International Management_ Culture, Strategy, and Behavior ( PDFDrive.com )

620 Name Index

Wang, Haiyan, 428, 430n72 Winograd, Terry, 419n7 Ye, Baoxiu, 261nn35–48
Ward, Allen C., 357n52 Winsor, Morgan, 71n63 Yeh, Rhy-song, 353n, 357nn56–57,
Ward, Andrew, 321n1, 321n3, 321n16 Winterkorn, Martin, 84
Ward, Mike, 561 Wipro, 6 358n64
Warner, Malcolm, 140n, 152n16, 490n, Wittenberg-Cox, S. A., 465n95 Yenikeyeff, Shamil, 383n13
Womack, Brian, 420n40 Yerak, Becky, 574n2
526n, 552n63 Wonacott, Peter, 253n1, 253n4, 254n26, Yi, Lee Mei, 171, 179n58
Warner Bros., 263 Yihaodian, 284
Warner Chilcott, 346 254n39 Yingluck Shinawatra, 30
Warsaw Stock Exchange, 59 Wong, Chi-Sum, 552n75, 552n84, 552n95, Yip, George S., 357nn38–39
Warshaw, Steve, 576 Yiu, Enoch, 322n29
Wasion Group, 377 553n110 Yi Xianrong, 567
Water for People, 105 Wong, Edward, 40n68 Yoo, Sangjin, 504n42, 504n49
Waterson, P. E., 504n38 Wong, Peter, 570 Yoshida, Tomoko, 553n107
Waterstone Human Capital, 284 Wong, Sue-Lin, 40n66 Yoshimura, Noboru, 206n49, 212,
Watson, Raymond L., 263 WorkChina, 433
Watson Wyatt Beijing, 433 Worker Rights Consortium, 109–110 243n15, 504n51
Watts, Jenny, 357n34 World Bank, 16, 33, 55, 80, 82, 246, 316, Yoshino, Michael, 351n, 358n59
Watts, Jonathan, 465n75 Young, Kathryn M., 356n23
Wayne, Leslie, 323n59 362, 428 Younglai, Rachelle, 70n14
Webasto, 353 WorldCom, 497 Yousef, Darwish A., 505nn61–63
Webb, Tim, 383n3 World Cup, 386 Yousef, Fathi S., 244n45, 244n48
Weber, Christophe, 170 World Economic Forum, 35, 80, 88, Youssef, Carolyn M., 545,
Weiss, Stephen E., 245n70
Welch, David, 287n18 494, 497 553nn116–117
Welge, Martin K., 322n43, 322n44 World Health Organization (WHO), 118 YouTube, 4, 44–45, 64, 395
Wells, Frank, 263 World Trade Organization (WTO), 7–12, YPF, 484
Wells, Nicholas, 40n45 Yu, K., 504n34
Wells Fargo, 86 20, 33, 60, 86, 170, 282, 293–294, Yu, Kaicheng, 504n59
Welsh, Dianne H. B., 178n35, 178n36, 363, 366, 380, 558, 563, 567, 569, Yu, Rose, 39n11
577–578 Yu, Xiao, 568n4
178n37, 178n38, 435, 459, 463n17, World Wildlife Fund (WWF), 86, 251 Yuan, Anne Xue Ya, 433–434, 463n12
465–466n100 Worm, Verner, 253n3 Yuchtman, E., 449, 464n52
Wentling, Rose Mary, 206n46 Worstall, Tim, 39n27 Yukl, R. K., 504n39
Werbach, Adam, 430n62 Worthy, Ford S., 405n Yum! Brands, 29, 30, 247
Werdigier, Julia, 562n29 Woywode, Michael, 504n43 Yunggar, Manuel, 324n75
Werre, Marco, 582n7 W. P. Carey School of Business, 101n Yunus, Muhammad, 314
Wertkauf, 282 Wright, Richard W., 178n48, 463nn37–38 Zachar, Deborah, 562n
Western Kentucky University, 110 Wu, John C. H., 506n111 Zahra, Shaker A., 325n118
Whalen, Jeanne, 115n, 120nn12–28, Wu, Yen-Chun, 405n, 406n, 413n52 Zaleznik, Abraham, 503n16, 503n19,
322n19, 515n Wu Bangguo, 415
WhatsApp, 2, 45 WuDunn, Sheryl, 206n51, 244n44 503n23
Wheatley, Jonathan, 357n35 Wuling, 347 Zalla, Jeff, 576
Whelan, Carolyn, 287n20 WWF (World Wildlife Fund), 86, 251 Zamiska, Nicholas, 71n49
Whirlpool, 161 Wyeth, 292 Zara, 81, 111
White, Donald D., 463n31 Wyler, Greg, 316 Zartman, William, 245n75
White, Gillian B., 112n48 Xiaomi, 156–158, 175 Zaun, Todd, 383n26
White, Lawrence, 322n30 Xi Jinping, 297 Zavyalova, Kira, 553n122
WHO (World Health Organization), 118 Xu, Chuan, 277n6 Zeidler, Sue, 277n23, 278n27, 278n30
Widodo, Joko, 365 Yahoo, 415, 416 Zeira, Yoram, 356n20
Wiggenhorn, Joan, 325n123 Yamaha, 363 Zeller, M., 412n46
Wildau, Gabriel, 70n37 Yan, Jun, 503–504n32 Zhejiang Wahaha Industrial Holdings
Wilkinson, Matt, 322n21, 322n23 Yang, John Zhuang, 178n49, 553n104
Willard, Anna, 272n1 Yang Yuanqing, 500 Ltd., 258
Williams, Frances, 39n30 Yanofsky, David, 71n61 Zhou, Nan, 243n30
Williams, Robert J., 464n53 Yanukovynch, Viktor, 360–361 Zhoudong Shangguan, 260n16
Willigan, Geraldine E., 268n Yaohan, 281 Zielenziger, Michael, 456n
Willis Towers Watson, 513 Yardley, Jim, 72nn76–77, 96n50, 112n47, Zong Qinghou, 256, 257–258
Wilmot, Bret, 79n 288n67 Zonis, Marvin, 179n75
Wilson, Julee, 106n39 Yaziji, Michael, 39n23, 314, 315n, ZTE Corp., 304
325n108 Zuckerberg, Mark, 2–3
Zuo, Mandy, 278n28

Subject Index

A page number with an e indicates an exhibit; an f a figure; an n, a source note or footnote; a t, a table.

Achievement culture, 140f, 143, 232 Arab countries. See also Middle East; online commerce in, 388–390
Achievement motivation theory, 446–449 specific country telecommunications services in, 65
Acquisitions, 303–304, 306 theme parks in, 276
Active management-by-exception (MBE-A) communication styles, 210, 212 trade agreements, 13, 31
cultural dimensions, 125, 174–175 Assembly-line work, 452–453
leaders, 488 economic environment, 30, 31, 33 Assertiveness, 146, 169–170, 494–495
Act of state doctrine, 54 leadership styles, 488 Assessment center, 409
Adaptability screening, 521–522 management across cultures, Association of Southeast Asian Nations
Administrative coordination, 298–299
Advertising 174–175, 540 (ASEAN), 13
negotiation tactics and styles, 231, 232, Australia
cultural diversity in, 201
executive recruitment via, 489–490 233, 237 communication styles, 213
free speech versus, 99–101 political environment, 51 cultural dimensions, 131–132, 134–137,
perceptual barriers in, 219–220 trading history, 8
Affective cultures, leader behavior in, Western management styles compared 140, 225
ethics, social responsibility, and
491–492 with, 485, 540
Affective verbal style, 211t, 213 “Arab Spring,” 33, 44–46, 51–52, 375 sustainability, 80
Afghanistan, 31, 51, 367 Argentina human resources management, 518,
Africa
cultural dimensions, 141 536–537, 538
about, 33–34 economic environment, 31 motivating employees, 432, 434, 445t
China’s strategic planning in, 297 human resources management, 537t political environment, 49
communications technology in, 316–317 leadership attributes, 475, 486, 494 technological environment, 63, 63t
economic environment, 18 management across cultures, 169–170 Austria, 142, 143, 166, 222, 494
as frontier market, 308 Walmart’s operations in, 279e, 280–281 Authentic leadership, 496–498
political environment, 51 Aristotelian ethics, 78 Authoritarian leadership, 474–475,
technological environment, 63t, 64–65 Arthashastra (Chanakya), 499
trading history in, 8 Ascription culture, 140f, 143, 232 477–479
Age, as international selection criteria, 520 ASEAN (Association of Southeast Asian Autocratic leadership, 476–477
Agreement, in negotiations, 231 Auto industry
Airline industry, 304, 333, 376 Nations), 13
Albania, 28 Asia. See also specific country entry strategies for, 333–335
Algeria, 55, 280 innovation in, 64, 75–76, 421–428
Alien citizens, treatment and rights of, 54 alliance challenges and opportunities, key success factors, 304
Alliances. See also Joint ventures 379–380 organizational structures, 347
challenge of, 377–378 quality performance of, 298, 405–406
definition and introduction, 332–335 Citibank’s operations in, 294 sociotechnical designs in, 453
examples of, 379–381 communication styles, 212–213, 215, sustainability in, 75–76
host government roles, 378–379 Autonomous leadership, 493
life cycle of, 378–379 219, 222, 225, 229
management of, 377–381 cultural dimensions, 133–135, B2B transactions, 64, 294, 348
organizational arrangements from, B2C transactions, 64
144–145 Balance-sheet approach, 530
346, 348 demographic changes, 14 Banana industry, 575–582
Allowances, 528–529 economic environment, 13, 15, 16–18 Bangalore, 81, 111, 285–286
Amateur terrorism, 367 emerging markets in, 29–30 Bangladesh, 15, 81, 83, 111, 285–286
American Foreign Corrupt Practices as frontier market, 308 Banking industry
HSBC’s operations in, 571
Act, 53 human resources management, 518, 529t in China, 293–294, 563–574
Anglo countries. See also specific country leadership attributes, 491–492, 494 e-business and, 64
management styles, 347, 485 financial reform in, 56–57
communication in, 227 motivating employees, 438, 449–451 Walmart’s entry into, 281–282, 284
cultural dimensions, 137, 169, 448–449 negotiation tactics and styles, 231, 234 Bargaining behaviors, 237–240. See also
human resources management, 531, technological environment, 63t, 65,
Negotiation
536–537 388–390 Base of the pyramid (BOP) strategy,
leadership attributes, 476, 480, 491 theme park industry in, 264–265,
Angola, 33, 285 313–317
Anti-Dumping Act, 365–366 273–277 Base salary, 527–528
Anti-Terrorism Act of 1996, 579 Walmart’s operations in, 280 BATNA (best alternative to a negotiated
Asia-Pacific region
Citibank’s operations in, 294 agreement), 237
Danone’s operations in, 256 Behavior management, 165
human resources management, 526–527
621

622 Subject Index

Belgium California, health and safety violations as competitive nation, 35
communication styles, 224 in, 108 cultural dimensions, 125, 127–129,
cultural dimensions, 144
leadership styles, 481 Canada 131–135, 140–143, 147, 273–275
M&A activity, 123–124 communication styles, 210, 213, 214, demographics, 14, 18, 19t
motivating employees, 454 220, 224, 225 economic environment, 13, 15–20, 23,
multiculturalism in, 198 cultural dimensions, 131, 132f, 136f, 137
political risk, 372 economic performance of, 24 28–29
terrorist attack links to, 52 ethics, social responsibility, and sustain- entry strategies, 312, 328–329, 334–335
ability, 114–116 ethics, social responsibility, and sustain-
Benefits, 528, 534 human resources management, 166,
Beverage industry, 248–253, 337 536–537 ability, 79–81, 83, 90
Bias in performance appraisal, 408 leadership attributes, 494 globalization trends, 6, 9
Bicultural groups, 199 legal and regulatory environment, 56 human resources management, 167–168,
Biotechnology, 62–63 motivating employees, 445t, 446, 450
Bitcoin currency, 59 Walmart’s operations in, 279e, 280–281, 529, 542–543
Bolivia, 475, 486 284–285 Internet commerce in, 388–390
Bonuses, 56 Internet users in, 415–418
BOP (base of the pyramid) strategy, Capital requirements, 57 leadership attributes, 472, 475, 483–484,
The Case for Servant Leadership
313–317 491, 494
Born-global firms, 318–319 (Keith), 499 legal and regulatory environment, 57–59
Born-international firms, 318–319 Case studies management across cultures, 167–172
Bowing, 221 motivating employees, 432–436,
Brazil advertising versus free speech, 99–101
Chiquita’s global turnaround, 575–582 438, 455
about, 386–387 Coca-Cola in India, 248–253 negotiation tactics and styles, 208–209,
communication styles, 224 Danone in China, 255–261
cultural dimensions, 123–124, 147–148 Disney in Asia, 273–277 232, 237, 240
economic environment, 15, 19–20, Euro Disneyland, 262–272 organizational culture, 192, 198
global drug pricing, 113–120 organizational structure, 339, 347
30–31, 32 Google in China, 415–420 political environment
entry strategies, 337 HSBC in China, 563–574
ethics, social responsibility, and sustain- IKEA’s global growth, 555–561 Danone’s experience, 255–260
Nike and human rights, 99–101 Disney’s experience, 273–275
ability, 90 Russell Athletic and sweatshop labor, Google’s experience, 415–419
globalization trends, 6 HSBC’s experience, 563–574
human resources management, 166, 107–111 IKEA’s experience, 558–559
Tata Nano, 421–428 overview, 48–51
514, 537t TOMS philanthropy, 102–105 strategy implementation, 307
management across cultures, 166, 174 Walmart’s global strategies, 279–286 political risk, 363–364, 372, 375
negotiation tactics and behaviors, 235, Cellular technology, 298 strategic formulation in, 303–304
Censorship, 415–418 strategic management in, 293–294, 297
238–240 Central American Free Trade Agreement strategy implementation in, 290–291,
organizational culture, 192
political environment, 49, 372, 375 (CAFTA), 11–12 307, 312
technology environment, 63 Central Asia, 31–33 technological environment, 61–62,
Walmart’s operations in, 279e, 280–281, Central Europe. See also specific country
63, 65
283, 284 economic environment, 13–14 theme park industry, 273–275
“Brexit,” 26, 47, 49 as emerging market, 27–28 trading history, 8
Bribery leadership attributes, 491 Walmart’s success in, 279–282, 284
motivating employees, 447 WTO obligations in, 50, 170, 282,
in China, 291 political risk, 365
as cultural misunderstanding, 163–164 Centralization, 352, 390–393 293–294, 363, 563, 567, 569
FCPA on, 54–55, 90–91 CEVITS countries, 16 Chromatics, 225–226
in Mexico, 281 Chaebols, 29 Chronemics, 225
as political risk, 365 Charismatic leaders, 487–488, 493, 495, 497 CIS (Commonwealth of Independent
in Russia, 172, 559 Child labor, 80, 83
tracking, 559 Chile States), 162–163
BRIC countries. See also specific country cultural dimensions, 134–135, 225 Civil or code law, 53
conducting business in, 170–174 as emerging market, 31 Classic terrorism, 367
economic power shifts, 15, 18–20, 19t household savings accounts in, 281 Climate change, 82–83
foreign direct investment in, 312 leadership behaviors and styles, 475, 486 Code or civil law, 53
political environment, 49 Walmart’s operations in, 279e, 280e, Codetermination, 394
Britain. See Great Britain; United Collectivism
283–284
Kingdom China, People’s Republic of. See also definition, 48, 130–131
Bureaucratization, 55–57, 58t, 403 as GLOBE dimension, 146–147, 493
Business cards, 221 Hong Kong; Taiwan management across cultures and,
Business Chemistry program, 183 about, 246–247
Cafeteria approach, 530 alliance management, 377, 380 156–157, 171
CAFTA-DR, 11–12 banking industry in, 293–294, 563–574 motivating employees and, 449–450
CAFTA (Central American Free Trade communication behaviors and styles, Trompenaars on, 141
Columbia, 136f, 137, 579
Agreement), 11–12 214, 219–220, 229 Comity doctrine, 54
Command economy, 23
Common law, 53
Commonwealth of Independent States

(CIS), 162–163

Subject Index 623

Communication Corporate social responsibility (CSR) Culture clusters, 489–491
advertising blunders, 219–220 Chiquita’s efforts in, 575–580 Culture meanings and dimensions. See also
cultural barriers, 221–223 Coca-Cola in India, 248–253
definition and introduction, 210 definition, 77 Human resources across cultures;
diversity and problems with, 200 environmental impact and, 100 Leadership across cultures;
in DOCSA, 187–188 ethical behavior and, 77 Management across cultures;
effectiveness in, 226–229 human rights and, 99–101 Motivation across cultures
flow of, 214–216 IKEA’s values, 558 changing values, 128–129, 142
interpretation of, 213–214 MNC business practices, 85–89 characteristics of, 124–127
language barriers, 216–219 philanthropy and, 75, 102–105 diversity, 125–128, 199–201
Middle Eastern and Western manage- sweatshop labor and, 107–111 IKEA’s values, 555–561
ment compared, 485t TOMS philanthropy, 102–105 international management approaches to,
motivating employees and, 433 Walmart’s challenges, 285–286 125–128
in negotiations, 236 joint ventures and alliances management
nonverbal, 223–226 Corruption and, 378
as part of global team management, 183 in China, 291, 567–568 in mergers and acquisitions, 122–124
perceptual barriers, 188, 219–221 FCPA and, 54–55, 90–91, 281 national and organizational interactions,
verbal, 210–213, 491–492 as political risk, 365 182, 186–190
written, 217–219, 227, 232 in Russia, 48–49, 172, 559 as normal distribution, 127–128
“security” payments, 579 offshoring and, 84–85
Communism, 23, 48, 50 Walmart’s challenges, 281, 285 proverbs representing cultural values, 222t
Communitarianism, 141–142 recognition of, 27
Commuter assignments, 546 Corruption Perceptions Index, 49, 91, Currency risk, 311, 403–404
Compensation 365, 559 Customer relations
in command economy, 23
bonuses, 56 Costa Rica, 90, 279e, 280e, 283 diversity and, 190, 201
cultural differences in, 166 Cost-of-living index, 527f in market economy, 22–23
gender inequity, 79–80, 449–450 Costs Czechoslovakia, former, 141
incentives and culture, 433, 438, Czech Republic, 447, 491, 537
cultural assimilators, 545 Decentralization, 352, 390–393
458–459 labor, 311 Decision-making
local rules for, 514 of overseas assignments, 512, 523–524, about competitors, 396–397
as motivation, 454–455 centralization/decentralization, 352,
for overseas assignments, 526–530, 534 526–530 390–393
wages, 80–81, 166 transition, 331–332 control linkages to, 397–398
Competition Counterfeit products, 65, 157–158, cultural differences in, 27, 126,
decision-making and, 392 132–133, 140, 142, 393–394, 515
environmental scanning for, 302–303 363, 364 definition and introduction, 388, 390–391
Google in China, 415–417 Country-centered strategy, 296–297 diversity and problems with, 200
location decisions and, 396–397 Country selections in strategic ethics theories and philosophy in, 77–79
Competitive nations worldwide, 35, 494 factors affecting authority for, 391–393
Concessions, in negotiations, 171, 231–235 implementation, 306–307 location considerations, 396–397
Confucianism, 129 Country-specific advantages (CSAs), Middle Eastern and Western
Conglomerate investment, 369 management compared, 485t
Content theories of motivation 308–309 by multicultural teams, 202
achievement motivation theory, 446–449 Credit ratings agencies, 56 process, 390–391
definition, 436 Crimea, 360–361, 554 strategic predispositions in, 159–160
hierarchy of needs, 436–441 Crisis management, 376, 474 TQM and, 394–396
two-factor theory, 442–446 CR (contingent reward) leaders, 487–488 Defensive and protective techniques,
Context, 210–211 CSAs (country-specific advantages), 374–375
Contextual verbal style, 211t, 212–213 Democracy, 50
Contingency approach, 162 308–309 Demographics
Contingent reward (CR) leaders, 487–488 CSR. See Corporate social responsibility economic power shifts and, 18
Control Cuba, 23, 48, 50, 98 of G-7, N-11, BRIC countries, 19t
approaches to, 401–403 Cultural assimilators, 544–546 global trends, 14–15
decision-making linkages to, 397–398 Cultural barriers. See also Communication world population and income, 313
in DOCSA, 187–188 Denmark
introduction, 388, 398–399 advertising blunders, 220 communication styles, 213
mechanisms for, 346t interpretation, 213–214, 222–223 decision-making in, 393–394
Middle Eastern and Western management in M&A, 331 DuPont’s operations in, 122–123
in negotiations, 231–234, 240 individualism in, 136f, 137
compared, 485t perception, 188, 219–220 leadership attributes, 494
performance evaluation as, 403–409 Cultural integrators, 535–536 motivating employees, 458
types, 399–401 Cultural relativism, 77 organizational culture in, 192–193
Controlling, 397 Cultural training programs, 227–229, 512, uncertainty avoidance in, 130
Control of one’s own environment, De novo investments, 330
536, 543–546
144–145 Culture. See also Culture meanings and
Copenhagen Consensus Investment
dimensions; Hofstede’s cultural
Priorities, 92t dimensions; Trompenaars cultural
Corporate governance, 89–90 dimensions
adaptability in overseas assignments,
518–519
definition and nature of, 124–125
differences across, 165–168
similarities across, 164–165
six basic variations in, 163t

