MBAD6197
Managing Multinational
Enterprises
DR. VICTOR Z. CHEN (WWW.CHENZITIAN.COM)
UNC CHARLOTTE
Course website: http://www.chenzitian.net/teaching/MBAD6197/
Quiz 9
Quiz 9
Quiz 9
The Big Picture

Jan 9-23: Introduction, who and why internationalize?

Jan 30-Feb 27: What makes an MNE successful?



Jan 30: Competitive advantage analysis

Feb 6: Firm-specific advantages (why this company?)

Feb 13: Location-specific advantages (why this place?)

Feb 20: Internalization benefits (why control vs. trade)?

Feb 27: A synthesis and a practice of your own company
Mar 13-May 1: Where abroad can an MNE replicate its success?

Mar 13: Comparing foreign locations
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Mar 20: Comparing financial/economic environments and risks
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Mar 27: Comparing legal/political environments and risks

Apr 3: Comparing social/cultural environments and risks

Apr 10: Risk management across institutional environments

Apr 17: A synthesis and a practice of your own company

May 1: Preparation for the final challenge.
May 8: “Global Managers” Challenge
Trivia question:
How many kisses do we give in a greeting?
Trivia question:
How many kisses do we give in a greeting?
Tonight’s agenda

A summary of my presentation with Mikael Hagstroem (Partner & COO,
McKinsey Analytics; Former SVP of Global Operations, SAS Institute) on Making
Management (Consulting) Tools based on Scientific Principles and Evidence


Cultural compass as an example
Practicing Cultural compass

“Global marketing team meeting in Japan” video

Previous cases taught in class

Your own company

7:00-7:50: Guest speaker, Rohan Paul (Deloitte) (Rescheduled TBC)

Quiz 10
Business Strategy
Analytics: Integrating
Reason and Data
3:45 PM to 4:45 PM
March 29, 2017
Salon 1 The Ritz-Carlton Charlotte, NC
Keynote Speaker:
Mikael Hagstroem, Partner & COO
McKinsey Analytics
Host and Speaker:
Dr. Victor Z. Chen
Professor, Belk College of Business
UNC Charlotte
Business
Reasoning
• Observation
• Hypothesis
• Empirical evidence
• Replications
• Synthesis
• Tool-making
Case study, field/lab
Observation
Foundational disciplines
Business Literature
Deductive
analysis
Inductive
analysis
Hypothesis
“If …then…” prediction
Statistical tests in
bigger samples
Empirical evidence
Reject
Support
Context
boundaries (e.g.,
geography,
industry, culture,
business cycle, etc.)
More independent samples
become available
Replications
Replications
Replicable
prescription
Synthesis
--- dash arrows suggest back loops because of
unsuccessful results.
Unreplicable
Predictor 1
Problem-solving: Predictor 1 of
a performance measure
Predictor 2
Systematic review & Meta-analysis
Predictor n
Predictor 3
Tool-making
A comprehensive problem-solving tool
Consulting
Big Data
Automated Management Consulting
Business Analytics
From Hofstede’s National Cultures to Cultural Compass:
Applying the Business Reasoning

What are the likely consequences if people of
difference cultures work together in a team?
From Hofstede’s National Cultures to Cultural Compass:
Applying the Business Reasoning

Observations: Geert Hofstede observed results from a world-wide survey of
employee values by IBM between 1967 and 1973

Hypotheses – Empirical Testing – Replications - Synthesis (Meta-Analysis)
Q1: who you are, culturally?
Members
Reference: USA
Tom (American)
Omar (Arab)
Sachiko (Japanese)
Jaseline (French)
Fernandes (Mexican)
Statistics
Average
Standard Deviation (STD)
Power distance index
Individualism vs. Collectivism
Masculinity vs. Femininity
91
91
38
46
71
30
62
62
53
95
43
69
46
46
68
92
86
82
64.60
17.57
55.20
25.23
64.40
19.69
74.80
18.36
Q2: what is most likely the conflicting
dimension?
The highest STD of your team is in the
dimension of
Individualism vs. Collectivism
Q3: what are the most likely consequences
(and correlations) by category?

