Lectureshttps://myclasses.argosy.edu/d2l/le/content/17886/HomeModule 4 OverviewProvides the learning outcomes on which the readings and assignments for this module are based.Examine the role and impact of cultural influences in a variety of corporate management models.Analyze global corporate models and discuss their appropriateness relative to the vision and mission of the corporation.Analyze the challenges of regional economic integration within the context of global managementEvaluate trends in global human resource management within the context multicultural organizations.Evaluate global marketing strategy implementation, product development, and operations on creating a sustainable competitive advantage.This module you examined the various levels of regional economic integration and changes in trade patterns between NAFTA member nations. You also examined the foreign exchange market and investor psychology using behavioral finance theories. We also explored the volatile world of the global monetary system.You learned about global strategy, external and internal environmental conditions that affect strategy formulation, and organizational core competencies required for global strategy formulation. You also learned about foreign entry modes, and issues related to export, import, and countertrade.In Module 4 we will examine international marketing and product development focusing on cultural differences. We will also explore how to plan and develop global communication strategies and overcome cultural barriers to communication. In addition, we will discuss global operations management with the focus on technological enablers and strategies for successful initiatives.Global Marketing and Product Development (1 of 5)IntroductionWhile the current trend is toward increasing globalization, cultural and economic differences among nations continue to impede that process. You can help your organization manage these challenges by adopting an international marketing campaign.However, to be successful, your campaign must take into account four critical variables — ones that can negatively affect the effectiveness of your international communication:Cultural barriersSource effectsCountry of origin effectsNoise levelsWe’ll explore cultural differences as factors in international marketing.Marketing to Cross-Cultural AudiencesA basic doctrine of marketing is “know your audience!” You must understand the needs and wants of the specified audience or demographic group for which your advertising message is designed. Why is this particularly important with global marketing? Because the complexity increases with cross-cultural audiences!Advertising for cross-cultural audiences needs to be based on the value orientation of the audience — the principles of right and wrong that are accepted by that culture. As a global marketer, you must be aware of these value orientations — they will have a profound impact on the consumption of products and services offered by your organization. Your marketing and communication plan must coincide with the tastes and preferences of the audience.International marketing is challenging primarily because of the cross-culture factor. Cultures are multi-dimensional, and effective marketing efforts address such factors as wealth, literacy, and language. You should identify these factors early in the decision-making process! Should your product be marketed in a certain county? Consider whether that country’s wealth and the distribution of that wealth among the population makes it a viable option for your marketing efforts. Global Marketing and Product Development (2 of 5)Applying Concepts of Social Strata to MarketingIn Module 1, we examined how social stratification affects global business operations. Multinationals that try to operate by the rules of their own culture may fail. We can apply the concepts of social strata — individuals being defined as either doing something or being someone — in the area of marketing.Understanding cultural differences must form an integral part of market analysis for products or services in the international environment. The culture’s value orientation will influence the way your product is packaged, positioned, promoted, and distributed.Consider the case of fast food restaurants. According to English (1994), they are extremely popular in doing-oriented cultures, less so in being-oriented cultures. Dining in a fine restaurant would be more important to a being-oriented culture. A fast food restaurant would make little sense in a culture that values the experience of eating.Globalization of Markets in the 21st CenturyIn his article, “The Globalization of Markets”, published by Harvard Business Review in 1983, Theodore Levitt claimed:“Trouble increasingly stalks companies that lack clarified global focus and remain attentive to the economics of simplicity and standardization…Companies that do not adapt to the new global realities will become victims of those that do.”Many argue that Levitt’s ideas are not altogether applicable in the 21st century. Marketing approaches to cross-cultural audiences can no longer be formulated by exploiting the economics of simplicity with standardized products, packaging, and communication.To reach a cross-cultural audience, you need insight into the perceptions the audience holds about your product. We’ll examine value orientation as it applies to segment of international markets next.Levitt, T. (1983). The globalization of markets. Harvard Business Review, 61(3), 92–101.Global Marketing and Product Development (3 of 5)Quote: If consumers, instead of countries, were used as the basis for identifying international segments, the effectiveness of marketing Source: Hofstede, Steenkamp, & WedelInternational Market SegmentationAs we’ve mentioned, value orientations are the basic beliefs of a culture. They are abstract in nature and often communicated implicitly through the socialization process. Therefore, these beliefs, while known by the members of a society, may not be easily explained to others.These value orientations serve as guiding principles for that society, but not necessarily for all individuals within. Many marketing efforts fail because