what are four areas of workplace function
corporate social resp.
risk management
managing global workforce
us employment law & Regulations
Perlmutter’s Four Multinational Corporation Orientations
Ethnocentric, Polycentric, Regiocentric, Geocentric
what is Ethnocentric in regards to corporation orientation
Headquarters maintains tight control over subsidiaries, who are expected to follow the strategic pattern, values, policies, and practices expressed by headquarters.
There is “one best way.”
Management will usually share a common ethnic background, different from the ethnic make-up of subsidiaries.
what is Polycentric in regards to corporation orientation
Subsidiaries are allowed a large measure of independence as long as they are profitable.
They may plot their own paths based on the business and cultural contexts of their countries.
There are “many best ways.”
what is Regiocentric in regards to corporation orientation
Subsidiaries are grouped into regions (such as Europe, North America, or Asia-Pacific).
Strategic coordination is high within the region but not as high between the region and headquarters.
what is Geocentric in regards to corporation orientation
Subsidiaries are neither satellites taking orders nor independent bodies setting their own course. Headquarters and subsidiaries are participants in a network, each contributing its unique expertise.
There is essentially “a team way,” transcending national borders.
what are the 4 categories that describe the strategic orientations of multinational enterprises (MNEs)?
Global, Multidomestic, International, Transnational
Globalization Strategy - international
weak link between HQ and dependent subsidiaries
A firm exports a product or service to foreign countries. The company may open production facilities or service centers, but the product/service, processes, and strategy are developed in the home country.
Examples: A German firm that manufactures robotics for specialized industrial purposes around the world; an American-based defense contractor, that, for security reasons, must maintain clear lines of separation among its various international subsidiaries.
Globalization Strategy - Multidomestic
Low GR and high LR
weak links between HQ and autonomous subsidiaries
The organization is a decentralized portfolio of subsidiaries. Goals and strategies are developed locally because of competitive demands. Knowledge is shared on a local rather than global level.
Example: A confectionery company, with different products and manufacturing and sales strategies for each market in which it operates.
Globalization Strategy- Global
High GR & low LR
strong links between HQ and subsidiaries.
The firm views the world as a single global market and offers global products that have little or no national variation or that have been designed with customizable elements. Strategy, ideas, and processes emanate from headquarters.
Example: A white goods manufacturer whose products are quite standardized (washing machines, dishwashers, etc.).
Globalization Strategy - Transnational
High GR and HIGH LR
Strong links between HQ and subsidiaries and among subsidiaries
The firm locates its value chain activities in the most advantageous geographic locations. Subsidiaries are allowed to adapt global products and services to local markets. Best practices and knowledge are shared throughout the organization.
Example: A cosmetics company that markets products specifically to different regions and prioritizes diversity in talent acquisition.
What are two additional approaches analysts use to describe strategic choices along the Global Integration–Local Responsiveness (GI–LR) continuum?
Upstream and downstream strategies, and identity and process alignment.
In an upstream strategy, where are decisions made, what do they focus on, and what areas do strategies typically address?
Made at the organization’s headquarters level
Focus on strategy, coordination, standardization, and integration of resources
Strategies address: workforce alignment, organizational development, and sharing of knowledge/experience
In a downstream strategy, where are decisions made, what do they aim at, and what areas do strategies typically address?
Made at the local level
Aim to adapt strategic goals and plans to local realities (local responsiveness)
Strategies address:
Agreements with local workforce groups
Adjustments to policies for local cultural practices (holidays, break times)
Adjustments for local legal requirements
What is process alignment, and what are examples of it in global organizations?
Definition: Extent to which operations (IT, finance, HR) are integrated across locations
Examples:
Single technology platform used in all locations
Same business performance metrics across all locales
Unified HR systems across locations
Contrast: Acquired businesses may retain separate processes and operate independently
What are known knowns in risk management
Events that are expected and involve little uncertainty.
What are known unknowns in risk management?
A: Uncertainties we know exist, but we don’t know much about their probability or impact.
What are unknown unknowns in risk management?
Risks we don’t know exist. These are unexpected events that can blindside individuals or organizations.
What is Nassim Taleb’s Black Swan theory about?
It describes unknown unknowns—rare, high-impact events that seem predictable in hindsight, like abrupt technological changes or sudden sociopolitical shifts.
unknown knowns
risk we mistakenly think we understand.
What are the three categories of risk according to Kaplan and Mikes?
A: 1. Internal & Preventable Risks
2. Strategy Risks
3. External Risks
What are the four general categories of organizational risks in the risk quadrants model?
Strategic – risks that affect the organization’s ability to achieve its objectives
Operational – risks that affect how the organization creates value
Financial – risks that affect accuracy/timeliness of financial performance info
Hazard – risks that can cause physical harm to people or property (illness, injury, etc.)
What are the four categories of risk in the PAPA Model?
Prepare – Predictable & Slow (can be anticipated and planned for)
Act – Predictable & Fast (require immediate action)
Park – Unpredictable & Slow (monitor but low urgency)
Adapt – Unpredictable & Fast (need flexible, adaptive responses)
Protected class
People who are covered under a particular federal or state antidiscrimination law.