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Đề cương khoá luận, bài tập Global Context
Typology: Exercises
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LECTURE 1 2 LESSARD, LUCEA AND VIVES (2013) – BUILDING YOUR COMPANY’S CAPABILITIES THROUGH GLOBAL EXPANSION 2 LU & BEAMISH – INTERNATIONAL DIVERSIFICATION AND FIRM PERFORMANCE: THE S-CURVE HYPOTHESIS 5 LECTURE 2 8 BRANNEN (2004) – WHEN MICKEY LOSES FACE: RECONTEXTUALIZATION, SEMANTIC FIT, AND THE SEMIOTICS OF FOREIGNNESS 8 HONG & DOZ – L’ORÉAL MASTERS MULTICULTURALISM 12 MEYER – NAVIGATING THE CULTURAL MINEFIELD 14 BRANNEN & SALK – PARTNERING ACROSS BORDERS: NEGOTIATING ORGANIZATIONAL CULTURE IN A GERMAN-JAPANESE JOINT VENTURE. 15 LECTURE 3 19 BREMMER (2005) – MANAGING RISK IN AN UNSTABLE WORLD 19 GHEMAWAT (2001) – DISTANCE STILL MATTERS: THE HARD REALITY OF GLOBAL EXPANSION 21 PORTER (1998) – CLUSTERS AND THE NEW ECONOMICS OF COMPETITION 24 LECTURE 4 27 HENNART & REDDY (1997) - THE CHOICE BETWEEN MERGERS/ACQUISITIONS AND JOINT VENTURES: THE CASE OF JAPANESE INVESTORS IN THE US. 27 HARZING (2002) – ACQUISITIONS VERSUS GREENFIELD INVESTMENTS: INTERNATIONAL STRATEGY AND MANAGEMENT OF ENTRY MODES 29 PAN & TSE (2000) – THE HIERARCHICAL MODEL OF MARKET ENTRY MODES 32 LECTURE 5 36 BEGLEY & BOYD – THE NEED FOR A CORPORATE GLOBAL MIND-SET 36 KUMAR & PURANAM (2011) – HAVE YOU RESTRUCTURED FOR GLOBAL SUCCESS? 39 GHEMAWAT (2007) – MANAGING DIFFERENCES: THE CENTRAL CHALLENGE OF GLOBAL STRATEGY 42 GHOSHAL – GLOBAL STRATEGY: AN ORGANIZING FRAMEWORK 45 LECTURE 6 47 FROST, BIRKINSHAW & ENSIGN (2002) – CENTRES OF EXCELLENCE IN MULTINATIONAL CORPORATIONS 47 GOVINDARAJAN & GUPTA (2001) – BUILDING AN EFFECTIVE GLOBAL BUSINESS 49 FABRIZIO & THOMAS – THE IMPACT OF LOCAL DEMAND ON INNOVATION IN A GLOBAL INDUSTRY 50 MIHALACHE, JANSEN, VAN DEN BOSCH & VOLBERDA – OFFSHORING AND FIRM INNOVATION: THE MODERATING ROLE OF TOP MANAGEMENT TEAM ATTRIBUTES 52
To create and sustain a global competitive advantage, companies need a systematic approach to exploiting, renewing and enhancing their core capabilities. What critical questions do global strategists need to answer before committing their companies’ resources to new markets? They developed a framework to help strategists answer the two most crucial questions of any global strategy. Those questions are:
The relative importance of the RAT and the CAT Tests, and the pace at which this dynamic cycle operates, will depend on a company’s maturity, its stage of internationalization and the overall state of the industry. For companies based in a rapidly evolving industry, RAT opportunities to transfer their home-market model to other countries will likely to be relevant. However, companies in businesses characterized by a multiplicity of competitive markets should be more focused on CAT opportunities.
