MGT 4302 VII

MGT 4302, International Management 1

Course Learning Outcomes for Unit VII Upon completion of this unit, students should be able to:

1. Compare and contrast the impact of different political, legal, and economic systems on international management. 1.1 Explain how leadership decisions and actions are influenced by culture.

2. Defend ethics and social responsibility in international management.

2.1 Discuss leadership strategies that promote ethics and social responsibility.

4. Analyze important elements of effective cross-cultural negotiation and communication. 4.5 Analyze effective leadership and management styles.

Required Unit Resources In order to access the following resources, click the links below. Luo, Y. (2016). Toward a reverse adaptation view in cross-cultural management. Cross Cultural & Strategic

Management, 23(1), 29–41. https://search-proquest- com.libraryresources.columbiasouthern.edu/scholarly-journals/toward-reverse-adaptation-view-cross- cultural/docview/2083825160/se-2?accountid=33337

Peratoner, C. (2013, May/June). Innovative leadership development fosters a unified global culture at Adobe

Systems Incorporated. Global Business and Organizational Excellence, 32(4), 6–15. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=86980080&site=ehost-live&scope=site

Reiche, B. S. (2017). Tips for nurturing global leadership talent. IESE Insight, Fourth Quarter(35), 31–38.

https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=127383455&site=ehost-live&scope=site

Unit Lesson Business trade across borders dates to 500 BC and the Persian Royal Road (Doh et al., 2024) It ran from the capital of Susa to the Aegean Sea, which is about 1,500 miles. To go from one end to another generally took three months. Goods were traded up and down this road. Yet, this road was also used by Alexander the Great to invade Persia. Thus, the notion that globalization and internationalization of companies has occurred in the last 50 years is incorrect. The issues of outsourcing, offshoring, and corporate espionage are also not new issues or concerns. Methods in communication and the use of technology are new, with more people being involved in trade as well. More people are aware that things come from other countries partly due to laws that require labeling to indicate the country of origin. Import and export laws are now new. Both affect what is allowed to come into the country and what items are blocked. Even though a company may be owned in one country, the products they make may include items that come from other geographical regions. For example, Tang is made by Mondelēz, a U.S. multinational company. Tang is made in 38 flavors, yet the most commonly available flavors in the United States are orange and lemon. Mango is sold in Bahrain,

UNIT VII STUDY GUIDE Leadership and Management in Global Business

MGT 4302, International Management 2

UNIT x STUDY GUIDE Title

orange, grape and pineapple are available in Brazil, orange, mango and apple are available in Argentina, and soursop is available in the Philippines (Mondelez International, 2017). As companies expand their manufacturing facilities outside the United States, they also make products that are available within the country where the plant is located. This requires training, research, and development specialists within that country. Thus, multinational companies have experts who work for them that may be called host nationals or third country nationals (TCNs) in addition to sending people from the originating country (known as expatriates). These positions require specific skills beyond the regular management ability, as well as the ability to be self-directed and work on a virtual team, having the cultural sensitivity to the country in which they work. Certainly, an expatriate must also be knowledgeable about the laws of the country and feel comfortable working within different cultures without violating the laws of either country. Bribery is common in Asia and many Latin American countries. Yet, it is still illegal there and in the United States. Any American expatriate that engages in bribery, even if it is the common way of doing business in the country they work in, has violated United States law. When the bribery is brought to the attention of the company and the American legal system, the expatriate will be charged, even though it was outside the United States. The American expatriate can be tried and convicted of bribery and be subject to fines and/or prison in the United States. In other words, just because the American expatriate has specialized skills and is able to adapt and work in another country’s environment, it does not mean they are allowed to violate any laws of the United States. Additionally, all monies earned in a foreign country after three months, or over $107,600 per year as of 2020, are subject to American taxes and foreign taxes (Cussen, 2020). Generally, a part of an expatriate’s compensation is that the foreign division pays the taxes in that country for the American expatriate. Prior to the 1970s, global, international, and multinational companies used overseas assignments as punishments for managers and executives; they are now considered premium jobs with significant salary increases when the individual returns to operations in the United States. Overseas assignments, particularly for women who are successful in their posting, will have higher salaries than others when they return. Quality and strategy take on different dimensions when a company is international. No longer can you count on the same values and beliefs. For example, in parts of China, like a few other countries, workers take a nap during the day. It begins with lunch at noon and extends until 2:15 p.m. Work ends at 6:00 p.m. Management in certain parts of China work from 8:00 a.m. to noon and 2:30 to 6:00 p.m. every day, with a 10-minute break in the morning and a 10-minute break in the afternoon. Certainly, some do take a nap. Others choose to read, grocery shop if the stores are open, or do some other type of work. In Japan, naps are also encouraged to improve productivity. Some cafes have created nap spaces with comfortable and quiet seating areas for customers who wish to have a coffee and a nap (Matsumoto, 2019). While studies in the United States report that Mondays are the least effective day and individuals are less effective after lunch, U.S. employees do not have naps. Yet, in companies that have naps, the employees are more effective when they return after the nap time. Research shows that “Americans are logging longer hours at work than ever before, and there’s some evidence that companies are becoming more lenient—even encouraging—toward at-work napping. According to an employee benefits survey of 600 American companies conducted by the Society for Human Resource Management,” the number of companies providing nap rooms has increased over previous years (Cotton, 2015, para. 3). Most European companies allow employees to take off at least four weeks for vacation. Germans are entitled to a minimum of 20 days per year. No compensation can be received if the days are not used by the employee (Kessenich, 2018). In the United States, most employees get two weeks but take only a few days. Contrary to popular belief, the United States is less productive than European companies where vacations are longer and mandatory. Additionally, they have better health and less burnout reported among employees. In fact, U.S. companies that choose to have divisions in Europe are mandated to meet the state vacation requirements for all employees—nationals and expatriates. They will also have to adhere to standards in regard to other benefits, such as health care. In certain countries like France and Germany, employees will not be fired for drinking at lunch and coming back to work with alcohol on their breath. Yet, the American employees do not get the same benefits.

