What do you think is your strongest component of cu ltural intelligence
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LaTrobe University
Faculty of Law and Management
School of Management
MGT1FOM: Foundations of Management
Tutorial Review Questions: Answer Guide
Topic 4: Managing in a global environment
2.
What do you think is your strongest component of cu
ltural intelligence? Your
weakest? How would you go about shoring up your wea
knesses?
Understanding the work undertaken by Hofstede and t
he GLOBE project is one
approach to addressing weaknesses.
4.
What policies or actions would you recommend to an
entrepreneurial
Australian business wanting to do business in Asia,
Europe or the USA?
The first thing a business should do is analyse the
environment that it is hoping to enter.
It should look at the economic environment, especia
lly the regional economics groups
such as the EU, ASEAN and NAFTA. The legal and poli
tical environment should be
considered in deciding which country to enter first
. The socio-cultural environment will
also influence this decision. Next, the company mus
t determine its entry strategy.
Exporting is the most likely strategy for a small e
ntrepreneurial business. It requires the
smallest investment and the least amount of risk, b
ut it also returns the least amount of
profit. Licensing and direct investment should also
be considered. Other factors such as
the correct organisational structure and type of ma
rketing strategy must also be
determined.
5.
What steps could a company take to avoid making pro
duct design and
marketing mistakes when introducing new products in
to a foreign country?
The basic need is an understanding of the foreign c
ulture and how the product will
relate to it. One technique for adapting to foreign
cultures is to use foreign nationals in
the design and implementation of new products. This
can be accomplished through
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decentralisation of product design decisions to the
foreign country, so that managers of
foreign affiliates have control over operations. An
other technique is to use foreign
nationals in a consulting capacity to give advice o
n the design and marketing of new
products. Yet another technique is to provide cultu
ral training and indoctrination to
managers and their families who are assigned to for
eign posts. Cultural sensitivity can
also be used as a criterion for selecting individua
ls to be given foreign managerial
assignments. Each aspect of product design – includ
ing labelling, colour, and function –
should be checked with people who are intimately fa
miliar with the foreign culture in
order to determine the kind of impact and acceptanc
e the product will have.
6.
Compare the advantages associated with the foreign-
market entry strategies of
exporting, licensing and wholly owned subsidiaries.
Of these three entry strategies, exporting is consi
dered to be low risk and low cost. The
reason is that the firm keeps its production facili
ties in its home country and uses
middlemen, foreign distributors or the Internet to
market its products abroad, thereby
avoiding the costs of setting up its own marketing
channels. The problem with
traditional exporting is that the firm has little c
ontrol over the marketing of its product
and no direct contact with foreign customers. Forei
gn licensing requires a somewhat
greater capital investment, and licensees are apt t
o have better contacts and greater
experience with marketing in their own countries. T
he international firm also maintains
some control over foreign production and marketing,
and will have some opportunity
for direct contact with foreign producers and custo
mers. The problem with licensing is
that licensees may eventually become competitors, a
nd they also may fail to maintain
rigid quality standards in production or marketing,
thereby damaging the reputation of
the international firm. A wholly owned subsidiary r
epresents the greatest costs and the
greatest risks, but also the greatest potential ret
urn. Owning a subsidiary gives the firm
more control over production and marketing than eit
her exporting or licensing. The firm
and its managers are close to the market and may ac
tually send managers to the foreign
countries to run the business in the host country.
If the business is successful, the
international firm will get to keep the profits. Th
e problem with wholly owned
subsidiaries is that establishing operating product
ion facilities in foreign countries is
costly and directly exposes the firm’s assets and p
ersonnel to economic and political
risks.
[Solved] What do you think is your strongest component of cu ltural intelligence
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- Submitted On 18 Jul, 2018 02:34:28
- Tutor-571
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