624 Subject Index

Dependents. See Spouses and dependents China, 28–29 Employment trends, 65–67
Derivatives markets, 56 European Union, 25–26 Empowerment, 395
Development assistance by MNCs, 92–93 India, 30, 42–43 Enablers and POS, 495
Dhaka, India, 111, 286 Japan, 26 England, 114–115, 212, 476, 480. See also
Diagnosing Organizational Culture for Middle East and Central Asia, 31–33
North America, 24–25 Great Britain; United Kingdom
Strategic Application (DOCSA), South America, 30–31 Entrepreneurship
187–188 world merchandise trade by region, 21t
Dictatorships, 50–52 Economic systems, 22–23 achievement motivation theory and,
Diffuse culture, 140f, 142–143 Education, as international selection 446–448
Direct controls, 400–401
Direct verbal style, 211–212 criteria, 520 as entry strategy, 317–318, 330
Dispersed subunits, 345 Education, at multinational online global trends in, 129
Disputes resolution, 54 in India’s auto industry, 425–426, 428
Distributive negotiations, 229–230 universities, 348 leadership attributes and, 500
Diversity. See also Multiculturalism and Education allowances, 529 TOMS Shoes, 102–105
diversity; Organizational culture Efficiency, 392 Entry strategies
and diversity Egypt alliances and joint ventures, 332–335
advantages of, 200–201 export-import, 317–318, 330, 338–339
cultural meanings and dimensions, cultural dimensions, 134–135 first movers, 312–313
125–128 economic environment, 15–16 franchising, 336
potential problems with, 199–200 ethics, social responsibility, and sustain- introduction, 328–330
DOCSA (Diagnosing Organizational licensing, 335–336
Culture for Strategic Application), ability, 90–91 mergers and acquisitions, 331–335
187–188 leadership attributes, 494 wholly owned subsidiaries, 330–331
Doctrine of comity, 54 political environment, 44, 49, 51, 375 Environmental foundation. See
Dodd-Frank Act, 56 trading history, 8
Domestic firms Eiffel Tower culture, 192–193, 195 Globalization; Legal and regulatory
multicultural development by, 196–198 EKC (Environmental Kuznets Curve), environment; Political environment;
multicultural negotiations by, 229 Technology environment
Domestic multiculturalism, 198 81–82 Environmental Kuznets Curve (EKC),
Downward communication, 214–215 Elaborate verbal style, 211t, 212 81–82
Drug pricing. See under Pharmaceutical Electronic freelancers, 348 Environmental protection
industry Electronic network organizations, 348 Chiquita’s efforts in, 578–580
E-7 economies, 15–16 El Salvador, 279e, 280e, 283 CSR and, 100
EAGLES countries, 16 Emerging and developing markets food served at theme parks, 273
“Ease of Doing Business” (World Bank), pesticides and water contamination,
42, 55–57, 58t, 154, 246 bureaucratization in, 55–57, 58t 248–253
East Asian countries, 493, 538. See also compensation in, 526–527 sustainability and, 81–84
specific country demographic changes, 14 Walmart’s sustainability initiatives,
Eastern Europe. See also specific country economic performance of, 26–30 88–89
cultural dimensions, 134–135 economic power shifts in, 15–20 Environmental scanning, 302–304
economic environment, 13–14, 27–28 entry strategies for, 333 Environmental standards, 9–10
entry strategies, 333 environmental concerns, 83 Equity joint venture, 332
human resources management, 529 as frontier markets, 308 Equity-oriented cultures, 191,
management behaviors and globalization trends, 6, 546 192–194, 195
styles, 189 less-developed economies, 30–35 Equity theory, 449–450
political environment, 47, 307, 365 market potential rankings, 36t Established economies evaluation, 24–26
Eastern philosophy, 78–79, 499 MNCs coming from, 7 Esteem needs, 437
East Germany, former, 507, 560–561 motivating employees in, 432–434 Ethically responsible leadership, 497–499
E-business, 63–64 pharmaceutical industry access by, Ethics. See also Corporate social
Economic environment. See also Financial responsibility; Corruption; Human
crisis of 2008–2010 117–118, 119f rights; Sustainability
2009 exports, 20 political risk in, 363 corporate governance, 89–90
2015-16 prices, 15, 20 pressure for change in, 9 cultural differences in, 84–85,
following terrorist attacks, 52 risk and reward in, 564, 566–567, 172, 190
forecasting trends in, 303 definition, 77
post-recession slowdown, 18–20 569–570, 573 in global drug pricing, 113–120
sectors of, 369 strategy implementation in, 311–317 international assistance, 92–93
strategy implementation and, 312 telecommunications in, 65 theories and philosophies, 77–78
world outlook projections, 34t, 35 Emotional and physical health, 519–520 Ethnocentric MNC, 537–538
Economic imperative, 295–296 Emotional cultures, 140f, 142, 491–492 Ethnocentric predisposition, 159–160
Economic performance by region Emotional factors, in negotiations, 236 Ethnocentrism, 539
Africa, 33–34 Employees. See also Human resource Europe. See also Central Europe; Eastern
Asia, 29–30 Europe; European Union (EU);
Central and Eastern Europe, 27–28 management specific country
behavior management of, 165 communication barriers and styles,
as critical resources, 511–512 215–217, 223, 225–226, 228
empowerment of, 395 cultural dimensions, 223
human resources tailoring to, 511 demographic changes, 14
overseas assignment motivations

of, 531
rewards and recognition of, 395
training of, 395, 406
Employee welfare, 75

Subject Index 625

foreign direct investment by, 20 economic pressures on HR function, Game console industry, 298
human resources management, 526–527, 512–513, 526, 530 GATT (General Agreement on Tariffs and

529t, 530–531, 538 foreign direct investment effects of, 20 Trade), 10–11, 577–578
leadership attributes, 479–481 jobs lost during, 66 GDP (GNP)
motivating employees, 457, 459 regulatory failures and, 54, 56–57
negotiation tactics and styles, 234 Financial performance evaluation, economic power shifts and, 15–19
organizational culture, 188–189, 202 individualism correlations to, 131–132
pharmaceutical industry in, 117, 293 403–404 GDR (German Democratic Republic), 507,
technological environment, 63t Financial services
trading history in, 8 560–561
Walmart’s operations in, 280, banking industry in China, 294, Gender
563–574
282–283 attitudes toward women, 79–80, 221
European Union (EU) corporate governance scandals, 89 expat spouse activities by, 522
e-business, 63–64 leadership styles and, 495
banana trade war, 576–578 offshoring activities, 79 work centrality and, 454–455
definition, 12 regulation of, 54, 56–57 Gender egalitarianism, 146, 493, 495
economic environment, 12–13, Walmart’s operations in, 281, 284 Gender equity, 79–80, 449–450
Finland, 457, 494 General Agreement on Tariffs and Trade
25–26, 73 Firm-specific advantages (FSAs), 308–309
human resources management, 167 First-mover strategies, 312–313 (GATT), 10–11, 577–578
leadership attributes, 489 Food production, 63 General nature of investment, 369
legal and regulatory environment, Foreign CEOs of Japanese firms, 170 Genetically modified organisms, 63, 301
Foreign citizens, treatment and rights Geneva Convention on Human Rights, 53
56–57, 59–60 Geocentric MNC, 538
political environment, 47–48, 366–367 of, 54 Geocentric predisposition, 159–160
technological environment, 63 Foreign Corrupt Practices Act (FCPA), Georgia, 491
Exacting verbal style, 211t German Democratic Republic (GDR), 507,
Exchange rate risk, 311 54–55, 90–91, 281
Expatriates (expats) Foreign direct investment (FDI), 20, 21t, 560–561
definition, 513 Germanic culture, leadership attributes
demographics of, 520, 524 22t, 294, 312, 369–371, 563–574
host country integration by, 518–519 Foreign selections. See International of, 491
motivation for overseas assignments, Germany
selection criteria
520–521 Formalization, 350–351 about, 507
repatriation of, 533–535, 546 Four I’s of leadership, 487 communication styles, 212, 215, 217,
Expectancy theory, 451 Four Ps of marketing, 310
Experience, as international selection France 220–221, 223, 228
controlling process in, 401–403, 404
criteria, 520 communication styles, 215, cultural dimensions, 123, 130, 140–144
Exports and imports 223–224, 228 decision-making in, 394
demographics, 14
2009 recession levels of, 20 controlling process in, 401–402 ethics, social responsibility, and
as entry strategy, 318, 330, 338–339 cultural dimensions, 127–128, 131, 132f,
world trade by region, 21t sustainability, 80, 116
Expropriation, 368 143–144 human resources management, 167–168,
External controls, 399–400 decision-making in, 393–394
External networking, 351 ethics, social responsibility, and sustain- 403, 527–528, 529, 531, 537
External risk, 360–361 leadership attributes, 479, 480,
Extreme behaviors, in negotiations, ability, 80
Euro Disneyland, 262–272 489, 494
237–238 human resources management, legal and regulatory environment, 57,
Extrinsic, 433, 434–435
Fair Labor Standards Act, 108 531, 537 233–234
Fair trade certification, 87–88 leadership across cultures, 479, 491 management across cultures, 166,
Family culture, 191–192, 195 legal and regulatory environment, 52, 57
Family overseas assignments. See Spouses management across cultures, 166, 167–168
motivating employees, 454,
and dependents 173–174, 189
Fascism, 48 motivating employees, 446, 457–459 457–458, 459
FCPA (Foreign Corrupt Practices Act), negotiation tactics and styles, 189 negotiation tactics and styles, 233–234
organizational culture and diversity, organizational culture, 187, 189, 190,
54–55, 90–91, 281
FDI (foreign direct investment), 20, 186–187 192–193, 202
political environment, 47, 48, 49, 372 organizational structure, 352–353
21t, 22t, 294, 312, 369–371, Walmart’s operations in, 281 political and legal environment, 47–49,
563–574 Franchises, 336
Federal Republic of Germany (FRG), 507 Free speech versus advertising, 99–101 233–234
Feedback systems, 226 FRG (Federal Republic of Germany), 507 Walmart’s operations in, 190, 279, 280e,
Femininity, 132 Frontier markets, 308
Finance function, 311 FSAs (firm-specific advantages), 308–309 281, 282
Finance goals, 305 Functional areas in implementation, Getting to Yes (Fisher and Ury), 235–237
Financial crisis of 2008–2010 Ghana, 64, 213
banking industry effects of, 310–311 Gifts, 163–164, 172, 175
565–566, 571 Future-oriented cultures, 144, 146–147, Global area division, 342–343, 346t
Global economic systems, 22–23
493–494 Global firms and multicultural
G-7 nations, 15–16, 19t, 361
G-8 nations, 27, 361 development, 197–198
G-20 reforms, 56 Global functional division, 343
Global Fund to Fight AIDS, Tuberculosis

and Malaria, 91
Global integration, 299–302

626 Subject Index

Globalization. See also Economic in national cultures, 126, 128, 130–131, protective and defensive techniques,
performance by region 141–142, 146–148 374–375

business practices and, 81, 111 in performance evaluation, 409 role of, in alliances, 378–379
criticisms of, 9–10 quality control circles, 215, 352, 404–405 Housing allowances, 528
definition and overview, 7–9 Groupthink, 201 Howard Award, 279
demographic changes and, 14–15, 18, 19t Guanxi, 171 Humane orientation, 147, 493–495
economic power shifts, 15–22 Guatemala, 279e, 280e, 283 Human resource management (HRM),
economic systems and, 22–23 Guided missile culture, 193–194, 195
environmental and social impacts, 9–10 Guinea, 33 165–168, 305
global and regional integration, 10–14 HAIRL system of appraisal, 166 Human resources across cultures. See also
history of, 8 Handshakes, 125, 173
management and, 5–7 Haptics, 224 Compensation; Training
social media and, 2–5, 35 Hardship allowances, 529 adjustment to international assignments,
world economic projections, 34t, 35 Headquarters nationals, 513–514
Globalization imperative, 160 Health, as international selection criteria, 525–526
Global Leadership and Organizational candidate motivations, 531
519–520 costs of international assignments, 512,
Behavior Effectiveness (GLOBE) Health insurance, 113, 115
study, 130, 145–149, 169–170, Hedge funds, 56 523–524
493–495 Herzberg’s two-factor theory, 442–446 cultural perspectives, 165–168
Global product division, 340–342, 346t Hierarchical system of authority, 186, economic pressures on MNCs, 512–513
Global sourcing, 296 host-country viewpoints, 531–532
Global strategy, 301–302 191–193 importance of, 511–513
Global virtual teams, 184 Hierarchy-of-needs theory, 436–441 international selection criteria, 518–523
GLOBE (Global Leadership and High-context cultures, 164, 210–213 international selection procedures,
Organizational Behavior High-definition optical disc industry, 301
Effectiveness) study, 130, 145–149, Hofstede’s cultural dimensions 524–526
169–170, 493–495 Middle Eastern and Western manage-
Goals, in Maslow’s need hierarchy, 438–440 GLOBE project and, 145, 147–148
Goal-setting theory, 450–451 individualism, 130–131, 132f, ment compared, 485t, 540
Goals for strategy formulation, 304–306 performance evaluations, 407–409
Government, public trust of, 86f 136–137, 452 positive organizational behavior, 545–546
Government relations. See Political indulgence versus restraint, 134–135 repatriation of expats, 533–535
environment; Political risk integration of, 136–139 selection procedures, 524–526
Great Britain. See also England; introduction, 129–130 sources of, 513–517
United Kingdom masculinity, 131–133, 138, 147, 378, success rates of international assign-
communication styles, 219, 224–225, 228
controlling process in, 401–402 447–448, 452 ments, 523, 533
cultural dimensions, 130, 136f, 137 motivations theory and, 438–441, 447–448 talent retention in India, 508–510
ethics, social responsibility, and sustain- power distance, 130, 136–138, 452 tips on working for foreigners, 515
ability, 80, 108 time orientation, 133–134 TQM techniques, 297–298, 394–396, 404
human resources management, Trompenaars expansion of, 139–145 trends, 523–524, 546–547
166–167, 529 uncertainty avoidance, 130, 137–138, Human rights
leadership attributes, 479, 489 child labor, 80, 83
management across cultures, 167 447–448, 452 corporate social responsibility for,
motivating employees, 454, 457, 458 Holidays and culture, 459
negotiation tactics and styles, 235 Home-country managers, 513–514 79–83, 576, 579–580
political environment, 47, 48, 49 Home-country nationals, 513–514 forced labor, 560–561
technological environment, 63 Home furnishings industry, 555–561 political environment and, 415–418
Greece Homogeneous groups, 199 sweatshop labor and, 81, 86–87, 99–100,
about, 73 Honduras, 86–87, 107, 109–111, 279e,
economic environment, 25–26, 59 107–111
leadership attributes, 491t 280e, 283 working conditions, 81, 111, 285–286
motivating employees, 443 Hong Kong Hungary, 28, 493, 537
political environment, 48 Hygiene factors, 442
Greenfield investments, 330 communication in, 215, 218 Iceland, 80
Group multiculturalism, 199 competitive ranking of, 35 ICT (information and communications
Group orientation. See also Team cultural dimensions, 136f, 137, 225–226
structures as emerging market, 29 technology), 316–317
communications interpretation in, 213 leadership attributes, 493 Idealized influence, 487
in decision making, 394, 395 motivating employees, 448 Ideologies, 47–50
Japanese versus American leadership organizational culture, 192 Implementation. See Strategy
styles, 482 theme park industry in, 273–276
kibbutz setting, 444, 449, 451 Walmart’s operations in, 279, 280, 281 implementation
management with, 157, 166–167, 169, 171 Honne, 394 Imports. See Exports and imports
motivation and, 435, 437, 447, 449, Horizontal investment, 369 Incentives, 458–459, 529
452–453, 458–459 Horizontal specialization, 351–352 Incubator culture, 194–195
Host countries, 519, 531–532 India
Host-country managers, 514, 538–542
Host-country nationals, 514 about, 42–43
Host governments. See also Political business climate in, 248–253, 337, 560
Coca-Cola’s operations in, 248–253
environment; Political risk communication styles, 183, 213
proactive political strategies, 375–377 cultural dimensions, 130, 134–135, 225
economic environment, 15–18, 19t,

