Chapter 3  Managing in a Global Environment

Every organization is affected in some way by the global environment. In this chapter, will learn what managers need to know about managing globally, including regional trading alliances, how organizations go international, and cross-cultural differences. Focus on the following learning outcomes as you read and study this chapter.

LEARNING OUTCOMES 

3.1 Contrast ethnocentric, polycentric, and geocentric attitudes toward global business.
3.2 Discuss the importance of regional trading alliances and global trade mechanisms.
3.3 Describe the structures and techniques organizations use as they go international.
3.4 Explain the relevance of the political/legal, economic, and cultural environments to global business.

A MANAGER’S DILEMMA 

In Chapter 3, students will explore the opportunities and challenges managers encountered in today’s global business environment. Managers in all types and sizes of organizations must constantly monitor changes and consider the particular characteristics of their own location as they plan, organize, lead, and control in this dynamic environment. As “A Manager’s Dilemma” illustrates, products and services designed in one country do not always translate well in others, as Yum Brand found with their recent venture in India. Yum Brand’s signature brands, Taco Bell, Pizza Hut, and KFC, will face a significant battle as they attempt to modify their products to appeal to India’s growing and competitive fast food market. 

Ask your students to put themselves in Yum Brand’s shoes. How would they prepare to manage the cross-cultural challenges presented by the continued international growth while at the same time preventing embarrassing cultural mistakes?

CHAPTER OUTLINE 

WHO OWNS WHAT?
 Students may be astonished to discover the country of ownership origin for many products they use. In taking this quiz and discussing their scores, students may also be surprised to learn that a significant number of well-known companies derive more than half of their revenues from global operations.

3.1 WHAT’S YOUR GLOBAL PERSPECTIVE?
 Most U.S. children study only English in school. It is not unusual for Germans, Italians, and Indonesians to speak three or four languages. Americans tend to think of English as the only international business language and see little need to study other languages.  How does the US’s monolingualism affect our view of culture?
A. Parochialism is viewing the world solely through your own perspectives, leading to an inability to recognize differences between people. Parochialism is an obstacle for many U.S. managers and stems from monolingualism.
B. Managers might have one of three perspectives or attitudes toward international business:
1. An ethnocentric attitude is the parochialistic belief that the best work ap¬proaches and practices are those of the home country (the country in which the company’s headquarters are located).
2. A polycentric attitude is the view that the managers in the host country (the foreign country where the organization is doing business) know the best work approaches and practices for running their business.
3. A geocentric attitude is a world-oriented view that focuses on using the best approaches and people from around the globe.
4. To be a successful global manager, an individual needs to be sensitive to differences in national customs and practices.

LEADERS WHO MAKE A DIFFERENCE

Indra Nooyi, CEO of PepsiCo, was recently named for the fourth straight year the Most Powerful Woman in Business by Fortune magazine and was named one of the 100 most powerful women in the world by Forbes magazine.  Born in India, Ms. Nooyi recognizes how important her company’s global business operations are.  On a recent trip to China, she spent 10 days immersing herself in China. She says, “I wanted to look at how people live, how they eat, what the growth possibilities are.”

