work, such as software development, as well. India is a popular country for companies to outsource call centers. B: Partnership Coca Cola manufactures and sells concentrates and syrups to bottling companies in many countries. The bottling companies then manufacture, package and distribute the Coca Cola branded products to customers and vendors.
Explanation A partnership is often the fastest, least risky, and cheapest way to sell products internationally. A joint venture is a type of partnership in which a company shares costs and risks with another company in the host country. Coca Cola relies on these partnerships to distribute their product globally. Suppose you are a manager for a multinational company that produces a variety of beauty products. Heartland Company was founded in 1942 and began making shampoo and soap products. Heartland, headquartered in St. Louis, Missouri, now sells hair care, soap, and makeup products in 22 countries across the globe. Heartland holds the majority market share in the U.S. and is largely regarded as a trend-leader in hair and beauty products. As the Global Brand Vice President, you have been tasked with taking the brand to Brazil, considered to be a large cosmetics market in the next few years. The Brazilian cosmetics and hair care market is largely dominated by Belleza who currently holds a 60% market share. Belleza is marketed toward young, fashion-forward women. The second largest company, Botánico, holds just a 20% share of the market. Your research suggests that while Botánico has efficient manufacturing and distribution, young consumers see them as being a brand for their mothers and grandmothers. Given the information above, what is the best market entry strategy for this company? Outsourcing Partnership Exporting Points: 1/1 Close Explanation Explanation: A partnership with Botánico is the best option for Heartland Company. Companies often form partnerships when one company has an advantage in an area such as manufacturing or distribution. We know that Botánico has this advantage in Brazil. Heartland’s strength are their products and knowledge of the younger market that Botánico does not appeal to. Although exporting is an option for Heartland, they will not be able to gain significant market share with this strategy. A partnership gives Heartland Company and Botánico an opportunity to compete with Belleza for market share among the young women of Brazil. This task would be significantly more difficult without a partnership.
6. Outsourcing and market entry strategies (Connect, Perform)
Place the letter next to each description in the space next to the market entry strategy described. Answer
Market Entry
Description
Strategy
A
Exporting
A.
C C B B
Jaguar Land Rover entered the Chinese market with the help of Chery Automotive, a Chinese automaker. Chery will help Jaguar Land Rover develop models tailored to the Chinese market.
Outsourcing
B.
Nike products are sold in many countries throughout the world. Nike manufactures their shoes in China and Vietnam.
A A
Partnership
C.
An artisanal chocolate company in Boston has a large number of Irish customers who purchase the chocolates to send to family and friends in Ireland. One of the customers has a brother in Dublin, Ireland that would like to sell the chocolates in his small gift shop.
Points: 1/1 Close Explanation Explanation: Exporting Outsourcing Partnership C: Exporting An artisanal chocolate company in Boston has a large number of Irish customers who purchase the chocolates to send to family and friends in Ireland. One of the customers has a brother in Dublin, Ireland that would like to sell the chocolates in his small gift shop. Explanation Exporting involves a company selling a product in a foreign country while maintaining the production facilities in their home country. Exporting is a low risk and relatively low cost way for companies to sell their products abroad. This artisanal chocolate company is exporting their products to Ireland. B: Outsourcing Nike products are sold in many countries throughout the world. Nike manufactures their shoes in China and Vietnam. Explanation Outsourcing or offshoring occurs when a company moves a division of labor to another country. Many companies choose to outsource manufacturing to China where labor is less expensive. The internet and lower telecommunications costs have allowed companies to outsource higher levels of work, such as software development, as well. Nike outsources their manufacturing to other countries. A: Partnership
Jaguar Land Rover entered the Chinese market with the help of Chery Automotive, a Chinese automaker. Chery will help Jaguar Land Rover develop models tailored to the Chinese market. Explanation A partnership is often the fastest, least risky, and cheapest way to sell products internationally. A joint venture is a type of partnership in which a company shares costs and risks with another company in the host country. Jaguar Land Rover and Chery Automotive formed a joint venture which shows Jaguar Land Rover’s commitment to selling cars in the Chinese market. Suppose you are a manager for a multinational company that produces a variety of beauty products. Heartland Company was founded in 1942 and began making shampoo and soap products. Heartland, headquartered in St. Louis, Missouri, now sells hair care, soap, and makeup products in 22 countries across the globe. Heartland holds the majority market share in the U.S. and is largely regarded as a trend-leader in hair and beauty products. As the Global Brand Vice President, you have been tasked with taking the brand to Brazil, considered to be a large cosmetics market in the next few years. The Brazilian cosmetics and hair care market is largely dominated by Belleza who currently holds a 60% market share. Belleza is marketed toward young, fashion-forward women. The second largest company, Botánico, holds just a 20% share of the market. Your research suggests that while Botánico has efficient manufacturing and distribution, young consumers see them as being a brand for their mothers and grandmothers. Given the information above, what is the best market entry strategy for this company? Exporting Outsourcing Partnership Points: 1/1 Close Explanation Explanation: A partnership with Botánico is the best option for Heartland Company. Companies often form partnerships when one company has an advantage in an area such as manufacturing or distribution. We know that Botánico has this advantage in Brazil. Heartland’s strength are their products and knowledge of the younger market that Botánico does not appeal to. Although exporting is an option for Heartland, they will not be able to gain significant market share with this strategy. A partnership gives Heartland Company and Botánico an opportunity to compete with Belleza for market share among the young women of Brazil. This task would be significantly more difficult without a partnership.
