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International comparative management finalHoorcollege 1
This course studies how the differences in culture impact the way you look at the organizational
structure of a firm. Studies differences in management styles and organizational approaches
between countries.
Explains these differences from societal characteristics
Globalization will have impact on institution and cultures and because management is imbedded in
society it will have an impact on that.
Contingency factors
- Contingency approach in organization theory: characteristics of management & organization
depend on task environment and related contingency tactors
- A contingency is a circumstance or condition that may or may not apply for some
organizations. Contingency is a future event or circumstance which is possible but cannot be
predicted with certainty. So examples of contingency factors are technology, environmental
turbulence and the size of the organization.
Contingency factors have an impact on organizational characteristics:
- Formalization: the extent to which an organization’s policies, procedures, job descriptions
and rules are written and explicitly articulated. Formalized structures are those in which
there are many written rules and regulations.
- Centralization: the concentration of control of an activity or organization under a single
authority.
- Task description: systematic characterization and documentation of tasks or subtasks and
execution conditions. Task description should be unambiguous, accurate, factual,
comprehensible, correct and uniformly designed and written within the company so that, for
example, confusion is ruled out.
- Use of control mechanism: a means to control the behavior of or within a process or system.
There are many types of control mechanisms. Human decision making is a control
mechanism made by an individual to start or delay a process in attempt to keep or bring a
process within a desired state.
,Explaining differences in management & organization between countries
Contingency factors can have an direct impact or affect the relations.
- Be aware of the danger of cultural attribution. Cultural attribution occurs when researchers
make cultural interpretation about differences found between countries without empirical
justification.
- We tend to say that is because of the culture, but we need to distinguish cultural and non-
cultural factors.
When looking for the influence of differences in institutional/cultural environment, always control for
differences in:
1. Organization size; age
2. Industry; technology
3. Etc.
- Two strategies for dealing with contingency factors in empirical research
1. Inclusion of control variables
2. Matching of samples
The first is the strategy of control variables
They included two culture dimensions. They also include control variables. They want to make sure
that the difference in behavior is only from the two culture dimensions.
Strategy of matched samples:
- Select narrow, but comparable subjects in the cultures to be compared
- Draw conclusions from this comparison regarding differences between the cultures based on
the specific samples
- Assumption: differences between the narrow samples are representative for the general
differences
The subjects you select have to be comparable otherwise the research is worth noting. Je kan
namelijk ook geen appels met peren vergelijken.
,What is globalization?
A qualitative shift towards a global economic system that is no longer based on autonomous national
economies but on consolidated global market place for production, distribution and consumption
(Holm & Sorensen, 1995).
Countries engage in economic things across boundaries.
Globalization definition found on google: Globalization is the word used to describe the growing
interdependence of the world’s economies, cultures, and populations, brought about by cross-border
trade in goods and services, technology, and flows of investment, people, and information.
Historical perspective:
The world is flat (after 2000)
- A strong advocate of the global changes
- The world as a level playing field
- All players (except labors) have an equal opportunity in terms of commerce. Commerce is the
activity of buying and selling, especially on a large scale.
- 10 flatteners; e.g., digitalization (workflow software), supply chain (e.g., Walmart), collapse of
the Berlin Wall.
According to him there are 10 flatteners, the factors that make, anyone can excess to the world of
globalization. A flattener is a trade whose terms are based on the assumption that the rate of return
will decrease.
The globalization process is slowing down
, After 2000 we see the line is flattened. The trend is that globalization is stabilizing.
Mixed view on same phenomenon
Or is it even reversing?
This is the global flow. After 2009, the global crisis, the spin of global integration didn’t pick up. Is this
a sign of reversing trend of globalization?
Forces promoting (further) globalization. So these are the factors that increase globalization:
- Decrease of transportation costs
- Decrease of communication costs
- Integration international financial markets. Integration of financial markets is a process of
unifying markets and enabling convergence of risk-adjusted returns on the assets of similar
maturity across the markets.
- Mass media, social media
- International migration (e.g., remittances): international migration is the movement of
people across international borders for the purpose of settlement. Remittances are typically
transfers from one person to another person or household.
There are also factors that limit the globalization:
- Economic:
1. Lower company profits outside home market
2. Decreasing economic gains of trade liberalization. Trade liberalization is the removal or
reduction of restrictions or barriers on the free exchange of goods between nations.
3. Overreliance on China, globally concentrated value chain, COVID-19. (overreliance =
overdriven vertrouwen).
- Social: unbalanced distribution of benefits.
- Cultural: search for cultural authenticity
- Political: limits of democracy
- Technological
Limits to globalization: economic
- Lower company profits outside home market
- “GM and its Chinese joint venture partners saw sales surge by 10.6 percent during the first
half of 2013, to nearly 1.6 million vehicles, an all-time record that positions it as the booming
Asian nations no. 2 automotive manufacturer. It sold just over 1.4 million vehicles in the U.S.
during the same period.
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