3.2 UNDERSTANDING THE GLOBAL ENVIRONMENT
 Several significant forces are reshaping today’s global environment. Important features of the global environment include regional trading alliances and different types of global organizations.
A. Regional Trading Alliances
 Regional trading alliances are reshaping global competition. Competition is no longer limited to country versus country, but region versus region.
1. The European Union (EU) is a union of 27 European nations created as a unified economic and trade entity (see Exhibit 3-1). Three more countries (will be gaining membership soon).
a. The primary motivation for the creation of the EU in February 1992 was to allow member nations to reassert their position against the indus¬trial strength of the United States and Japan.  Currently its membership covers a base of nearly have a billion people and 31% of the world’s economic output.
b. Sixteen of the 27 member states of the EU have agreed to adopt the common currency of the EU, the euro.  Denmark, the United Kingdom and Sweden have opted out of using the euro.
c. The Lisbon Treaty, signed in December 2007, provides the EU with a common legal framework to meet current challenges facing European economies, such as climate change, security and energy needs.
d.  The concept of solidarity has been a challenge as individual member states struggle with the maintaining a common currency at the same time valuing protectionist measures that foster nationalism.  Another recent struggle has been the massive debt crisis of Greece which has been bailed out by the International Monetary Fund.
2. The North American Free Trade Agreement (NAFTA) is an agreement among the Mexican, Canadian, and U.S. governments in which barriers to trade have been eliminated.
a. NAFTA went into effect on January 1, 1994 and today is the world’s largest trading block in terms of GDP. Canada is currently the US’s top trading partner with Mexico being number three (China is number two).  As of 2010, it remains the largest trading bloc in terms of combined GDP of its members.
b. Eliminating barriers to free trade (tariffs, import licensing require¬ments, customs user fees) has resulted in a strengthening of the eco¬nomic power of all three countries.
c. Colombia, Mexico, and Venezuela signed an economic pact eliminat¬ing import duties and tariffs in 1994.
d. The Central American Free Trade Agreement (CAFTA) is agreement between the US and five Central American countries: Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.  Currently, only Costa Rica and El Salvador have signed onto this agreement.
e. Thirty-four countries in the Western Hemisphere continue to negotiate a Free Trade Area of the Ameri¬cas (FTAA) agreement.  FTAA was to have been in effect no later than 2005, but has not yet become operational; its future is still undetermined.
3. The Association of Southeast Asian Nations (ASEAN) is a trading al¬liance of Southeast 10 Asian nations (see Exhibit 3-2).
a. In the future, the Southeast Asian region promises to be one of the fastest-growing and increasingly influential economic regions of the world.
b. The future economic impact of the Southeast Asian region could rival that of both NAFTA and the EU.
4. Other Trade Alliances. The 53-nation African Union (AU) came into existence in July 2002. AU members plan to achieve greater economic development and unity among Africa’s nations.  The South Asian Association for Regional Cooperation (SAARC) is composed of eight Asian member states that began eliminating tariffs in 2006.

B. Global Trade Mechanisms
1. The World Trade Organization (WTO)
Formed in 1995 and evolving from GATT, the WTO is the only global organization dealing with the rules of trade among nations.
a. Membership consists of 153 countries and 30 observer governments as of 2008.
b. The WTO appears to play an important role even though critics are vocal and highly visible.
2. International Monetary Fund and World Bank Group
a. The International Monetary Fund (IMF) is an organization of 185 countries that promotes international monetary cooperation and provides member countries with policy advice, temporary loans, and technical assistance to establish and maintain financial stability and to strengthen economies.
b. The World Bank Group is a group of five closely associated institutions, all owned by its member countries, that provides vital financial and technical assistance to developing countries around the world.

C. Organization for Economic Cooperation and Development (OCED)
The Organization for European Economic Cooperation, formed 194, is a Paris-based international economic organization whose mission is to help its 30 member countries achieve sustainable economic growth and employment and raise the standard of living in member countries while maintaining financial stability in order to contribute to the development of the world economy.

3. DOING BUSINESS GLOBALLY
A. Different Types of International Organizations 
 Business has been conducted internationally for many years (e.g., DuPont conducted business in China in 1863, H. J. Heinz manufacturing their brands since 1905, and Ford established its first overseas sales branch in France in 1908). Multinational corporations did not become popular until the mid-1960s. Global organizations can be classified in the following categories:
1. The term multinational corporation (MNC) is a broad term that refers to any and all types of international companies that maintain operations in multiple countries.
2. A transnational corporation (TNC), sometimes called a borderless organization, is a type of international company in which artificial geographical barriers are eliminated.
3. Your students should keep in mind that neither the national origin of a company nor the national origin of its employees is any longer a good measure of where that company conducts business.
B. How Organizations Go International
An organization that goes international typically progresses through three stages, which are illustrated in Exhibit 3-3.
1. Companies that go international may begin by using global sourcing (also called global outsourcing). In this stage of going international, companies purchase materials or labor from around the world, wherever the materials or labor are least expensive. Beyond the stage of global sourcing, each successive stage to become more international involves more investment and risk.
2. In the next stage, companies may go international by exporting (making products domestically and selling them abroad) or importing (acquiring products made abroad and selling the products domestically). Both exporting and importing require minimal investment and risk.
3. In the early stages of going international, managers may also use licensing (giving another organization the right to make or sell its products using its technology or product specifications) or franchising (giving another organization the right to use its name and operating methods).
4. After an organization has done international business for a period of time, managers may decide to make more of a direct investment in international markets by forming a strategic alliance, which is a partnership between an organization and a foreign company partner(s). In a strategic alliance, partners share resources and knowledge in developing new products or building production facilities.
5. A joint venture (a specific type of strategic alliance) may be undertaken to allow partners to form a separate, independent organization for some business purpose.
6. Managers may decide to make a direct investment in a foreign country by establishing a foreign subsidiary, in which a company sets up a separate and independent production facility or office. Establishing a foreign subsidiary involves the greatest commitment of resources and the greatest risk of all of the stages in going international.

