Free Essay

Cross-Culture Work in a Global Economy

In: Business and Management

Submitted By cleidetie
Words 2396
Pages 10

Cross-Culture Work in a
Global Economy
Erin Meyer, affiliate professor at INSEAD and author of The Culture Map, on why memorizing a list of etiquette rules doesn’t work. For more, read the article, Navigating the
Cultural Minefield.


SARAH GREEN: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Sarah
Green. I’m talking today with Erin Meyer, an Affiliate Professor of Organizational
Management at INSEAD. She’s the author of the book, The Culture Map, and of the HBR article, “Navigating the Cultural Minefield.” Erin, thanks so much for talking with us today.

ERIN MEYER: Thank you, Sarah.

SARAH GREEN: So let’s just start by tell us what The Culture Map is. And tell us a little bit about why you developed it, what’s the problem you’re trying to solve.

ERIN MEYER: I became very interested in researching how cultural differences were impacting business people, because I found that, although the world has changed quite dramatically over the last 15 years, the discourse around management hasn’t kept up with it. So just to give you an example of this, I was just in a bookstore yesterday. And I picked up a book about negotiations, a new book written by an American author.

And as I’m looking through it, I can tell that the implicit assumption by the author is that the people who are negotiating, who are reading the book, are going to be negotiating with people who come from their own culture. But this isn’t the case anymore. I mean, every year we’re working more and more with people all over the world.

So the question, I think, that every leader needs to ask himself is, do I have the skills necessary to lead in a global economy? Do I know how to adapt my motivational style to motivate my Chinese employees differently than I would motivate my employees from
Brazil? And do I know how to negotiate a deal differently when I’m negotiating with suppliers in India? And do I understand how to do that differently to get the best deal when
I’m negotiating with people in Sweden? And that’s what I’ve tried to do in my book, in The
Culture Map, is to provide a system that helps people to decode how culture is impacting their day-to-day work, and then provide strategies for helping them to improve their effectiveness when working in this very complex, multicultural world that we are now working in.

SARAH GREEN: And so you have actually taken a number of different kind of criteria and mapped them out all along a spectrum. And then you can kind of plot different countries on the spectrum. And what I found interesting about this approach was that you go beyond just communication to talk about specific activities like evaluating performance, and disagreement, and persuasion, and how these things work differently in different cultures.
Why did you think it was so important to get that level of specificity in there?

ERIN MEYER: Well, I wanted to be really specific because I think that, if you just give people a concept and they don’t understand how to apply it, that the information is interesting, but perhaps not so useful. So I wanted to be specific. I wanted to scale to help people to really pinpoint what it is that they can do differently in their day-to-day work in order to be more effective.

In addition, I also found that people have a tendency to typecast cultures on just one or two scales. And then that leads them into traps. So for example, well, let’s say you have an
American who’s working with a French person. And he might think, OK, well, I know the

French are really implicit. So that would lead him to then assume that the French are also less direct with negative feedback, which is not the case.

In French culture, they are more implicit communicators than Americans are. But they’re also much more direct with negative feedback than Americans are. And this can cause a problem if you don’t understand these discrepancies, because you might have a French employee who’s working for an American and who then misunderstands the American’s tendency to give three positives with every negative as an actual compliment. Meaning that the American might think he’s given poor feedback. And the French person might leave that same meeting thinking that he’s just received good feedback. So in any case, The
Culture Map allows you to pinpoint how cultures change from one scale to another and see both the similarities and differences in a concrete way.

SARAH GREEN: And it’s interesting because, throughout the piece, you have these kinds of reminders about this is all relative. And depending on where you are on the scale, certain practices may look differently to you. Because I think, to your point about globalization, we’re not just going across two cultures. We’re often moving between three or four cultures, or even more. So can you just spend a little bit more time talking a little bit about what that looks like in practice, when you’ve got a Brazilian and an Indian and an America all in a room, how that kind of relativity plays out?

