Question

1. Describe four types of cultures and how corporate culture relates to the environment.

2. Define a cultural leader and explain the tools a cultural leader uses to create a high-performance culture.

3. Define globalization and explain how it is creating a borderless world for today’s managers.

4. Describe various approaches businesses use to enter the international arena.

Answer 1

Meaning of Corporate culture :- It refers the beliefs and behaviors that determine how a company's employees and management interact.

Corporate culture is also influenced by national cultures and traditions, economic trends, international trade, company size, and products.

Four distinct types of company cultures.

Clan Culture

Clan cultures have a friendly, collaborative culture and can be compared to a large family—i.e., a clan—where people have a lot in common. Strong bonds of loyalty, tradition, and commonality generally form.

Adhocracy Culture

The root word here is “ad hoc.” An adhocracy is a dynamic and innovative environment where employees are willing to take chances and leaders are typically seen as inspirational innovators willing to challenge assumptions and take risks.

• A dynamic entrepreneurial, and creative place to work. People stick their necks out and take risks.   

Market culture :-Amarket culture is a culture in which the goal is to get down to business, get work done, and achieve results. This is often a competitive environment, even among coworkers. The purpose of being at work in a company with this type of culture is to make as much profit and capture as much market share as possible. Amazon is a great example of this type of company, and Jeff Bezos is known as being a demanding taskmaster. Apple, under Steve Jobs’ reign, is another example.

Hierarchy Culture

Process and procedure are everything in a hierarchy culture. Leaders are there to monitor and facilitate adherence to tried and true ways of doing business. Costs and mistakes are kept low by following the rules and the guidelines that have gotten the business this far in the first place.

A very formalized structured place to work. Procedures govern what people do.

Managing culture requires a significant portfolio of skills in the four concepts of the model – adaptability, mission, involvement and consistency. Organizations with strong adaptive cultures where employees share a larger vision for their company are more likely to have united, cooperative workforce which promote profitability, productivity andi increased market share.

. THE ENVIRONMENT & CORPORATE CULTURE

Culture is the environment that surrounds you at work all of the time. It is a powerful element that shapes your work enjoyment, your work relationships, and your work processes. However, culture is not something that you can see, except through its physical manifestations in your workplace.

In many ways, culture is like personality. In a person, the personality is made up of the values, beliefs, underlying assumptions, interests, experiences, upbringing, and habits that create a person’s behavior.

Culture is made up of such traits shared by a group of people. Culture is the behavior that results when a group arrives at a set of generally unspoken and unwritten rules for working together.

An organization’s culture is made up of all of the life experiences each employee brings to the organization. Culture is especially influenced by the organization’s founder, executives, and other managerial staff because of their roles in decision making and strategic direction. Still, every employee has an impact on the culture that is developed at work.

Culture can be represented in a group’s language, decision making, symbols, stories and legends, and daily work practices.

A cultural leader is a manager who uses signals and symbols to influence corporate culture.Cultural leaders influence culture by articulating a vision for the organizational culture thatemployees can believe in, and heeding the day-to-day activities that reinforce the cultural vision.

These are the points to create a high-performance culture.

.Collaboration: Employees cooperate, share, and work well together.

. Innovation: The company leader encourages new ideas, and individuals are able to move ideas through the organization.

. Effective communication employees send, receive, and understand the necessary information.

. Support: Employees provide each other with the resources and guidance they need to be successful. They’re confident in company leadership.

Wellness.:-The company has the policies and resources to help people maintain physical and mental health.

. Work Environment: The company has a comfortable workplace where people have the resources to be effective in their work.

Globalization :-Globalization is the connection of different parts of the world resulting in the expansion of international cultural, economic, and political activities. It is the connection of different parts of the world resulting in the expansion of international cultural, economic, and political activities. It is the movement and integration of goods and people among different countries.

A “borderless world”... refers to an open world which can bring influences upon people. It may bring about changes in their culture, beliefs, traditions and others.

• Managing in a Borderless World -identifies the purpose for the companies to go abroad and trying to invest in foreign countries regardless of the way to enter it, like joint ventures, wholly owned businesses, licensing …but effective global operations require a genuine equidistance of perspectives. But even with the best will in the world, managers find that kind of vision hard to develop and harder to maintain.
• Most managers in all big companies aretrying to increase their sales and marketshare, but the only way nowadays is tosearch for new market where there are newopportunities (especially in the far east) inorder to expand their businesses.
• The major purpose to go internationally isdue to the intensive and huge competitionthe companies are facing in their localmarkets, domestic and foreigncompetition.
• The factors that lead managers tomanage in a borderless world are thecost factor that all companies careabout because it will identify themarginal profit.

International Business Approaches

1. Ethnocentric approach

2. Polycentric approach

3. Re giocentric approach

4. Geocentric approach

The most common market entry strategies are outlined below.

Exporting

Exporting means sending goods produced in one country to sell them in another country. Exporting is a low-risk strategy that businesses find attractive for several reasons. First, mature products in a domestic market might find new growth opportunities overseas. Second, some firms find it less risky and more profitable to export existing products, instead of developing new ones.

Licencing

Under a licensing agreement, a firm (licensor) provides a product to a foreign firm (licensee) by granting that firm the right to use the licensor’s manufacturing process, brand name, patents, or sales knowledge, in return for payment. The licensee obtains a competitive advantage in this arrangement, while the licensor obtains inexpensive access to a new market. Scarce capital, import restrictions, or government restrictions often make this the only way a firm can market internationally. This method does contain some risks. It’s typically the least profitable method for entering a foreign market, and it entails a long-term commitment.

Joint Ventures

A joint venture is a partnership between a domestic and foreign firm. Both partners invest money, share ownership, and share control of the venture. Typically the foreign partner provides expertise about the new market, business connections and networks, and access to other in-country elements of business like real-estate and regulatory compliance. Joint ventures require a greater commitment from firms than other methods, because they are riskier and less flexible.

Turnkey Projects

Turnkey projects are particular to companies that provide services such as environmental consulting, architecture, construction and engineering. A turnkey project is where the facility is built from the ground up and turned over to the client ready to go – turn the key and the plant is operational. This is a very good way to enter foreign markets as the client is normally a government and often the project is being financed by an international financial agency such as the World Bank so the risk of not being paid is eliminated.

Greenfield Investments

Greenfield investments require the greatest involvement in international business. A greenfield investment is where you buy the land, build the facility and operate the business on an ongoing basis in a foreign market. It is certainly the most costly and holds the highest risk but some markets may require you to undertake the cost and risk due to government regulations, transportation costs, and the ability to access technology or skilled labour.