3.4 MANAGING IN A GLOBAL ENVIRONMENT
 Managing in a global environment entails challenges.
A. The Legal-Political Environment
 The legal-political environment does not have to be unstable or revolutionary to be a challenge to managers. The fact that a country’s political system differs from that of the United States is important to recognize.
B. The Economic Environment
 The economic environment also presents many challenges to foreign-based manag¬ers, including fluctuations in currency exchange rates, inflation, and diverse tax policies.
1. In a free market economy, resources are primarily owned by the private sector.
2. In a planned economy, all economic decisions are planned by a central government.
C. The Cultural Environment
 Countries have different cultures, just as organizations do. National culture is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important. See Exhibit 3-4 for a synopsis of American national culture.  An approach devel¬oped by Geert Hofstede serves as a valuable framework for understanding differences between national cultures.
1. Hofstede studied individualism versus collec¬tivism. Individualism is the degree to which people in a country prefer to act as individuals rather than as members of groups. Collectivism is characterized by a social framework in which people prefer to act as members of groups and expect others in groups of which they are a part (such as a family or an organiza¬tion) to look after them and to protect them.
2. Another cultural dimension is power distance, which measures the extent to which a society accepts the fact that power in institutions and organiza¬tions is distributed unequally.
3. Uncertainty avoidance describes the degree to which people tolerate risk and prefer structure over unstructured situations.
4. Hofstede identified the dimension of achievement versus nurturing. Achievement is the degree to which values such as assertiveness, the acquisition of money and material goods, and competition prevail. Nurturing emphasizes sensitivity in relationships and concern for the welfare of others.
5. Long-term and short-term orientation. People in countries having long-term orientation cultures look to the future and value thrift and persistence. Short-term orientation values the past and present and emphasizes a respect for tradition and fulfilling social obligations.
6. Countries have different rankings on Hofstede’s cultural dimensions, and managers should be aware of the cultural differences present in countries in which they do business (see Exhibit 3-5).
7. The Global Leadership and Organizational Behavior Effectiveness (GLOBE) research program is an assessment that updates Hofstede’s studies.
a. GLOBE began in 1993 and identified nine dimensions on which national cultures differ:  Assertiveness, future orientation, gender differentiation, uncertainty avoidance, power distance, individualism/collectivism, in-group collectivism, performance orientation, and humane orientation.
b. Exhibit 3-6 indicates how different countries rank on these nine dimensions.

D. GLOBAL MANAGEMENT IN TODAY’S WORLD
1.  The Challenge of Openness.  As companies compete in the international arena, the openness that is necessary to conduct business successfully in a global environment poses great challenges.
a. The increased threat of terrorism, economic interdependence of trading countries, and significant cultural create a complicated environment in which to manage.
b. Successful global managers need to have great sensitivity and understanding.
c. Managers must adjust leadership styles and management approaches to accommodate culturally diverse views.
2. Challenges of Maintaining a Global Workforce. As more businesses go global, managers have a greater need to understand the global workforce.
a. Cultural Intelligence encompasses three main areas: knowledge of the culture, mindfulness (the ability to pay attention to signals and reactions across cultural situations), and behavioral skills.
b. A Global Mindset allows leaders to be effective in cross –cultural environments and includes three elements: intellectual capital, psychological capital, and social capital (see Exhibit 3-7).
 

LET’S GET REAL:
Cheryl Trewatha
Sr. Group Manager
Quality Assurance
Target Corp.
Brooklyn Park, MN

Managing an organization is difficult, managing an organization that operates in multiple countries and cultures is even more so.  In the day-to-day process of running a large international corporation, Ms. Trewatha affirms that how people are treated is an important element of the organization’s success.  Questions she seeks to answer in her position dealing with employees working across cultures are: Is recognition between a boss and employee privately or in front of a peer group most valued? What types of awards are most valued: plaques, paid time off or awards of monetary value?
How do you make the most of the innovation of your employees? How does the culture affect the chain of command? What is the appropriate way to surface new ideas that may challenge a current process? When students address these questions, emphasize that national culture is often a contingency variable that influences employee reactions.