A proposed theoretical framework for the study of multinationality and performance included both benefits and costs of geographical expansion over different phases of internationalization. Data on several firms show a consistent horizontal S-shaped relationship between multinationality and performance. Also, firms investing more heavily in intangible assets achieved greater profitability gains from growth in foreign direct investment. Findings Returns from a geographic diversification strategy are related to costs and benefits that varied depending on the extent of a firm’s internationalization. This association was show in a horizontal s-curve, which at first showed a performance decline with increasing internationalization, followed by a positive relationship between geographic diversification and firm performance, which then declined at very high levels of multinationality. Also, firms with strong technology or advertising asset advantages achieved higher returns to geographic expansion. Benefits from Geographic Diversification Geographic diversification provides exploration and exploitation benefits. It enables firms to realize economies of scale and scope. It helps it reduce fluctuations in revenue by spreading its investment risks over different countries. It helps reduce costs and increase revenues by increasing a firm’s market power over its suppliers, distributors and customers. A firm can gain above-normal returns by exploiting its firm-specific assets, especially intangible ones. Costs Related to Geographic Diversification The costs of geographic diversification are typified by the problems and liabilities of newness and foreignness. When making a foreign investment, a firm’s managers contend with many challenges related to a new operation, such as purchasing and installing facilities, staffing and establishing international management systems and external business networks. These challenges can put a new subsidiary in a disadvantageous position. Also, transaction- and coordination costs increase with the degree of geographic diversification. Geographic Diversification and Firm Performance The above review identifies the exploitation and exploration benefits for geographic diversification while outlining the costs associated with being new and foreign and managing dispersed operations across borders. Figure 1 shows how the integration of these benefits and costs leads to the nonlinear relationship between geographic diversification and performance.
The process At the initial stages of international expansion ( phase 1 ), a firm encounters liabilities of newness and foreignness in which it must pay some ‘tuition’ in the for of reduced profits resulting from such disadvantages. With increasing international expansion, experiential learning about how to establish a subsidiary efficiency in a host country reduces the costs associated with being new and foreign. At the same time, growing geographic diversification enables asset advantages to be exploited across a greater spread of markets, which occurs alongside the development of new capabilities in international markets. The result is phase 2 , in which increasing levels of geographic scope are associated with growth in a firm’s profitability/ Although the costs related to newness and foreignness are being reduced, during phase 2, the second set f costs we depict, those for governance and coordination, begin to rise. As a firm’s network becomes more extensive, governance and coordination costs escalate to the point where costs can again surpass the benefits of geographic diversification. and the firm performance declines, marking phase 3. Putting above arguments together, we hypothesize a horizontal S-shaped relationship between the extent of a firm’s foreign direct investment (FDI) and performance. Interaction Effects of Intangible Assets and Geographic Diversification One important dimension that can moderate the exploitation benefit of an internationalization strategy is a firm’s intangible assets (technological know-how, patents, management skills, brands etc.). Transactions with such assets, both buying and selling, are subject to market failure. For efficient exploitation, the cross0border exchange of these assets must be internalized. An intangible asset’s value is not likely to depreciate significantly over time when it is applied in different markets. Given the resource and time costs of developing such assets, the efficiency of and return to their exploitation is greater when their scope of use is greater. Hence, one way to exploit an intangible asset to its full value is to deploy it in a broad range of markets, such as in a geographic diversification strategy. Consequently, firms with intangible assets should be able to generate abnormal high returns from their FDIs through scale and scope economies and trough exploitation of market imperfections in the trade of intangible assets.