30, 248
entry strategies, 337, 380

Subject Index 627

ethics, social responsibility, and sustain- Inspirational motivation, 487 Interviewing procedures, 524
ability, 79–81, 83, 248–253 Instrumental verbal style, 211t, 213 Intimate distance, 224, 225f
Insurance policies, for political risk, 376 Intrinsic, 433–434
globalization trends, 6, 9 Integrative negotiations, 230 Investment
human resources management, 508–510, Integrative Social Contracts Theory
general nature of, 369
513, 516, 537 (ISCT), 85 regulation of, 60
leadership behaviors and styles, 475, Integrative techniques, 373–374 special nature of, 369–371
Intellectual property Iran, 15, 51, 365
485–486 Iraq war, 24, 31, 47, 51, 174, 220, 365
legal and regulatory environment, 54 copyright infringement, 417 Ireland, 25, 167, 494
management across cultures, 172–173 counterfeit products, 65, 157–158, ISAs (international strategic
motivating employees, 445f, 448
political environment, 49, 248–253, 284, 363, 364 alliances), 377
patents, 157–158, 291–293 ISCT (Integrative Social Contracts
307, 560 political risk and, 363, 364
political risk, 364, 370, 372, 375 trademarks, 255–261 Theory), 85
strategic management, 290–291 WTO initiatives, 33, 86 Islamic law, 51, 53, 327
strategy implementation, 307 Intellectual stimulation, 487 ISO 9000 standard, 396
Tata’s auto operations in, 421–428 Interdependent relationships, 345 ISO 14000 standard, 87
technological environment, 61–62, 65–66 Interests over positions, in negotiations, 236 Israel, 444, 445f, 449–451, 454
Walmart’s operations in, 279e, 280e, Internal controls, 399–400 Italy
Internal networking, 351
284, 285 Internal resource analysis, 304 communication styles, 228
Indigenization laws, 368 Internal risk, 361–362 cultural dimensions, 144
Indirect controls, 401 International division structure, demographics, 14
Indirect verbal style, 211–212 ethics, social responsibility, and sustain-
Individualism 339–340, 346t
International entrepreneurship, 317–318. ability, 116
changing values in, 129, 142 human resources management, 537t
definition, 130 See also Entrepreneurship leadership attributes, 489
Hofstede’s study of, 130–131, 132f, International firms and multicultural management behaviors and styles, 189
motivating employees, 445f, 458
136–137 development, 196–198 political environment, 48
management across cultures and, 156–157 Internationalization, 7 Japan
motivating employees and, 449–450, 452 International jurisdiction, 53 about, 414
in political environment, 47–48 International law, principles of, 53–54 alliance challenges and opportunities,
in strategic alliances, 378 International management, 5–7. See also
Trompenaars study of, 140f, 141–142 379–380
Individualized consideration, 487 Management across cultures; communication in, 210, 212–213, 215,
Individual-oriented cultures, 187–188, Strategy formulation; Strategy
implementation 217, 221, 224–226, 232
191–192, 194–195 International selection criteria. See also cultural dimensions, 125–126, 128–130,
Indonesia Human resources across cultures
adaptability to cultural change, 518–519 133, 142, 144–145, 276
about, 467 age, experience, and education, 520 decision-making in, 394, 397–398
cultural dimensions, 133, 140, 143–144 definition, 518 demographics, 14
economic environment, 15–16, 29–30 general criteria, 518 economic power and performance, 13,
human resources management, 531–532 language training, 520
motivating employees, 458 leadership ability, 522–523 16–18, 20, 26
political risk, 365 motivation for overseas assignment, ethics, social responsibility, and sustain-
Walmart’s operations in, 279 520–521
Indulgence versus restraint, 134–135 physical and emotional health, 519–520 ability, 78, 80, 91, 117
Industrial piracy. See Intellectual property preparedness, 523 human resources management, 167–168,
Industrial sector investments, 369–371 spouses and dependents, 521–522
Information and communications International selection procedures, 524–526 518, 527, 529–531, 534, 536–537
International strategic alliances (ISAs), 377 leadership attributes, 476–479, 481–483,
technology (ICT), 316–317 International strategic management. See
In-group collectivism, 146, 493 Strategy formulation; Strategy 488, 491
Innovation implementation legal and regulatory environment, 53,
International strategy, 301–302
in auto industry, 64, 75–76, 421–428 Internet 55–56, 60
bureaucratization and, 55 access to, 61, 316–317 management across cultures, 166, 170,
as cultural dimension, 126 Chinese government controls, 363, 372,
entrepreneurship and, 317–318, 500 415–418 405, 474
leadership styles and, 476, 483, 494, entrepreneurial and new ventures, 317, motivating employees, 435–436, 445f,
319, 348
496–497 online commerce, 294, 388–390 446, 449, 452–459, 515
in market/command economies, 22–23 worldwide usage, 63–65 negotiation tactics and styles, 231–235,
organizational culture, 156–157, 162, Interpersonal relationships, in negotiations,
230–231, 232, 235–236 238–240
202, 453, 545 Interpretation, as communications barrier, organizational characteristics of MNCs,
organizational structure and, 418–419 213–214, 222–223
in pharmaceutical industry, 291–292 350–354
strategic management and, 296, 301, organizational cultures and diversity,

314, 337 196, 199–201
sustainability and, 89 quality performance in, 298, 394–395,
trends in, 60–62
Inpatriates, 515–516 404–407
strategy implementation, 310
technological environment, 63, 65, 66
theme park industry, 264–265, 276
Walmart’s operations in, 279, 280, 283

628 Subject Index

Job-content factors, 446 Leadership across cultures Macro political risk analysis, 364–365
Job-context factors, 446 authenticity in, 496–498 Malaysia
Job design, 451–453 Chinese managers, 483–484
Job Orientation Inventory (JOI), 444–445 company size, level, and age roles in, as emerging market, 29
Job satisfaction studies, 444–446, 480–481 leadership behaviors and styles,
culture clusters, 489–491
455–458 democratic values in, 480–481 475, 492
Joint ventures development programs, 468–470 management across cultures, 164
entrepreneurial, 500 multiculturalism and diversity in, 196
in China, 255–261, 273, 275, 563–574 ethically responsible, 497–499 theme parks in, 276
definition and overview, 332–333 European managers, 479–481 Management
differing views of, 27, 162–163 GLOBE study insights, 493–495 comparative behaviors of, 531–532
as entry strategy, 332–333, 336 Indian managers, 485–486 cultural impacts on, 125–128, 146
management of, 377–381 Japanese managers, 476–479, 481–483, definition and introduction, 5–7
organizational arrangements from, 488, 491 effectiveness of, in motivation, 433
Latin American managers, 486 globalization trends in, 5–7
346–348 managerial grid, 476–479 home-country, 513–514
political risk of, 364–365 manager-leader paradigm, 470–472 host-country, 514, 538–542
in Russia, 27, 336, 360–362, 370 Middle Eastern managers, 485 women in, 79–80
Walmart’s global strategies, 279, positive organizational scholarship, Management across cultures
495–496 Asian and Western styles compared, 347
281, 284 qualities for success, 489 bias in performance appraisal, 408
Jugaad, 486 subordinates roles, 481 control strategies and, 399–400, 403
Kaizen, 395–396, 405 Theories X, Y, and Z, 472–474 differing values and, 262–272
Kantian ethics, 77–78, 79 universalism in, 487–488 foreign CEOs of firms, 170
Karoshi, 455–456 U.S. managers, 482–483 GLOBE project and, 169–170
Kasky v. Nike Inc., 99–100 human resources, 165–168
Keiretsu, 26 Leadership behaviors and styles introduction, 158–159
Kenya, 64, 316 authentic, 496–498 in joint ventures and alliances, 378
Key success factor (KSF), 304 authoritarian, 474–475, 477–479 manager-leader paradigm, 470–472
Kinesics, 224 autocratic, 476–477 Middle Eastern and Western styles com-
Korea. See North Korea; South Korea autonomous, 493
Kuwait, 55 charismatic, 487–488, 493, 495, 497 pared, 485, 540
Labor costs, 311 participative, 475–478, 493–495 parochialism and simplification,
Labor practices. See Human rights paternalistic, 474–476, 481–482
Labor unions self-protective, 493–494 162–164
servant, 499–500 religion and, 164, 174–175, 488
in China, 279 team-oriented, 493–495 similarities across cultures, 164–165
Chiquita’s relationship with, 575–576, transactional, 487–488 specific examples (see also individual
transformational, 487–488, 497
579–580 universal, 487–488 countries)
in France, 267, 269–270 Arab countries, 170, 174–175
in Germany, 190, 353 Learning, 538–539 Brazil, 174
in Japan, 167 Learning organizations, 538 China, 170–172
Laissez-faire (LF) leaders, 488 Legal and regulatory environment France, 173–174
Language India, 172–173
as communication barrier, 216–219 bureaucratization, 55–57, 58t Russia, 172
as international selection criteria, 520 corruption, 54–55, 90–91, 281 strategic predispositions, 159–160
training programs, 226–227, 515, 520, financial services, 54, 56–57 strategies for different cultures,
forecasting trends in, 303
540, 543 international law, 53–54 160–162
Laos, 50 introduction, 52–53 success factors, 162
Largest global retailers, 279e negotiations and, 233 training in, 535–541
Latin America. See also specific country privatization, 57–60 Manager-leader paradigm, 470–472
trade and investment, 60 Manufacturing
Chiquita’s operations in, 575–582 Libya, 44, 51, 375 controlling process in, 298–399
communication styles, 213 Licenses, 335–336 ethics and sustainability in, 80–81,
cultural dimensions, 200, 225 Local issues
economic environment, 11–12, 15, 24 in strategic implementation, 307–308 84, 89
human resources management, Tata’s manufacturing plants, 426–427 foreign direct investment in, 369
Localization, 526–527, 530, 546 offshoring of, 10
526–527 Location considerations organizational structure for, 337–339,
leadership attributes, 475, 486, 492 competition and, 396–397
motivating employees, 435, 441, decision-making for, 396–397 342, 351–352
for implementation, 306–308 TQM in, 395
450, 451 negotiation tactics and, 234 Maquiladoras, 25
negotiation tactics and styles, 231 Long-term oriented cultures, 133–134 Market economy, 22–23
organizational culture, 202 Low-context cultures, 164, 210–213 Market environment, forecasting trends
political environment, 47, 365 Lump-sum method, 530
technological environment, 63t in, 302
Walmart’s operations in, 283–284, Marketing, 161, 201, 305, 310
Market orientation and multicultural
298–299
Latin cultures, 201, 227, 491t development, 197
Leadership, defined, 470 Masculinity, 131–133, 138, 147, 378,

447–448, 452

Subject Index 629

Maslow’s hierarchy-of-needs theory Mixed economy, 23 National cultures. See Culture meanings
Herzberg theory linkage to, 442, 446 Mixed organization structure, 343–344 and dimensions; Management
international findings on, 437–441 MNCs (multinational corporations). See across cultures
introduction, 436–437
occupational group goals, 440 also Corporate social responsibility; Nationalism, 49–50
professional technical personnel Organizational culture and Nationality principle, 53
goals, 439 diversity; Organizational structure; Nationalization of business, 49
Sustainability National responsiveness, 299–302
Maternity leave, 166 corporate governance, 89–90 Neglected tropical diseases (NTDs),
Matrix structure, 343–344, 346t corruption and, 90–91
MBE-A (active management-by-exception) definition and introduction, 5–7 117–118
development assistance by, 92–93 Negotiation
leaders, 488 globalization of, 83–85
MBE-P (passive management-by-exception) legal and regulatory environment, 52–60 bargaining behaviors, 237–240
management philosophy on training, cultural differences in, 231–234, 240
leaders, 488 537–540 definition and introduction, 229
Media, public trust of, 86f multicultural development phases of, France and Spain contrasted, 189
Medicare, 113–116 196–198 for mutual benefit, 235–237
Mediterranean countries, 489 organizational characteristics of, Netflix’s strategies, 208–210
Memorandum of understanding 350–354, 454 power positions for, 373–377
organizational cultures in, 185, process of, 230–231
(MOU), 426 190–195 style of, 233–234
Mercosur, 12, 31 organizational training programs, tactics for, 234–235
Mergers/acquisitions 539–540 types of, 229–230
political environment and, 46–52 Negotiations
culture clashes in, 122–124 technological environment, 60–67 communication skills in, 236
definition, 331 Monochronic time schedule, 225 Netherlands
as entry strategy, 331–332 Morocco, 494 cultural dimensions, 126, 142
EU authority over, 366–367 “Motivating Employees from Other HRM and cultural differences, 166
organizational arrangements from, 346 Cultures” (Thiederman), 434 leadership attributes, 494
Mexico Motivation, defined, 434 motivating employees, 454
about, 359 Motivation across cultures organizational culture in, 192–193
cultural dimensions, 130–131, 132f, achievement motivations theory, Neutral cultures, 140f, 142, 491–492
446–449 News media, 45, 86f
134–135, 141–144 assumptions about, 434–436 New Zealand, 63, 136f, 137, 443
economic environment, 15–16, 24–25 in emerging markets, 432–434 NGOs (nongovernmental organizations),
human resources management, 166–168, equity theory, 449–450
for foreign assignments, 520–521 85–87, 108–110, 117–118,
531–532, 537t goal-setting theory, 450–451 314–315, 497
leadership behaviors and styles, hierarchy-of-needs theory, 436–441 Nicaragua, 279e, 280e, 283
Hofstede’s dimensions and, 187–188 Nigeria
475, 486 incentives, 458–459, 529 about, 207
negotiation tactics and styles, 233 job design, 451–453 as emerging market, 15, 33
strategy implementation, 306–307, nature of, 434–436 leadership attributes, 492, 494
POS and, 495–496 political environment, 59, 65
312–313 reward systems, 458 technological environment, 64, 316
trade agreements, 11–13 two-factor theory, 442–446 Nike Inc., Kasky v., 99–100
Walmart’s operations in, 279–282 work centrality, 454–458 Nonequity venture, 332
Micro political risk analysis, 364–367 Motivators, 442 Nongovernmental organizations (NGOs),
Middle East. See also Arab countries; MOU (memorandum of 85–87, 108–110, 117–118,
understanding), 426 314–315, 497
specific country Multicultural groups, 199 Nonprofit organizations. See
communication styles, 213–214, 222, Multiculturalism and diversity Nongovernmental organizations
advantages of, 200–201 Nonverbal communication
224–225 development phases, 196–198 definition and overview, 223–226
conducting business in, 174–175 problems with, 199–200 negotiation behaviors, 237, 239–240
cultural dimensions, 174, 225 team effectiveness building, 201–203 Nordic culture, leadership attributes
economic environment, 31–33 types, 198–199 in, 491
human resources management, 529 Multi-domestic strategy, 301–302 Normal distribution, culture viewed as,
leadership styles, 485, 486 Multinational corporations. See MNCs 127–128
legal and regulatory environment, 55 Multinational universities, 348 North America. See also specific country
motivating employees, 449 Mutual benefit in negotiations, 235–237 Arab Spring effects in, 51
organizational culture, 201, 202 Myanmar, 52 communication and cultural values, 222
political environment, 44–46, 51, 365, N-11 economies, 15 communication styles, 183
NAFTA (North American Free Trade cultural dimensions, 141
367–368 Agreement), 11–12, 24–25, 60, 359 economic environment, 24–25
strategic management in, 300 human resources management,
technological environment, 63t 526–527, 529t
trading history, 8 online commerce in, 388–390
Military regimes, 51–52 technological environment, 63t
Millennium Development Goals

(U.N.), 100
Minimum wage, 80
Ministry of International Trade and

Industry (MITI), 26
Misinterpretation, as communications

barrier, 213–214, 222–223
MIST countries, 15

630 Subject Index

North American Free Trade Agreement Organization of American States Inter- Philosophical perspectives, 77–78, 472–474,
(NAFTA), 11–12, 24–25, 60, 359 American Convention Against 499, 537–540
Corruption, 91
Northern Europe, 189, 225. See also Physical and emotional health, 519–520
specific country Orphan and specialty drugs, 116–117 Physiological needs, 437
Outsourcing Planning, strategic, 295
North Korea, 23, 48, 50 Planning for negotiations, 230
Norway, 49, 114–115, 133, 451 criticisms of, 7, 10, 516–517 POB (positive organizational behavior),
NTDs (neglected tropical diseases), CSR and, 285–286
definition, 7 545–546
117–118 ethics of, 79, 83–85 Poland, 28, 59, 180, 447, 493, 537
OAS Inter-American Convention Against as human resources source, 511, Political environment. See also