MGT 4302, International Management 3

UNIT x STUDY GUIDE Title

This means that specialized strategies and management methods need to be developed for international companies along with specific procedures. Members on virtual teams may have to adjust their work based not only on time, but also on holidays, vacations, lunch time, processes, and procedures. For example, if people in China have a meeting, it should not interfere with their nap time. One way that helps get around this issue is using software for projects that will take information and record updates and notes for each member that the information applies to. Face-to-face meetings may be impossible for most of the team in many cases. Thus, using technology beyond telephone and email is imperative. Think about discussing an issue by using the “reply all” button because everyone needs to know the information. It is much simpler to log the information into a project software system and then designate access to everyone who needs that information. The information is delivered to them the way they prefer. That could be email for some, text for others, instant message for others to a watch or technology device other than a mobile phone, or automated message. These software packages allow people to work together and have capabilities beyond the normal Voice over Internet Protocol (VoIP) that is used for many meetings over the computer. Project software packages allow people to see each other, edit documents together on a computer, make changes immediately, and document the changes for those who need to be made aware instantly. So, while old technology like phones and conference calls can be used, there is more appropriate technology for virtual teams within companies that work as well or better. Often people in the same room have to make changes to a document and then email it back and forth even in the same room. With various project software packages, people can be logged into the same document and make changes at the same time, thus eliminating the need to email back and forth and possibly get the wrong version sent to people on the team. International business can mean a company produces the same thing all over the world, or a company can produce many things in many countries, some of which are specific only to a few countries. The home country, such as the United States, may have entire divisions that never interact with the employees and the products they make are never seen in the United States. American companies’ leadership established overseas must be cognizant of the various ways in which employees interact as well as the standards for health care, vacations, holidays, and time off. Even if American employees do not get the added benefits of other countries; the employees in another country must get the same standard benefits as the other companies. Managers must be aware of words that can cause issues. Some words or phrases do have different meanings. By accident, they can offend employees and other managers as well as other businesses if they are not aware. Ethics and etiquette issues are taken much more seriously in Asian and Latin American countries than they are here in the United States. As you begin to specialize in an area, make sure you know the language, culture, and specifics. For example, men might not be allowed to be seen with a single female in some countries, while a single female might not be allowed to go out with a married man at night without problems. While seemingly simple to the people in most parts of the United States in business, it may create unnecessary problems overseas. Onward to a new career with a company doing business in another country!