ERIN MEYER: Yeah. So maybe I’ll just give you an example. So this is actually an example from the book, but I think it’s one that people experience all of the time.

I was working a little while ago with a global team. And at the beginning on the team, I had both Americans and French people that were working together. And I asked the Americans what’s it like to work with the French. And they gave me an answer I had heard many times. They said, well, Erin, you know the French.

They said, the French, they’re always late. They’re really chaotic. They’re really disorganized. They’re always changing the topic in the middle of the meeting, which makes it very difficult to follow them. And they were frustrated with their perception of what it was like working with the French.

But then a little bit later, I had a group from India that joined the same team. And after they had been working together for a while, I asked the Indians what’s it like to work with the
French. And the Indians said to me, well, Erin, you know French.

They said, you know, they’re so rigid. And they’re so inflexible. They’re so focused on the structure and punctuality of things that they’re unable to adapt as things change around them. And if you don’t tell them weeks in advance exactly what’s going to happen in the meeting, in what order, it makes them very nervous.

All right. So here we have this American and Indian culture that are having two totally opposite impressions of the French culture. And you can see that, if you look at The
Culture Map tool that I work with, you can see on what I call, The Scheduling Scale, which is the scale that looks at time orientation, you can see that the French culture falls somewhere in the middle on a world scale. But it falls halfway between where the US would fall and where India falls, which leads to this opposite perception on the same culture. And this type of relativity, I experience this every day in my work. Then I was working with some Chinese a few days ago doing some interviews. And they were talking with me about how startling it was to them that the French were so egalitarian. One of them said, you know, it’s amazing the French really think that everybody is totally equal. And if you ask any British person who’s been working in France, they’ll tell you how extremely hierarchical they are.

So this is really important. I think this relativity is really important for today, because maybe 20 years ago, most of us who were working internationally, either we were business travelers, or are we were ex-patriots. And that meant that, mostly, you just had to understand one other culture was like and how that culture compared to your own culture.
But for leaders today who are working in multinational organizations, that is not enough.
You have to understand now how each culture perceives one another so that you can better facilitate the sometimes very complicated interactions.

SARAH GREEN: Well, and that, I think, for me, raises a question about some of the cultures you mentioned are closer together than I, maybe, would have assumed. And others seem further apart then I would have assumed. Did you run across pairings like that, that were either closer than you would assume, or further apart than you would have assumed?

ERIN MEYER: Well, often cultural pairings don’t line up with our stereotypes. And I’ll give you two examples of that. One is that, in the West, we have a tendency to think that all
Asian countries are more or less the same. So we might talk about Japanese culture and
Chinese culture thinking, well, jeez, those cultures are 90% alike. And you really couldn’t be further from the truth.

On the eight-scale culture map that I work with, it is true that six of the scales, China and
Japan fall relatively similar to one another, although the difference between them is still noticeable. But then there’s two scales where those two cultures fall on opposite ends. And one of them is the scheduling scale where we look at time orientation where the Japanese are very linear time, which means that they’re very focused on punctuality, and structure, and organization, being organized. And the Chinese are highly flexible time, which means they’re very focused on reactivity, and changing things as you go. And adaptability is more important than flexibility. So there’s that one big gap.

And then there’s another big gap on the map that looks at how decisions are made differently from one culture to another. And the Japanese are, perhaps, the most consensual society in the world, meaning that decisions are made in groups, by consensus, bottom up. And the Chinese culture is a highly top-down society, which means decisions are made by the boss in a top-down manner. So if you’re managing both Japanese and
Chinese, you need to understand these differences. Thinking that they’re the same it’s just going to end up getting you in trouble.

And then the second pairing that I think is perhaps interesting is that we do have some research that indicates that the most difficult cultural move is not, let’s say– I don’t know–
Americans moving to China, as you might think, but is actually Americans moving to the
UK. So we’ve seen that Americans moving to the UK have a higher expatriate failure rate than Americans moving to Asia. And that arises because of something that I call “cultural

dissonance,” which means that when you’re working with another culture that speaks another language, where people have a different physical appearance, they eat different kinds of food, the culture is really obvious to you, meaning that you recognize that the culture is different. So if you have an American moving to China, you think, wow, Chinese culture is going to be so different from my own. So I really have to be ready to be flexible.