7. Sociocultural and legal-political differences (Connect, Perform)
Under President Hugo Chávez, who held power from 1999 until his death in 2013, the government of Venezuela nationalized numerous petroleum industry facilities. Companies operating there faced
political risk
, because the government could have tried to force them to accept minority stakes in assets that they built. Points: 1/1 Close Explanation Explanation: Political risk is the probability that a company will lose assets, earning power, or managerial control due to politically based events in other countries or actions by those countries’ governments. The nationalization of assets, or the government takeover of those assets, is a major political risk. Political instability includes riots, revolutions, civil disorders, and frequent changes in government. (Source: Daniel, F. J. (10, June 24). Venezuela to nationalize U.S. firm’s oil rigs. Reuters. Retrieved from http://www.reuters.com/article/2010/06/24/us-venezuela-nationalizationsidUSTRE65N0UM20100624/) Which of the following companies has high individualism? Dave Douglas, the CEO of Intrane, LLC, routinely walks through the office, stopping to chat with his employees. He encourages them to speak freely, and he gives them credit for their good ideas. His employees all say that Dave is one of the few bosses whose open door policy is just that: an open door. Ivana’s Images has a reputation for being the best in the business. Sure, Ivana is difficult to work with —you wouldn’t want her on your team—but she can do layout and design faster and better than anyone else. Ivana likes to work by herself, and she is happiest when she can prove that she is better than everyone. Mylar Mechanics is a global organization, so it is important to make sure that employees are able to communicate with each other on a regular basis. Last week, managers used the World Clock Meeting Planner to find the best time for a meeting between the Amsterdam, Austin, Delhi, and Orlando offices. Points: 1/1 Close Explanation Explanation: Ivana’s Images is an example of a company with individualist values. In an individualist culture, people act on their own, and individual achievements are rewarded. This is in contrast with a collectivist society, such as that of Japan. In Japan, children are taught, “The nail that sticks out gets hammered down.” Compare this message with the more individualistic U.S. saying, “The squeaky wheel gets the grease.”
Which of the following companies has high power distance? In Allegra Systems, all of the managers wear suits and ties, while all of the employees wear casual dress. Managers are asked to speak first in every meeting, and employees rarely contradict what they say.
Dave Douglas, the CEO of Intrane, LLC, routinely walks through the office, stopping to chat with his employees. He encourages them to speak freely, and he gives them credit for their good ideas. His employees all say that Dave is one of the few bosses whose open door policy is just that: an open door. At Anderson’s Autos, compensation is based on how much you sell, not on what your job title is. Sales figures and overall profitability results are shared freely throughout the company, and managers and employees routinely get together to brainstorm about new ways to increase revenues. Points: 1/1 Close Explanation Explanation: Sabine Industries is a company with high power distance. In high power-distance cultures, there is a distinct difference between the people in charge and the people who follow them. One indicator of a high power-distance culture is the use of titles, particularly if they are used for one level of employees and not another. Another indicator is whether or not people expect to be asked for their opinions: In high power-distance cultures, decisions are made by those in charge, and lower-level employees are not consulted. Which of the following companies has high uncertainty avoidance? It seems like Lucasa Lighting has a new organizational chart every few months. People don’t seem to mind. Lucasa is growing rapidly, and change is expected and even welcomed. Employees enjoy working with new people on a regular basis—it helps them to learn new skills and see the organization differently. At Sipria Insurance, little has changed since the 1960s. Few employees even know how to use e-mail, and most business is conducted by telephone or in person with a simple handshake. Since Sipria caters exclusively to older people who are less likely to use the Internet, its practices work well for the company. Mary has been in real estate for 30 years and loves it because there’s always something new to learn. Last year, she attended a class on feng shui, the Chinese practice of harmonizing the arrangement of home furnishings, and this year she signed up to take several classes on how to handle home foreclosure sales. The changing trends and laws are what keeps real estate exciting for Mary. Points: 1/1 Close Explanation Explanation: Sipria Insurance is exhibiting high uncertainty avoidance. People and companies who avoid uncertainty do not like change, and they are likely to do what they can to create a structured and predictable environment. Cultures with high uncertainty avoidance often have strict rules for behavior, and people are less likely to question the established order or make efforts to learn new things.