Corruption, 91 516–517 Political risk
Objectivity, in negotiations, 236–237 sweatshop labor and, 107–111 in China, 48–51, 255–260, 273–275,
O.B.Mod. (organizational behavior technological advancements and, 65–67
Overseas selections. See International 307, 415–419, 558–559, 563–574
modification), 165 country selection and, 307
OCB (organizational citizenship selection criteria forecasting trends in, 303
Ownership-control risks, 369 ideologies, 47–50
behavior), 545 Pacific Rim, 13, 166 in India, 248–253, 284, 560
Oceania, 63t Pakistan, 15, 42, 60, 90, 192, 475 negotiations and, 233
Oculesics, 224 Parenthood and work centrality, 454–455 political systems, 50–52
Offshoring, 7. See also Outsourcing Paris Agreement on Climate Policy, 82–83 in Russia, 360–362, 559
1001 Ways to Reward Employees Parochialism, 162–163 sanctions, 360–361
Participative leadership, 475–478, 493–495 social media and, 44–46
(Nelson), 432 Particularism, 139–141 strategy implementation and, 312
Open-source model, 61 Partnerships. See Alliances; Joint ventures Political imperative, 296–297
Operational risks, 368–369 Passive management-by-exception Political risk. See also Political
Operations goals, 305
Options creation, in negotiations, 236 (MBE-P) leaders, 488 environment
Organizational behavior. See Human Past-oriented cultures, 144 definition, 362
Patents, 157–158, 291–293 international sanctions, 360–362
resources across cultures; Paternalistic leadership, 474–476, 481–482 in joint ventures, 255–261, 336,
Leadership across cultures; PC industry, 296, 398–399
Motivation across cultures People’s Republic of China (PRC). 364–365
Organizational behavior modification management framework for, 368–372
(O.B.Mod.), 165 See China nature and analysis of, 362–368
Organizational characteristics of MNCs, Perception responding to, 373–377
350–354, 454 Political systems, 50–52
Organizational citizenship behavior of Americans by foreigners, 540 Polycentric MNC, 538
(OCB), 545 as communication barrier, 188, 219–221 Polycentric predisposition, 159–160
Organizational culture, defined, 185 definition, 219 Polychronic time schedule, 225
Organizational culture and diversity differences in, 188, 199–200 Portugal, 25, 136f, 137, 227
characteristics of, 185–186 of foreigners by Americans, 220 Positive organizational behavior (POB),
external culture compared with, in negotiations, 232
184–185 Performance evaluation 545–546
global teams, 182–184 financial, 403–404 Positive organizational scholarship (POS),
Hofstede’s dimensions, 187–188 Middle Eastern and Western manage-
Lessem and Neubauer’s dimensions, 189 495–496
management of, 196–203 ment compared, 485t Power distance
Middle Eastern and Western manage- motivating employees and, 433
ment compared, 485, 540 personnel, 407–409 comparative managerial behavior
in MNCs, 185, 190–195 quality, 404–407 and, 532
national culture interactions with, 182, Performance orientation, 147, 172, 493
186–190 Personal distance, 224, 225f GLOBE project and, 145t, 146–148,
Trompenaars’s four corporate cultures, Personal information gathering, 418 169–170
191–195 Personal verbal style, 211t, 212–213
Organizational structure Personnel performance evaluation, Hofstede on, 130, 136–138
global arrangements, 340–344 motivating employees and, 452
initial entry strategies, 338–339 407–409 organizational behavior and, 494
international division, 339–340 Persuasion, in negotiations, 231 in strategic alliances, 378
matrix, 343–344 Peru, 31, 225, 486 Power positions for negotiation, 373–377
Middle Eastern and Western manage- Pesticides use, 248–253 PRC (People’s Republic of China).
ment compared, 485, 540 Pharmaceutical industry
network-based, 348 See China
nontraditional, 346–348, 425–426 biotechnology research and, 62–63 Predispositions, 159–160
for product integration, 349–350 developing countries access to, Present-time-oriented cultures, 144
for strategy formulation, 337–338 Price orientation, 197, 421–428
for strategy implementation, 337–338 117–118, 119f Primary sector investments, 369–371
summary, 346t intellectual property provisions, 86 Principle of sovereignty, 53
Tata in India, 422–423 prices, 113–116, 118 Private equity investments, 56
transnational network, 344–346 specialty and orphan drugs, 116–117 Privatization, 57–60, 312–313
strategic management, 290–293 Proactive political strategies, 375–377
Philanthropy, 75, 102–105 Process theories of motivation, 436,
Philippines, 15, 79, 448, 493–494
449–451
Product development, organizational

mechanisms for, 349–350

Subject Index 631

Product focus, 157 in emerging markets, 312 Singapore
Production and strategic implementation, external/internal, 360–361 communication flow, 215
operational, 368–369 cultural dimensions, 136f, 137, 198
310–311 ownership-control, 369 as emerging market, 29, 35
Product/service orientation and systemic, 57 leadership attributes, 493–494
transfer, 368 motivating employees, 445, 448
multicultural development, 197 ROI (return on investment), 403 organizational culture, 192
Profit, 403 Romania, 444, 474 theme parks in, 276
Profitability goals, 305 Russia
Promises, in negotiations, 238–239 about, 554 Singapore Free Trade Agreement, 11
Protective and defensive techniques, alliance challenges and opportunities, Smartphone market, 156–158, 175,

374–375 380 417–418
Protective principle, 53 controlling process in, 398 Social aspects of globalization, 9–10
Proverbs representing cultural corruption in, 48–49, 172, 559 Social class, 173
cultural dimensions, 134–135 Social democracy, 49
values, 222t economic environment, 13–15, 19–20, Social distance, 224, 225f
Proxemics, 224–225 Social environment trends, 303
Public distance, 224, 225f 27–28 Socialism, 48–50
Public trust, 85–86 entry strategies for, 336 Socialist law, 53
Puerto Rico, 280e ethics, social responsibility, and sustain- Social media
Purchasing power parity, 313f
Quality control circles (QCCs), 215, 352, ability, 90 crisis management via, 376
human resources management, 520 globalization and, 2–5, 35
404–405 IKEA’s operations in, 558 global terrorism and, 52
Quality imperative, 297–298 joint ventures in, 336, 360–362, 370 political environment and, 44–46
Quality management, 297–298, leadership attributes, 473–474, Social needs, 437
Social responsibility. See Corporate social
394–396, 561 491, 493
Quality of work life (QWL), 452–453 management across cultures, 27, responsibility
Quality performance, 404–407 Societal collectivism, 146
Recession of 2009. See Financial crisis of 164–165, 172 Sociotechnical designs, 453
motivating employees, 435, 459 South Africa
2008–2010 negotiation process in, 208–209,
Reciprocity, 171 about, 154
Refugee crisis, 45–46 231, 240 as emerging market, 33
Regiocentric MNC, 538 political environment, 48–49, ethics, social responsibility, and
Regiocentric predisposition, 159–160
Regional system, 530 360–362, 559 sustainability, 90
Regulatory environment. See Legal and political risk, 336, 360–362, 364, motivating employees, 445f
political environment, 33, 79, 86
regulatory environment 369–370 technology environment, 64, 66
Relationship-oriented cultures, 202 sanctions against, 27, 208, Walmart’s operations in, 280, 285
Relationships South America. See also specific country
360–361, 554 communication styles, 215, 224–225
as corporate culture dimension, 187–188, Rwanda, 316 cultural dimensions, 131, 132f, 227
191–192, 197–198 SA8000 standard, 87, 579–580 economic performance of, 30–31
Safety needs, 437 human resources management, 531
customer, 190, 201 Salaries, 454–455, 527–528, 534 negotiation process in, 234
in foreign countries, 376–377 Sanctions, 27, 208, 360–361, 554 South Korea
interdependent, 345 Saudi Arabia communication styles, 219
in negotiations, 230–231, 232, cultural dimensions, 130
about, 327 economic environment, 14–16, 29
235–236 communication and cultural values, 222 human resources management, 536–537
with stakeholders, 499, 557–559 economic environment, 33 leadership attributes, 476–479, 481–482
Relative bargaining power, 373–377 legal and regulatory issues, 55, management across cultures,
Relativism, 77
Religion and culture 543, 560 163–165
in Arab countries, 174–175, 488 political environment, 51 motivating employees, 449, 455,
Islamic law, 51, 53, 327 Scandinavian countries, 394, 476, 480,
in Malaysia, 164 457–458
terrorism motivated by, 367 489, 493. See also specific country organizational characteristics of
Religiously motivated terrorism, 367 School systems, 132–133, 543
Relocation expenses, 528 Securitization, 57 MNCs, 350
Repatriation, 533–535, 546 Selection for overseas assignments, technological environment, 63
Repatriation agreements, 534 theme parks in, 276
Responsible global leadership, 498–499 524–526. See also International Walmart’s operations in, 279, 280e, 282
Restraint versus indulgence, 134–135 selection criteria Sovereignty and sovereign immunity, 53
Retailers, largest worldwide, 279e Self-actualization needs, 437 Soviet Union, former countries of
Return on investment (ROI), 403 Self-protective leadership, 493–494 cultural values of, 140–141
Reward systems, 458 Senegal, 64, 317 as emerging markets, 30–32
Right-wing totalitarianism, 52 September 11, 2001 terrorist attacks, 220 entry strategies, 333, 336
Ringisei, 394 Sequential-time orientation, 143 management across cultures, 162–163
Risks. See also Political risk Servant leadership, 499–500 motivating employees, 447
currency, 311 Service sector investments, 369–371 political environment, 47, 365
Short-term oriented cultures, 133–134
Similarities across cultures, 164–165
Simplification, 163–164

632 Subject Index

Spain Supply chain management organizational culture and, 182–185,
communication barriers, 220 across cultures, 157 193–194, 199
communication effectiveness, 228 at IKEA, 557–558, 560
cultural dimensions, 130, 134, 142, innovation in, 296, 337–338, 425–426 virtual, 184
144, 227 organizational structure for, 337 Technology environment. See also Internet
economic environment, 25 quality performance and, 405–406
ethics, social responsibility, and sustain- strategy formulation and biotechnology, 62–63
ability, 116 implementation, 296 controlling process in, 398–399
leadership attributes, 489 sustainability in, 74–75 e-business, 63–64
negotiation strategies, 189 employment effects of, 65–67
organizational culture, 201 Sustainability environmental scanning and, 302
political environment, 48, 49 Chiquita’s efforts in, 575–582 nature of investment in, 369–370
definition, 88 organizational cultures in, 193–194
Specialization, 351–352 Eastern philosophy views of, 78 sophistication level of, 369–370
Specialized operations, 345 environmental protection and, 81–84 telecommunications, 64–65, 298,
Special nature of investment, 369–371 MNC business practices, 74–76,
Specialty and orphan drugs, 116–117 85–89 316–317
Specific culture, 140f, 142–143 philanthropy and, 102–105 trends in, 60–62, 65–67, 298, 302
Spouses and dependents, 521–522, 524, water, 248–253 work centrality in, 454
Teenagers, training programs for, 543
533–535, 543 Sweatshop labor, 81, 86–87, 99–100, Telecommunications, 64–65, 298, 316–317
Stakeholders 107–111 Territoriality principle, 53
Terrorism, 44–45, 52, 220, 365, 367–368,
political environment and, 375–376 Sweden
relationships with, 499, 557–559 communication styles, 212 579
social responsibility and, 85, 90, cultural dimensions, 140 Testing, human resources, 409, 447,
decision-making in, 394
109–111, 113 human resources management, 166, 531, 524, 545
Start Something That Matters (Mycoskie), 555–561 Thailand, 29–30, 142, 294
leadership styles, 481, 493 Thematic Apperception Test (TAT), 447
104 motivating employees, 452–453, Theme park industry
Stereotyping, 127–128, 170, 199 457, 459
Strategic alliances. See Alliances negotiation tactics and styles, 237 in Asia, 264–265, 273–277
Strategic management. See also Strategy political environment, 47, 49 in France, 262, 265–277
in the U.S., 262–264
formulation; Strategy Switzerland, 142–143, 198, 202, Theory X managers, 472–474
implementation 213, 493 Theory Y managers, 472–474
definition and introduction, 293–294 Theory Z managers, 474, 482
global and regional strategies, 299–302 Synchronous-time culture, 143–144 Third-country nationals (TCNs), 514–516
need for, 294–295 Syria, 31, 44–46, 51, 52 Threats, in negotiations, 238–239
planning benefits, 295 Systemic risk, 57 Time orientation
Strategic orientation and multicultural Taguchi method, 406–407 in Brazil, 174
development, 197 Taiwan in China, 171
Strategic planning, 295 as cultural dimension, 222, 225
Strategic predispositions, 159–160 communication barriers, 219–220 deadlines, 144, 232
Strategy formulation economic performance, 29 in decision-making process, 394
approaches to, 295–299 HSBC’s operations in, 571 diversity and problems with, 200
environmental scanning, 302–304 Japanese and U.S. subsidiaries in, Hofstede on, 133–134, 147
goal setting for, 304–306 in Latin America, 200, 225
internal resource analysis, 304 350–354 in mergers/acquisitions, 331
introduction, 290–292 motivating employees, 433, 458 in Middle East, 174, 225
organizational structure for, 337–338 negotiation tactics and styles, 240 in negotiations, 234–235
Strategy implementation Walmart’s operations in, 282 Trompenaars on, 143–144
approaches to, 295–299 Tanzania, 64 Togo, 33
born-global firms, 318–319 Tao Te Ching (Lao-Tzu), 499 Token groups, 199
country and firm-specific factors, Tariffs, 10–11, 60 Totalitarianism, 50–52
308–309 Task orientation, 202, 231 Total quality management (TQM),
definition, 306 Task-oriented cultures, 191, 192–193,
in emerging markets, 311–317 297–298, 394–396, 404
entrepreneurship, 317–318 195, 202 TPP (Trans-Pacific Partnership), 13, 24, 31
finance and, 311 Tatemae, 394 TQM (total quality management),
location considerations, 306–308 TAT (Thematic Apperception Test), 447
marketing and, 310 Taxes, 529–530 297–298, 394–396, 404
organizational structure for, 337–338 TCNs (third-country nationals), 514–516 TRACE (Transparent Agents Against
production and, 310–311 Teaching organizations, 538
Student advocacy, 107–111 Team-oriented leadership, 493–495 Contracting Entities) standard, 91
Subcontracting, 7, 10, 511, 515–516 Team structures. See also Group Trade, history of, 8
Subordinates, 471, 472, 474–475, 481 Trade agreements, 10–14, 21t, 24–25, 31,
Subsidiaries, 330–331, 338–339, 370, orientation
391–393 building multicultural effectiveness in, 60, 359
Succinct verbal style, 211t, 212 Trade policies, 363–364
201–203 Training
global, 484
leadership of, 184, 203 cultural, 227–229, 512, 536, 543–546
definition, 535
for expat teenagers, 543

Subject Index 633

in international management, United Arab Emirates, 485 legal and regulatory environment,
535–537, 547 United Kingdom. See also England; Great 10–12, 60

language, 226–227, 515, 520, 540, 543 Britain management across cultures, 162–164,
learning styles, 538–539 Brexit vote, 26, 47, 49 167, 169–170
management philosophy impact on, cultural dimensions, 131–132, 134,
motivating employees
537–538 140–143 assumptions about, 435
organizational structure and, 349 European management characteristics, content theories, 445t, 446–448
program types, 541–544 job satisfaction studies, 455–457
reasons for, 539–541 189 process theories, 450–451
TQM and, 395, 406 human resources management, 166, quality of work life, 452–453
Transactional leaders, 487–488 rewards and incentives, 458–459
Transatlantic Trade and Investment 536–537 Theory Y approach, 472
management across cultures, 166 work centrality, 454
Partnership (T-TIP), 12 motivating employees, 446, 451
Transfer risks, 368 organizational culture, 193–194 negotiation
Transformational leaders, 487–488, 497 political environment, 46, 47 behaviors and styles, 233, 237,
Transition strategies, 534–535 Walmart’s operations in, 279, 280e, 238–240
Transnational network structure, 344–346, process, 231, 232, 235
282–283
346t United Nations Environment Programme organizational characteristics of MNCs,
Transnational strategy, 301–302 350–354
Trans-Pacific Partnership (TPP), 13, 24, 31 (UNEP), 88
Transparent Agents Against Contracting United Nations Global Compact, 87 organizational culture, 186–188, 192–194,
United Nations Global Reporting 198, 202
Entities (TRACE) standard, 91
Trompenaars cultural dimensions Initiative, 87 pharmaceutical industry in,
United Nations Sustainable Development 290–291, 293
achievement versus ascription, 140f, 143
control strategies, 399–400 Goals, 92–93 political risk in, 363–366
environment, 144–145 United States quality performance in, 404–407
GLOBE project and, 145–148 steel industry in, 365–366
individualism versus communitarianism, communication technological environment, 63, 66
cultural impacts, 222–223 Universalism, 139–141
140f, 141–142 feedback systems, 226 Universal leadership behavior, 487–488
introduction, 139 flow of, 215 Upward communication, 215–216
neutral versus emotional, 140f, 142 language barriers, 216–219 Utilitarianism, 78–79
specific versus diffuse, 140f, 142–143 nonverbal, 224–226 Validity, 545
time, 143–144 perceptual barriers, 220–221 Value of work, 454–455
universalism versus particularism, verbal styles, 210, 212–213 Values, 128. See also Culture meanings

139–141 controlling process in, 402–403 and dimensions
Trust cultural dimensions Variety amplification, 482
Variety reduction, 482
of business and government, 85–86 achievement culture, 143 Venezuela
in diverse groups or teams, 199, 202 competitiveness, 35t
ethically responsible leadership and, 497 control of one’s environment, GLOBE study insights, 494
as part of global team management, 183 national culture dimensions, 140,
T-TIP (Transatlantic Trade and Investment 144–145
individualism, 131, 132f, 136f, 142–144
Partnership), 12 organizational culture in, 192
Tunisia, 44, 51, 375 137, 141 Verbal behaviors, in negotiations, 237–239
Turkey indulgence, 134–135 Verbal communication styles, 210–213,
in M&A activity, 122–124
economic environment, 15–16 nationalism, 49 491–492
leadership attributes, 475, 488, 491t priorities of, 125 Vertical investment, 369
legal and regulatory issues, 55, 59 specific culture, 142–143 Vertical specialization, 351–352
organizational culture, 192 stereotypical views, 127 Vienna Convention of Diplomatic
Two-factor theory of motivation, 442–446 time orientation, 134, 143–144
Uganda, 64 transitional nature of, 128–129 Security, 53
Ugly American problem, 540 universalism, 140–141 Vietnam
Ukraine, 360–361 economic environment, 8, 16–18, 24, 35
Ulysses Program, 547 ethics, social responsibility, and sustain- alliance challenges and opportunities,
Uncertainty avoidance 380–381
as cultural dimension, 130, 137–138 ability, 80, 83, 85–88, 90–91, 108,
leadership and, 494 113–118 economic environment, 15–16, 23, 29
managerial differences and, 169–170 foreign direct investment by, 20 HSBC’s operations in, 571
motivating employees and, 447–448, 452 human resources management labor environment, 81
in strategic alliances, 378 comparative management behavior, political environment, 48, 50, 53,
verbal communication styles and, 531–532
compensation, 527–528, 529, 530 364–365
211t, 212 cross-cultural management, 167 technology environment, 61
UNEP (United Nations Environment HRM practices, 536–537 Virtual teams, 184
international selection criteria, 518 Virtue theory, 78–79
Programme), 88 repatriation of expatriates, “Volcker Rule,” 56–57
Unifying Free Trade Agreement, 24 533–535, 546 Wages, 80–81, 166
leadership, 475–476, 480–483, Warsaw Pact, 507
491, 494

634 Subject Index

Western Europe, 14, 134, 141, 189, 290, Working for foreigners, 515 definition and overview, 10–12
347. See also specific country Workplace culture, 190–195 dispute-settlement mechanism of,
Workplace layout, 214, 225
Western management styles, 347, 485 The World Is Flat (Friedman), 7, 60 577–578
Western philosophies, 77–78 “World’s Most Admired Firms” trade monitoring by, 60
Wholly owned subsidiaries, Written communication, 217–219, 227, 232
(Hay Group), 407–408 Zambia, 444, 494
330–331, 370 World Trade Organization (WTO)
Wireless network business, 298, 316–317
Work centrality, 454–458 China’s obligations, 50, 170, 282,
Working conditions. See Human rights 293–294, 363, 563, 567, 569

