References Cotton, D. (2015, January 5). Why companies are cozying up to napping at work. Theta Spring.

http://thetaspring.com/blog/2015/1/5/why-companies-are-cozying-up-to-napping-at-work Cussen, M. P. (2020, December 11). 5 groups that don’t pay taxes. Investopedia.

https://www.investopedia.com/financial-edge/0411/5-groups-that-dont-pay- taxes.aspx#:~:text=5%20Groups%20That%20Don't%20Pay%20Taxes%201%20Not-for- Profit,with%20Many%20Deductions.%205%20Taxpayers%20with%20Many%20Dependents

Doh, J. P., Luthans, F., & Gaur, A. (2024). International management: Culture, strategy, and behavior (12th

ed.). McGraw-Hill. https://online.vitalsource.com/#/books/9781265812874 Kessenich, F. (2018, July). Germany: Financial compensation for annual leave. Bird & Bird.

https://www.twobirds.com/en/news/articles/2018/germany/financial-compensation-for-annual-leave

MGT 4302, International Management 4

UNIT x STUDY GUIDE Title

Matsumoto, C. (2019, June 14). Japan wakes up to the benefits of napping on the job. Nikkei Asia. https://asia.nikkei.com/Life-Arts/Life/Japan-wakes-up-to-the-benefits-of-napping-on-the-job

Mondelez International. (2017). 2017 fact sheet. https://www.mondelezinternational.com/~ /media

/MondelezCorporate/Uploads/downloads/tang_Fact_Sheet.pdf Suggested Unit Resources In order to access the following resources, click the links below. The following articles from the CSU Online Library offer additional insight into this unit’s topics. You are highly encouraged to read each article. Cho, Y., Park, J., Han, S. J., & Ho, Y. (2019). “A woman CEO? You’d better think twice!”. Career

Development International, 24(1), 91–108. https://www-proquest- com.libraryresources.columbiasouthern.edu/scholarly-journals/woman-ceo-you-d-better-think- twice/docview/2173770316/se-2?accountid=33337

Reiche, B. S., Bird, A., Mendenhall, M. E., & Osland, J. S. (2017). Contextualizing leadership: A typology of

global leadership roles. Journal of International Business Studies, 48(5), 552–572. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=123732693&site=ehost-live&scope=site

MGT 4302, International Management 1

Course Learning Outcomes for Unit VII Upon completion of this unit, students should be able to:

1. Compare and contrast the impact of different political, legal, and economic systems on international management. 1.1 Explain how leadership decisions and actions are influenced by culture.

2. Defend ethics and social responsibility in international management.

2.1 Discuss leadership strategies that promote ethics and social responsibility.

4. Analyze important elements of effective cross-cultural negotiation and communication. 4.5 Analyze effective leadership and management styles.

Required Unit Resources In order to access the following resources, click the links below. Luo, Y. (2016). Toward a reverse adaptation view in cross-cultural management. Cross Cultural & Strategic

Management, 23(1), 29–41. https://search-proquest- com.libraryresources.columbiasouthern.edu/scholarly-journals/toward-reverse-adaptation-view-cross- cultural/docview/2083825160/se-2?accountid=33337

Peratoner, C. (2013, May/June). Innovative leadership development fosters a unified global culture at Adobe

Systems Incorporated. Global Business and Organizational Excellence, 32(4), 6–15. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=86980080&site=ehost-live&scope=site

Reiche, B. S. (2017). Tips for nurturing global leadership talent. IESE Insight, Fourth Quarter(35), 31–38.

https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=127383455&site=ehost-live&scope=site

Unit Lesson Business trade across borders dates to 500 BC and the Persian Royal Road (Doh et al., 2024) It ran from the capital of Susa to the Aegean Sea, which is about 1,500 miles. To go from one end to another generally took three months. Goods were traded up and down this road. Yet, this road was also used by Alexander the Great to invade Persia. Thus, the notion that globalization and internationalization of companies has occurred in the last 50 years is incorrect. The issues of outsourcing, offshoring, and corporate espionage are also not new issues or concerns. Methods in communication and the use of technology are new, with more people being involved in trade as well. More people are aware that things come from other countries partly due to laws that require labeling to indicate the country of origin. Import and export laws are now new. Both affect what is allowed to come into the country and what items are blocked. Even though a company may be owned in one country, the products they make may include items that come from other geographical regions. For example, Tang is made by Mondelēz, a U.S. multinational company. Tang is made in 38 flavors, yet the most commonly available flavors in the United States are orange and lemon. Mango is sold in Bahrain,