But when you have two cultures where people speak the same language and physically don’t look very different, people underestimate the difficulty. And then they are less flexible, which often leads them to get frustrated more easily. And Americans moving to the UK is a classic example of that where the American moves to London thinking, well, mostly, I’m just focused on my strategy. And then after a while, when cultural issues start to arise, he thinks these British are incompetent, instead of thinking there’s something cultural that I need to understand here.

So that’s only important that, when you’re looking at the framework, at The Culture Map, that you recognize that small gaps matter. You don’t have to be moving from the left side to the right side. You might just be moving a little bit of a nudge to the right, or a little bit of a nudge the left, and it’s still impacting you.

SARAH GREEN: Well, and it’s interesting that you mention these different examples, because I think a lot of the business and managerial advice I have read over the years is giving etiquette rules that you’re supposed to memorize. But what I’m getting from you is that this is way too complicated to try to just memorize some rules. So what are some things people could do in the absence of having a guidebook to inhale?

ERIN MEYER: Well, I do think, just to mention that, I think that often people worry a lot about etiquette when they travel to another country. They worry about how am I going to shake hands, or what are people expecting me to wear. And I found with these superficial elements that, today, with globalization, most managers are pretty accepting of cultural differences. They are working with someone from another culture. And they give business cards in a way that’s different than you would in your country, or they don’t shake hands the way you would in your country, we forgive each other. There’s no big deal. We just recognize, oh, OK, we’re culturally different.

But when it comes to these deeper issues, like what leads us to feel trust for somebody, or what leads us to feel persuaded by an issue, and those are the things that are really impacting our international business today. So I think the best thing that a manager can do is to show a lot of humility, a lot of curiosity, and to recognize that this is an ongoing learning process, that we never become experts on it. But that the more you learn to decode these differences, the more successful you can be.

SARAH GREEN: Erin, thanks again, so much, for chatting with us today.

ERIN MEYER: Thank you, Sarah.

SARAH GREEN: That was Erin Meyer of INSEAD. Her book is The Culture Map. And her
HBR article is, “Navigating the Cultural Minefield.” For more, including Erin’s blog posts, visit

This article is about NEGOTIATIONS

Similar Documents

Premium Essay

International Management

...Globalization Effects on Culture, Business Ethics, and Leadership: A Managerial View Introduction The world’s economy has developed and changed dramatically throughout the years and continues to do so. We are quickly moving away from a world where each country’s economy is isolated and more towards a world with an interdependent global economic system. This interdependent global economic system is commonly referred to as globalization (Saee 2005). The book written by John Saee, Managing Organizations in a Global Economy: An Intercultural Perspective, suggests that the growth of global trade, cross-border investments, mass migration, large-scale tourism, and much more has turned the world into more of a “global village” (Saee 2005). While globalization has effected nearly every aspect of human civilization, it has created some very serious concerns for managers whose organizations and firms already are or are planning to be involved in business transactions that take place outside of their domestic environment. If companies and corporations want to be successful in today’s economy, then it is important for managers to have a thorough knowledge and understanding of different types of cultures, business ethics, and ways of leadership, and the implications that these differences will have on their businesses. In this paper, we will discuss the effects that globalization has had on managers with respect to culture, business ethics, and leadership. Culture Globalization......

