Multi-cultural and Transnational Management (INE 3223-E)

MA. Nguyen Thi Phuong Linh

Office: R.407, E4 Building, University of Economics & Business – Vietnam National University, Hanoi
Mobile: (+84) 967257858
Email: phuonglinhnt@vnu.edu.vn
Course introduction
Course description

This course focuses on the challenges and opportunities associated with

organizational management and business strategy in the global environment.

Students will gain a general overview of the process and effect of

internationalization in contemporary business, along with an introduction to theories,
concepts and skills relevant to managing effectively in today’s global environment.
Course objectives

This course aim to equip general knowledge in international

management to students and to help them to become well-prepared
and well-informed experts or managers in the future.

It also develops personal, professional, and interpersonal skills and

attributes for students.
 Course calendar

Chapter 2: The Chapter 4: Chapter 5: Cross-

Chapter 1: Chapter 3:
meanings and Organizational cultural
Environmental Managing across
dimensions of cultures and communication
Foundation cultures
Culture Diversity and Negotiation

Chapter 6: Chapter 9: Human

Chapter 7: Chapter 8:
Management resources selection
Motivation across Leadership across
Decision and and development
cultures cultures
Control across cultures
Required textbooks
Assessment and grading

Class Homework/Quiz: Group

attendance: 5% 5% presentation: 15%

Mid-term exam: Final assignment:

15% 60%
 Chapter 1:
Environmental
Foundation
OUTLINE

Assess Assess the implications of globalization and international linkages

Introduce the basic economics systems, political systems, and legal

Introduce systems

Review key technological developments, including the growth of e-

Review commerce, and discuss their impact on MNCs now and in the future.

Examine ethics in international management and some of the major

Examine ethical issues and problems confronting MNCs.
Introduction

 Management is the process of completing activities with and through other people.

 International management is the process of applying management concepts and

techniques in a multinational environment and adapting management practices to
different economic, political, and cultural contexts.

 An MNC is a firm that has operations in more than one country, international sales,
and a mix of nationalities among managers and owners. Managers from today’s
MNCs must learn to work effectively with those from many different countries
Globalization and international linkages

 Globalization can be defined as the process of social, political, economic, cultural,

and technological INTEGRATION among countries around the world.

 Globalization refers to the shift toward a more integrated and interdependent

world economy

 Globalization is distinct from internationalization in that internationalization is the

process of a business crossing national and cultural borders, while globalization is
the vision of creating one world unit, a single market entity.

 Evidence of globalization can be seen in increased levels of trade, capital flows,

and migration.
Economic systems
Economic Systems
There are three types of economic systems

Command Mixed
economies economies

Market
economies
 Economic Systems

1. Command economies - government plans the goods and services that a country produces, the quantity that is
produced, and the prices at which they are sold
 All businesses are state-owned, and governments allocate resources for “the good of society”
 Because there is little incentive to control costs and be efficient, command economies tend to stagnate
2. Market economies - all productive activities are privately owned and production is determined by the interaction
of supply and demand
 The government encourages free and fair competition between private producers
 In other words, if demand for a good or service exceeds supply, the price will inevitably rise, while an excess
supply over consumer demand will result in a price decrease.
 Since the interaction of the community and firms guides the system, organizations must be as versatile as
the individual consumer. Competition is fervently encouraged to promote innovation, economic growth,
high quality, and efficiency.
3. Mixed economies - certain sectors of the economy are left to private ownership and free market mechanisms while
other sectors have significant state ownership and government planning
 Governments tend to own firms that are considered important to national security
Economic Systems
Political systems
Political systems

Political system refers to the system of government in a

nation

Political systems can be assessed according to two

dimensions
• Collectivism vs Individualism
• Democracy vs Totalitarianism
 (1) Collectivism vs Individualism

 Collectivism stresses the primacy of collective goals over

individual goals.

 The need of societies as a whole are generally viewed as

being more important than individual freedoms.

 Today, collectivism is equated with socialists.

 (1) Collectivism vs Individualism

 Individualism: An enphasis on the importance of guaranteeing

individual freedom and self-expression.

 Individualism is built on two central tenets:

 first, that individual freedom and self-expression are

guaranteed

 second, that people are allowed to pursue their own self-

interest in order to achieve the best overall good for society
 (2) Democracy vs Totalitarianism

 Democracy: refers to a political system in which government is by the people, exercised either directly

or through elected representatives. These elected representatives then form a government, whose

function is to make decisions on behalf of the electorate

 Emphasize:
(1) an individual’s right to freedom of expression, opinion, and organization; (2) a free media; (3) regular elections in which all
eligible citizens are allowed to vote; (4) universal adult suffrage; (5) limited terms for elected representatives; (6) a fair court system
that is independent of the political system; (7) a nonpolitical state bureaucracy; (8) a nonpolitical police force and armed service; (9)
relatively free access to state information
 (2) Democracy vs Totalitarianism

 Totalitarianism: In a totalitarian country, all the constitutional guarantees on which representative democracies are built—an
individual’s right to freedom of expression and organization, free media, and regular elections—are denied to the citizens. In
most totalitarian states, political repression is widespread, free and fair elections are lacking, media are heavily censored, basic
civil liberties are denied, and those who question the right of the rulers to rule find themselves imprisoned, or worse.