Using semiotics – the study how language systems convey meaning – and the Walt Disney Company’s experience in internationalization, the notion of semantic fit as a necessary complement to strategic fit is developed. Also a conceptual model of recontextualization is formalized. This is the process by which firm assets take on new meanings in distinct cultural environment. One of the biggest concerns MNEs face regarding internationalization is assessing the fit of what they wish to transfer abroad with the new host environment. If the parent company is significantly foreign form its subsidiary, the transferred firm assets may not fit the receiving context in the host country. This liability of foreignness has been a fundamental assumption in the MNE literature and has become a central focus in theory building. Problems resulting from the liability of foreignness in MNEs abound. Complex cultural misalignments when entire systems of organizations are transferred do happen. For example, in Walt Disney Company’s lawsuits in France, at Disneyland Paris, because of the lack of fit between personnel policies and the French employees charged to enact them. The MNE literature suggests a variety of conditions that can mitigate the negative effects of foreignness. Foremost among these is previous experience in internationalization. Several cultural paradoxes concerning the Disney Case
Consider the same black-and-white kimono worn by a Western woman as an outer wrap to a party in the U.S. Severed from its complex chain of signification particular in Japan, in this new context, the signifier might simply connote a certain cosmopolitan chicness. Further, a Japanese observer attending the party might make assumption about the Western woman wearing a kimono, if he or she were to use the Japanese system of signification associated with kimono protocol (funeral clothes). Such mistaken assumptions about the signified connotations of a sign are due to a lack of semantic fit. Semiotics identifies three levels of semantic meaning:
- Conceptual meaning at the deepest level of core values and assumptions, and is most abstract. (Mickey as ideal American boy, Malificent as the embodiment of evil) - Narrative meaning that is actualized through value-laden stories. (Disney’s fairy tales that put forth certain life-goals, such as goodness and wealth in the case of Cinderella) - Discursive meaning that is generated figuratively by attaching values to words, and generally does so by appealing to the five senses. (Disney’s Cinderella happiness expressed in capturing the love of a handsome prince, and wealth expressed in grand balls and elaborate coaches). Lack of semantic fit might occur at any one or a combination of these three semantic levels of signification. Considering again the transnational example of the case of the displaced kimono, the lack of semantic fit takes place at the conceptual level – the basic association between the signifier of the black-and-white formal kimono to the abstract signified of the funeral in U.S. context has been lost. Recontextualization The second critical contribution of semiotics to international management is the understanding of the process by which signs evolve in social contexts. The emphasis on the role of the historical, political and cultural contexts of the society in attributing meaning to signs provides an important foundation for the process by which firm assets take on distinct meaning in new cultural contexts – recontextualization. Figure 3 is a graphic representation of the rudimentary aspects of recontextualization identifying three key triggers of semiosis in transnational transfer.
Semiosis consists of three phases:
A person rooted in more than one culture is usually able to spot and reconcile differences in understanding and communication, serving as a buffer both within teams and more broadly in the organization. In addition, he or she will probably be more open to adapting to multiple mind-sets and communication modes. These skills equip L’Oréal’s multiculturals to play five critical roles:
Culture is too complex to be measured meaningfully along just one or two dimensions. I have built on the work of many in my field to develop a tool called the Culture Map. It is made up of eight scales representing the management behaviours where cultural gaps are most common. By comparing the position of one nationality too another on each scale, the user can decode how culture influences day-to-day collaboration. The Culture Map The eight scales on the map are based on decades of academic research into culture from multiple perspectives. The scales and the metrics are:
Research on culture There has been a lot of research on national cultural differences, but almost none of them say anything about the dynamic aspects of intercultural encounters and how managers in particular contexts deal with cultural differences. In the IJV analyzed in this article, situational elements and change mattered greatly in highlighting some kinds of differences and making certain forms of negotiated change desirable for team members. This article extends the approach of Strauss (1978) to the multicultural organizational arena. It is mentioned that usually one of the national cultural groups within a bicultural organization has a more dominant influence than the other in shaping the working cultures of IJVs teams. Assumption 1: The national cultural origins of IJV team members serve as initial anchors or points of departures for team members as sources of values, meanings and norms brought to the bicultural organizational context. The negotiated culture perspective sees national cultural traits brought to a venture as elements that, over time, can be recombined or modified through on-going interactions among team members. Assumption 2 : The structure of the IJV, the characteristics of its members and the relations of power and interdependence among them, and the specific issues and threats confronted by the team will shape which of the many cultural traits become salient in the social negotiation of the IJV working culture. Experiences in bicultural IJVs challenge members to see themselves, work situations and others in new ways. As such, the IJV provides experiences that also serve as selective mirrors for viewing oneself and one’s own culture. The ‘other’ and what makes it such, is therefore a product of how we understand the situation and ourselves, and is subject to learning and modification over time. What also is important with regard to understanding working culture formation is that there are differences within cultures. An individual’s culture of origin does not necessarily neatly reflect the general attributes of his or her representative cultural group. Assumption 3 : When members from two distinct national and organizational cultures come together a ‘negotiated culture’ emerges. For example: given culture A and B, the negotiated cultural outcome will neither be A nor B nor AB, but some other outcome more like a mutation containing parts of both parents as well as some aspects of its own idiosyncratic making. So to say an IJV is a contested terrain where groups compete to assert norms and practices. Assumption 4: The specific attributes of an IJVs’ working culture will be emergent and cannot be determined a priori Assumption 5: The cultural stances of organizational actors may map into ‘issue domains’ in unexpected ways.
