International
Management
Managing Across Borders and Cultures
TEXT AND CASES
EIGHTH EDITION
Helen Deresky
International M
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– Updated! Major revisions made to examples and case studies to
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International Management explores the dynamic global environment of
business management and uses locally applicable cases and examples
including the Lynas Corporation in Malaysia, 1time Airline in South Africa
and HSBC in Dubai.
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INTERNATIONAL
MANAGEMENT
Managing Across Borders and Cultures
TEXT AND CASES
Eighth Edition
HELEN DERESKY
Professor Emerita, State University of New York–Plattsburgh
Boston Columbus Indianapolis New York San Francisco Upper Saddle River
Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto
Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
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Brief Contents
5
Preface 13
Part 1 the Global Manager’s Environment 21
Chapter 1 Assessing the Environment: Political, Economic, Legal,
Technological 22
Chapter 2 Managing Interdependence: Social Responsibility, Ethics,
Sustainability 58
Comprehensive Cases PC1-1
New: Case 1 An Ethics Role-Playing Case: Stockholders versus
Stakeholders (Global/Sri Lanka) PC1-1
New: Case 2 BlackBerry in International Markets: Balancing
Interests and Host Nations’ Security
Concerns (Global/Middle East) PC1-3
Part 2 the Cultural Context of Global Management 89
Chapter 3 Understanding the Role of Culture 90
Chapter 4 Communicating Across Cultures 130
Chapter 5 Cross-cultural Negotiation and Decision Making 163
Comprehensive Cases PC2-1
New: Case 3 Google’s Orkut in Brazil: What’s So Social
about It? (Brazil) PC2-1
Case 4 MTV Networks: The Arabian Challenge
(Saudi Arabia) PC2-9
Part 3 Formulating and Implementing Strategy for International
and Global Operations 191
Chapter 6 Formulating Strategy 192
Chapter 7 Implementing Strategy: Strategic Alliances; Small es;
Emerging Economy Firms 234
Chapter 8 Organization Structure and Control Systems 261
Comprehensive Cases PC3-1
New: Case 5 Alibaba in 2011: Competing in China &
Beyond (China/Global) PC3-1
New: Case 6 Carrefour’s Misadventure in Russia
(France/Russia) PC3-17
New: Case 7 Walmart’s Expansion in Africa: A New
Exploration Strategy (U.S./Africa) PC3-27
New: Case 8 Evaluating the Chrysler-Fiat Auto Alliance
in 2012 (Italy/U.S./Global) PC3-33
Part 4 Global Human resources Management 287
Chapter 9 Staffing, Training, and Compensation for Global Operations 288
Chapter 10 Developing a Global Management Cadre 318
Chapter 11 Motivating and Leading 348
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6 BRIEF CONTENTS
Comprehensive Cases PC4-1
New: Case 9 Foreign Investment in Chinese Banking Sector:
HR Challenges (China) PC4-1
New: Case 10 Indra Nooyi: A Transcultural Leader
(India/Global) PC4-9
Part 5 Integrative Section IC-1
Integrative Term Project IC-1
New: Integrative Case: Case 11 Mahindra and Mahindra (B):
An Emerging Global Giant? (India/
Global) IC-3
New: Case 12 After the Breakup:
The Troubled Alliance Between
Volkswagen and Suzuki
(Japan/Germany) IC-13
Glossary 375
Endnotes 381
Name and Subject Index 397
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Contents
7
Preface 13
Part 1 the Global Manager’s
Environment 21
Chapter 1 assessing the Environment:
Political, Economic, Legal,
technological 22
Opening Profile: The Globalization of
Risk 23
The Global Environment 24
Globalization 24
Global Trends 24
Globality and Emerging Markets 25
Backlash against Globalization 27
Effects of Institutions on Global Trade 28
Effects of Globalization on Corporations 28
Small and Medium-Sized Enterprises (SMEs) 30
Regional Trading Blocs 30
The European Union (EU) 30
Asia 32
Comparative Management in Focus: China
Helps Prop Up the Global Economy 32
The Americas 16
Other Regions in the World 37
The Russian Federation 37
The Middle East 37
Developing Economies 38
The African Union (AU) 38
The Globalization of Information
Technology 38
Management in Action: Intel Brings Changes
to Vietnam’s Economy and Culture 39