UNIT VII STUDY GUIDE Leadership and Management in Global Business

MGT 4302, International Management 2

UNIT x STUDY GUIDE Title

orange, grape and pineapple are available in Brazil, orange, mango and apple are available in Argentina, and soursop is available in the Philippines (Mondelez International, 2017). As companies expand their manufacturing facilities outside the United States, they also make products that are available within the country where the plant is located. This requires training, research, and development specialists within that country. Thus, multinational companies have experts who work for them that may be called host nationals or third country nationals (TCNs) in addition to sending people from the originating country (known as expatriates). These positions require specific skills beyond the regular management ability, as well as the ability to be self-directed and work on a virtual team, having the cultural sensitivity to the country in which they work. Certainly, an expatriate must also be knowledgeable about the laws of the country and feel comfortable working within different cultures without violating the laws of either country. Bribery is common in Asia and many Latin American countries. Yet, it is still illegal there and in the United States. Any American expatriate that engages in bribery, even if it is the common way of doing business in the country they work in, has violated United States law. When the bribery is brought to the attention of the company and the American legal system, the expatriate will be charged, even though it was outside the United States. The American expatriate can be tried and convicted of bribery and be subject to fines and/or prison in the United States. In other words, just because the American expatriate has specialized skills and is able to adapt and work in another country’s environment, it does not mean they are allowed to violate any laws of the United States. Additionally, all monies earned in a foreign country after three months, or over $107,600 per year as of 2020, are subject to American taxes and foreign taxes (Cussen, 2020). Generally, a part of an expatriate’s compensation is that the foreign division pays the taxes in that country for the American expatriate. Prior to the 1970s, global, international, and multinational companies used overseas assignments as punishments for managers and executives; they are now considered premium jobs with significant salary increases when the individual returns to operations in the United States. Overseas assignments, particularly for women who are successful in their posting, will have higher salaries than others when they return. Quality and strategy take on different dimensions when a company is international. No longer can you count on the same values and beliefs. For example, in parts of China, like a few other countries, workers take a nap during the day. It begins with lunch at noon and extends until 2:15 p.m. Work ends at 6:00 p.m. Management in certain parts of China work from 8:00 a.m. to noon and 2:30 to 6:00 p.m. every day, with a 10-minute break in the morning and a 10-minute break in the afternoon. Certainly, some do take a nap. Others choose to read, grocery shop if the stores are open, or do some other type of work. In Japan, naps are also encouraged to improve productivity. Some cafes have created nap spaces with comfortable and quiet seating areas for customers who wish to have a coffee and a nap (Matsumoto, 2019). While studies in the United States report that Mondays are the least effective day and individuals are less effective after lunch, U.S. employees do not have naps. Yet, in companies that have naps, the employees are more effective when they return after the nap time. Research shows that “Americans are logging longer hours at work than ever before, and there’s some evidence that companies are becoming more lenient—even encouraging—toward at-work napping. According to an employee benefits survey of 600 American companies conducted by the Society for Human Resource Management,” the number of companies providing nap rooms has increased over previous years (Cotton, 2015, para. 3). Most European companies allow employees to take off at least four weeks for vacation. Germans are entitled to a minimum of 20 days per year. No compensation can be received if the days are not used by the employee (Kessenich, 2018). In the United States, most employees get two weeks but take only a few days. Contrary to popular belief, the United States is less productive than European companies where vacations are longer and mandatory. Additionally, they have better health and less burnout reported among employees. In fact, U.S. companies that choose to have divisions in Europe are mandated to meet the state vacation requirements for all employees—nationals and expatriates. They will also have to adhere to standards in regard to other benefits, such as health care. In certain countries like France and Germany, employees will not be fired for drinking at lunch and coming back to work with alcohol on their breath. Yet, the American employees do not get the same benefits.