Words: 2915 - Pages: 12

Premium Essay


...PREFACE 3 Int. Studies of Mgt. & Org., vol. 36, no. 4, Winter 2006–7, pp. 3–8. © 2007 M.E. Sharpe, Inc. All rights reserved. ISSN 0020–8825 / 2007 $9.50 + 0.00. DOI 10.2753/IMO0020-8825360400 Preface Globalization and Its Effects on International Strategy and Cross-Cultural Management Globalization is one of today’s most controversial buzzwords, though the spread of this term worldwide since the early 1990s may be testimony to its own significance. Skeptics argue that the entire discussion about globalization is unjustified, as all its essential facets—foreign trade, cultural exchange, technological progress and cross-national cooperation—are not new but are phenomena that can be traced back to our earliest civilizations. So, is globalization just a myth or a euphemism for the deregulation mantra under the supremacy of Anglo-American capitalism and for an economization of areas previously unrelated to the pressure of competitiveness, the market principle, and the price mechanism? Are the current trade patterns truly global, when 80 percent of trade is conducted within the “triad” of western Europe, North America, and the Pacific Rim, which together make up only 20 percent of the world’s population? Contrary to these arguments, we believe that globalization is as new a phenomenon as the term itself and that it does merit the attention it now receives in scholarly, political, and managerial debates. It is less a question of some new occurrences but is more so one that......

Words: 2303 - Pages: 10

Premium Essay

Document Current It Situation – External

...PREFACE 3 Int. Studies of Mgt. & Org., vol. 36, no. 4, Winter 2006–7, pp. 3–8. © 2007 M.E. Sharpe, Inc. All rights reserved. ISSN 0020–8825 / 2007 $9.50 + 0.00. DOI 10.2753/IMO0020-8825360400 Preface Globalization and Its Effects on International Strategy and Cross-Cultural Management Globalization is one of today’s most controversial buzzwords, though the spread of this term worldwide since the early 1990s may be testimony to its own significance. Skeptics argue that the entire discussion about globalization is unjustified, as all its essential facets—foreign trade, cultural exchange, technological progress and cross-national cooperation—are not new but are phenomena that can be traced back to our earliest civilizations. So, is globalization just a myth or a euphemism for the deregulation mantra under the supremacy of Anglo-American capitalism and for an economization of areas previously unrelated to the pressure of competitiveness, the market principle, and the price mechanism? Are the current trade patterns truly global, when 80 percent of trade is conducted within the “triad” of western Europe, North America, and the Pacific Rim, which together make up only 20 percent of the world’s population? Contrary to these arguments, we believe that globalization is as new a phenomenon as the term itself and that it does merit the attention it now receives in scholarly, political, and managerial debates. It is less a question of some new occurrences but is more so one that......

Words: 2303 - Pages: 10

Premium Essay

Cultural Issues and Ethics in International Business

...activity also involves foreign trade and international, which includes transactions such as exports, imports, investments, or financing that are performed worldwide. Among the success factors that can be mentioned in the international business operations are competitiveness, financial support between the parties and logistics. This aspect is very important because when the actors involved are from different countries or regions, the business success is more complicated. In analyzing the economy, we must review the dimension that transcends the borders of a country, i.e. which addresses the problems international economic purposes (Maddox, 1993). The importance of international relations in trading, politics or culture has reached a global level, a deeper meaning that one cannot speak only about goods but also exchange programs of integration. The international economy requires to study the problems of international economic transactions. Therefore, when we talk about international economy is talking about the international trade factors. International business is the exchange of economic goods that takes place between the two or more nations in a way that rises the outflows...

Words: 1481 - Pages: 6

Premium Essay

Management Strategies and Building a More Successful Global Business

...Final Paper – International Management (2012-08-MAN-372-OL011) Management Strategies and Building a more Successful Global Business Introduction Globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has manifold dimensions: economic, political, security, environmental, health, social, cultural, and others. The focus here is on the concept of "globalization" as applied to the world economy. International expansion is simply about smart preparation and well-thought-out execution; it can be enticing and highly profitable, but only if you do it right. If you don’t plan for tax exposures, business model alterations, and international corporate structure in advance, then you’re setting yourself up for an uphill battle at best — and failure at worst. With the increasing trend of globalization, industries are rapidly expanding into the international market. With no exception, many U.S.-based companies are expanding beyond the home country despite the risks. Why is international expansion important? A company can grow by exploiting overseas market opportunities and imperfections through internationalization, and growth has a positive impact on the firm performance. In short, international expansion can be profitable to companies. Moreover, why is the relationship between international expansion and firm performance important? Ultimately, a company’s......