ANSWERS TO REVIEW AND DISCUSSION QUESTIONS 

1. Contrast ethnocentric, polycentric, and geocentric attitudes toward global business.

The ethnocentric, polycentric, and geocentric views vary by their degree to which the holder adheres to the belief that their culture is the best and their willingness to accept best approaches from other cultures.  An ethnocentric attitude is the parochialistic belief that the best work approaches and practices are those of the home country (the country in which the company’s headquarters are located).  A polycentric attitude is the view that employees in the host country (the foreign country in which the organization is doing business) know the best work approaches and practices for running their business. A geocentric attitude is a world-oriented view that focuses on using the best approaches and people from around the globe. Managers with this type of attitude have a global view and look for the best approaches and people regardless of origin.

2. Describe the current status of each of the various regional trading alliances.

Recently, the EU is the most active of all of the regional trading alliances.  With the adoption of majority of the guiding principles established in their charter, these countries are pushing forward on reforms that will solidify the political, economic and social commonalities between their countries.   However, this is not to say that the EU does not have its problems, with fears that the economic turmoil in weaker EU countries like Greece could spread to other member states.  NAFTA has seen less recent development as the partners (US, Mexico, & Canada) are not seeking to push for reforms other than free trade.  For the most part, the members of NAFTA are pleased with the economic growth results attributed to the agreement.  Issues regarding certain specifics of NAFTA, such as investor disputes and claims of dumping, are still to be resolved.

3. Contrast multinational, multidomestic, global, and transnational organizations.

A multinational corporation (MNC) refers to a broad group of organizations and refers to any type of international company that maintains operations in multiple countries. The types of MNC vary with respect to the degree to which they decentralize decision making across countries in which they operate.  One type of MNC is a multidomestic corporation, which decentralizes management and other decisions to the local country.  A global company is a MCN which centralizes its management and other decisions in the home country.  This type of company takes a world view of operations, seeking to maximize efficiency by producing goods that have a global appeal.  Finally, the transnational company eliminates artificial geographical barriers and seeks the best possible arrangement without regard to country to maximize efficiencies and competitive advantage.

4. What are the managerial implications of a borderless organization?
 In a borderless organization, artificial geographic borders do not separate functions, divi-sions, or activities. The managerial implications of such an organization are that it is infinitely more flexible in its ability to respond to changing marketplace conditions. However, this type of organization is much more difficult to control.

5. Describe the different ways organizations can go international.

Management makes its first attempt to go international by using global sourcing, in which companies take advantage of lower costs and minimal risk.

Next, managers may go international by exporting products to other countries and/or importing products from other countries. Exporting and importing involve minimal risk and provide more control over the company’s product(s).

 In licensing (primarily used by manufacturers) and franchising (mainly used by service organizations), management continues to look at ways to enter the global market, and at the same time, avoid investing a lot of capital.

Strategic alliances and joint ventures allow partners to share both the risks and the rewards incurred in business conducted by the partners through the alliance.

Establishing a foreign subsidiary involves the greatest commitment of resources and the greatest amount of risk of all of the stages of going international. Companies setting up a foreign subsidiary do not have to share profits with a partner but, at the same time, do not have a partner who will share the loss if a business enterprise fails.

6. Explain how the global political/legal and economic environments affect managers of global organizations.

From Chapter 2, the external environment includes both political/legal and economic factors.  As part of the environment, both of these factors influence organizational performance.  For global organizations, these factors become more important and complex because organizations now have to deal with the political and economic environments of the countries in which they operate.  For example, now managers not only have to know what is legal (or illegal) in their home country but also the countries in which they sell or manufacture their products or services.

7. Can the GLOBE framework presented in this chapter be used to guide managers in a Thai hospital or a government agency in Venezuela? Explain.

Yes, the GLOBE framework discussed in Chapter 3 is applicable to both situations. Managers must first understand the unique cultural characteristics of each country in order to modify management decisions and practices.

8. What challenges might confront a Mexican manager transferred to the United States to manage a manufacturing plant in Tucson, Arizona? Will these issues be the same for a U.S. manager transferred to Guadalajara? Explain.