Tool-making
Uncertainty avoidance
40
40
80
54
68
81
Work-related behaviors
Communication behaviors
Conflict behaviors
Work-related attitudes and perceptions
Group-related attitudes and perceptions
Conflict management/negotiation
Perceived justice and reward allocation rules
Organization citizenship (-21%)
Self-promotion (20%)
Conflict avoidance (-30%)
Ethics (39%)
Need for affiliation (-37%)
Concern for others' interests (Seniority (-28%)
Leadership style preference
Is it easy for us to cooperate in group if we all
converge to team average score?
Paternalism (46%)
Difficult because of a high team
average score in this dimension
From Hofstede’s National Cultures to Cultural Compass:
Applying the Business Reasoning
Behavioral and perceptual conflicts due to cultural distance in Power Distance
Work-related behaviors:
Absenteeism
Communication behaviors:
Sensitivity to others
Conflict behaviors:
Work-related attitudes and perceptions:
Organizational commitment because of feelings of
obligations
Group-related attitudes and perceptions:
Teamwork preference (-)
Conflict management/negotiation:
Perceived justice and reward allocation rules:
High perception of justice
Leadership style preference:
Directive
From Hofstede’s National Cultures to Cultural Compass:
Applying the Business Reasoning
Behavioral and perceptual conflicts due to cultural distance in Individualism vs.
Collectivism
Work-related behaviors:
Organizational citizenship (-)
Communication behaviors:
Self-promotion
Conflict behaviors:
Conflict avoidance (-)
Work-related attitudes and perceptions:
Ethics
Group-related attitudes and perceptions:
Need for affiliation (-)
Conflict management/negotiation:
Concern for others’ interest (-)
Perceived justice and reward allocation rules:
Less respect for seniority
Leadership style preference:
Paternalism
From Hofstede’s National Cultures to Cultural Compass:
Applying the Business Reasoning
Behavioral and perceptual conflicts due to cultural distance in Masculinity vs. Femininity
Work-related behaviors:
Efforts
Communication behaviors:
Self-promotion
Conflict behaviors:
Compromising
Work-related attitudes and perceptions:
Ethics (-)
Group-related attitudes and perceptions:
Social avoidance
Conflict management/negotiation:
Perceived justice and reward allocation rules:
Less respect for equity
Leadership style preference:
Paternalism
From Hofstede’s National Cultures to Cultural Compass:
Applying the Business Reasoning
Behavioral and perceptual conflicts due to cultural distance in Uncertainty avoidance
Work-related behaviors:
Innovation (-)
Communication behaviors:
Sensitivity to others
Conflict behaviors:
Work-related attitudes and perceptions:
Organizational commitment based on costs and
benefits
Group-related attitudes and perceptions:
Team commitment
Conflict management/negotiation:
Perceived justice and reward allocation rules:
High perception of justice
Leadership style preference:
Directive
Exercise 1

Given the nationalities of your teammates in the “Global marketing
team meeting in Japan” video

1. Find each person’s Hofstede’s cultural measures based on their
nationality

2. Use Cultural compass to discuss potential cultural pitfalls for
communications and teamwork among these teammates

3. Now watch the video again
Exercise 2

Use cultural compass to discuss what the potential cultural pitfalls are in:

Wal-Mart in Germany and Korea

Target in Canada

Google in China

3P Turbo in Brazil
Exercise 3

Use cultural compass to discuss what the potential cultural pitfalls are if:

GM British-born, married to a German wife.

Lived in the US, managing a German-based firm in Charlotte.

What are likely the cultural pitfalls when working in a team, consisting of this
GM, a German-based German engineer, and a local American sales
manager.
Group Practice

Given your short list of foreign markets

1. Find their Hofstede’s cultural measures

2. Use Cultural compass to discuss potential cultural pitfalls for
organizational integration processes and local adaptation


First, measure your own teammates’ cultures;

Second, add a new teammate from the shortlisted market.
An integration of all previous practices

CSA/FSA table, contextual boundaries

Economic/financial: exchange rate risks and inflation

Legal/political: political risks

Socio/cultural: Cultural pitfalls
Contact
Victor Z. Chen
Belk College of Business
UNC Charlotte
+1 (704) 687-7645
[email protected]
www.ChenZitian.com
Course website: http://www.chenzitian.net/teaching/MBAD6197/