Words: 3379 - Pages: 14

Premium Essay


...International Management Culture, Strategy, and Behavior Ninth Edition Fred Luthans University of Nebraska-Lincoln •Jonathan P. Doh Villanova University Mc Graw Hill Education Table of Contents Part One Environmental Foundation 1 2 The World of International Management: An Interconnected World Introduction Globalization and Internationalization Globalization, Antiglobalization, and Global Pressures Global and Regional Integration The Shifting Balance of Economic Power in the Global Economy 2 4 6 6 9 12 Global Economic Systems Market Economy Command Economy Mixed Economy 19 19 19 20 Economic Performance and Issues of Major Regions Established Economies Emerging Economies Developing Economies on the Verge 20 20 22 26 The World of International Management—Revisited 30 Summary of Key Points 32 Key Terms 32 Review and Discussion Questions 32 Answers to the In-Chapter Quiz 33 Internet Exercise: Global Competition in Fast Food 33 In the International Spotlight: India 2 Globalization and International Linkages 34 The Political, Legal, and Technological Environment 36 The World of International Management: Social Media and the Pace of Change 36 Political Environment Ideologies Political Systems 38 39 41 Legal and Regulatory Environment Basic Principles of International Law Examples of Legal and Regulatory......

Words: 2319 - Pages: 10

Premium Essay

International Management: Managing Across Borders and Cultures, Text and Cases, Seventh Edition

...Borders and Cultures, Text and Cases, Seventh Edition SEVENTH EDITION FEATURES • Streamlined text in eleven chapters, with particular focus on global strategic positioning, entry strategies and alliances, effective cross-cultural understanding and management, and develop- ing and retaining an effective global management cadre. The seventh edition has been revised to reflect current research, current events and global developments, and includes company examples from the popular press. In Chapter 1, we introduce trends and developments facing international managers and then expand those topics in the context of the subsequent chapters. For example, we discuss developments in globalization and its growing nationalist backlash— in particular resulting from the global financial crisis. We discuss the effects on global business of the rapidly growing economies of China and India and other emerging economies such as those in Africa, and the expansion of the EU; the globalization of human capital; and the esca- lating effects of Information Technology and the global spread of e-business. We follow these trends and their effects on the role of the international manager throughout the book. For exam- ple, in Chapter 6 we focus further on strategies for emerging markets, while also dealing with changing strategies to respond to economic decline around the world and an increasing level of nationalism in some industries; we have a section on “Using E-Business for Global......

Words: 1340 - Pages: 6

Premium Essay

Cross Cultural Communication with Japan

...Cross Cultural Communications between Canada and Japan Management 340 December 2, 2010 Executive Summary Japan witch is located off the eastern edge of Asia has a current population of 127 million people. Japan witch operates as a free market has the 3rd largest economy in the world and has a labour force of over 65 million people. In Japanese culture is expected that employees have lifetime commitment to their employers. The Japanese people recognize responsibility and work as extremely important characteristics of their culture. The responsibilities are divided into very small details and are incorporated into a family-style working environment. Business leaders and management participate in all activities. The employees in Japan are motivated by private recognition, the corporate missions of the company, stability, and most importantly being part of a winning team. Formal meetings are considered times for employee to share ideas and visions. In Japanese culture employees can contribute regardless of status. Furthermore informal meetings are seen as occasions to build personal relationships and should contain no direct business discussions. Since Japan has one of the most indirect languages, and many messages are metaphorical it is important to refrain from saying terms such as “No” and “You”; these terms can be seen as rude and should be placed with appropriate terms. Instead of saying “You”, refer to contact by their last......