Supplemental In-Depth Integrative Case

Nokia Targets the Base of the Pyramid

One of the most widely used clichés in the world of busi- time: In both Africa and India less than 15 percent of the
ness is the so-called 80/20 rule. In the realm of sales, the population has mobile phones.6
rule is sometimes interpreted as “80 percent of our sales Asia has the largest measured regional BOP market
come from 20 percent of our customers.”1 One recent for ICT, $14.3 billion, reflecting the region’s significant
business theory that has challenged this rule is the so BOP population of 1.49 billion. Its estimated total BOP
called BOP or Bottom of the Pyramid perspective, devel- market for ICT (including the Middle East) is $28.3 bil-
oped and popularized by C.K. Prahalad.2 It refers to the lion, including the spending of 2.9 billion people. Not
around 4 billion people at the bottom of the economic far behind is Latin America’s measured BOP market,
pyramid with a purchasing power of US$2,000 per year $11.2 billion, accounting for the ICT spending of 276 mil-
or less. Prahalad and colleagues have proposed that these lion people. The region’s estimated total BOP market is
low-income consumers represent great potential but $13.4 billion (360 million people). In Eastern Europe the
require a unique mix of pricing, promotion, low cost measured BOP market for ICT is $3.0 billion (148 mil-
delivery, and effective communication in order to success- lion people); the estimated total market is $5.3 billion
fully reach.3 The key to selling to BOP consumers is that (254 million people). In Africa the measured BOP mar-
an MNC strategy be affordable, accessible, and socially ket is $2.0 billion (258 million people), and the estimated
driven. Nokia is one company that is taking this perspec- total BOP market $4.4 billion (486 million people).
tive seriously. Though smallest, the African ICT market is the most
Business interest in BOP markets is rising. Multina- rapidly growing one—and it has already generated very
tional companies have been leaders in this trend, espe- profitable companies and significant wealth.7
cially in food and consumer products. And large national The BOP share of the total household ICT market in
companies have also taken a leadership role, proving to measured countries varies across regions. In Asia the BOP
be among the most innovative in meeting the needs of share is about half of the total market, 51 percent; in other
BOP consumers and producers, especially in such sectors regions it is smaller though still substantial: 36 percent in
as housing, agriculture, consumer goods, and financial Eastern Europe, 28 percent in Africa, 26 percent in Latin
services. And small start-ups and social entrepreneurs America. Africa shows the greatest disparity between the
focusing on BOP markets are rapidly growing in number. BOP share of the population (95 percent) and the BOP
But perhaps the strongest and most dramatic BOP leader- share of ICT spending (28 percent)8.
ship success story is mobile telephony.4 At the national level there are wide disparities in the
BOP share of ICT spending. These disparities stem in
The Global ICT Market part from regulatory differences affecting the pace at
The measured BOP market for ICT—information and com- which mobile phone networks expand. They also reflect
munication technologies and the services they provide—is national differences in urban-rural demographics, since
$30.5 billion for Africa (11 countries), Asia (9), Eastern mobile networks start in urban areas and only then spread
Europe (6), and Latin America and the Caribbean (9). This to rural areas.9
represents annual household ICT spending in the 35 low- In Asia the extremes are represented by Pakistan and
and middle-income countries for which standardized data Bangladesh, where the BOP accounts for more than 89 per-
exist, covering 2.1 billion of the world’s BOP population. cent of the ICT market, and Thailand, where the BOP pop-
The total BOP household ICT market in these four regions, ulation, though substantial, accounts for only 29 percent of
including 3.96 billion people in all surveyed countries, is the market. In Africa the extremes are Nigeria (98 percent)
estimated to be $51.4 billion.5 and Burundi (12 percent). In Eastern Europe the extremes
But the ICT sector has been growing explosively in are represented by Belarus and Kazakhstan (74 percent)
developing regions in the interval since countries were and FYR Macedonia (21 percent). In Latin America and
surveyed, with Internet services and especially mobile the Caribbean, only in Jamaica does the BOP account for
phone companies adding customers at rates that may well more than half of total ICT household spending (71 percent);
have doubled BOP sector spending since that time. More- the other extreme is Colombia, where the BOP accounts for
over, rapid market growth is expected to continue for some only 12 percent of ICT spending.10

1

2 Part 4 Organizational Behavior and Human Resource Management

Between 2000 and 2005 the number of mobile sub- to inspire and inform their product design and development
scribers in developing countries grew more than fivefold— and position Nokia as a global company and leading brand.15
to nearly 1.4 billion. Growth was rapid in all regions, but For example, field observations in Uganda demon-
fastest in sub-Saharan Africa—Nigeria’s subscriber base strated that entry level customers of the mobile phone
grew from 370,000 to 16.8 million in just four years providers at the bottom of the pyramid segment could
(World Bank 2006). Household surveys confirm substan- rarely afford their own personal handsets. Often an entire
tial and growing mobile phone use in the BOP population, family would share one cell phone. In response to this
which has clearly benefited from the access mobile phones observation, Nokia launched a shared phone device in
provide to jobs, to medical care, to market prices, to fam- emerging markets, one that permits up to five separate
ily members working away from home and the remittances profiles, contact directories and other personalization fea-
they can send, and, increasingly, to financial services.11 tures so that each user can have his or her “own” phone.
A strong value proposition for low-income consumers Over time as income permitted, people would purchase
has translated into financial success for mobile compa- the brand and phone they’d already become accustomed
nies. Celtel, an entrepreneurial company operating in to using, increasing Nokia’s sales.16
some of the poorest and least stable countries in Africa, Observing how people live and behave with mobile
went from start-up to telecom giant in just seven years. phones at BOP in developing nations, how they’ve accessed,
Acquired for US$3.4 billion in 2005, the company now enhanced and shaped communications in many different
has operations in 15 African countries and licenses cover- locales and socioeconomic segments around the world has
ing more than 30% of the continent.12 shown Nokia the “weak signals” or early indicators that
enabled them to anticipate future trends, emerging needs,
Nokia’s BOP Strategy and market behavior. Recently, Nokia has reinvented itself
Another major player on the ICT (information and com- as a mobile computing company, focusing on services and
munication technologies) market has been the Finnish on creating the Internet experience on the mobile platform.17
MNC Nokia. Nokia terms its BOP market strategy as
“user-centered innovation”—the search for insights and Nokia Sharing Survey:
inspiration that starts with observing an intended audience Understanding and
in order to understand them. The goal was to discover Responding to BOP Markets
unmet needs or opportunity gaps where existing products, The Nokia sharing survey was conducted in emerging
services, or business models left their customers unful- markets (India, China, Brazil, Pakistan, Vietnam, Russia,
filled. This reduced the “hit or miss” gamble of new prod- and Egypt) in October and November 2007, which con-
uct introductions and increased the rate of diffusion of an firmed that mobile phone sharing was on the rise. Accord-
innovation in the market.13 ing to the survey more than 50% of respondents in India
According to a company press release, in 2002, Nokia and Pakistan and nearly 30% in Vietnam indicate that they
unveiled a strategy to lower the cost of owning and oper- share, or would share, their mobile phone with family or
ating a mobile phone and to bring the benefits of mobile friends, a figure which contrasts with consumer behavior
telephony to people in emerging markets. Later, Nokia was in more mature markets.18 Because of its ability to quickly
expanding that vision by introducing a number of devices spot this important trend and receive important feedback
and services that aimed to bring the power of the Internet from consumers, Nokia was able to introduce new phones
to these markets as well. By introducing products and ser- meeting the needs of its BOP customers and gain more
vices that are affordable, relevant, and easy-to-use, Nokia respect and popularity on the ICT market.
believes it can connect people with each other, accessing “Phone sharing is a logical trend. More and more fami-
information, news, entertainment, and sharing.14 lies are purchasing a mobile phone for the entire family to
The challenge for most MNCs entering BOP markets is use, not just the head of the household. In addition, digital
how to address the increasing needs at the bottom of the cameras are quickly becoming more popular in these mar-
social and economic pyramid around the developing world. kets, and as such taking and sharing digital images is
These emerging consumer markets have been either becoming more common,” said Alex Lambeek, Vice Pres-
unknown or never studied as consumer markets at the great ident, Entry Devices, Nokia. “In response, Nokia has devel-
extent conventional mainstream consumer markets have oped a number of innovative features like the multiple
been studied, where decades of research and metrics are phonebook to support phone sharing, and we have added
available for sophisticated analysis of the market players. technologies like Bluetooth to some models to make trans-
To gather more information about the new BOP customers, ferring images and ringtones easy and affordable.”19
Nokia employed a participatory approach to reach new In January 2008, Nokia unveiled the Nokia 2600 clas-
markets. They allocated full-time in-house resources to sic and the Nokia 1209, two mobile handsets that offered
conduct continuous ongoing exploratory research in order useful features, range of colors, or exchangeable covers

Supplemental In-Depth Integrative Case Nokia Targets the Base of the Pyramid 3

for consumers in emerging markets. Nokia 2600 classic the exception of a few, companies have not succeeded in
also allowed consumers to customize their phones with the rural market. Nokia has been flourishing in rural India
colorful, fully changeable Xpress-on covers and MP3 by customizing its phones according to market needs.24
ring tones. The cheerful Nokia 2600 classic also features “Filling in the information gaps in agriculture and edu-
a number of entertainment features, including an FM cation with Nokia Life Tools, we strive to contribute
radio and a VGA camera. Nokia 2600 classic, which was towards empowering people with the right tools to help
projected to retail for approximately 65 euros before them make informed decisions in their daily lives,” said
applicable taxes or subsidies, was introduced in all key Jawahar Kanjilal, Global Head of Emerging Market Ser-
markets during the first quarter of 2008. Nokia 1209 was vices, Nokia. “Nokia Life Tools was developed to help
available globally during the second quarter of 2008 and bridge the digital divide in the emerging markets.”25
retailing for approximately 35 euros before applicable “Nokia is a global innovator with a strong pulse of
taxes or subsidies.20 local markets. Agriculture employs more than 60 percent
“While cost sensitivity is an important element in cre- of all workforce in India. This sector of the economy
ating mobile devices for emerging markets, the over- needs fresh inputs via technology for the sector to get to
whelming feedback we receive from consumers in these a 3 percent growth,” said Shiv Shivakumar, Vice Presi-
markets is that they want their mobile device to comple- dent, Nokia India. “Education and English language, on
ment their personality and offer a range of colors and the other hand, are springboards for a number of small
entertainment features,” said Alex Lambeek. “The Nokia town and rural youth to move into the employment mar-
2600 classic offers a colorful sense of flair and a robust ket. Nokia, through services in agriculture and education,
set of features at an exceptionally accessible price. As will fulfill these opportunities for the Indian population.”26
with all Nokia devices, it is backed by a brand that stands Before the end of 2008 Nokia announced plans to con-
for quality and durability.”21 duct a limited scale pilot in India. Reuters Market Light
The second model, the Nokia 1209, offered additional (RML) was chosen as the content service provider, col-
cost management features to make phone sharing easy and laborating with Nokia for agriculture services in the pilot,
convenient. Innovations included the pre-paid tracker, a where accurate and regular information on weather, prices
cost-tracking application, and the multiple phonebook, and availability of seeds, fertilizers, pesticides, and pre-
which allowed up to five people to store personal contact vailing market prices for the produce would be sent to the
lists of up to 200 numbers on a single phone. Designed farmer. The information should be customized to the
for first-time buyers, the Nokia 1209 incorporated Nokia’s farmer’s location and selection of crops, and be delivered
intuitive user interface and dust resistance, and offered up directly to his Nokia mobile phone. By getting the latest
to 80 languages. The Nokia 1209 also had a one-piece information directly on their mobile phones, farmers can
key mat for durability and reliability.22 overcome uncertainty and get just the right information
that they need to grow and sell their crops.27
Nokia Life Tools: “Technology is changing the way farmers, their families,
Service for the BOP and their surrounding communities are contributing to the
In November 2008 Nokia introduced a range of affordable economy, as well as benefiting from it. Reuters Market
mobile devices and innovative new services specifically Light has already proven the value of customized and local-
for people in emerging markets. In addition to Nokia’s ized information to the farming community, with thousands
lowest cost handset, as well as its first handset for emerg- of farmers having already made significant additional prof-
ing markets with an integrated digital music player, Nokia its using RML,” said Amit Mehra, Managing Director,
unveiled a range of services that leverage the power of Reuters Market Light. “Through our collaboration with
the Internet. Estimated retail prices of the new devices Nokia, we hope to reach even more farmers so that they
ranged from 25 to 90 EUR, with several models expected can make informed decisions that have a direct and positive
to begin shipping in 2008. Nokia’s suite of Internet ser- impact on their productivity and yield.”
vices for emerging markets was projected to be available The Education Service of Nokia Life Tools aimed
beginning in 2009.23 to  give students a decisive advantage by boosting their
In 2008 Nokia launched Life Tools, a service aimed to English language skills and local, national, and interna-
tap the unmet information needs of rural farmers. Since tional general knowledge via language lessons, quizzes on
2000, the rural market has emerged into a gold mine for English words and phrases, and the general knowledge
MNCs wanting to expand their market share. Due to rising information toolkit. Together with EnableM for the pilot,
income level, literacy rate, and disposable income, the rural these services were designed to give students an edge they
consumer market has been growing at twice the rate of the otherwise lacked. In the future, the Education Service
urban market, accounting for nearly 50 percent of the sales will also come with information on higher education and
of many product categories like FMCG and consumer career guidance and tips, exam preparation, quizzes, and
durables. However, despite the booming opportunities, with access to exam results.

4 Part 4 Organizational Behavior and Human Resource Management

“Nokia Life Tools was developed in collaboration with an integrated camera. The Nokia 2320 classic and the
the target users and the industry. The success of this ini- Nokia 2323 classic were expected to begin shipping dur-
tiative can be assured through regular consumer feedback ing the second quarter of 2009 with an estimated retail
to ensure that their needs are best met. More importantly, price of 40 EUR. The Nokia 2330 classic was expected
it will require a collaborative effort between Nokia, our to begin shipping during the second quarter of 2009 with
operator partners, industry participants, and information an estimated retail price of 50 EUR.32
providers across the agriculture and education sectors as The Nokia 1202 and Nokia 1661 offered exceptional
we connect the next billion mobile phone subscribers, value. At only 25 EUR, the Nokia 1202 was Nokia’s low-
many of whom will indeed hail from these developing est cost mobile device to date. Developed specifically for
regions,” added Mr Kanjilal.28 people in rural areas, the Nokia 1202 included standard
features like a flashlight, extended battery life, loud ring-
Nokia and Continuous Innovation to Meet tones, and a phone book for up to five users. The Nokia
BOP Customer Needs 1661 was Nokia’s lowest cost color phone including an
Another innovation in late 2008 that was developed by FM radio and a large color screen with an estimated retail
Nokia especially for emerging markets was Mail on Ovi, price of 30 EUR. The Nokia 1661 also supported a flash-
a new affordable Internet service, which was enabled on light, loud ringtones, and multiple phonebooks.33
Nokia Series 40 devices, offering the possibility to create
an e-mail account directly on the mobile phone without Nokia, Siemens, and
having to use a personal computer, giving millions of Internet for the Next Billion
users the ability to create their first Internet identities and In April 2007 Nokia began operating in a joint venture
communicate in new ways. Mail on Ovi was easy to find, with German corporation Siemens AG, creating Nokia
setup, and use for immediate e-mail access from one’s ­Siemens Networks. The company, jointly owned by
mobile phone. The global rollout of Mail on Ovi was Nokia and Siemens (50 percent/50 percent) and consoli-
scheduled for the end of 2008.29 dated by Nokia, combined Nokia’s networks business and
At the end of 2008, to support the range of new mobile Siemens’ carrier related operations for fixed and mobile
services for emerging markets, Nokia announced that it networks.34 With more than 60,000 employees in over
would expand its portfolio of affordable mobile phones, 150 countries, Nokia Siemens Networks is one of the
including the following: Nokia 7100 Supernova, Nokia largest telecommunications hardware, software, and ser-
5130 XpressMusic, Nokia 2320 classic, Nokia 2323 clas- vices companies in the world. The company is committed
sic, Nokia 2330 classic, Nokia 1202, and Nokia 1661. The to innovation and sustainability and offers a complete
Nokia 7100 Supernova was designed for style and enter- portfolio of mobile, fixed, and converged network tech-
tainment. This colorful device was highlighted by its nologies as well as professional services including con-
large, high resolution color screen, FM radio, 1.3 mega- sulting and systems integration, network implementation,
pixel camera, and support for Share on Ovi, Nokia’s maintenance and care, and managed services.35 Nokia
online photo sharing service, and other photo sharing Siemens company projects tomorrow’s connected world
sites, also included support for Mail on Ovi, as well as a as “smart, simple, and efficient.” It introduces a new
browser for surfing information on the Internet. The innovative concept of “smart connectivity.” The company
Nokia 7100 Supernova was expected to begin shipping in states on its Web site: “Tomorrow’s networks will be
the fourth quarter of 2008 with an estimated retail price smarter as well as simpler. Smart connectivity is an inno-
of 75 EUR.30 vative concept that will provide powerful connectivity
Nokia 5130 XpressMusic is Nokia’s most affordable solutions for heterogeneous networks. It will enable easy,
music phone to date, featuring dedicated music keys, a transparent, and efficient access to services anytime and
digital music player, FM radio, and a standard 3.5 mm anywhere on the users’ preferred device. When imple-
connector for headphones. Equipped with an integrated mented, it will generate significant benefits for consum-
2  megapixel camera, the Nokia 5130 XpressMusic also ers, CSPs, and enterprises.”36
supports image sharing through Share on Ovi, as well as The Nokia Siemens venture had started a separate ini-
the Mail on Ovi e-mail service. The Nokia 5130 Xpress- tiative called “Internet for the next billion”. Nokia Sie-
Music was planned to begin shipping in the first quarter mens Network envisioned that by 2015, five billion people
of 2009 with an estimated retail price of 90 EUR.31 will be connected in a worldwide community brought
Premium looks and practicality were the hallmarks of closer together by voice and increasing data communica-
the Nokia 2320 classic, Nokia 2323 classic, and Nokia tions, and that nowhere will the impact of this revolution
2330 classic. These affordable devices supported Mail on be more pronounced than in emerging markets.37 As a
Ovi and Nokia Life Tools. In addition, the Nokia 2323 first step toward the realization of that vision, Nokia Sie-
classic offered an FM radio with recording and an Internet mens is addressing the concrete challenges of connecting
browser. The Nokia 2330 classic was also equipped with the “next billion.” These people will be predominantly users

