What is internationalization?
the performance of trade and investment activities by companies across national borders
What are the 2 dominant theories of internationalization?
- traditional growth and development
2. born- global
What is the traditional model of internationalization?
- incremental; entering physically close markets first then increasing commitment to international markets gradually
domestic > import/export > multinational org > global firm
What is the born-global model of internationalization?
after business inception, seeks to derive significant competitive advantage from the use of resources & sale of outputs in multiple countries
What is a multinational organization?
an organization that thinks of itself as a firm that has a nationality but has operations in many countries
What is a national subsidiary?
managers at subsidiaries have direct access and communication with managers at headquarters; may have minimal communication with other subsidiaries
What is an international division?
an official line of communication goes from the field through the international division to the appropriate areas and departments at headquarters; could lead to duplication of efforts; may create rivalry between domestic and international division
What is a global firm?
does not divide operations into domestic and international; has a global perspective
What are 4 different organizational structures? (CCFP)
- credentials
- context
- family orientation
- political principles
What are the characteristics of an organization based on credentials?
- people identify with professional attributes
- employees can enter and leave an org at any level
- individual advancement & individual opportunities
- cultural leaning toward equal opportunity, individualism, merit
What are the characteristics of an organization based on context?
- people identify with their organization
- importance of group, reciprocity, mutual dependency
- personality that fits is more important than skills
- company loyalty from employees
What are the characteristics of an organization based on family orientation?
- implication that family will take care of family before outsiders
- positions are flexible to accommodate family qualifications
- business conducted at a personal level; trust is necessary
What are the characteristics of an organization based on political principles?
- political orientation of employee influences employment and promotion decisions
What are the 3 types of culturally diverse teams?
- destroyers
- equalizers
- creators
What are “destroyers”?
- when members of culturally diverse teams mistrust each other and guard information
- teams may engage in stereotyping
What are “equalizers”?
- members are prone to achieving mediocrity because they prefer to view themselves as a homogenous group & suppress differences
- cannot/ do not want to leverage diversity for innovation or performance advantage
What are “creators”?
- members that explicitly recognize and accept differences between members
- understand, incorporate, and leverage differences to gain competitive advantage
What are the 5 steps in building successful culturally diverse teams?
- create self awareness
- map cultural differences
- bridge gaps and identify synergies
- develop strategies
- assess results