MGT 4302, International Management 3

UNIT x STUDY GUIDE Title

This means that specialized strategies and management methods need to be developed for international companies along with specific procedures. Members on virtual teams may have to adjust their work based not only on time, but also on holidays, vacations, lunch time, processes, and procedures. For example, if people in China have a meeting, it should not interfere with their nap time. One way that helps get around this issue is using software for projects that will take information and record updates and notes for each member that the information applies to. Face-to-face meetings may be impossible for most of the team in many cases. Thus, using technology beyond telephone and email is imperative. Think about discussing an issue by using the “reply all” button because everyone needs to know the information. It is much simpler to log the information into a project software system and then designate access to everyone who needs that information. The information is delivered to them the way they prefer. That could be email for some, text for others, instant message for others to a watch or technology device other than a mobile phone, or automated message. These software packages allow people to work together and have capabilities beyond the normal Voice over Internet Protocol (VoIP) that is used for many meetings over the computer. Project software packages allow people to see each other, edit documents together on a computer, make changes immediately, and document the changes for those who need to be made aware instantly. So, while old technology like phones and conference calls can be used, there is more appropriate technology for virtual teams within companies that work as well or better. Often people in the same room have to make changes to a document and then email it back and forth even in the same room. With various project software packages, people can be logged into the same document and make changes at the same time, thus eliminating the need to email back and forth and possibly get the wrong version sent to people on the team. International business can mean a company produces the same thing all over the world, or a company can produce many things in many countries, some of which are specific only to a few countries. The home country, such as the United States, may have entire divisions that never interact with the employees and the products they make are never seen in the United States. American companies’ leadership established overseas must be cognizant of the various ways in which employees interact as well as the standards for health care, vacations, holidays, and time off. Even if American employees do not get the added benefits of other countries; the employees in another country must get the same standard benefits as the other companies. Managers must be aware of words that can cause issues. Some words or phrases do have different meanings. By accident, they can offend employees and other managers as well as other businesses if they are not aware. Ethics and etiquette issues are taken much more seriously in Asian and Latin American countries than they are here in the United States. As you begin to specialize in an area, make sure you know the language, culture, and specifics. For example, men might not be allowed to be seen with a single female in some countries, while a single female might not be allowed to go out with a married man at night without problems. While seemingly simple to the people in most parts of the United States in business, it may create unnecessary problems overseas. Onward to a new career with a company doing business in another country!

References Cotton, D. (2015, January 5). Why companies are cozying up to napping at work. Theta Spring.

http://thetaspring.com/blog/2015/1/5/why-companies-are-cozying-up-to-napping-at-work Cussen, M. P. (2020, December 11). 5 groups that don’t pay taxes. Investopedia.

https://www.investopedia.com/financial-edge/0411/5-groups-that-dont-pay- taxes.aspx#:~:text=5%20Groups%20That%20Don't%20Pay%20Taxes%201%20Not-for- Profit,with%20Many%20Deductions.%205%20Taxpayers%20with%20Many%20Dependents

Doh, J. P., Luthans, F., & Gaur, A. (2024). International management: Culture, strategy, and behavior (12th

ed.). McGraw-Hill. https://online.vitalsource.com/#/books/9781265812874 Kessenich, F. (2018, July). Germany: Financial compensation for annual leave. Bird & Bird.

https://www.twobirds.com/en/news/articles/2018/germany/financial-compensation-for-annual-leave

MGT 4302, International Management 4

UNIT x STUDY GUIDE Title

Matsumoto, C. (2019, June 14). Japan wakes up to the benefits of napping on the job. Nikkei Asia. https://asia.nikkei.com/Life-Arts/Life/Japan-wakes-up-to-the-benefits-of-napping-on-the-job

Mondelez International. (2017). 2017 fact sheet. https://www.mondelezinternational.com/~ /media

/MondelezCorporate/Uploads/downloads/tang_Fact_Sheet.pdf Suggested Unit Resources In order to access the following resources, click the links below. The following articles from the CSU Online Library offer additional insight into this unit’s topics. You are highly encouraged to read each article. Cho, Y., Park, J., Han, S. J., & Ho, Y. (2019). “A woman CEO? You’d better think twice!”. Career

Development International, 24(1), 91–108. https://www-proquest- com.libraryresources.columbiasouthern.edu/scholarly-journals/woman-ceo-you-d-better-think- twice/docview/2173770316/se-2?accountid=33337

Reiche, B. S., Bird, A., Mendenhall, M. E., & Osland, J. S. (2017). Contextualizing leadership: A typology of

global leadership roles. Journal of International Business Studies, 48(5), 552–572. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=123732693&site=ehost-live&scope=site