 There are four major forms of totalitarianism :

1. Communist totalitarianism – found in states where the Communist party monopolizes power (Vietnam, Laos, China, Cuba)

2. Theocratic totalitarianism - found in states where political power is monopolized by a party, group, or individual that governs according to
religious principles (Iran, Saudi Arab)

3. Tribal totalitarianism - found in states where a political party that represents the interests of a particular tribe monopolizes power
(Zimbabwe vàTanzania)

4. Right-wing totalitarianism - permits some individual economic freedom, but restricts individual political freedom (Sing, Philip, Korea, Indo)
Legal systems
 Legal and Regulatory environment

 There are four foundations on which laws are based around the world. Briefly summarized, these are:

1. Islamic law. This is a law derived from the interpretation of the Qur’an and the teachings of the Prophet
Muhammad. It is found in most Islamic countries in the Middle East and Central Asia.

2. Socialist law. This law comes from the Marxist socialist system and continues to influence regulations in former
communist countries, especially those from the former Soviet Union, as well as present-day China, Vietnam,
North Korea, and Cuba. Since socialist law requires most property to be owned by the state or state-owned
enterprises, MNCs have traditionally shied away from these countries.

3. Common law. This comes from English law, and it is the foundation of the legal system in the United States,
Canada, England, Australia, New Zealand, and other nations.

4. Civil or code law. This law is derived from Roman law and is found in non-Islamic and nonsocialist countries
such as France, some countries in Latin America, and even Louisiana in the United States
Technological Environment and Global shifts in Production

 MNCs need to keep their businesses

connected; this is becoming increasingly
easier as technology contributes to
“flattening the world.” Thomas
Friedman, in his book The World, Is Flat,
writes that such events as the
introduction of the Internet or the World
Wide Web, along with mobile
technologies, open-sourcing, and
workflow software distribution, not only
enable businesses and individuals to
access vast amounts of information at
their fingertips in real-time but are also
resulting in the world flattening into a
more level playing field.
 Technological Environment and Global shifts in
Production

 In addition to the trends discussed above, other specific ways in which technology will affect
international management in the next decade include:
1. Rapid advances in biotechnology that are built on the precise manipulation of organisms will revolutionize the fields of
agriculture, medicine, and industry.
2. The emergence of nanotechnology, in which nanomachines will possess the ability to remake the whole physical
universe.
3. Satellites that will play a role in learning. For example, communication firms will place tiny satellites into low orbit,
making it possible for millions of people, even in remote or sparsely populated regions such as Siberia, the Chinese
desert, and the African interior, to send and receive voice, data, and digitized images through handheld telephones.
4. Automatic translation telephones will allow people to communicate naturally in their own language with anyone in
the world who has access to a telephone.
5. Artificial intelligence and embedded learning technology will allow thinking that formerly was felt to be only the
domain of humans to occur in machines.
6. Silicon chips contain up to 100 million transistors, allowing computing power that now rests only in the hands of
supercomputer users to be available on every desktop.
7. Supercomputers that are capable of 1 trillion calculations per second, will allow advances such as simulations of the
human body for testing new drugs and computers that respond easily to spoken commands.
 Ethics and Social Responsibility

 Ethics, the study of morality and

standards of conduct, is often the
victim of subjectivity as it yields to the
will of cultural relativism or the belief
that the ethical standard of a
country is based on the culture that
created it and that moral concepts
lack universal application.
 Ethics and Social Responsibility

 Reconciling Ethical Differences across Cultures: Most MNCs seek to adhere to a code of
ethical conduct while doing business around the world, yet must make some adjustments
to respond to local norms and values.
 Corporate Social Responsibility and Sustainability:
 Corporate social responsibility (CSR): The actions of a firm to benefit society beyond the
requirements of the law and the direct interests of the firm.
 Fair trade: An organized social movement and market based approach that aims to help
producers in developing countries obtain better trading conditions and promote
sustainability.
 Sustainability: Development that meets current needs without harming the future.
Implication for International
Management
Discussion question

1. How has globalization affected different world regions? What are some of the benefits and
costs of globalization for different sectors of society (companies, workers, communities)?
2. Why would MNCs be interested in South America, India, the Middle East and Central Asia,
and Africa, the less developed and emerging countries of the world? Would MNCs be
better off focusing their efforts on more industrialized regions? Explain
3. In what ways do different political, economic, and legal systems influence the environment
in which MNCs operate?
4. How will advances in technology and telecommunications affect developing countries?
Give some specific examples.
Case study:
Vietnam