Supplemental In-Depth Integrative Case Nokia Targets the Base of the Pyramid 5

from low-income segments of the population, from poorly the rapidly declining price of some handheld devices is
connected rural areas, or from emerging markets and further accelerating this demand.42 Nokia Siemens Net-
developing countries.38 works has offered an end-to-end 3G solution that allows
rapid building of a 3G footprint and capacity, especially
Network Village, Internet Kiosk, addressing the specific needs of emerging markets.
and 3G Future According to Nokia Siemens, this solution provides low
Nokia Siemens Network has launched a number of initia- total cost of ownership while maintaining good service
tives to develop solutions supporting sustainable develop- quality. It also helps operators in emerging markets intro-
ment in emerging markets. For example, during 2008 the duce 3G easily, based on a sound business plan backed
Nokia Siemens Networks Village Connection was rolled by solid experience and research.43
out in India, with trials in Africa, the AsiaPacific region
and Latin America. By the end of the year, some 50 vil- Connectivity Scorecard
lages were covered by this innovative, cost-efficient solu- In 2008, Nokia Siemens Networks published findings
tion that enables operators to extend their reach to remote from a connectivity research study carried out across
villages and bypass the technology that typically would 25 countries. The study, which analyzes not only a nation’s
be required. In 2008, Nokia Siemens Networks also ICT infrastructure but how well it is being used, ranks
launched Internet Kiosk, an extension to the Village Con- each nation’s performance on a Connectivity Scorecard.
nection program that lowers Internet costs by sharing Designed by Leonard Waverman, the Scorecard investi-
access.39 gates how “usefully connected” countries around the
Many people living in rural villages require access to world really are. The Connectivity Scorecard is designed
mobile communications in order to reap the considerable to ­provide a comparison of how countries rank in relation
socio-economic benefits that technology brings. However, to  each other at a given point in time. The Scorecard
bringing modern technology to remote regions can be assesses performance against approximately 30 indicators
challenging for an operator. Service providers need to of connectivity, including broadband, fixed-line, mobile,
adopt innovative solutions to provide access for these and computing technologies, that contribute to a country’s
communities at a level which is affordable for the con- social and economic prosperity. Measures of positive ICT
sumer but also a sustainable business for the service pro- deployment include workforce IT skills, literacy, the use
vider. Village Connection is a unique GSM and IP-based of enterprise software, and women’s access to ICT.44
solution that extends mobile voice and data coverage to The Connectivity Scorecard has enabled Nokia Siemens
rural villages enabling the use of a franchise-based busi- Networks to track ICT progress in the countries covered,
ness model that is entirely new in the telecoms sector. For and to issue an urgent wake-up call to governments and
service providers, rural coverage becomes a realistic busi- businesses. Nokia Siemens wants to raise awareness of the
ness opportunity, while a village entrepreneur becomes an fact that better use must be made of infrastructure if coun-
integral part of a service provider’s distribution and mar- tries are to experience the full social and economic ben-
keting network. The new services contribute to the whole efits of ICT. The Connectivity Scorecard also provides a
community, while the entrepreneur benefits from the busi- platform for dialogue with regulators, financial institu-
ness opportunity.40 tions, multinational organizations, universities, and com-
Nokia Siemens believes that the Village Connection munications service providers. Through this dialogue,
and Internet Kiosk models are viable ways of bringing Nokia Siemens Networks want to encourage stakeholder
commercial mobile services to poor and rural areas, but action and engagement to help improve individual country
they realize that more efforts need to be undertaken jointly scores.45
with governments and regulators to create effective mar- In 2009 a second version of the Nokia Siemens Net-
kets for mobile operators. As one example of the work in work Connectivity Scorecard came out. It included double
this area, they launched an eCommerce Solution pilot the number of countries, including many from the Asia
project in China in 2008, aiming to provide the kind of Pacific and Africa regions, altogether 25 innovation-
services needed to support rural development needs.41 driven economies (advanced economies) and 25 resource
In the beginning of 2009 Nokia Siemens Networks had and efficiency-driven economies (emerging markets).
posted a number of articles related to 3G expansion in This broader study gave further insights into the correla-
emerging markets. Nokia Siemens assessed that Internet tion between ICT deployment and usage and social and
connectivity via mobile broadband is proving to be a economic development. The results confirmed that even
highly successful service in many emerging markets, the wealthiest and most technologically advanced coun-
whether through PCs powered by 3G dongles or handheld tries still have plenty of room to develop their ICT infra-
devices. According to Nokia Siemens, 3G can provide structure and improve its use. The findings suggest that
much-needed and inexpensive voice capacity in areas with the best connectivity is yet to come, and that there is still
congested 2G networks. The low price of PC dongles and much work to be done.46

6 Part 4 Organizational Behavior and Human Resource Management
Connectivity Scorecard 2009:

Efficiency and Connectivity
resource driven score
economies

Malaysia 7.07 Tunisia 3.50

Turkey 6.71 China 3.19

Chile 6.59 Philippines 3.17

South Africa 5.76 Egypt 3.02

Mexico 5.39 Sri Lanka 2.87

Russia 5.37 Vietnam 2.75

Argentina 5.14 India 1.88

Brazil 5.12 Indonesia 1.87

Colombia 4.08 Kenya 1.75

Botswana 3.98 Bangladesh 1.60

Thailand 3.75 Pakistan 1.54

Iran 3.62 Nigeria 1.30

Ukraine 3.60

Innovation driven Connectivity
economies score

United States 7.71 Hong Kong SAR 5.33

Sweden 7.47 France 5.22

Denmark 7.18 New Zealand 4.85

Netherlands 6.75 Belgium 4.65

Norway 6.51 Korea 4.17

United Kingdom 6.44 Italy 3.99

Canada 6.15 Czech Republic 3.71

Australia 6.14 Spain 3.49

Singapore 5.99 Portugal 3.02

Japan 5.87 Hungary 2.72

Finland 5.82 Greece 2.62

Ireland 5.70 Poland 2.49

Germany 5.37

Source: www.nokiasiemensnetworks.com.47

According to Nokia Siemens, connectivity is the key divide in support of the Millennium Development Goals
enabler of the information flow that defines modern econ- set by the United Nations for 2015, in particular the
omies. It is integral to economic productivity in advanced reduction of poverty and the improvement of education
economies and to the transformation of the economies of and health.48
many Asian and African countries. However, as stated in
Nokia Siemens 2008 Corporate Responsibility Report, Targeting Rural Regions
access to mobile communications is not only about having for Growth
the right technology and infrastructure. The Connectivity Overall, Nokia has been redirecting its overall corporate
Scorecard, developed with the London Business School, strategy to emerging and rural regions. One new service
identifies countries, such as Malaysia, that are leaders in we have alluded to is the monthly program that provides
the developing world in realizing the potential of com- farmers with real-time market data on current prices for
munications technology. It also highlights unused poten- commodities. Since 2009, 6.3 million people have signed
tial in many countries. By extending communications in up to pay Nokia $1.35 a month for commodity data in
such challenging areas of the world, Nokia Siemens Net- India, China, and Indonesia. In November 2010, Nokia
works are taking a real step toward bridging the digital

Supplemental In-Depth Integrative Case Nokia Targets the Base of the Pyramid 7

announced it was expanding this Life Tools program, part Questions for Review:
of its Ovi mobile services business, to Nigeria. With 152 1. Is the concept of “serving the poor” really an
million residents, Nigeria is Africa’s most populous coun-
try. But, Nokia says, only 29 percent of the Nigerian attractive business opportunity? How does business
population owns a cellphone, although other figures place leadership drive companies such as Nokia to pursue
the level higher because some phones are shared. such an opportunity?
While most analysts and media focus attention on the 2. What are the trends in the ICT (information and
competition for high-end smart-phones, nearly 80 per- communication technologies) market? How attrac-
cent of handsets sold are simpler models that can be tive is the ICT market in the BOP countries? How
used for voice and text messaging, but not much more. fast is that market growing?
Two-thirds of the world’s nearly 5 billion mobile phone 3. What is Nokia’s BOP strategy? Describe Nokia’s
subscribers live in emerging and developing markets, products/services developed specifically for emerging
where Nokia is the market leader with more than a third markets. What cultural challenges are associated with
of the market. Nokia’s goal is to encourage handset users developing, marketing, and distributing telecommuni-
to take advantage of their value-added services and to cations products and services in emerging markets?
stimulate cellphone purchases among those who do not 4. How has Nokia leveraged its presence in both mobile
yet own a mobile phone, so that they can receive these devices and value-added services to offer poor custom-
services. “The premise here is that we will be able to ers a bundle of services? Is this an effective product
complement good hardware with services that will development/marketing strategy? Why or why not?
attract and create a sticky situation with the consumer,”
said Mary T. McDowell, Nokia’s executive vice presi- Source: This case was prepared by Tetyana Azarova of Villanova
dent in charge of the company’s cellphone business. U­ niversity under the supervision of Professor Jonathan Doh as the basis
“This is not only good business but also about doing for class discussion. It is not intended to illustrate either effective or
good for the community.”49 ineffective managerial capability or administrative responsibility.

Endnotes 17. Ibid.
18. “Nokia Unveils Two Handsets That Offer a Range of Useful
 1. Bruce Kidd, Senior VP, Managing Strategic Accounts, “The Cost
to Serve Rule,” July 28, 2009, http://blog.walkerinfo.com/blog/ Features and Colours Aimed at Consumers in Emerging
creating-customer-value/0/0/the-cost-to-serve-rule. Markets,” Nokia press release, January 22, 2008, http://www.
nokia.com/A4805502.
  2. C. K. Prahalad and Allen Hammond “Serving the World’s 19. Ibid.
Poor Profitably,” Harvard Business Review, September 2002. 20. Ibid.
21. Ibid
  3. Ibid. 22. Ibid.
  4. Allen Hammond, William J. Kramer, Julia Tran, Rob Katz, 23. “Inform, Involve, Empower—Nokia’s Service Mantra for Emerg-
ing Markets with Nokia Life Tools,” Nokia press release,
and Courtland Walker, “The Next 4 Billion: Market Size and November 4, 2008, http://www.nokia.com/A41403254.
Business Strategy at the Base of the Pyramid,” IFC & World 24. Shreya Tantia and Priti Krishnan, “Nokia’s Rural Marketing
Resource Institute, March 2007, http://www.wri.org/publication/ Strategies in India,” Reaching Out to the Bottom of Pyramid
the-next-4-billion. Marketing Strategies Case Study, February 2009, http://www.
  5. Ibid. ibscdc.org/Case_Studies/Marketing/Marketing%20Strategies/
  6. Ibid. MKS0119.htm.
  7. Ibid. 25. “Inform, Involve, Empower.”
  8. Ibid. 26. Ibid.
  9. Ibid. 27. Ibid.
10. Ibid. 28. Ibid.
11. Ibid. 29. “Nokia Introduces Affordable Mobile Devices and Services That
12. Ibid. Make the Internet Available for Emerging Markets,” Nokia press
13. Niti Bhan, “The Fortune at the Bottom of the Pyramid release, November 4, 2008, http://www.nokia.com/A41403253.
Begins with Understanding,” September 9, 2008, 30. Ibid.
http://www.emergingfutureslab.com/perspective_20/ 31. Ibid.
2008/09/how-does-unders.html. 32. Ibid.
14. Nokia, press release, http://www.nokia.com/A4405102.
15. Bhan, “The Fortune at the Bottom of the Pyramid Begins with
Understanding.”
16. Ibid.

8 Part 4 Organizational Behavior and Human Resource Management

33. Ibid. 42. Nokiasiemensnetworks.com, “Internet for the Next Billion; 3G
34. Nokia Corporation, Form 20-F for the fiscal year ended Solution Brings Internet and Voice to Emerging Markets,” http://
www.nokiasiemensnetworks.com/insight/enriched-customer-
December 31, 2008, http://www.nokia.com/NOKIA_COM_1/ experience/recommended-solutions/3g-solution.
About_Nokia/Financials/form20-f_08.pdf.
35. http://www.nokiasiemensnetworks.com/about-us/company. 43. Ibid.
36. http://www.nokiasiemensnetworks.com/about-us/company/ 44. Nokiasiemensnetworks.com, “Corporate Responsibility: Connectivity
innovation-and-technology.
37. http://unite.nokiasiemensnetworks.com/internetforthenextbillion. Scorecard,” http://www.nokiasiemensnetworks.com/about-us/
38. Nokiasiemensnetworks.com, “Corporate Responsibility: Bringing corporate-responsibility/bringing-connectivity/connectivity-
Connectivity,” http://www.nokiasiemensnetworks.com/about-us/ scorecard.
corporate-responsibility/bringing-connectivity. 45. Ibid.
39. Nokia Corporation, Form 20-F for the fiscal year ended 46. Ibid.
December 31, 2008. 47. http://www.nokiasiemensnetworks.com/about-us/corporate-
40. Nokiasiemensnetworks.com, “Internet for the Next Billion; responsibility/bringing-connectivity.
Village Connection with Internet Kiosk Brings the Internet to 48. Ibid.
First-time Users,” http://www.nokiasiemensnetworks.com/insight/ 49. Kevin J. O’Brien, “Nokia Sees Cellphone Growth among the
internet-for-the-next-billion/recommended-solutions/village- World’s Poorest,” New York Times, November 2, 2010, p. B3.
connection-with-internet-kiosk-brings-the-internet-to-first.
41. Nokiasiemensnetworks.com, “Corporate Responsibility: Bringing
Connectivity.”

In-Class Simulation

1. “Frankenfoods” or Rice Bowl for the World:
The U.S.-EU Dispute over Trade in Genetically
Modified Organisms

This simulation is designed to develop skills in cross- unfounded fears about GMOs.3 In addition, the U.S.
cultural negotiations with an emphasis on multi-stake- government argued that requiring labels for GMO prod-
holder dialogue and exchange. ucts would result in segregating GMO foods from non-
GMO foods and, in so doing, limit their consumer appeal.
Synopsis Furthermore, the threshold of 0.9 percent was far too
On August 18, 2003, members of the World Trade restrictive, according to U.S. officials.
Organization (WTO) met in Geneva to hear a U.S.
request for a full-blown dispute-settlement proceeding Description of Exercise
regarding European Union (EU) restrictions on the This exercise provides an interactive case simulation in
import and sale of goods produced with or containing which you will be assigned to a group that will assume
genetically modified organisms (GMOs). In late 1996, the role of one of several stakeholder groups in the
Monsanto exported the first genetically modified soy- actual dispute between the United States and the EU
beans to Europe, assuming that consumers would accept over trade in GMOs. In this case, the U.S. government,
them as Americans had. The timing was not good, how- on behalf of U.S. farmers and the biotech industry, argued
ever, as the GMO issue became linked in the minds of that the EU is in violation of global trading rules. Europe
Europeans with “mad cow” disease, an outbreak that responded that it has the right to protect the health and
was first thought limited to animals but eventually safety of its population and domestic crops, given the
killed several humans. Neither GMO companies nor uncertainties over the effects of GMOs on humans, ani-
European authorities were prepared for the reaction, as mals, and plants.
public sentiment immediately turned against the technol- This simulation assumes that the United States and the
ogy. Britain’s Daily Mirror ran a front-page headline in EU proceed through the WTO dispute-settlement proce-
1998 warning against “Frankenfood.” In 1998, five dures, and it places participants in the roles of the various
European countries said they wouldn’t process any more disputants: the U.S. government, the European Union, a
applications for genetically modified crops, and the EU consortium of GMO companies, a group of interested
upheld this decision.1 developing countries, a group of NGOs, and a WTO Dis-
In May 2003, the United States filed a complaint with pute Settlement Panel.
the WTO in hopes of getting the ban lifted. In response,
in the summer of 2003, the European Parliament passed Genetically Modified Food
groundbreaking legislation that would require detailed According to some estimates, over half the world’s soy, a
labeling of all food products containing as little as 0.9 key ingredient in products ranging from candy bars to
percent of genetically modified ingredients, and would animal feed, comes from genetically modified strains. In
require origin tracing in order to gain approval. Although 2005, about 8.5 million farmers in 21 countries were
these steps were designed to move toward lifting the planting genetically altered seeds.4 The global market
moratorium, many in the United States charged that these value of genetically modified crops in 2006 was $6.15
rules would be unworkable, would be discriminatory billion. Yet genetically modified food has quickly become
toward imports, and would violate WTO sanitary and as controversial as cloning. The central feature of a GMO
phytosanitary (SPS) agreements.2 is human alteration of the DNA of an organism through
Paradoxically, both sides claimed to be concerned the use of biotechnology. Proponents and opponents in the
about public health and environmental safety. The U.S. genetic-modification debate have been eager to weigh in
government and industry argued that the EU was in on the benefits and risks associated with using GMOs.
violation of WTO provisions requiring nondiscriminatory Each side has identified a number of key arguments to
treatment of like or similar goods. The Americans con- support its position:
tended that uninformed Europeans were spreading
1

2 Skill-Building and Experiential Exercises

Benefits food not only is hurting U.S. commerce but also is dis-
∙ Increased yields. couraging developing countries from growing genetically
∙ Herbicide-tolerant crops encourage less tilling/soil modified crops for export.
The U.S. government believes that genetically modi-
erosion. fied products could reduce hunger and poverty in the
∙ Insecticidal crops encourage less use of harmful world’s poorest nations, and that by restricting the use of
GMOs, the EU is aggravating starvation in the develop-
p­ esticides. ing world.7 Biotechnology, according to U.S. policy mak-
∙ Virus-resistant crops. ers and biotech executives, offers the prospect of crops
∙ Development of drought-resistant crops. that are more resilient, require less water, and give higher
yields. Thus, the EU ban on genetically modified foods
Risks indirectly contributes to starvation by denying access to
∙ Possible allergic or other health responses in more efficient agricultural techniques.8 Furthermore,
according to Robert B. Zoellick, the U.S. trade represen-
humans/livestock. tative, uninformed European attitudes continue to spread
∙ Creating new or more vigorous pests and pathogens. unfounded fears in developing countries, where the need
∙ Harm to “nontarget” beneficial species. for the increased yields offered by genetically modified
∙ Unwanted gene flow. foods is greatest.9 In addition, according to the U.S. gov-
∙ Irreparable changes in species diversity and in ge- ernment, GMO technologies would help developing
countries dramatically increase export earnings. The U.S.
netic diversity within a species. government is not only concerned that Europe will pre-
Genetically engineered products are not new. Insulin vent the use of GMOs, but also that the EU model could
used in medicine is an example of genetic engineering. The serve as a blueprint for other countries, including those
insulin gene from the intestines of pigs is inserted into bac- in the developing world, that plan to regulate GMOs.
teria.5 The bacteria grow and produce insulin, which is then In its recent WTO dispute with the EU, the United States
purified and used for medical purposes. Other genetically argued that the EU’s ban on GMOs violated international
engineered products include the chemical compound aspar- trade rules. In February 2006, the WTO dispute panel ruled
tame, used as a sugar substitute, and the hepatitis B vaccine. in favor of the United States, Canada, and Argentina, decid-
A large barrier to the acceptance of GMOs worldwide ing that the EU and six member states had broken trade
is the fuzzy international law regulating GMO trade. The rules by banning the import of genetically modified foods.
Agreement on Sanitary and Phytosanitary Measures (SPS The ban caused “undue delays” in the approval of GMO
Agreement), part of the 1994 agreement that established the products, thereby violating the SPS Agreement.10
World Trade Organization, requires that food safety regula- Along with continued criticism from Europe, the GMO
tions be based on scientific risk assessments.6 Most studies cause has experienced some setbacks in the United States
to date seem to point to the conclusion that foods contain- as well. For example, Aventis CropScience, developer of
ing GMOs are safe for human consumption. But the fact StarLink corn, was forced to pay $10 million to Iowa farm-
that a majority of these studies were conducted by or for ers and grain elevators in premiums and compensation for
U.S. biotech firms independent of any third-party overseers losses tied to growing and handling genetically modified
suggests to some that the findings are suspect. In 1997, the grain that contaminated the grain supply. Although the
United States won a complaint with the WTO against the government had approved StarLink for use in livestock
EU concerning an EU ban on h­ ormone-treated beef, but the feed, it was not cleared for human consumption after pos-
EU continued to enforce the broader ban on approval of sibly allergic reactions were reported in people who con-
newly introduced GMO products because a large majority sumed the protein that StarLink produces. Hundreds of
of Europeans are steadfastly against the use of GMOs. food products were recalled in 2001 after testing showed
The United States, along with Canada and Argentina, residues of the StarLink protein in taco shells and other
filed another complaint with the WTO in 2003, claiming food. Some estimates suggest costs could eventually exceed
that the EU’s ban on genetically modified products vio- $200 million.11 Anti-GMO activists in the United States
lates international trade rules. In 2006 the WTO ruled in continue to make progress. In 2007, rice producers in
favor of the United States, claiming that the EU had indeed California called for a moratorium on transgenic rice in
violated recognized trade rules. Now the EU is seeking to the state, and a USDA ruling could stop the production of
limit GMO sales through tougher approval processes. genetically modified alfalfa throughout the United States.12