The Mexican manager would have to become familiar with the legal-political, economic, and cultural environments of the United States. The cultural environment would be particularly challenging, since the national culture of Mexico varies greatly from the national culture of the United States in three out of five of Hofstede’s dimensions. On the individualism-collectivism dimension, Mexico is a more collective society, whereas the United States is more indi¬vidualistic. In the power distance dimension, Mexico rates high, while the United States rates low. In the uncertainty avoidance dimension, Mexico again rates high, while the United States rates low.

9. How might the cultural differences in the GLOBE dimensions affect how managers (a) use work groups, (b) develop goals/plans, (c) reward outstanding employee performance, and (d) deal with employee conflict?

There are multiple ways to address this question.  First, students may address each item by referring to one of the nine dimensions presented in the GLOBE model.  For example, a) institutional collectivism, b) future orientation, c) performance orientation, or d) assertiveness.  Or, students may attempt to use multiple dimensions to address each item.  On reflection, it is possible to see many combinations of how the dimensions would impact the items presented in the question.

10. Is globalization good for business? For consumers? Discuss.

Simply put, the answer to this question is yes.  Ultimately, it is best for companies and consumers when there is free and fair trade between companies.  Global competition will produce better, more innovative products and is a powerful driver for global economic development.  However, while there are arguments that globalization does not help local businesses, the premise for this point of view lies in virtues of protectionism and the fact that many countries do not play by the rules and that some companies do not have the interest of consumers at heart.

ETHICS DILEMMA 

Is IBM’s policy of moving employees to other countries ethical/fair?  Students may believe that this policy unethical in that it violates an employee’s freedom to choose where they live or that it imposes undue hardship upon employees.  The thought of uprooting a family and moving to a country without friends and family may be horrifying for some students. On the other hand, this policy may save employees from losing their jobs and income.  While some students may believe living overseas would be a punishment, much like being sent to detention for bad behavior, an overseas assignment may be seen as an opportunity to advance within the company, to the learn new and valuable skills, or give the person a chance to learn a new culture.

SKILLS EXERCISE:  DEVELOPING YOUR  COLLABORATION SKILLS 

An important skill for any employee and new manager is collaboration.  In this exercise students are work on building their own political skills based on 4 steps: looking for common points of interest, listening to others, checking for understanding, accepting diversity, seeking additional information, and not becoming defensive. Students are encouraged to take notes to track their progress and then to evaluate their own level of collaboration skill development.

WORKING TOGETHER:  TEAM EXERCISE 

In groups of three to four individuals, students are asked to develop a global aptitude assessment form for Yum Brands.  This company was addressed in the opening Manager’s Dilemma.  Students are encouraged to think about what characteristics typify a successful global manager.  After the groups develop their list, they should share with the rest of the class.

YOUR TURN TO BE A MANAGER 

• Find two current examples of each of the ways that organizations go international. Write a short paper describing what these companies are doing.

• The U.K.-based company Kwintessential has several cultural awareness “quizzes” on its Web site, www.kwintessential.co.uk/resources/culture-tests.html. Go to the Web site and try two or three of them. Were you surprised at your score? What does your score tell you about your cultural awareness?

• On the Kwintessential Web site, you’ll also find Country Etiquette Guides. Pick two countries to study (from different regions) and compare them. How are they the same? Different? How would this information help a manager?

• Interview two or three professors or students at your school who are from other countries. Ask them to describe what the business world is like in their country. Write a short paper describing what you found out.

• Create a timeline illustrating the history of the European Union and a timeline illustrating the history of NAFTA.

• Take advantage of opportunities that you might have to travel to other countries, either on personal trips or on school-sponsored trips.

• Suppose that you were being sent on an overseas assignment to another country (you decide which one). Research that country’s economic, political/legal, and cultural environments. Write a report summarizing your findings.

• If you don’t have your passport yet, go through the process to get one. (The current fee in the USA is $100.)

• Steve’s and Mary’s suggested readings: Nancy J. Adler, International Dimensions of Organizational Behavior, 5th edition (South-Western Publishing, 2008); Kenichi Ohmae, The Next Global Stage (Wharton School Publishing, 2005); John Hooker, Working Across Cultures (Stanford Business Books, 2003); and Thomas L. Friedman, The Lexus and the Olive Tree (Anchor Books, 2000).

ANSWERS TO CASE APPLICATION QUESTIONS 
Held Hostage

1. What’s your reaction to these events? Do you think your reaction is influenced by the culture, values, and traditions of the country in which you find yourself? Explain.

