Therefore, multinational companies with high labor costs are more likely to enter countries with totally different economic conditions. For instance, companies in developed countries usually enter China or Southeast Asia countries for much lower labor costs. Barney (1991) and Ghemawat (2001) propose that rich countries, participated in more cross border deals. On the other side, companies which rely on economies of scale, scope and standardization tend to enter countries that are similar to their home countries, because they need to replicate the operations and business model to gain competitive advantage. Based on Transaction Cost Theory, a greater economic distance between the home country and the target country may result in higher transaction costs.
Powell and Colyvas (2008) refer to this reciprocal influence in two distinct ways of analysis: ‘built up’ processes and ‘pulled down’ processes. Built up processes, also referred to as ‘bottom up’ processes, uncover the influences of individual and organizational actors on higher-level institutions by means of micro-level rituals and negotiations that aggregate over time (Powell and Colyvas, 2008). Pulled down or ‘top down’ processes on the other hand stress how institutional logics at a societal level are embedded as ‘taken-for-granted’ norms within organizations and individual beliefs. This process, where macro-level and micro-level processes influence each other is visualized in the figure below (figure 2). March and Olsen (1989) refer to this mechanism in two dichotomous distinctions.
We can see that both groups are quite divergent (except 2 dimensions called Masculinity and Uncertainty Avoidance) that marks the gap between the countries. As a result, the cultural barrier will most likely affect the foreign company and its presence in the Chinese market. Figure 2: Hofstede’s cultural dimensions of China, Hong Kong, the United States and the UK Note: Reprinted from “Hofstede Insights”. Retrieved from https://www.hofstede-insights.com/ Foreign companies should consider the main characteristics of China defined by Hofstede (2017): 1. Power distance – the Chinese society for a long period of time was affected by
An ideal working capital administration is relied upon to contribute absolutely to the creating of firm value. To reach ideal working capital administration firm supervisor ought to control the tradeoff in the middle of productivity and liquidity precisely. The motivation behind this study is to research the relationship between working capital administration and firm productivity. Money transformation cycle is utilized as measure of working capital administration. This study has utilized board information of 1628 firm-year for the time of 1996-2006 that comprise of six diverse monetary areas which are recorded in Bursa Malaysia.
The extent to which personal value systems and business ethics appear to be intricately related to managerial decision-making is of particular importance. Baumhart (1961) indicated that one of the variables affecting business ethics and decision-making was an individual’s personal value system and personal code of behaviour. He recommended additional research to clarify this relationship. In response, England (1975) conducted a comprehensive survey to investigate managers’ value systems and ethical decision-making. That much remained to be discovered about personal value systems, how they are forced, and how they are affected in an organisational environment was shown by the study findings.
Relational exchange Theory Relational exchange theory is based on sociology. Relational exchange also can be defined as an interactive process, where mutual understandings were developed, commitments were made and finally achieved the desired outcomes. The relational exchange theory believes that the relational norms are the tools for controlling opportunism and create a healthy long-term collaborative framework. The relational exchange arrangement can be viewed as a method to fix the flaws of formal contract, which undermines trust and thereby encourage the opportunistic behavior. The core of the theory is relational norms which can help build up an effective contract governance, and eventually achieve a better vendor- customer relationship.
1 Introduction The sub-Saharan Africa region has been suffering during the past few decades, mainly due to severe corruption, political instability and civil wars. As a result, unemployment, poverty and underdevelopment prevail all over sub-Saharan Africa. Although some countries like Angola, Ghana or South Africa have experienced economic as well as social development, a vast portion of the countries remain underdeveloped and poor. The aim of this paper is to exemplify the main causes of underdevelopment in sub-Saharan Africa. I argue that the main reasons causing this underdevelopment are inefficient political as well as economic institutions and corruption.
When discussing Macro Environment it is essential to state the definition of this terminology for its importance on the level of strategic planning and analysis. Therefore, many definitions are found in references with different words but it all leads to the same meaning. Marco environment is the major externals and uncontrollable factors that influence an organization’s decision making and affect its performance and strategies. These factors include the economic factors; demographics; legal, political and social conditions, technological changes, and natural forces. (Business dictionary).
6.1 The advantages of administrative theory under Weber Max Weber searched for structural solutions to the problems within an organisations, thus Max Weber believed fundamentally that restructuring organisations could eliminate the majority of negative activities and issues of organisational behavior. However Max Weber developed important contribution to concepts such as bureaucracy, supervision, division of labour, and coordinated work by informal communication and standardization. Max weber theories gave public sector organisations a framework for knowledge and a guide to achieve organisational objectives and goals (Mahmood 2012: 516). According to Mahmood (2012: 516) Max Weber focused on dividing organization into hierarchies and establishing strong lines of authority and control. He suggests that organizations should develop comprehensive and detailed standard operating procedures to perform pre-planned tasks, Max Weber believes that civilization was changing to seek technical result at the cost of humanistic
Introduction The following literature review will take account of some of the well-known and more recent research on the following themes; Hong Kong and Chinese Culture, Short Term International Assignments and Pre-Departure & Cross Culture Training. The first two themes will set the scene as to why pre-departure & cross cultural training might be important and effective or indeed might not be effective as previously thought when embarking on an international assignment to conduct international business in the foreign host country and its culture. Hong Kong & Chinese Culture According to Tylor (1881) culture is such a complex phenomenon involving morals, laws, beliefs, knowledge, customs and other characteristics adopted by society overtime that distinguishes them from other cultural societies. Hofstede (1984) defines culture as the “collective programming of the mind which distinguishes one group of people from another”. Furthermore, Ying Fan (2000) argues that culture is the collection of morals, beliefs, behaviours, customs, values and behaviours that separate one society from another.