they were formulated on a faulty premise — that the individual in a culture holds the same values of his or her culture.As a global player, you need to recognize ways in which value orientations affect market segmentations and assumptions about target audiences. If marketing efforts are targeted to the culture as a whole, your campaign may not be successful.The global market place requires skillful international segmentation, which means dividing the market or population into subgroups with similar characteristics. Bases for segmenting include:Geographic differencesPersonality differencesDemographic differencesUse of product differencesPsychographic differences (relating to values, attitudes, and lifestyle)International segmentation studies carried out over the past decade have used macro-level data (geopolitical, economic, and cultural) to identify market segments, often as the basis for grouping countries for marketing efforts. This approach provides limited insight into individual consumers who are likely to respond to the marketing campaign.Your organization’s success in developing, positioning, and selling products across national borders depends on how well you have identified and analyzed target audiences. If you use consumers, instead of countries, as the basis for identifying international segments, your marketing strategies will be more effective.Global Marketing and Product Development (4 of 5)Means-End Chain (MEC) TheoryIn a 1999 study of Europe’s yogurt market, Hofstede, Steenkamp, and Wedel found that global market segments could be identified through a means-end chain of value orientations. That is, segments of consumers were identified based on the product attributes they desired. These attributes led to consumption benefits, which ultimately satisfied personal values. Therefore, consumers with similar values formed global segments.Graphic depicting the means-end chain (MEC) model:Product Attributes,Consumption Benefits,Consumer ValuesThe MEC model can assist you in identifying relationships between consumers and products at the segment level. The model accounts for various response tendencies across and within countries, which commonly hamper identification of cross-national segments.You can apply this model of international segmentation to a variety of target market selection and differentiation strategies, such as:Developing specific products for specific segments.Bundling products (also referred to as market specialization) in order to maintain competitive position and subsequently capture consumer tendencies.Developing the same physical product for multiple segments that is positioning the product differently in each segment by taking into account segment-specific benefits and perceived values of the product.Developing a mass product based on segment responses.Take the time to research the target culture — it can pay huge dividends! And remember not to make global assumptions about all the members in that target audience.Steenkamp, J. B. E. M., Hofstede, F. t., & Wedel, M. (1999). A cross-national investigation into the individual and national cultural antecedents of consumer innovativeness. Journal of Marketing, 63(2), 55–69. Global Marketing and Product Development (5 of 5)Graphic depicting the Four Ps Approach.The Four Ps ApproachHow do you measure the success of a marketing campaign? How will you know if you’ve analyzed the market correctly for competitive advantage?With over 30 years of experience in marketing research and consultancy, Penny Mesure offers what she calls the “the four Ps approach.” It measures:Penetration: To what extent is your audience aware of your campaign?Proposition: To what extent does your audience agree with the central message of your campaign?Preference: Does your audience express a preference for your product?Prompting Action: Will the audience act as you expect?Next, we discuss the need for effective and strategic communication in global organizations. Strategic Communication (1 of 7)What is strategic communication?Strategic communication is the process of proactive, targeted development and delivery of key messages, and the engagement of key stakeholders at the right time, in the right manner, with the right responsiveness.We’ve discussed cultural differences and challenges of reaching a cross-cultural audience. The key to a successful international marketing plan is a communication strategy — one that is designed to deliver your marketing messages appropriately to a cross-cultural audience.In fact, you’ll find that strategic communication plays an important role in many areas of global management, including:Multicultural workforce managementStrategic alliance and joint ventureInternational organization negotiationsGlobal organizational leadershipMarketing and product developmentEmployee performance assessmentsCross-cultural teamsCustomer interactionsTransformational business activity or change management effortsIT implementationNext, we’ll find out how to formulate a communication strategy, and then design a communication plan. Strategic Communication (2 of 7)Formulating a Communication StrategyWhy would you need to formulate a communication strategy and then a plan for implementing it? If your organization is undergoing any of the following activities, effective communication is critical for a successful outcome:RestructuringOff-shoringRe-engineeringTechnology transformationCultural changesCustomer service improvementsAll too often, organizations don’t give communication strategy a high priority until they find themselves in a defensive position. Therefore, a crucial part of strategic communication is the formulation of a communication plan that achieves buy-in from both internal and external stakeholders.Who are the stakeholders?Stakeholders play a vital role in managing change — whether it’s a new company policy, a joint venture or strategic alliance, or the release of a new product line. All these business activities result in change and require a communication strategy that will positively impact stakeholders.Stakeholders are anyone involved in the change process:Organizational leadersManagement teamsEmployeesCustomersSuppliersJoint venture organizationsFor