The U.S. Position The EU Position
In the United States, 86 percent of soy and more than 40 For most Europeans, the debate over genetically modified
percent of corn are genetically modified. The U.S. gov- foods is closely intertwined with cultural, environmental,
ernment argues that the EU ban on genetically modified

In-Class Simulation 1. “Frankenfoods” or Rice Bowl for the World: The U.S.-EU Dispute over Trade in Genetically Modified Organisms 3

and health issues. Earlier surveys suggested that nearly The EU argues the United States is motivated exclu-
80 percent of Europeans do not want to consume products sively by economic considerations and that the U.S. gov-
with GMOs,13 although European opinion about GMOs ernment is responding only to the agribusiness and biotech
seems to be getting more optimistic. A 2006 Eurobarom- firms that stand to gain financially if current restrictions
eter survey reported that, of those with a decided opinion are lifted. For example, in 2003, ten agricultural conglom-
on “green” biotechnology, only 58 percent discouraged it. erates, many of which are active in GMOs, owned almost
This brings European opinion on GMOs close to that of 40 percent of the world’s seed market.17 According to
Canada.14 Martin Rocholl, director of Friends of the Earth Europe,
At the heart of the debate over genetically modified “The U.S. Administration, funded by the likes of GMO
products is the growing disagreement between the United giant Monsanto, is using the undemocratic and secretive
States and Europe over what steps are necessary to protect WTO to force-feed the world foods containing GMOs.
public health and the environment.15 A major obstruction Decisions about the food we eat should be made in Europe
to settling this argument is deeply embedded in European and not in the White House, the WTO or Monsanto’s HQ.
culture. Food and culture are closely linked in Europe’s We welcome the European Commission’s commitment to
historical and contemporary life. Many European regions fight this aggressive U.S. policy and ensure that Europe’s
celebrate their unique food traditions and local produce. wildlife and people are protected from the threats of GM
Unlike Americans, whose food choices are driven by acces- crops.”18
sibility and convenience, Europeans try to limit the influ- Since the WTO’s 2006 decision, which ruled the EU’s
ence of corporate food companies on their food choices. ban on genetically modified products illegal, the EU has
Respecting their preferences, global food companies such fought to control the presence of GMOs on its own turf.
as McDonald’s, Burger King, and Coca-Cola have pledged Under the SPS Agreement, the EU originally banned all
to keep all products for sale in Europe free of GMOs.16 genetically modified products on the grounds that they
Another obstacle to the use of GMOs is the fact that, could not be proven “safe.” However, the WTO decision
in recent years, Europe experienced several health crises— claimed that enough evidence is now available to perform
notably the outbreak of bovine spongiform encephalopathy adequate risk assessments of genetically modified prod-
(BSE), commonly known as “mad cow” disease—that ucts and, furthermore, that most existing risk assessments
alerted people to the possible dangers lurking in the food do not provide enough of a reason for banning such prod-
supply. Experts agreed that beef from cows with the dis- ucts.19 The EU’s new authorization process will likely be
ease was perfectly safe; then dozens of people died. Bio- the stage for new disputes regarding the international sale
tech firms will have difficulty convincing Europeans to of genetically modified products.
consume GMOs in the absence of long-term statistical GMOs are starting to become more prevalent in
evidence from third parties supporting their safety claims. Europe, with GMO crop area expected to increase over
Exacerbating the issue is the persistent view in Europe the next decade. “It will be slow but within 10 years
that the United States continues to engage in a unilateral— GMOs will have reached the point of no return,” said
some would say imperial—foreign policy. Regardless of the Jean-Michel Duhamel, Monsanto’s director for southern
ongoing battle over GMOs, many people in Europe support Europe.20 But common anti-GMO sentiment is still
challenging U.S. positions as a matter of principle—as a strong. Some European companies, such as Unilever, pro-
demonstration of European strength and cultural unity. duce genetically modified products, but they don’t sell
These strong views will continue to influence E­ uropean those products in Europe because of consumer opposi-
consumer choices no matter the outcome of the current tion. G­ ermany’s Metro AG chain, like other major Euro-
dispute. Resistance by European customers to all U.S. foods pean grocery stores, doesn’t allow bioengineered
could overshadow any GMO benefits to the U.S. economy ingredients in its store brands.21 Labeling rules proposed
if, for example, the labeling provision is not upheld. The to replace the ban have generated heated responses from
EU also argues that U.S. corporations are squeezing farm- European GMO opponents. Greenpeace promised to mar-
ers around the world through their control of exporting and shal thousands of volunteers throughout Europe to police
processing activities with the goal of developing a lower- grocery stores in the weeks that follow the launch of
cost, vertically integrated global s­upply chain. labeling. “If consumers start buying it and get used to it,
European and North American protesters have been we will lose,” says Dan Hindsgaul, the head of Green-
seen with banners calling genetically modified products peace’s effort. In 2006, Greenpeace sent a petition, call-
“Frankenfoods,” a label that deliberately associates them ing all EU member states to alter their GMO-labeling
with frightening and unpredictable risks. Europe formally rules to include products such as meat, eggs, and milk,
adopted a “precautionary principle” (described below) which come from animals that are fed with genetically
that takes a cautious approach to the approval of new modified products. According to Greenpeace, the typical
bioengineered food, assuming that there may be unfore- diet of a farm animal in Europe consists of up to 30
seen effects unless proven otherwise. percent GMOs.22

4 Skill-Building and Experiential Exercises

Substantial Equivalence and The reluctance of key foreign trading partners—the EU,
the Precautionary Principle Japan, and other nations—to import genetically modified
The issue of scientific proof has been a major point of products has become a significant problem for American
contention. At the heart of the debate are the concepts of farmers as they compete in the international marketplace.
substantial equivalence and the precautionary principle. (In 2003, Australia joined the United States as a third-
The term substantial equivalence was first mentioned in party supporter in the WTO dispute against the EU over
a 1993 Organization for Economic Cooperation and the ban on GMO products. Australia is a minor producer
Development (OECD) report on the safety of biotechnol- of GMO crops, including cotton and carnations.23 Support
ogy. Members of the OECD agreed that the most practical for GMOs in Australia primarily comes from the national
approach to determining the safety of foods derived by government, while state governments and public opinion
biotechnology is to consider whether they represent a tend to oppose GMOs.) In the United States, genetically
“substantial equivalent” to analogous traditional products. modified crops, including corn and soybeans, are now
The term substantial equivalence was borrowed from the planted on millions of acres of farmland. If current
U.S. Food and Drug Administration’s (FDA) definition of restrictions on genetically modified foods aren’t lifted,
a class of new medical devices that do not differ materi- American farmers will lose millions of dollars from
ally from their predecessors and thus do not raise new unusable crops. In March 2004, the American Soybean
regulatory concerns. However, after considering the pos- Association (ASA) stepped forward to take a lead role in
sible unseen effects of foods that contain GMOs, the EU preparing the WTO challenge of the EU’s labeling ban.
argues that it is difficult to directly apply the FDA defini- In addition, the ASA claims the labeling threshold of
tion of substantial equivalence in this case. The concept 0.9 percent is too stringent and lacks statistical backing.
of substantial equivalence was applied for the first time Also worsening the farmers’ plight is the fact that world-
to a GMO in the safety assessment of the Flavr Savr wide commodity prices have dropped over the past decade.24
tomato before it went to market in 1994. Data collected
revealed that the modified tomato was equivalent to the Developing Countries
nonmodified parent plant, and genetically modified toma- In developing countries, farmers have been resisting pres-
toes were accepted under FDA rules. sure to grow bioengineered crops—even if they could
The EU adopted an approach to health and safety risks improve their productivity and reduce hunger—for fear of
known as the “precautionary principle.” In common par- losing their European market.
lance, this approach may be summed up as, “Better safe GMO supporters believe that the modified organisms
than sorry.” Under this policy, new products are not can resist certain viruses and extreme temperatures,
assumed to be safe unless scientifically shown to be so. enabling crops to survive with less energy than is nor-
According to some in the EU, there is little scientific, mally required with nonmodified seeds. This ability could
third-party evidence that shows foods containing GMOs be very useful in regions that don’t have much fertile soil
are safe for consumption. The precautionary principle and lack other usable resources. More abundant yields
thus provides justification for restricting GMOs unless would help feed the large population in most developing
they can be shown to be safe in all respects. countries. For example, yields could be increased by
growing insect-resistant crops in regions where bugs have
Biotech and Agricultural Firms seriously restricted outputs. Proponents believe that foods
Because of their international reach, several large U.S. containing GMOs will be able to alleviate starvation and
firms, including Monsanto and DuPont, that support bio- hunger in needy places. The United States insists that
tech and use biotech crops in their products have pressed GMOs do not pose a risk to developing nations because
the U.S. government to take a strong stand on the issue. the seeds are destined for consumption, not planting.25
The United States is the largest agricultural exporter in GMO crops are also considered by some to be better for
the world, and U.S. officials argue that trade restrictions regions such as Africa where lack of education and train-
of any kind will only undermine an already sluggish ing in the use of fertilizers and other modern farming
global economy. At stake for large biotech multinationals techniques hampers agricultural development. Transgenic
is a substantial amount of future commerce. These firms crops make up for this lack of education because the tech-
have claimed huge losses since the EU ban was put into nology to control insects is already packaged in the seeds
effect in 1998, projecting that the ban has cost them close and farmers just have to plant them.
to $300 million annually. U.S. government policy has Skeptics argue that the skewed food distribution sys-
been supportive of biotech firms and a strong advocate of tem, not lack of access to GMOs, is responsible for food
their ability to help alleviate famine in developing coun- shortages in developing countries. According to this view,
tries by producing more abundant yields in areas notori- developing countries are underfed because most of the
ous for infertile soil and a lack of other resources. food that they generate is sold in the export market to the
wealthy developed nations. Furthermore, they question

In-Class Simulation 1. “Frankenfoods” or Rice Bowl for the World: The U.S.-EU Dispute over Trade in Genetically Modified Organisms 5

how poor developing countries will be able to afford the interests may be similar may consult with each other for
genetically modified seeds. U.S. agricultural firms own an additional 10 to 15 minutes to coordinate presentations
the patents, and the suspicion is widespread that U.S. and minimize duplication. For example, the consortium of
companies will limit the availability of nonmodified seeds GMO companies might consult with the U.S. government.
in order to support the sale of modified ones. Also, many The WTO Dispute Settlement Panel is composed of
people in the developing world remain skeptical about the “judges” and should be treated respectfully. Each group
health effects. In late June 2002, Zambia’s minister of com- should make an opening presentation of no more than 10
merce, trade, and industry, Dipak Patel, proclaimed that minutes to the WTO panel. The presentation should sum-
African nations would not accept genetically modified food marize the main points of the argument and urge a par-
until it has been proved safe for human consumption.26 ticular decision by the panel. Panel members may then ask
South Africa, one of only a few African nations that questions of the groups for an additional 15 minutes. After
allow the planting of genetically modified crops, is expected each group presents its argument, the WTO panel will
to test a strain of genetically modified maize in late 2007. deliberate for 20 minutes and present its findings.
The prospects for GMOs in Africa, especially maize, could The issue for decision by the WTO Dispute Settlement
be on the rise since the 2006 maize streak virus, which Panel is whether the EU prohibition on imports of genet-
destroyed anywhere between 5 and 100 percent of African ically modified products is consistent with WTO princi-
farmers’ crops.27 ples. Depending on the ruling in this matter, the WTO
In Brazil, controversy surrounded President Lula da panel may offer specific remedies for how the ruling
Silva’s Provisionary Measure 131, which authorized the should be implemented. Further, the panel may wish
commercialization of genetically modified soy. Opponents to consider whether the proposed labeling and origin
of GMOs in Brazil suggested that the governing admin- requirements (which in theory would allow the resumption
istration, notorious for bribery and scandals, was influ- of imports of genetically modified products) would or
enced by its relationship with Monsanto, which owns the would not resolve the dispute, and whether this ban itself
patent on the most popular genetically modified soy. would be consistent with WTO principles.
­Brazilian legislators agreed and proposed that genetically
modified soy in Brazil be burned and replaced with con- GATT/WTO Principles:
ventional crops beginning in February 2004. Later, under General Obligations
pressure from some farming interests, the legislators The General Agreement on Tariffs and Trade (now the
reversed position, and genetically modified crops and World Trade Organization) was founded after World War II
seeds are now permitted. to establish rules for international trade practices and to
The UN Cartagena Protocol, an agreement intended to resolve disputes among nations. Two fundamental prin-
educate emerging-market countries about the benefits and ciples govern most GATT/WTO provisions: most-favored-
risks of genetically modified products, was activated in nation treatment and national treatment. National treatment
June 2003 when the Republic of Palau became the 50th refers to the obligations of the contracting parties to treat
country to ratify the bill. The agreement is designed to the nationals of foreign countries no less favorably than
help educate emerging-market countries about the risks of they treat the nationals of their own country. A more com-
proliferated GMOs. mon term for this obligation is “nondiscrimination.” The
GATT/WTO also requires that the parties extend most-
Simulation Instructions favored-nation treatment to other parties, so that some
You will be assigned to one of six groups: countries are not treated more favorably than others. Dis-
pute settlement resolution (when one or more countries
1. The U.S. government. accuse another contracting party of violating GATT/WTO
2. The European Union. rules) is carried out by three- to five-member panels that
3. A consortium of companies that manufacture or use render reports (decisions).

GMO products, including Monsanto and Cargill. Exceptions
4. A group of interested developing countries. The GATT/WTO provides for limited exceptions to the
5. A group of nongovernmental organizations (NGOs) above-mentioned obligations. For example, preferential
trade agreements such as the EU and NAFTA are permit-
opposed to the exchange of GMO products. ted to extend better than most-favored-nation treatment to
6. A WTO Dispute Settlement Panel. their members under certain conditions. There are also
“general” exemptions, which excuse otherwise illegal
Participants should spend 20 to 30 minutes reviewing actions if they are designed to protect public morals, pre-
the case and formulating arguments that advance the serve national heritage, and limit commerce in goods made
agenda of their group. Refer to the “GATT/WTO Princi-
ples” section below and to the background material above
for information. After the initial session, groups whose

6 Skill-Building and Experiential Exercises

with prison labor. Although the word environment is never Questions for Discussion After
mentioned, the GATT/WTO does offer a basis for deviat- Conclusion of Simulation
ing from GATT/WTO principles in support of environ- 1. How does your solution compare to your expecta-
mental protection. Specifically, Article XX holds that the
GATT/WTO does not prevent contracting parties from tion of the likely actual outcome? What is different
taking actions (1) necessary to the protection of human, or similar in the two approaches?
animal, or plant life or health and (2) relating to the con- 2. How would you characterize the cultures of Europe
servation of exhaustible natural resources—provided trade (France and Germany) and the United States in
measures affecting international commerce are joined by terms of Hofstede’s scheme? In what ways are the
restrictions on domestic production or consumption. cultures similar, and in what ways do they differ?
The Uruguay Round agreement established agree- How might the differences influence approaches to
ments on the application of sanitary and phytosanitary disputes like this one?
(SPS) measures and technical barriers to trade (TBT). 3. Why would an approach emphasizing “substantial
SPS measures are those necessary to safeguard human, equivalence” result in an outcome different from the
animal, and plant health. Typically, when applied by an outcome of a policy driven by the “precautionary
individual country, they are designed to safeguard its principle”?
citizens, animal and plant industries, and environment 4. How might the United States and EU resolve differ-
against the risks posed by exotic pests and diseases, and ences such as this in the future?
against general threats to health entering from outside,
and to control the incidence and spread of pests and dis- Source: © McGraw-Hill Irwin. This simulation was prepared by
eases already present. P­ rofessor Jonathan Doh as the basis for class discussion. It is not
These agreements established the basis for reducing or intended to illustrate either effective or ineffective managerial capabil-
eliminating nontariff regulatory barriers unless they respect ity or administrative responsibility.
scientifically substantiated and internationally recognized
standards and conformance procedures and technical and ENDNOTES
labeling regulations. As applied to international trade,
SPS protocols include a range of control measures—   1. Scott Miller, “EU’s New Rules Will Shake
for example, import requirements; methods of treatment, Up Market for Bioengineered Food,” Wall
manufacture, handling and packaging, and storage; inspec- Street Journal, April 16, 2004, p. A1.
tion and certification requirements; and in some cases
outright import bans on some products from certain areas.   2. Kerry Capell, “The Genetically Modified
The major areas covered are plant quarantine measures, Food Fight,” BusinessWeek Online, July
animal quarantine measures, and food safety standards. 21, 2003, bw.com/news/941856.
Thus, governments may restrict imports of products that asp?0dm5C18LB.
have been found to pose health or safety risks, based on
sound, scientific evidence. Specifically, SPS measures   3. Elizabeth Becker, “U.S. Contests Europe’s
must be designed to accomplish one or more of the fol- Ban on Some Food,” New York Times, May 13,
lowing objectives: 2003, p. B4.

