GSLC-1 (Session 4)
Chapter 5 Managing Across Cultures
(Luthans & Doh, 2009, International Management: Culture, Strategy, and Behavior, 7th Ed.)
Review and Discussion Questions (p151)
1. Define the four basic predispositions MNCs have toward their international operations.
The four basic predispositions MNCs have toward their international operations are:
* Ethnocentric predispositions: a nationalistic philosophy of management whereby ...view middle of the document...
* Regiocentric predispositions: a philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis.
* Geocentric predispositions: a philosophy of management whereby the company tries to integrate a global systems approach to decision making.
2. If a locally based manufacturing firm with sales of $350 million decided to enter the EU market by setting up operations in France, which orientation would be the most effective: ethnocentric, polycentric, regiocentric, or geocentric? Why? Explain your choice.
Responding to the cultural needs of local operations and customers, MNCs find that regional strategies can be used effectively in capturing and maintaining worldwide market niches. In this case, as the operations are set up in France, to enter the EU market the firm should manage a strategy that forms a regional integration and national responsiveness, so it would be most effective if the firm use the regiocentric orientation where the firm’s own interests are blended with the culture of France and most countries in EU and the firm uses the flexible manufacturing technology.