a global manager strategic communication begins with a stakeholder analysis of values, attitudes, and concerns. This ensures that important messages are focused on the target audience. Strategic Communication (2 of 7)Formulating a Communication StrategyWhy would you need to formulate a communication strategy and then a plan for implementing it? If your organization is undergoing any of the following activities, effective communication is critical for a successful outcome:RestructuringOff-shoringRe-engineeringTechnology transformationCultural changesCustomer service improvementsAll too often, organizations don’t give communication strategy a high priority until they find themselves in a defensive position. Therefore, a crucial part of strategic communication is the formulation of a communication plan that achieves buy-in from both internal and external stakeholders.Who are the stakeholders?Stakeholders play a vital role in managing change — whether it’s a new company policy, a joint venture or strategic alliance, or the release of a new product line. All these business activities result in change and require a communication strategy that will positively impact stakeholders.Stakeholders are anyone involved in the change process:Organizational leadersManagement teamsEmployeesCustomersSuppliersJoint venture organizationsFor a global manager strategic communication begins with a stakeholder analysis of values, attitudes, and concerns. This ensures that important messages are focused on the target audience. Strategic Communication (3 of 7)Designing a Strategic Communication PlanCommunication planning is an on-going process that helps to build acceptance and support for your business. The four phases of this process are: awareness, questioning, acceptance building, and sustaining.The awareness phase builds awareness of and prepares stakeholders for forthcoming changes. This phase has three objectives:Inform stakeholders about imminent changes.Ensure that stakeholders understand the reasons for the changes.Motivate and encourage participation in the change process.The questioning phase requires two-way communication to share concerns and issues. During this phase, stakeholders frequently challenge the reasons for the change or implementation approaches. To move past this phase, stakeholders need to address the following issues:Is the organization committed to the change effort?Is the change in the long-term interest of the organization?What’s in it for stakeholders?What will this change do to or require from stakeholders?Communication efforts are designed in part to address these and other questions your stakeholders may have. Timely and accurate feedback from stakeholders is essential. Stakeholders who are more affected by the change may require more assistance and attention during this phase. Strategic Communication (4 of 7)Depicts the phases of the Strategic Communication Plan: 1. The awareness phase prepares stakeholders for forthcoming changes. 2. The questioning phase requires two-way communication to share concerns. 3. The acceptance building phase is designed to transform resistance into support and commitment. 4. The sustaining phase involves institutionalizing new behaviors. Designing a Strategic Communication Plan (Continued)The acceptance building phase is designed to transform ambivalence or resistance into support and commitment. Stakeholders should begin to see tangible signs of your organization’s commitment to the change initiative. The goals of this phase are to:Convince stakeholders that the current environment is inadequate or that a new initiative should be undertaken.Prepare stakeholders for the change or new business activity.Influence stakeholders to embrace the change initiative or new business activity.The sustaining phase involves institutionalizing new behaviors and pursuing continuous improvement. Without adequate support, companies can slip back into the old ways of functioning. Needed at this stage:Constant monitoring and support to ensure that new paradigms become ingrained in the organization’s culture.Defining and implementing actions to support ongoing improvement initiatives. Strategic Communication (5 of 7)To be effective, a communication plan should contain the following key elements: 1. Clear analysis of the communication environment, 2. guiding principles, 3. Goals and objectives. 4. Target audience analysisKey Components of the Communication PlanNow that you’ve learned about the process of strategic communication planning, let’s take a look at the plan’s major components.To be effective, your communication plans should contain the following elements:Clear analysis of the communication environment Demonstrate that you thoroughly understand the stakeholders and issues relevant to the business activity. Identify current communication infrastructures, existing communication vehicles and organizations, and unique issues relevant to implementing the business activity.Guiding principlesEnsure the communication strategy is effective and measurable by identifying the principles that serve as its framework.Goals and objectives Enable synchronization of all processes. Make sure your communication strategy and plan contains goals and objectives that are vertically and horizontally integrated with those of the intended business activity.Target audience analysis Manage your stakeholder community successfully. Tailor your communication strategy in terms of content, delivery methods, and timing to the unique needs of each stakeholder group. Stakeholder groups both affect and are affected by changes in various ways and at various times during the communication process life cycle. Strategic Communication (6 of 7)Click to read an article that looks at stakeholders and stakeholder analysis.Gathering Information from StakeholdersYou need to be aware of the issues concerning your stakeholders! Performing research and obtaining this information will help you formulate an effective communication strategy.You can obtain information from stakeholders in several ways, such as:Surveys: A data collection survey is a sophisticated, flexible tool used to collect stakeholder information. Surveys are particularly