While it is possible that students may have a variety of reactions to this question, it probable that the common reaction is that the French employees crossed the line and committed a serious infraction by holding manager’s against their will.  Students should agree that this tradition of holding managerial employees hostage and civil protest may be acceptable in some cultures, but not in the United States. Students should refer to the case and France’s history of protests to better see that the behavior of the French employees in this case is part of their culture.

2. Look at what Hofstede’s and the GLOBE findings say about France. How would you explain these workers’ actions given these findings?

According to Hofstede’s dimensions, France tends to rate moderately high on power distance, moderately high on individualism, moderately high on uncertainty avoidance, and low on masculinity. From these findings we see that workers in France are more likely to take aggressive stances on issues and at the same time with their higher level uncertainty avoidance believe in the search for truth.  Combined with their feelings about power being distributed equally, it is evident that these employees’ reactions fit with their national culture.

3. We’ve said that it’s important for managers to be aware of external environmental forces, especially in global settings. Discuss this statement in light of the events described.
Opposed to a situation where hostages are taken in other countries with the threat that they may be harmed or killed for ransom, a greater understanding of the culture in this case would show management that the actions taken by the French employees are based on a desire to improve the conditions for other workers and not likely to result in harm to the person detained. Failing to understand the cause of this behavior could lead to an overreaction and result in potential violence and loss of life.

4. What might the French managers have done differently leading up to the point at which workers felt they needed to take their managers hostage in order to be heard? Explain.

Better communication about worker conditions and the attitudes of workers toward changes in the workplace could possible help to avoid these situations.  Managers could have also suggested other tactics that increased worker involvement in decision making.

5. Do you think something like this could happen in the United States? Why or why not?

Each culture has its own guidelines for approaching organizational problems.  While it is unlikely that holding management hostage will ever take off in the US, employees here have their own way of handling these types of situations that would be seen as unacceptable in other cultures.  For example, the threat that a workers would demand higher wages or leave the organization would be seen as acceptable in the US but in very bad taste in other countries that are more collectivist or had a higher power distance.

Global Stumble
1. What obvious cultural differences between Nomura and Lehman do you see in this situation?

Some of the obvious differences that exist regard the treatment of females in the workplace, the degree of centralization and decision making, and the payment of upper-level management.

2. What global attitude do you think characterizes Nomura? Be specific in your description. Do you see any evidence of that changing?

From the evidence in the case that Japanese oriented policies from Nomura were forced upon American employees in the US (i.e. female dress codes), and statement that Nomura had a Toyko-centric nature, it appears that Nomura initially adopted an ethnocentric attitude.  However, it appears that Nomura responded to the changes by adopting a polycentric attitude to deal with problems between the companies.

3. Do some cultural research on Japan and the United States. Compare those cultural characteristics. What similarities and differences exist? How might these cultural differences be affecting the situation at Nomura?

Students can find information on cultural differences from several sources including the Department of Commerce, and the International Trade Administration (http://trade.gov/).  For individuals traveling to another country, there is information available at the US State Department (http://travel.state.gov/).  Students can also compare Geert Hofstede’s findings on both national cultures at http://www.geert-hofstede.com/index.shtml.  This website shows graphically how the cultures compare on the five dimensions.  In comparing the US with Japan, the US is more individualistic than Japan, while Japan is higher on the dimensions of masculinity, uncertainty avoidance and long-term orientation. 

4. What could Nomura managers do to support, promote, and encourage cultural awareness among employees? Explain.

One of the easiest ways for Nomura to promote cultural awareness is to create more exposure between employees from the different business units.  This can be done by moving employees around to other labs or setting up virtual teams between the units in foreign subsidiaries. By setting up projects with a culturally diverse membership, SAP can better educate employees on the differences that exist across the varying cultures. 

5. What do you think the statement, “When your business is global, management needs to be global,” is saying? In your opinion, is Nomura doing this?

After Normura’s initial difficulties, it clear that they now appreciate the difficulties of expanding into a global company.  Acquiring another firm from outside their culture to meet their strategic demands was a risky move.  Most organizations mergers are equated with a marriage.  As research has shown, the more diverse the participants backgrounds and cultures, the bumpier the honeymoon.  Evidence shows, however, that Nomura has taken steps to ease the transition by integrating some of the management team and moving around some the top managers outside of the home country.