The Globalization of Human Capital 39
The Global Manager’s Role 40
The Political and Economic Environment 41
Political Risk 42
Political Risk Assessment 44
Managing Political Risk 44
Managing Terrorism Risk 45
Economic Risk 45
The Legal Environment 46
Contract 47
Other Regulatory Issues 47
The Technological Environment 48
Under the Lens: Information Technology (IT) 49
Global E- 50
Conclusion 52
Summary of Key Points 53 • Discussion
Questions 53 • Application
Exercises 54 • Experiential
Exercise 54 • Internet Resources 54
E CaSE Study: Apple’s iPhones—Not
“Made in America” 54
Chapter 2 Managing Interdependence:
Social responsibility, Ethics,
Sustainability 58
Opening Profile: McDonald’s CSR Experience
in China 59
The Social Responsibility of MNCs 60
Under the Lens: Managing CSR in the
Workplace 61
CSR: Global Consensus or Regional
Variation? 63
From CSR to Shared Value? 64
MNC Responsibility Toward Human Rights 64
Comparative Management in Focus: Doing
in China—CSR and the Human
Rights Challenge 65
Ethics in Global Management 67
Ethics in Uses of Technology 70
Bribery 72
Making the Right Decision 74
Managing Interdependence 76
Foreign Subsidiaries in the United States 76
Managing Subsidiary–Host Country
Interdependence 76
Managing Environmental Interdependence and
Sustainability 79
Under the Lens: Mining Corporation and
Pollution Charges—Lynas Corporation in
Malaysia 81
Management in Action: Recycling Lives—
Social Entrepreneurship Breaking Down
Barriers 82
Implementing Sustainability Strategies 82
Conclusion 83
Summary of Key Points 84 • Discussion
Questions 84 • Application
Exercise 85 • Experiential
Exercise 85 • Internet Resources 85
E CaSE Study: Nike’s CSR
Challenge 86
Comprehensive Cases PC1-1
New: Case 1 An Ethics Role-Playing Case:
Stockholders versus Stakeholders PC1-1
New: Case 2 BlackBerry in International Markets:
Balancing Interests and Host
Nations’ Security Concerns PC1-3
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8 CONTENTS8 CONTENTS
Part 2 the Cultural Context of Global
Management 89
Chapter 3 understanding the role of
Culture 90
Opening Profile: Adjusting to Saudi
Arabian Culture 91
Culture and Its Effects on
Organizations 94
Societal Culture 94
Organizational Culture 95
Culture’s Effects on Management 95
Influences on National Culture 98
Cultural Value Dimensions 98
Project GLOBE Cultural Dimensions 98
Under the Lens: Religion and the
Workplace 99
Cultural Clusters 102
Hofstede’s Value Dimensions 104
Trompenaars’s Value Dimensions 106
Consequence or Cause? 107
Critical Operational Value Differences 108
The Internet and Culture 109
Management in Action: India’s IT Industry
Brings Cultural Changes 111
Developing Cultural Profiles 112
Comparative Management in Focus:
Profiles in Culture—Japan, Germany, Latin
America 113
Culture and Management Styles Around the
World 118
Under the Lens: Doing in Brazil—
Language, Culture, Customs,
and Etiquette 118
Saudi Arabia 122
Chinese Family Small es 122
Conclusion 124
Summary of Key Points 124 • Discussion
Questions 125 • Application
Exercises 125 • Experiential
Exercises 125 • Internet Resources 126
E CaSE Study: Australia and New
Zealand: Doing with
Indonesia 126
Chapter 4 Communicating across
Cultures 130
Opening Profile: The Impact of Social Media
on Global 131
The Communication Process 132
Cultural Noise in the Communication Process 133
The Culture–Communication Link 133
Trust in Communication 134
The GLOBE Project 135
Cultural Variables in the Communication
Process 135
Under the Lens: Communicating in
India—Language, Culture, Customs,
and Etiquette 136
Under the Lens: How Feng Shui Affects
144
Context 146
Management in Action: Oriental Poker
Face: Eastern Deception or Western
Inscrutability? 148
Comparative Management in Focus:
Communicating with Arabs 149
Communication Channels 151
Information Technology: Going Global and
Acting Local 154
Under the Lens: Google’s “Street View”
Makes Friends in Japan but Clashes with
European Culture 155
Managing Cross-Cultural
Communication 156
Developing Cultural Sensitivity 156
Careful Encoding 156
Selective Transmission 157
Careful Decoding of Feedback 157
Follow-up Actions 157