useful in reaching large, widely dispersed stakeholder groups and can be administered in various ways.Focus Groups: A focus group is used to gather feedback from an audience group. For example, a focus group can be formed to gather information about various communications channels, evaluate their usefulness, and determine improvements if required.Town Hall Meetings: A town hall meeting provides a live forum to gather feedback from internal and/or external stakeholders. Information gathered from such forums is easily solicited and distributed.Interviews: An interview is used to gather information from an individual or small group. Interviews can include all the members of a stakeholder group or a representative sample.Existing Documentation: Published reports, white papers, briefing notes, policy issuance, and meeting minutes provide useful information about various stakeholder groups.Internet Chat Rooms: An Internet chat room is a channel that can be synchronous or asynchronous, such as Web casts and question-and-answer programs.E-mail: An e-mail program is easy to use, and found virtually everywhere as a data collection tool. An additional bonus: e-mail facilitates communication with one or more stakeholder groups at any time and from any place. Strategic Communication (6 of 7)Click to read an article that looks at stakeholders and stakeholder analysis.Gathering Information from StakeholdersYou need to be aware of the issues concerning your stakeholders! Performing research and obtaining this information will help you formulate an effective communication strategy.You can obtain information from stakeholders in several ways, such as:Surveys: A data collection survey is a sophisticated, flexible tool used to collect stakeholder information. Surveys are particularly useful in reaching large, widely dispersed stakeholder groups and can be administered in various ways.Focus Groups: A focus group is used to gather feedback from an audience group. For example, a focus group can be formed to gather information about various communications channels, evaluate their usefulness, and determine improvements if required.Town Hall Meetings: A town hall meeting provides a live forum to gather feedback from internal and/or external stakeholders. Information gathered from such forums is easily solicited and distributed.Interviews: An interview is used to gather information from an individual or small group. Interviews can include all the members of a stakeholder group or a representative sample.Existing Documentation: Published reports, white papers, briefing notes, policy issuance, and meeting minutes provide useful information about various stakeholder groups.Internet Chat Rooms: An Internet chat room is a channel that can be synchronous or asynchronous, such as Web casts and question-and-answer programs.E-mail: An e-mail program is easy to use, and found virtually everywhere as a data collection tool. An additional bonus: e-mail facilitates communication with one or more stakeholder groups at any time and from any place. Strategic Communication (7 of 7)Performing Stakeholder AnalysisThe stakeholder analysis process enables you to understand current awareness and willingness levels. Stakeholder profiles combine findings, conclusions, and recommendations that support your communications strategy and plan.These profiles will help you decide:Which stakeholder group(s) to targetWhen to reach out to the various stakeholder groupsWhat messages to communicateWhat communication medium(s) to useHow to measure the impact of communicationImpact of Cultural Barriers on Communication StrategyYou’ve discovered that multiculturalism in global organizations creates unique challenges by widening the diversity of perspectives, approaches, and business methods represented within the organization.Communication about business activities requires that all affected stakeholders receive the right message at the right time, with careful consideration to the values, attitudes, and behaviors of the target audience.The concept of knowing your audience is particularly important when operating in cross-cultural environments. Messages are interpreted differently in cultures, and prior knowledge of cultural nuances enables effective communication and successful business activities.Global Operations Management (1 of 5)IntroductionIn the textbook readings this module, you found out about issues associated with manufacturing in global operations management. International organizations must make decisions concerning these issues, such as: Represents the decisions that international organizations must make regarding issues associated with manufacturing in global operations management: Where should they locate their manufacturing operations? Should they make-or-buy component parts needed? Should they try to form strategic alliances with suppliers? Can they benefit from implementing just-in-time (JIT) inventory systems? What types of information technology should be utilized in operations? We’ll take a closer look now at how technology is utilized in operations management.Materials ManagementInformation technology plays a major role in materials management — all the activities involved in delivering materials to a manufacturing facility, moving them through the manufacturing process, and finally delivering the products through the distribution system to end users.The materials management function is more complex in an international business scenario as a result of distance, time, exchange rates, customs barriers, and so on. Efficient materials management has a major impact on the organization’s bottom line.Global Operations Management (2 of 5)ERP/MRP SystemsThe business management system that helps integrate all facets of your global business — planning, manufacturing, sales, and marketing — is known as enterprise resource planning (ERP). The software applications can assist you with inventory control, order tracking, customer service, finance, and human resources.The ERP systems you see today provide timely and accurate information for the entire organization. But these systems took decades of design and testing to reach this degree of sophistication.What is MRP?Beginning