Words: 6130 - Pages: 25

Free Essay

Global Business Cultural Analysis of South Korea

...Global Business Cultural Analysis of South Korea John Smith University of Rochester BUS 800 – INTERNATIONAL BUSINESS Dr. Peterson March 6, 2015   Abstract Today, the United States conducts a substantial amount of business with South Korea. It is important that American managers, entrepreneurs, and businessmen understand the South Korean social, cultural, and religious dimensions of the nation. The South Korean culture and customs are uniquely different from those of the United States. The culture and customs of the United States are based on European traditions and religious Christian beliefs. The culture and customs of South Korea are based on Confucianism’s way of life, Buddhism’s individual salvation, and since the 1950’s Christianity’s redemption of the soul. American businesses that incorporate South Korean culture into American business practices will develop long lasting business relationships with their South Korean counterparts. American businessmen working in multinational corporations have adjusted well the collectivist culture of South Korea. Multinational enterprises considering cross border business in South Korea can feel safe investing in South Korea. Keywords: South Korea, United States, cultural dimensions, multinational business, Hofstede.   Introduction South Korea is one of the United States most important strategic and economic partners in Asia. Members of Congress tend to be interested in South Korea for political purposes. ......

Words: 7498 - Pages: 30

Premium Essay

Managing Cross-Cultural Staff."

...Managing cross-cultural staff." ABSTRACT Cross-cultural communication in business is a feature of study that looks at how people from dissimilar backgrounds converse, in comparable and different ways among themselves, and how they handle to communicate crosswise with cultures. In this investigation we will try to find which are the problems and what ways can we find in order to manage better employees from around the world. The plan of the essay is to expand a better understanding of the key points that control cross-cultural communication and international staff managing . 1. INTRODUCTION Anthropology includes all aspects of human behaviors and ideas. Anthropologists study diverse cultures to be more compliant and accommodating, more appreciative and to improve our own culture. Culture influences the business setting and management practices of a country and helps appreciate the differences between countries, it is difficult to determine and shows significant dissimilarity inside a country .A cultural approach does not accommodate transform and tends towards stereotypes. Besides every country has its own position of competitive improvement in its politico-economic ,industrial relations ,training and other requirements for firms and workers in their dealings with the state and culture. The resultant 'varieties of capitalism in different countries mediate the influences of global economy and multinational practices (Armit and Shoemaker ,1993).There is a......

Words: 2375 - Pages: 10

Premium Essay

Cultural Issues in Virtual Global Project

...Abstract In an era of globalization, more and more companies tend to choose global virtual team with members of different cultural backgrounds because leaders gradually promote their company to the world. Global projects with using virtual teams are primarily linked through computer and telecommunications technologies across national boundaries. Globalization of the construction industry has brought unique challenges such as coordination among project participants from different countries, and individual’s preferences in decision make and communication. As economic borders between countries come down, cultural barriers will most likely go up and pose new challenges and opportunities for business. Solving the cultural issues has been found to be of crucial importance for the success of virtual teams. This research attempts to characterize cultural differences along the dimension of cultural values and cultural practices Keywords: Virtual global project; Cultural diversity; Project management.   Introduction Traditionally, a team-based project requires all team members physically present in a specific location for a period of time. But virtual global project requires a virtual team that members can engage in and deliver projects with limited or no direct physical interaction with other members. It allows multinational enterprises to draw on the widest talent pool available among their global employee base. Team members typically don't need to meet face-to-face, they......

Words: 3046 - Pages: 13

Premium Essay

International Journal of Business and Managemen

...and Education Cross-Cultural Etiquette and Communication in Global Business: Toward a Strategic Framework for Managing Corporate Expansion Ephraim Okoro1 1 School of Business, Howard University, Washington, USA Correspondence: Ephraim A. Okoro, Department of Marketing, School of Business, Howard University, 2600–Sixth Street, NW, Washington, D.C. 20059, USA. Tel: 1-202-806-1545. E-mail: Received: March 22, 2012 doi:10.5539/ijbm.v7n16p130 Abstract The expanding scope of business corporations in the first decade of the twenty-first century is drawing much scholarly attention, and the trend has been described as a fact of life that defies the stretch of human imagination. The concept of global economy has expanded consumer awareness, defined new standards and rules of operations, and increased the need for national and corporate interdependence. Multinational organizations are exploring opportunities around the world, demonstrating sensitivity towards cultural differences in order to gain from the proliferation and growth of international enterprise. Recent studies indicate that while some corporations compete successfully in the global marketplace, others have failed to sustain their competitive advantage because of cultural imperialism or inadequate acculturation of their managers on international assignment. Corporate analysts argued that the key to global business success depends on effective cross-cultural etiquette and global workforce......