1. To protect animal or plant life or health within the   4. Nina V. Fedoroff, “Genetically Modified
territory of the member from risks arising from the Foods: Making the Earth Say Beans,” Sci-
entry, establishment, or spread of pests, diseases, ence Journal, Penn State Eberly College of
disease-carrying organisms, or disease-causing Science, vol. 26, Spring 2007.
organisms.
  5. Bacillus thuringiensis, www.bt.ucsd.edu.
2. To protect human or animal life within the territory   6. John Hulsman, “Cherry-Picking: U.S.
of the member from risks arising from additives,
contaminants, toxins, or disease-carrying organisms and European Relationship,” Heritage
in food, beverages, or feedstuffs. Foundation, www.heritage.org/research/
tradeandforeignaid/tst061103.cfm.
3. To protect human life or health within the territory   7. Mark Drajem, “EU Pledges to Begin
of the member from risks arising from diseases car- Approving Gene-Modified Crops This Year,”
ried by animals, plants, or products thereof, or from Bloomberg News, June 17, 2003.
the entry, establishment, or spread of pests.   8. Jeremy Rifkin, “The Fight over GMO Crops
Exposes the Weaknesses of Globalization,”
4. To prevent or limit other damage within the terri- The Guardian, June 2, 2003, p. 16.
tory of the member from the entry, establishment,   9. Becker, “U.S. Contests Europe’s Ban on
or spread of pests. Some Food.”

In-Class Simulation 1. “Frankenfoods” or Rice Bowl for the World: The U.S.-EU Dispute over Trade in Genetically Modified Organisms 7

10. Regulatory Compliance Systems, LLC, 18. Press release from Friends of the Earth
“Precautionary Principle will ‘Run in Place’ Europe, www.foeeurope.org/press/2003/
in 2007, Trade Expert Predicts,” Pesticide.net AW_18_Aug_GMO_trade_war.htm,
Insider eJournal 4, no. 2 (January 30, 2007). August 18, 2003.

11. Jerry Perkins, “Iowa StarLink Costs $9.2 19. Regulatory Compliance Systems, “Precaution-
Million—Aventis CropScience Pays Claims ary Principle will ‘Run in Place’ in 2007.”
to Farmers, Elevators,” Des Moines Register,
September 15, 2001. 20. Sybille de La Hamaide, “Europe GMO Area
to Surge over 10 Years: Monsanto,” Reuters,
12. The Center for Urban Education about Sus- June 25, 2007.
tainable Agriculture (CUESA), “News about
Our Food’s Genes,” Weekly Newsletter, 21. Miller, “EU’s New Rules.”
March 3, 2007. 22. “Better GMO Labelling Backed by a Million

13. Sara Fitzgerald, “Putting the EU in Its Place: Europeans,” Euractiv.com, February 5, 2007.
Why Filing a GMO Case with the WTO Is 23. “Australia Struggles to Win Support for
Crucial,” Heritage Foundation, www.heritage.
org/research/Europe/em855.cfm. GMO Crops,” Reuters, March 10, 2005.
24. Interview with Keith Dittrich, president of
14. GMO Compass, “Majority of Europeans
Believe Biotech Will Improve Quality of the American Corn Growers Association,
Life,” June 20, 2006, www.gmo-compass.org/ June 12, 2003.
eng/news/messages/200606.docu.html. 25. Arpad Pusztai, “Genetically Modified Foods:
Are They a Risk to Human/Animal Health?”
15. John Connor, “GM Corn Variety Classed as http://www.mindfully.org/GE/GE2/
Safe,” New Zealand Herald, July 7, 2002, Pusztai-Risk-To-Health.htm.
p. A6. 26. Daniel Levine, “Mapping a New Plan for
Biotech,” San Francisco Business Times,
16. Becker, “U.S. Contests Europe’s Ban on March 10, 2003, p. 12.
Some Food.” 27. Crystal Davis, “Genetically Modified Crops
May Boost African Agriculture,” Earth
17. John Schoen, “Is This Biotech Boom for Trends, World Resources Institute, January 16,
Real?” www.msnbc.com/news/930313. 2007, earthtrends.wri.org/updates/node/142.
asp?0dm=L1BmB, June 23, 2003.

In-Class Simulation

2. Cross-Cultural Conflicts in the Corning-Vitro Joint
Venture

This simulation is designed to develop skills at interna- same time, sales of household, flat glass, and other tradi-
tional negotiation with an emphasis on cross-cultural tional glass products remained important to the company.
communication and negotiation.
NAFTA and Glass3
Case Summary During the early part of NAFTA negotiations (1989–1991),
During the NAFTA negotiations, many U.S. firms were con- U.S. makers of household and flat glass products expressed
cerned about the reduction of U.S. tariffs on flat glass, which concern about their ability to compete against cheaper
averaged 20 percent, and the perceived competitive advan- Mexican imports, and some even accused Corning S.A.
tages Mexican glass firms would have in the event these of unfair trading practices. Guardian Industries Corp., a
tariffs were removed. In the fall of 1991, in the midst of the ­Michigan-based manufacturer of float glass—the high-
NAFTA negotiations, Vitro S.A., the $3 billion Mexican quality flat glass used in mirrors, insulated windows, fur-
glassmaker, signed a tentative $800 million joint venture niture, and automobiles—complained that Vitro, the only
with Corning Inc. Two mirror companies were established— Mexican producer of float glass, was engaged in anticom-
Corning-Vitro and Vitro-Corning—and each company took petitive practices by trying to intimidate a Mexican glass
an equity stake in each of these joint-venture firms. In addi- distributor that was considering buying a product from
tion, the two parent companies agreed to a series of market- Guardian. Vitro exported approximately $120 million in
ing, sales, and distribution relationships to support the float glass and related products to the United States in
activities of each of the new companies.1 Two years later, 1990. Other glassmakers argued that even with present U.S.
the joint venture was in distress, and some of the interested duties averaging over 20 percent on household glassware
parties were suggesting that it be dissolved. This simulation from Mexico, the after-duty prices of the Mexican products
provides participants with an opportunity to undertake nego- were significantly below those of U.S. producers, owing in
tiations designed to resolve these differences. large part to considerably lower labor and energy costs.
In February 1991, the International Trade Commission
Background (ITC) issued a report on these allegations. Vitro Crisa (an
Vitro Sociedad Anonima is a 100-year-old Mexican com- operating subsidiary of Vitro S.A.) allegedly priced its
pany with roughly $3.5 billion in sales and 40,000 employ- glass beverageware at about 20 to 30 percent below that
ees. As Vitro positioned itself to take advantage of the of U.S. producers in the U.S. market. Vitro Crisa’s lower
emerging North American market, CEO Ernesto Martens- productivity relative to U.S. industry, said the ITC, was
Rebolledo described the tightrope the company must walk: offset by considerably lower labor costs (about $1.50 an
“We don’t want to lose our identity as a Mexican company hour versus $15 an hour in 1987 in the United States),
with a unique culture and relationship with our employ- which constituted nearly half of the production costs of
ees, but we don’t want to be battered in the world the U.S. household glassware industry. The cost of natural
­marketplace either.”2 In 1989, Vitro completed a hostile gas, another major production input, was about 15 percent
takeover of Anchor Glass Container Corporation, and in lower in Mexico.
1992, Vitro laid off some 3,000 workers, an unusual move
in Mexico at that time, given traditional notions about Problems Arise4
labor-management relations and job security. “Vitro and Corning share a customer-oriented philosophy
Corning, an upstate New York maker of glass, traces its and remarkably similar corporate cultures.” This was the
roots back to the mid-1800s. In recent years, Corning has characterization of the joint venture offered at the time by
diversified into fiber optics and other high-technology Julio Escamez, a Vitro executive. Both companies had long
applications of glass, ceramics, and composite materials. histories of successful joint ventures. Corning Inc. had been
During the 1980s, Corning’s business increasingly relied an innovative leader in foreign alliances for over
on sales of fiber optics to telecommunications firms. These 73 years. One of the company’s first successes was an alli-
firms were beginning construction of the new infrastructure ance with St. Gobain, a French glassmaker, to produce
to support high-speed voice and data transmission. At the Pyrex cookware in Europe during the 1920s. Corning has

1

2 Skill-Building and Experiential Exercises

formed approximately 50 ventures over the years. Only nine The Mexicans sometimes thought Corning moved too
failed (dissolved), an impressive number considering one fast; the Americans felt Vitro was too slow.
recent study found that over one-half of foreign and national Cultural differences generally, said Richard Sinkin, the
alliances do not succeed. From 1985 to 1990, Corning’s corporate consultant, are “the No. 1 problem for doing
sales from joint ventures were over $3 billion, contributing business in Mexico.” That may be an exaggeration, but it
more than $500 million to its net income. Corning enters underscores the difficulty of transferring a culture across
into joint ventures primarily to gain access to markets that the border. Sinkin’s own experience bears that out. He is
it cannot penetrate quickly enough to obtain a competitive bilingual and often works in Mexico but finds that it isn’t
advantage. In addition, both companies were globally ori- always easy to get paid because the Mexican view of con-
ented, and both had founding families still at their centers. tracts differs markedly from the view commonly held in
Yet the joint venture became subject to a series of cultural the United States. In Mexico, the terms of a contract “are
and other conflicts that began to undermine this vision. kind of ideal things that you strive to achieve,” Sinkin said,
“while in the U.S. they are law.” In general, corporate style
U.S.-Mexico Alliances5 is more formal in Mexico than in the United States. Titles
“There are many reasons why corporate marriages between are common, and nearly everyone is “licenciado,” which
Mexican and U.S. companies fail,” says Richard Sinkin, loosely refers to having any professional training. Forget-
managing director of InterAmerican Holdings, a consul- ting the honorific can be seen as a serious insult.
tancy based in San Diego, California, that advises U.S. In Mexico, executives can expect the unquestioned loy-
companies doing business in Mexico. Sinkin says that U.S. alty of employees, but outsiders are often viewed with
and Mexican companies often get together for the wrong mistrust. Horace E. Scherer, director general of Hobart
reasons. Unless the two partners contribute essential quali- Dayton Mexicana, the Mexican subsidiary of the Hobart
ties to the marriage, the alliance soon founders. The second Corporation, said his salespeople must often make four
difficulty is corporate control. “Most Mexican firms are trips to complete one transaction because of that lack of
still run as family businesses,” Sinkin says, “and these trust. To sell the company’s scales and other equipment,
firms are often reluctant to share control with an outside a salesperson starts with a visit to the client’s top official.
investor.” If a sale is made, a representative of the company itself
In the case of the Corning-Vitro JV, Corning managers must deliver the goods because the customer won’t accept
said that they were sometimes left waiting for important delivery from DHL or some other service. If all the papers
decisions about marketing and sales because in the are in order on delivery, the company representative is
­Mexican culture, only top managers could make them and told to come back on an appointed day to present an
at Vitro those people were busy with other matters. Vitro’s invoice, in person; if the invoice is accepted, an appoint-
sales approach was less aggressive than Corning’s, the ment is made for the rep to return to receive payment.
remnant of years in a closed economy, and was sometimes Many companies that have formed joint ventures end up
at odds with the pragmatic approach Corning had devel- creating their own new corporate culture, taking bits and
oped over decades of competition. pieces from each side. At Vitro-Whirlpool in Monterrey,
assembly-line workers have a long tradition of taking what
NAFTA and Alliances6 in Mexico is referred to as “el puente,” or the bridge, which
To varying degrees, such cultural issues have plagued many commonly extends a formal holiday into a mini-vacation.
mergers and alliances with their roots in the North Ameri- When, for instance, Mexico’s version of Mother’s Day fell
can Free Trade Agreement. “Mexico initially appears to be on Tuesday, May 10, workers did not show up on Monday,
the United States except that people speak Spanish,” said bridging the gap to the holiday. (If an American holiday
Harley Shaiken, a labor economist who often works in falls on a Tuesday, of course, absenteeism will be high on
Mexico. “That’s just not the case, which everyone finds out Monday, but in Mexico the custom is far more entrenched—
in the short term rather than the long term.” The trade pact and can even shut a plant down.) The company now allows
may have created false expectations about how much like workers to take the “puente,” but only if they agree to work
the United States Mexico has become. In discussing cul- an extra hour each day for eight days beforehand.
tural differences, it’s difficult not to slip into stereotypes Because their corporate conversations can be filled with
about “mañana”—Mexicans who move at a slower pace. so many feints and pleasantries, Mexicans often use memos
But what the gap separating the two business cultures really to convey dissatisfaction. When Labatt’s (the Canadian
amounts to is a different approach to work, reflected in brewer) Mexican manager, Noel Trainor, decided to cut
everything from scheduling to decision making to etiquette. back employees’ lunch from two hours to one, he had to do
In the Corning venture, the Mexicans sometimes saw it in a memo that all 30 employees had to sign. Trainor said
the Americans as too direct, and Vitro managers, in their he abided by a strict holiday policy, priding himself on the
dogged pursuit of politeness, sometimes seemed to the degree to which his compatriots had been able to adapt to
Americans unwilling to acknowledge problems and faults. the expectations of the United States and seemingly only

In-Class Simulation 2. Cross-Cultural Conflicts in the Corning-Vitro Joint Venture 3

half aware of the degree to which he had compromised. “We companies over whether to stay in or dissolve the JV.
only give what we are obligated by law to give,” he said, Groups 1 and 3 should consider the following:
“and of course half a day on Mother’s Day.”
1. The logic and original rationale for the JV.
Financial and Commercial Concerns7 2. How that logic may still hold.
Added complications emerged from the relatively strong 3. How the JV could be made to work better.
peso, increased overseas competition, and a reconsidera-
tion of marketing strategies by both companies. The joint Groups 2 and 4 should consider the following:
ventures suffered from the different administrative prac-
tices of the two companies. “Managing from two countries 1. What caused the JV relationship to sour.
was more complicated than we anticipated,” said Corning. 2. Why the partner has not lived up to expectations.
“There were different (management) structures, styles and 3. What the terms of dissolution should be.
accounting systems.” Corning said the different needs of
customers in the United States and Mexico complicated Each company agrees on a position to bring forward to
the integration of sales and distribution. Corning’s U.S. the partner. This position need not necessarily be a demand
customers, especially the large discount stores, expect the to maintain the joint venture or to dissolve it; rather it could
timely and regular delivery of products packaged in a cer- be a contingency laying the conditions for maintaining the
tain way; Vitro’s Mexican customers are less demanding. relationship, or demands for how it should be dissolved.
In 1992, Corning-Vitro had sales of approximately Once each company has decided on its position, representa-
$700 million, and Vitro-Corning achieved turnover of tives from each Corning group (two to four representatives
about $230 million. total) will meet with their counterparts from the Vitro groups.

Issues for Decision Negotiation 2
As a result of cultural clashes, failure to integrate comple-
mentary product lines, and disappointing sales, both Corn- Each company must decide, collectively, through negotia-
ing and Vitro are contemplating dissolving the joint tion, whether to remain within the joint venture or dis-
ventures. Within the two companies, however, there are solve it. The representatives from each company have
those who support maintaining the relationship, and others 60  minutes to reach some resolution. They must consult
who oppose it. Corning and Vitro must first decide on with the remainder of their company throughout the nego-
whether they want to remain in the joint ventures and, if tiation to ensure support for the outcome. The main issues
they do, under what conditions. If they decide to dissolve for consideration include:
the relationship, they must negotiate the terms of the dis-
solution. If they decide to remain in the arrangement, some 1. The logic and original rationale for the JV.
changes must be made to address the growing problems. 2. How that logic may still hold.
3. How the JV could be made to work better.
Simulation Instructions 4. What caused the JV relationship to sour.
You will be assigned to one of four groups. 5. Why the partner has not lived up to expectations.
The groups are ad hoc. Each group represents an ad-hoc 6. Whether the JV should be terminated and, if so,
committee appointed by the CEO of each company to make
recommendations about the future of the alliance. The what the terms of dissolution should be.
groups’ initial positions can be characterized as f­ollows:
1. Vitro—supports keeping JVs Ultimately, issue 3 or 6 must be resolved. Any solution,
2. Vitro—against keeping JVs whether to maintain the JV, dissolve it, or some hybrid
3. Corning—supports keeping JVs approach, should be comprehensive and address these
4. Corning—against keeping JVs elements:

Negotiation 1 ∙ Financial structure: Terms for financing existing or
The initial negotiation occurs within each company. new ventures under the arrangement or payments for
Hence, Vitro Groups (1 and 2) discuss their differing dissolution of the relationship.
positions, and Corning Groups (3 and 4) exchange their
views with each other. Each pair of groups (1∕2 + 3∕4) ∙ Governance: Board, management, or other top-level
should decide whether their company wants to remain changes in ownership and leadership under the pres-
within the joint venture or dissolve it. Each pair of ent or revised relationship.
groups has 45 minutes to negotiate within the respective
∙ Marketing: Agreements about marketing, distribu-
tion, and sales relationships either under the current
arrangement or in any new structure.

∙ Competition/cooperation: Changes in the way in
which each company operates in the other’s territo-
ries or markets.

4 Skill-Building and Experiential Exercises

Table 1
Hofstede’s Cultural Ratings for the United States and Key Latin Countries

Power Uncertainty Individualism Masculinity
Distance Avoidance
91 62
United States 40  46 38 69
80 52
Mexico 81  82 46 56
38 49
Canada 39  48 13 64
16 42
Argentina 49  86 12 73
51 42
Brazil 69  76 27 31

Colombia 67  80

Peru 64  87

Venezuela 81  76

Spain 57  86

Portugal 63 104

Source: Geert Hofstede, Culture’s Consequences: International Differences in Work-Related Values (Beverly Hills, CA: Sage, 1980).

Questions for Discussion After ENDNOTES
Conclusion of Simulation
1. Compare your solution to the joint venture’s prob- 1. “Glassmakers’ Complaints Aired in NAFTA
Hearings,” LDC Debt Report/Latin American
lems with the actual outcome. What is different or Market, September 9, 1999, p. 10.
similar in the two approaches?
2. How would you characterize the Mexican and U.S. 2. Nancy A. Nichols, “From Complacency to
culture in terms of Hofstede’s scheme (see Table 1)? Competitiveness: An Interview with Vitro’s
In what ways were the cultures similar and in what Ernesto Martens,” Harvard Business Review,
ways were they different? September–October 1993, p. 162.
3. Compare Corning-Vitro’s problems to those of some
of the other international joint ventures described in 3. “Glassmakers’ Complaints Aired in NAFTA
this simulation. How were they similar, different, Hearings.”
and more or less challenging?
4. How have other companies in Mexico and Latin 4. Anthony Depalma, “It Takes More than a
America addressed these cultural divisions in the Visa to Do Business in Mexico,” New York
recent past? How should they do so as they go for- Times, June 26, 1994, sec. 3, p. 5.
ward with comprehensive regional Latin American
strategies? 5. Leslie Crawford, “Anheuser’s Cross-Border
Marriage on the Rocks: Modelo Deal Is the
Source: © McGraw-Hill Irwin. This simulation was prepared by Latest U.S.-Mexican Partnership to Be Soured
Jonathan Doh of Villanova University as the basis for class discussion. by Disagreement,” Financial Times, March 18,
It is not intended to illustrate either effective or ineffective managerial 1998, p. 46.
capability or administrative responsibility.
6. Depalma, “It Takes More than a Visa.”
7. John Holusha, “Corning to Buy Northern

Telecom Assets,” New York Times, December
16, 1993, sec. D, p. 4.