the mid-1960s, IBM and other technology companies pioneered applications created for use in the manufacturing industry. Over time, they designed software packages that capture all aspects of the production function electronically — suppliers, materials, inventories, distribution, and production facilities management.Materials Resources Planning (MRP) was originally designed for materials planning only. When labor and machine (resources) planning were incorporated, it became known as MRPII, or manufacturing resources planning. Today, the definition of MRPII is generally associated with MRP systems.The American Production and Inventory Control Society (APICS), defines MRPII as “a method for the effective planning of all the resources of a manufacturing company.”MRP links several business functions that include:business planningproduction planningmaterial schedulingmaterial requirementscapacity requirement planningYou can use the output of these functions for planning business strategy, purchase commitments, shipping, and inventory projections. And MRP has a simulation capacity to answer “what if” types of questions for use in strategic planning.Global Operations Management (3 of 5)Challenges with Implementing MRPIn theory, MRP seemed to be a good approach to managing manufacturing operations. However, problems surfaced with its implementation. Early versions of MRP systems were not consistent in output as a result of constant fluctuations in supply and demand of products. In fact, they seemed to drive up inventories instead of reducing them as expected.Several researchers studied the nature of these problems. Wallace found the following five major challenges relating to MRP implementations:People: Those in charge of the MRP startup were not aware of change management aspects associated with MRP. Further, involvement levels were not adequate for successful implementation.Inadequate training and education: Many MRP system implementations were attempted with insufficient training of personnel of capabilities and benefits.Bad data: “When inventory and bill-of-material (BOM) records cannot be maintained at 95% to 98% accuracy, bad data makes it impossible to complete the key elements of MRPII such as Master Production Schedule (MPS)” (Ip & Kam, 1998).Management involvement: Lack of management involvement and poor attitudes led to implementation failures of MRP.Timing: “When the duration of the implementation project is extended for too long, for example, for more than two years, the chances of failure increase significantly as people’s attention cannot be prolonged, especially as the business environment is changing as well.” (Ip & Kam, 1998).The goal of MRP was to increase efficiency through production schedule management, inventory reduction, increasing cash flow, and timely delivery of products. But many early implementations of MRP were unsuccessful. This has led to continued development of enterprise resource planning systems.Global Operations Management (4 of 5)Click to read the article, “Next Up: A Global ERP Rollout” New Approaches to ERPMRPII was enhanced in an attempt to rewrite the rules for integrated manufacturing management. A new ERP model emerged — one that could be used not only by manufacturing organizations, but by all businesses, regardless of industry.This model takes as a more comprehensive approach to automating business processes. In addition to integrating MRP’s manufacturing capability, this enterprise-wide system links such processes as:Human capital managementData warehousingDocument controlInitially there were implementation issues, but ERP systems have successfully delivered on the promise of integration and process streamlining.Recently, ERP systems have merged with Internet technologies, resulting in some negative consequences for organizations. ERP systems are adaptive technologies, meaning that each enhancement builds on previous technological achievements.On the other hand, the Internet is viewed as a disruptive technology, altering the manner in which organizations conduct their business. As a global manager, you’ll need to monitor its effect on your employees’ quality of life.Global Operations Management (5 of 5)Successful Implementation of ERPAs we’ve discussed, implementing ERP systems can be challenging for senior managers. While the success factors are well understood, most ERP startups fail to deliver the anticipated business value.Keep these guidelines in mind when your global operation is planning to put ERP into practice:Systems should be consistent with strategic and operational vision and reflect the organization’s required business capabilities.Implementations should be phased so that problems are addressed early in the startup.Businesses should own the program — management should be involved throughout the process.Data collection for ERP should be performed during the project, not after.Accessing ERP DataWhen coupled with Internet technologies, ERP system data is available to business partners, customers, and employees. This combination of adaptive and disruptive technologies creates a change environment and affects the nature of business interactions. It changes how people access corporate information and how they make decisions — either as employees or as customers.This increased access to knowledge and information can transform the way you do business, improving the organization’s performance in the global marketplace.SummaryThis brings us to the end of Module 4 lectures!In this module you explored a variety of issues related to global marketing and product development. You learned strategies for managing cultural differences that are essential to the success of international marketing efforts. You delved into the realm of strategic communication, and how to formulate a communication strategy and design a communication plan. You also found out about the benefits and challenges of implementing MRP/ERP systems in global operations management.In Module 5 we’ll investigate issues concerning human resource management (HRM) in the context of the global business environment. We’ll look at how effective HRM improves multicultural communication, and thus organizational performance.