Conclusion 158
Summary of Key Points 158 • Discussion
Questions 159 • Application
Exercises 159 • Experiential
Exercise 159 • Internet Resources 159
E CaSE Study: Miscommunications with
a Brazilian Auto Parts Manufacturer 160
Chapter 5 Cross-cultural Negotiation and
decision Making 163
Opening Profile: Shiseido and Bare
Escentuals—Cultural Conflicts in
Negotiations 164
Negotiation 165
The Negotiation Process 165
Stage One: Preparation 166
Variables in the Negotiating Process 166
Stage Two: Relationship Building 167
Nontask Sounding 167
Stage Three: Exchanging Task-Related
Information 168
Stage Four: Persuasion 168
Stage Five: Concessions and Agreement 169
Management in Action: Cultural
Misunderstanding—The Danone-Wahaha
Joint Venture in China Splits after Years of
Legal Dispute 170
Understanding Negotiation Styles 171
Successful Negotiators around the World 173
Comparing Profiles 175
Managing Negotiation 175
Using the Internet to Support Negotiations 176
E-Negotiations 177
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litigation
Underline
CONTENTS 9
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Managing Conflict Resolution 177
Comparative Management in Focus:
Negotiating with the Chinese 177
Context in Negotiations 180
Decision Making 181
The Influence of Culture on Decision Making 182
Under the Lens: Negotiations and Decisions
to Save the Eurozone System 182
Approaches to Decision Making 184
Comparative Management in Focus: Decision
Making in Japanese Companies 185
Conclusion 187
Summary of Key Points 187 • Discussion
Questions 187 • Experiential
Exercise 188 • Internet Resources 188
E CaSE Study: Facebook’s Continued
Negotiations in China 189
Comprehensive Cases PC2-1
New: Case 3 Google’s Orkut in Brazil: What’s So
Social about It? PC2-1
New: Case 4 MTV Networks: The Arabian
Challenge PC2-9
Part 3 Formulating and Implementing
Strategy for International and
Global Operations 191
Chapter 6 Formulating Strategy 192
Opening Profile: Global Companies Take
Advantage of Opportunities in South
Africa 193
Reasons for Going International 196
Reactive Reasons 196
Globalization of Competitors 196
Trade Barriers 197
Regulations and Restrictions 197
Customer Demands 197
Proactive Reasons 197
Economies of Scale 197
Growth Opportunities 197
Resource Access and Cost Savings 198
Incentives 198
Management in Action: 1time Airlines 199
Strategic Formulation Process 200
Steps in Developing International and Global
Strategies 200
Step 1. Establish Mission and Objectives 201
Step 2. Assess External Environment 202
Institutional Effects on International
Competition 203
Under the Lens: China Limits Foreign
Property Ownership 204
Sources of Environmental Information 205
Step 3. Analyze Internal Factors 205
Competitive Analysis 206
Strategic Decision-Making Models 208
Step 4. Evaluate Global and International Strategic
Alternatives 209
Approaches to World Markets 209
Global Strategy 209
Regionalization/Localization 210
Global Integrative Strategies 211
Using E- for Global Expansion 212
E-Global or E-Local? 214
Step 5. Evaluate Entry Strategy
Alternatives 215
Exporting 215
Licensing 216
Franchising 216
Contract Manufacturing 216
Offshoring 217
Service Sector Outsourcing 217
Turnkey Operations 218
Management Contracts 218
International Joint Ventures 220
Fully Owned Subsidiaries 220
E- 221
Step 6. Decide on Strategy 221
Comparative Management in Focus: Strategic
Planning for Emerging Markets 223
Timing Entry and Scheduling Expansions 230
The Influence of Culture on Strategic
Choices 230
Conclusion 230
Summary of Key Points 231 • Discussion
Questions 231 • Application
Exercises 231 • Experiential
Exercise 232 • Internet Resources 232
E CaSE Study: Search Engines in Global
232
Chapter 7 Implementing Strategy: Strategic
alliances; Small es;
Emerging Economy Firms 234
Opening Profile: From BP to Exxon: Beware
the Alliance with the Bear 235
Strategic Alliances 235
Joint Ventures 236
Equity Strategic Alliances 237
Non-Equity Strategic Alliances 237
Global Strategic Alliances 237
Global and Cross-Border Alliances: Motivations and
Benefits 238
Challenges in Implementing Global
Alliances 239