8. Communication challenges (Connect, Perform)
Read the scenario and determine if the situation is describing a high or low context culture.
Scenario
High
Low
context
context
A multinational company’s website design for a German country features a lot of text and information on the
products in addition to pictures of a person engaged in a solitary activity.
In China, it is important to build personal relationships before embarking on a business relationship. The Chinese value relationships and trust more than business.
Points: 1/1 Close Explanation Explanation: Low context cultures generally use communication to exchange facts and information rather than to build personal relationships. Meaning is derived from words and business transactions are more important than building relationships and trust. Low context cultures also focus on individual welfare and achievement rather than the welfare of the group. In high context cultures, people use communication to build personal social relationships. Meaning is derived from context--setting, status, and nonverbal behavior--more than from words. Relationships and trust are more important than business and the welfare and harmony of the group are valued rather than individual achievement. Like the global mindset, which can be thought of as having cognitive, psychological, and social dimensions, CQ can be thought of as having three dimensions: cognitive, physical, and emotional. Determine which dimension of CQ each example of behavior represents. Example
Dimension of CQ
Seeking out new ethnic restaurants and trying new dishes with unknown ingredients Emotional
Learning Spanish or Chinese to communicate more effectively with colleagues and customers Physical
Points: 0.5 / 1
Close Explanation Explanation: Example
Dimension
Explanation
of CQ
Seeking out new ethnic
Emotional
Trying new ethnic restaurants and foods is an example of the emotional dimension of cultural
restaurants and trying new
intelligence, which reflects the confidence and pleasure someone feels when interacting with
dishes with unknown
another culture. To have a high CQ, you must be comfortable with the ambiguity of not always
ingredients
being sure what other people mean or whether they are inter preting your communication the way you intend. Sometimes people will have unexpected responses to things you do and say. The manager with a high CQ can adapt quickly and does not feel stressed out by the demands of the situation.
Learning Spanish or Chinese to communicate
Cognitive
Learning another language is an example of the cognitive dimension of cultural intelligence, which concerns knowing and understanding cultural differences. These can include whether a
more effectively with
culture or subculture is high context or low context, religious beliefs, patterns of verbal and
colleagues and customers
nonverbal communication, expectations of gender roles, food and music preferences, and much more.
8. Communication challenges (Connect, Perform)
Read the scenario and determine if the situation is describing a high or low context culture.
Scenario
High
Low
context
context
At Testing Resources Inc., most employees are seasonal workers hired to grade standardized tests for several states. Employees work independently and conversation only occurs if someone needs clarification on an answer. Employee performance metrics are posted daily, and the highest performing individuals receive a $20 bonus.
Every Sunday, Carly’s family, including her aunts, uncles, and cousins, gathers at her grandparents hou se for
dinner. They all sit on the patio and talk and play croquet.
Points: 1/1 Close Explanation Explanation: Low context cultures generally use communication to exchange facts and information rather than to build personal relationships. Meaning is derived from words and business transactions are more important than building relationships and trust. Low context cultures also focus on individual welfare and achievement rather than the welfare of the group. In high context cultures, people use communication to build personal social relationships. Meaning is derived from context--setting, status, and nonverbal behavior--more than from words. Relationships and trust are more important than business and the welfare and harmony of the group are valued rather than individual achievement. Like the global mindset, which can be thought of as having cognitive, psychological, and social dimensions, CQ can be thought of as having three dimensions: cognitive, physical, and emotional. Determine which dimension of CQ each example of behavior represents. Example
Dimension of CQ
Reading several British newspapers to understand the perspectives of one’s UK counterparts on world events and popular Cognitive
culture
Making eye contact because this conveys honesty in the other culture Emotional
Points:
0.5 / 1 Close Explanation Explanation: Example
Dimension
Explanation
of CQ
Reading several British
Cognitive
newspapers to understand the
Reading foreign newspapers is an example of the cognitive dimension of cultural intelligence, which concerns knowing and understanding cultural differences. These can
perspectives of one’s UK
include whether a culture or subculture is high context or low context, religious beliefs,
counterparts on world events and
patterns of verbal and nonverbal communicat ion, expectations of gender roles, food and
popular culture
music preferences, and much more.
Making eye contact because this conveys honesty in the other culture
Physical
Making eye contact is an example of the physical dimension of cultural intelligence. The physical dimension has to do with one’s ability to adapt components of nonverbal
communication to operate more effectively in a cross-cultural situation. These components include facial expressions, gestures, tone of voice, and other physical behaviors.
