Global Business Management

GLOBAL BUSINESS MANAGEMENT

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Global Business Management

A Cross-cultural Perspective

ABEL ADEKOLA

University of Wisconsin-Stout, USA

and

BRUNO S. SERGI

University of Messina, Italy

© Abel Adekola and Bruno S. Sergi 2007

All rights reserved. No part of this publication may be reproduced, stored in a re￾trieval system or transmitted in any form or by any means, electronic, mechanical,

photocopying, recording or otherwise without the prior permission of the publisher.

Abel Adekola and Bruno S. Sergi have asserted their moral right under the Copyright,

Designs and Patents Act, 1988, to be identified as the authors of this work.

Published by

Ashgate Publishing Limited Ashgate Publishing Company

Gower House Suite 420

Croft Road 101 Cherry Street

Aldershot Burlington, VT 05401-4405

Hampshire GU11 3HR USA

England

Ashgate website: http://www.ashgate.com

British Library Cataloguing in Publication Data

Adekola, Abel

Global business management : a cross-cultural perspective.

- (Innovative business textbooks)

1. International business enterprises - Management

I. Title II. Sergi, Bruno S.

658.1'8

Library of Congress Cataloging-in-Publication Data

Adekola, Abel.

Global business management : a cross-cultural perspective / by Abel Adekola and

Bruno S. Sergi.

p. cm. -- (Innovative business textbooks)

Includes bibliographical references and index.

ISBN 978-0-7546-7112-1

1. International trade--Cross-cultural studies. 2. International business

enterprises--Cross-cultural studies. 3. International business enterprises--

Management. 4. Globalization. 5. Multiculturalism. I. Sergi, Bruno S. II. Title.

HF1379.A34 2007

658'.049--dc22

ISBN: 978-0-7546-7112 1

2007002939

Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall.

Contents

List of Case Studies vii

List of Boxes, Figures and Maps ix

List of Tables xi

Foreword xiii

Preface xv

Acknowledgments xvii

Introduction 1

1 International Management and Cross-cultural Perspectives 7

2 Changes and Growth in the International Marketplace 23

3 An Introduction to Multinational Enterprises 41

4 The Impact of Economics and the International Monetary

Framework on International Management 65

5 The Impact of Domestic Politics on International Business 95

6 Information Technology and its Impact on International Management 125

7 International Service Management 147

8 Culture Defined 163

9 The Impact of Culture on International Management 201

10 Cross-cultural Training and Expatriate Assignments 239

11 Toward New International Business Conditions and Opportunities 261

Appendix – International Metaphors 273

Bibliography 281

Index 297

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List of Case Studies

Low-Budget Cola Shakes Up Markets South of the Border

Japan, Mexico Hammer Out Final Details on Trade Deal

Lincoln Electric’s Harsh Lessons from International Expansion

Hong Kong’s Economic System

The Moral and Ethical Responsibility of MNEs

Outsourcing: Jobs in Jeopardy

Euro Disney

Counselors Now Target Japanese Overseas

Transplanting Corporate Cultures Globally

Placing a US Firm in Germany

Ford, GM Fight over Brightest Labor Market

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List of Boxes, Figures and Maps

Box 3.1 Country Profile 1— France 51

Box 3.2 Country Profile 2—Singapore 53

Box 3.3 Country Profile 3—Peru 54

Box 3.4 Country Profile 4—Poland 56

Figure 4.1a Primitive Forms of Money—Katanga or “Wife Buying Cross” 67

Figure 4.1b Primitive Forms of Money—Manilla 67

Figure 4.1c Primitive Forms of Money—Pu (Spade Money) 68

Figure 4.1d Primitive Forms of Money—Shell Arm Ring 68

Figure 4.2 Japanese Currency 76

Map 8.1 Brazil 182

Map 9.1 Ghana 220

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List of Tables

Table I.1 Foreign Direct Investment 4

Table 2.1 GATT Trade Rounds 26

Table 4.1 Old and New European Union Member States Delegation

to the United States 74

Table 5.1 The Index of Fiscal Burden, Europe and North America 106

Table 6.1 Sources of US Productivity Growth, 1959–2003 128

Table 6.2 Growth of High-Technology and Other Manufactured

Exports, 1985–2000 132

Table 6.3 World Internet Usage and Population Statistics 136

Table 8.1 Hofstede’s Dimensions 168

Table 8.2 Cultural Dimension Scores for Ten Countries 169

Table 8.3 Comparing Cultural Differences: Mexico with Canada and

the United States 171

Table 9.1 How to Reward your Global Workforce 230

Table 10.1 Mercer Human Resource Consulting, Cost of Living

Survey—Worldwide Rankings 2006 248

Table 11.1 Timeline Featuring Some of the Significant Historical

Developments in China and India 264

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Foreword

In today’s fast integrating markets, cross-cultural perspectives, especially non￾European perspectives, are indispensable to the success of global businesses. Dr

Adekola’s and Dr Sergi’s opportune work offers many such perspectives that can help

enterprises the world over in understanding the complete matrix of doing business

in an international arena. Many information-rich threads of management principles

have been interwoven with dynamic cultural factors that influence the former in no

less concrete way, serving as a vivid guide to those transacting business in the cross￾cultural cosmos. This book is an expert treatise on the fundamental principles that

influence cross-cultural interactions, and is thereby invaluable for those engaged in

international strategy and management. The book focusses on managing transnational

organizations, providing a concrete basis for understanding the influence of culture

on international management, and the key roles that international managers play.

I would like to compliment Abel and Bruno on the timeliness of the book, as the

new-age demands that we understand our work and its global stakeholders. The idea

is not to obfuscate the differences between cultures and practices but to understand

people from different ethoi to be able to make work-processes smoother. Of course,

such an activity naturally enriches our understanding of people in different cultural

settings, adding to our own persona.

The butterfly effect is of particular relevance. It just goes on to establish that while

a product can be designed, marketed and sold with the best of brains behind it, it is

finally a unique rapport with the target audience, riding on cultural understanding that

will create the impact. Do people remember the vandalizing of Coke and McDonalds

in Germany, and so many other similar instances? Ultimately, we are in a universe

of people, by the people, and for the people. And if you must ignore cross-cultural

perspectives, then you will do so at your own peril!

This book would be especially helpful for students of International Business

and Management at undergraduate and postgraduate levels. It could also be used

as a supplement to general undergraduate business classes, such as Principles of

Management, Hospitality Management, Tourism Management, Organizational

Leadership Management, and Import-Export Management.

This book is of universal appeal to students in universities and colleges, both in

the US and internationally, as well as to anyone who wishes to be an international

player in his or her business or profession.

Vinay Rai

President

Rai Foundation

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