Implementing Alliances Between SMEs and
MNCs 241
Under the Lens: Dancing with
Gorillas: How SMEs Can Internationalize
through Relationships with Foreign
Multinationals 241
Guidelines for Successful Alliances 243
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10 CONTENTS
Comparative Management in Focus: Joint
Ventures in the Russian Federation 244
Implementing Strategy 247
Implementing Strategies for SMEs 247
Under the Lens: Breaking Down Barriers for
Small Exports 248
Implementing a Global Sourcing Strategy 249
Under the Lens: Global Supply Chain Risks—
The Japanese Disaster 250
Implementing Strategies for Emerging Economy
Firms 251
Challenges in Implementing Strategies in Emerging
Markets 252
Managing Performance in International Joint
Ventures 252
Knowledge Management in IJVs 253
Government Influences on Strategic
Implementation 254
Cultural Influences on Strategic
Implementation 255
Management in Action: Mittal’s Marriage to
Arcelor Breaks the Marwari Rules 256
E-commerce Impact on Strategy
Implementation 257
Conclusion 258
Summary of Key Points 258 • Discussion
Questions 258 • Application
Exercise 259 • Internet Resources 259
E CaSE Study: The Nokia-Microsoft
Alliance in the Global Smartphone Industry
(circa 2011) 259
Chapter 8 Organization Structure and Control
Systems 261
Opening Profile: Tata’s Acquisition
of Jaguar Land Rover 262
Organizational Structure 263
Evolution and Change in MNC Organizational
Structures 263
Under the Lens: Samsung Electronics
Reorganizes to Fight Downturn 264
Integrated Global Structures 265
Organizing for Globalization 268
Organizing to “Be Global, Act Local” 268
Management in Action: Procter & Gamble’s
“Think Globally-Act Locally” Structure—10
Years of Success 270
Emergent Structural Forms 272
Comparative Management in Focus: Changing
Organizational Structures of Emerging
Market Companies 272
Interorganizational Networks 273
The Global E-Corporation Network Structure 273
The Transnational Corporation (TNC) Network
Structure 274
Choice of Organizational Form 275
Organizational Change and Design Variables 275
Control Systems for Global Operations 277
Under the Lens: FIFA—Restructuring for
Governance Oversight of Ethics 278
Direct Coordinating Mechanisms 279
Indirect Coordinating Mechanisms 280
Managing Effective Monitoring Systems 281
The Appropriateness of Monitoring and Reporting
Systems 281
The Role of Information Systems 281
Evaluation Variables Across Countries 282
Conclusion 282
Summary of Key Points 282 • Discussion
Questions 263 • Application
Exercises 263 • Experiential
Exercise 263 • Internet Resources 283
E CaSE Study: HSBC’s Global Reorganization
and Corporate Performance in 2012 284
Comprehensive Cases PC3-1
New: Case 5 Alibaba in 2011: Competing in China &
Beyond PC3-1
New: Case 6 Carrefour’s Misadventure in
Russia PC3-17
New: Case 7 Walmart’s Expansion in Africa: A New
Exploration Strategy PC3-27
New: Case 8 Evaluating the Chrysler-Fiat Auto
Alliance in 2012 PC3-33
Part 4 Global Human resources
Management 287
Chapter 9 Staffing, training, and
Compensation for Global
Operations 288
Opening Profile: Staffing Company
Operations in Emerging Markets 289
Staffing for Global Operations 291
Under the Lens: HSBC’s Staffing Challenges in
the UAE 293
Managing Expatriates 298
Expatriate Selection 298
Expatriate Performance Management 299
Expatriate Training and Development 300
Cross-cultural Training 302
Culture Shock 302
Subculture Shock 304
Training Techniques 304
Integrating Training with Global Orientation 305
Compensating Expatriates 305
Training and Compensating Host-Country
Nationals 308
Training HCNs 308
Management in Action: Success! Starbucks’
Java Style Helps to Recruit, Train, and Retain
Local Managers in Beijing 309
Compensating HCNs 311
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Comparative Management in Focus: IHRM
Practices in Australia, Canada, China,
Indonesia, Japan, Latin America, Mexico, South
Korea, Taiwan, and the United States 312
Conclusion 314
Summary of Key Points 314 • Discussion
Questions 314 • Application
Exercises 314 • Experiential
Exercise 315 • Internet Resources 315
E CaSE Study: Kelly’s Assignment in