Words: 6775 - Pages: 28

Premium Essay


...Introduction The objective of this research is to determine the convergence, divergence and cross-vergence of culture in IHRM, by looking at recruitment and selection in Nigeria as well as the Pension Scheme. It will also focus on the political, economic, social, technical and legal environment a number of factors that influence human resource policies and practice in Nigeria. International human resource management(IHRM) is the term used to refer to the instance where an organisation`s HRM entails managing employees in more than one nation .(Ngo et al 1998 cited in Lloyd and Hartel ,2004, pg60) .According to( Dowling et al, 2008) IHRM covers a wide range of human resource issues faces MNCs in different parts of their organizations additionally ,we include comparative analysis of HRM in different countries.(Capelli and Croker, 1996) argues that international human resource practices is a crucial factor in creating unique organisational competences ,in turn help companies differentiate their products and services and thus build competitive advantage. International HRM refers to relatively separate areas of practice and research (Dowling and Welch ,2004) HRM policies and practices are carried out within an economic, social, political and legal environment .Thus there is a need for considerable historical and cultural insights into local conditions to understand the processes, philosophies and problems of national models of HRM (Hofstede, 1993) .The indigenous Nigeria system......

Words: 3614 - Pages: 15

Premium Essay

Chapter One Questions

...Assignment 1. Describe the shifts in the world economy over the past 30 years.  What are the implications of these shifts for international businesses based in Great Britain? North America? Hong Kong? Over the last 30 years, there has been a shift away from a world in which national economies were relatively self-contained entities, isolated by barriers to cross-border trade and investment, and by national differences in government regulation, culture, and business systems; and moving toward a world where barriers to cross-border trade and investment are declining, material cultures are becoming similar, and national economies are merging into an integrated, interdependent global economic system.  As companies from Japan and emerging markets like China play a more vital role in the world economy, the dominance of companies from the United States and Western Europe has diminished.  Significant implications for British firms involve looking beyond Europe and America for investment and opportunities.  Consumer spending power is growing quickly in developing countries. For North American companies, the same holds true, although the importance of the growing prosperity in Latin America suggests a potentially huge market in “their backyard.” Hong Kong is perceived as the gateway to the immense market of mainland China.  Since Hong Kong firms are now less taken for granted, access to China is improving along with the move towards a market economy within China.  International......

Words: 1336 - Pages: 6

Premium Essay


...Globalization International Business consists of business transactions between parties from more than one country. Areas that change as you cross borders: boundaries, currencies, cultures, legal systems, availability of resources, and skills & knowledge. International Business Activities: • Exporting and importing: countries can depend heavily on exports, e.g. Netherlands 83%. You can import and export services (invisible traders) or goods (visible trade). Most secure way to test if your good can be well received by another culture. • International investments: Two options. Foreign Direct Investment opens a store in the host country with the same operating system that you use: in your home country. Foreign Portfolio Investment: buying financial assets in another firm in the country. • International licensing: a foreign company gets exclusive rights to use your intellectual property for a specific time in exchange for a royalty. • International franchising: it is a specialized form of international licensing. You not only use the brand and the products, but also keep the same form of operations. For example, Tim Hortons. • International management contract: not very common, but can be used by big companies. Send managers to another country for a specific period of time. Example Disney Paris and Disney USA. Phases of Development (going global): • Domestic Phase: (aka Product oriented phase) focused on development of the product. • Multidomestic phase: (aka......

Words: 642 - Pages: 3