The IJV setting and study The plant was founded in 1710 as a paper mill in a small German town; the plant has always belonged to one of the town’s chief employers. Before the JV, a small family owned company operated the plant. After the JV, it was also partially owned by a Japanese company, both have 47.5 per cent, it is now called Nutech, and another Japanese trading company took a 5 per cent ownership share. The reason for the JV was that the plant was suffering from chronic low productivity but management had been reluctant to close it simply for legal and social reasons. For this study interviews were the most important source of data. In total 17 subjects were interviewed: 6 Japanese and 11 Germans. There ware three phases.
As emerging markets generate greater shares of global supply and demand, companies need better methods to weigh political risk against financial reward. Companies fear unpredictable change, even as they seek profit from he opportunities change creates. To help weigh dangers against opportunities, corporations mulling foreign ventures routinely consult economic risk analysts. But basing global investment decisions without understanding the political context is like basing nutrition decisions on calorie count without examining the list of ingredients. Reassuring data on countries’ per capita income, growth, inflation often obscures potential threats from other sources. Iran’s parliament, for example, last year passed legislation that complicates foreign companies’ abilities to plant stakes in that country’s telecom sector. This is a example of political risk , broadly defined as the impact of politics on markets. Political risk is influenced by the passage of laws, the foibles of leaders, and the rise of popular movements – in short, all the factors that might politically stabilize or destabilize a country. Corporate leaders may lack the sophisticated understanding this very complex subject requires. Political risk analysis is more subjective than its economic counterpart and demands that leaders grapple not just with broad, easily observable trends, but also with nuances of society. This article will help corporate leaders become better appraisers of information about the myriad shifting influences on global investment. Armed with that understanding, business strategists can minimize the risks and seize opportunities far beyond their home shores. Politics is Everyone’s Business Any company with exposure in foreign markets needs early, accurate information on political developments. There are four principle reasons for this:
A country with both capabilities will always be more stable than a country with just one. Shocks themselves are another important concept of political risk. They can be either internal (demonstrations in Egypt; a transfer of political power in Cuba) or external (thousands of refugees from North Korea fleeing into China; the tsunami in Southeast Asia). Risk by the Numbers Speculation about the outcomes of these or other scenarios appear in numerous publications, but corporations debating operational or infrastructure investments abroad need more objective, rigorous assessments than those found in the op-ed pages. Companies can either:
- Buy political risk services from consultants, or - Develop the capacity in-house (Shell, AIG). Either way, a complete and accurate picture of any country’s risk requires: - Analysts with strong reportial skills; - Timely and accurate data on a variety of social and political trends; and - A framework for evaluating the impact of individual risks on stability. The Eurasia Group developed a tool that incorporates 20 composite indicators of risk in emerging markets. The DESIX scores risk variables according to both their structural and temporal components. Structural scores highlight long-term underlying conditions that affect stability. They then serve as a baseline for temporal scores, which reflects the impact of policies, events, and developments that occur each month. The indicators are organized into four equally weighted subcategories: - Government - Society - Security - Economy Ratings for all subcategories are aggregated into a single composite stability rating, which is expressed as a number on a scale of zero to 100 – from a failed state to a fully institutionalized, stable democracy.