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an entry strategy in which the organization maintains its production facilities within its home country and transfers its products for sale in foreign countries
engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country; also called offshoring.
an entry strategy in which an organization in one country makes certain resources available to companies in another to participate in the production and sale of its products abroad
a form of licensing in which an organization provides its foreign franchisees with a complete package of materials and services
an entry strategy in which the organization is involved in managing its production facilities in a foreign country
a variation of direct investment in which an organization shares costs and risks with another firm to build a manufacturing facility, develop new products, or set up a sales and distribution network.
the most risky type of direct investment, whereby a company builds a subsidiary from scratch in a foreign country.
a company's risk of loss of assets, earning power, or managerial control due to politically based events or actions by host government
events such as riots, revolutions, or government upheavals that affect the operations of an international company
the degree to which people accept inequality in power among institutions, organizations and people
a value characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity
a preference for a loosely knit social framework in which individuals are expected to take care of themselves.
a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests
a cultural preference for achievement, heroism, assertiveness, work centrality, and material success
a cultural preference for relationships, cooperation, group decision making, and quality of life
a concern with the past and present and a high value on meeting social obligations.
a cultural attitude marked by the tendency to regard one's own culture as superior to others.
Multinational corporation (MNC)
An organization that receives more than 25 percent of its total sales revenues from operations outside the parent company's home country; also called global corporation or transnational corporations
Cultural intelligence (CQ)
a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses
feelings of confusion, disorientation, and anxiety that result from being immersed in a foreign culture.
Market potential is limited to the home country, with all production and marketing facilities located at home.
Exports increase, and the company usually adopts a multidomestic approach, meaning the competition is handled for each country indepependently.
The company has marketing and production facilities located in many countries, with more than one-third of its sales outside the home country. These companies adopt a globalization approach, meaning they focus on delivering a similar product to multiple countries.
Global (or stateless) stage
Transcends any single home country. These corporations operate in true global fashion, making sales and acquiring resources in whatever country offers the best opportunities and lowest cost.
represents the economic conditions in the country where the international organization operates. This part of the environment includes such factors as economic development, resource and product markets, and exchange rates, each of which is discussed in the following sections.
When operating in another country, company managers must evaluate the market demand for their products. If market demand is high, managers may choose to export products to that country.
Hofstede's Value Dimension
Four dimensions of national value systems that influence organizational and employee working relationships: Power distance; Uncertainty avoidance; Individualism and collectivism; Masculinity/femininity
Globe Project Value Dimensions
Identify nine dimensions that explain cultural differences, including those identified by Hofstede (1) Assertiveness (2) Future orientation (3) Uncertainty avoidance (4) Gender differentiation (5) Power distance (6) Societal collectivism (7) Individual collectivism (8) Performance orientation (9) Humane orientation
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