Japan 315
Chapter 10 developing a Global Management
Cadre 318
Opening Profile: The Expat Life 319
Expatriate Career Management 320
Preparation, Adaptation, and Repatriation 321
The Role of the Expatriate Spouse 322
Expatriate Retention 323
The Role of Repatriation in Developing a
Global Management Cadre 323
Knowledge Transfer 324
Global Management Teams 326
Under the Lens: Expatriates’ Careers Add to
Knowledge Transfer 326
“Virtual” Transnational Teams 328
Managing Transnational Teams 329
Management in Action: The Role of Women in
International Management 332
Working Within Local Labor Relations
Systems 334
The Impact of Unions on es 334
Organized Labor Around the World 335
Convergence Versus Divergence in Labor
Systems 337
Under the Lens: Vietnam—The Union Role in
Achieving Manufacturing Sustainability and
Global Competitiveness 338
Adapting to Local Industrial Relations Systems 340
The NAFTA and Labor Relations in Mexico 341
Comparative Management in Focus: Labor
Relations in Germany 342
Conclusion 344
Summary of Key Points 344 • Discussion
Questions 345 • Application
Exercise 345 • Experiential
Exercise 345 • Internet Resources 345
E CaSE Study: Expatriate Management at
AstraZeneca 345
Chapter 11 Motivating and Leading 348
Opening Profile: The EU Leader—
Myth or Reality? 349
Motivating 350
Cross-Cultural Research on Motivation 350
The Meaning of Work 351
The Needs Hierarchy in the International
Context 353
Comparative Management in Focus:
Motivation in Mexico 354
Under the Lens: Managing in
Russia—Motivation and Leadership
Challenges 358
Reward Systems 360
Leading 361
The Global Leader’s Role and
Environment 361
Under the Lens: Global Leaders from
India 363
The E- Effect on Leadership 364
Management in Action: Leadership in a
Digital World 364
Cross-Cultural Research on Leadership 365
Contingency Leadership: The Culture
Variable 366
The GLOBE Project 366
Earlier Leadership Research 367
Conclusion 371
Summary of Key Points 371 • Discussion
Questions 371 • Application
Exercises 372 • Experiential
Exercise 372 • Internet Resources 372
E CaSE Study: The Olympus Debacle—
Western Leader Clashes with Japan’s
Corporate Leadership Style 372
Comprehensive Cases PC4-1
New: Case 9 Foreign Investment in Chinese Banking
Sector: HR Challenges PC4-1
New: Case 10 Indra Nooyi: A Transcultural
Leader PC4-9
Part 5 Integrative Section IC-1
Integrative Term Project IC-1
New: Integrative Case: Case 11 Mahindra
and Mahindra (B): An Emerging Global
Giant? IC-3
New: Case 12 After the Breakup: The Troubled
Alliance Between Volkswagen and
Suzuki IC-13
Glossary 375
Endnotes 381
Name and Subject Index 397
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Preface
13
EiGhth Edition ChanGEs
• Comprehensive cases: 11 of the 12 comprehensive cases are new and current; one is
a popular one from the seventh edition. The case selection provides increased coverage
of emerging markets and high-technology companies. A range of topics and geographic
locations is included, as well as an interactive Ethics Role Playing Case.
• Integrative Section: There are two new comprehensive cases in the Integrative sec-
tion that are exciting because they cover topics from throughout the book: Mahin-
dra and Mahindra, an “emerging” giant, and the Volkswagen-Suzuki breakup. In
addition, the popular Integrative Term Project has been retained.
• A new feature box called “Under the Lens” has been added—one or two in each
chapter. This feature gives an in-depth look at important aspects of the chapter subjects,
including, for example, “Doing in Brazil,” “How Feng Shui Affects Busi-
ness,” “Negotiations and Decisions to Save the Eurozone System,” and “How SMEs Can
Internationalize.”
• Maps added throughout.
• Chapter-Opening Profiles: Nine of the 11 Opening Profiles are new, keeping two
favorites. Examples are “The Globalization of Risk,” and “The Impact of Social
Media on Global .”
• Chapter-Ending Cases: There are eight new chapter-ending cases, keeping three
favorites. Examples …
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You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
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