INTERNATIONAL

MANAGEMENT AND
CULTURAL DIVERSITY

Nazrin Mirzazade
Fidan Hajiyeva
Nihad Pashazade

26. 10.2023
Agenda
 International Management

 Challenges facing the global managerial worker

 Methods of entr y into World Markets

 Success factors in the global Marketplace

 The scope, competitive advantage and potential

problems of managing

Nihad Pashazade
“Sit Where you Like”
(Chinese vs. American culture)

In Chinese culture, hierarchy is really impor tant,

whereas in American culture, it's more about
equality and displays of hierarchy aren’ t culturally
comfor table.

Nazrin Mirzazade
 International Management

The management of business operations in an organization ser ving markets and operating in
more than one countr y. It requires knowledge and skills beyond normal business expectations,
such as familiarity with the local market and competitive conditions, the legal and fi nancial
environment, the capability to do multicurrency transactions , and managing across borders.

Multinational Corporation Transnational corporation

 A multinational corporation (MNC)  Transnational corporations (TNCs) are companies

is a company that has business that operate in more than one countr y. Unilever,
operations in at least one countr y Mcdonald’s, and Apple are all examples of TNCs.
other than its home countr y.
 TNCs tend to have offi ces and headquar ters
located in the developed world.

Fidan Hajiyeva
 Vo d a fo n e G r o u p

Apple company i s U S A b a s e d g r o u p B u t i n I n d i a t h i s c o m p a ny
i s o p e ra t e d s e p a ra t e l y a s Vo d a f o n e I n d i a a n d
produces goods in China and other counties but
m a ke s d e c i s i o n s i n d e p e n d e n t l y
o p e ra t e d o r d e c i s i o n s v i a h o m e c o u n t r y A m e r i c a

Fidan Hajiyeva
 Trade agreements among countries
World Trade Nor th American Free Central American Free
European Union
Organization Trade Agreement Trade Agreement
 27-nation alliance US & other countries in
 Liberal trading relationships 
 Wo r l d ’s l a r g e s t  153 member countries among US, Canada, Mexico We s t e r n H e m i s p h e r e
economic entity Only international agency E l i m i n a t i o n o f a l l t a r i ff s
  B e n e fi t s o n c h e a p l a b o r f o r c e , 
 Schengen Agreement overseeing rules of increased revenue, enter to on 80% of US
international trade neighboring markets manufactured goods
 Monetary union in 11
countries- Euro  Free trade /open markets  Threats for American workers?  Strong regulatory
Violation of standards and
labor/environmental environmental protection
standards?

Nihad Pashazade
 Outsourcing /
Off shoring
Practice of hiring an individual or
another company outside the
organization to per form work

Nazrin Mirzazade 9/8/20XX 7

The Case for Global Outsourcing

 Google
 Alibaba
 WhatsApp
 Basecamp
 Skype
 Slack
 Opera

Fidan Hajiyeva
The Case against Global Outsourcing

 Losing Control  Risking Public Backlash

 Hidden Costs  Time Frames

 Security Risks  Losing Focus

 Quality Control issues  Things Get Lost in Translation

 Shared Financial Burdens  Moral Dilemmas

Nihad Pashazade
 Sensitivity to cultural differences

 Cultural sensitivity is awareness of local and

national customs and their importance in effective
interpersonal relationships

 Multiculturalism is the virtue of being open to others

 Multicultural worker is open to people who harbor

different beliefs and customs

Nazrin Mirzazade
Cultural mistakes to avoid

Fidan Hajiyeva
Cultural differences in Business

Examples:

 Personal Space Expectations

 High and Low Context

 Diff ering Meanings of Cues

 The Importance of Relationships

 Cultivate Cultural
Understanding
Nihad Pashazade
 Challenges facing
the global
managerial
worker

Nazrin Mirzazade
1. Developing global leadership skills

Explanation: Example:

 Saudi
Ability Arabia
to eff ectively
workinglead
week:
people
from
from other
Saturday tocultures
Wednesday

 Diffi
Combination
culties: of cultural sensitivity
and general leadership skills
 Scheduling business meetings
 Transfer of management principles
 Meeting deadlines
from one culture to another

 Good interpersonal relationships

Nazrin Mirzazade
2. Currency Fluctuations
M ul t i n a t i o n a l C o r p o ra t i on’s va l ue i s a ff e c t ed m o r e t h a n
n a t i o na l c o m p a n i es b y a ny m o ve m en t i n c ur r en c i e s
exc h a ng e ra t e. T h i s c h a n g e m ay a ff ec t t he c o m p a ny ’s
a s s et s p r i c e, fi na nc i a l s t r u c t ur e, p r o fi t m a r g i n , a nd c a s h
fl o w ( Fei x i a ng , 2 0 1 2 )

T h e exc h a n g e ra t e fl uc t u a t i o n i s a n i m p o r t a nt t hi n g f o r
m o s t of t h e c o m p a n i es es p ec i a l l y m ul t i na t i on a l
c o r p o ra t i o ns . T h er e a r e m a ny way s f o r d e a l i ng w i t h s u c h
fl u c t ua t i o n w hi c h a l l of t h em have t h e s a m e a i m t o
r ed u c e f o re i g n exc ha ng e l o s s es a n d re d u c e t he
i n s t a b i l i t y of c a s h fl o w.

E x a m p l e: W hy d i d A p p l e m o m en t a r i l y s t o p s a l es i n
Tu r key ? ( D ec 2 0 2 1 )

Fidan Hajiyeva
 3. Balance of trade problems

 The balance of trade (BOT), also known as the trade balance, refers to the diff erence
between the monetar y value of a countr y ’s impor ts and expor ts over a given time period.

 The United States impor ted $239 billion in goods and ser vices in August 2020 but
expor ted only $171.9 billion in goods and ser vices to other countries. So, in August, the
United States had a trade balance of -$67.1 billion, or a $67.1 billion trade defi cit.

 Conversely, China's trade surplus has increased even as the pandemic has reduced global
trade. In Aug. 2022, China expor ted goods wor th $314.9 billion and impor ted goods wor th
$231.7 billion. This generated a trade surplus of $79.4 billion for that month, a drop from
$101 billion the preceding month.

Nihad Pashazade
4. Human rights violations, corruption & violence

 international managers face potential ethical problems when their customers and suppliers
reside in countries where human rights are violated.

 In some countries a string of offi cials demand payments before allowing foreigners to
conduct business or to speed approval of operating license.

 Impor tant risk for multinational companies is when its employees are trapped in violent
acts in another countr y.

Nazrin Mirzazade
 Human Rights
Violations in
India

Presentation Title 9/8/20XX

Nazrin Mirzazade
5. Culture Shock

 Culture shock or adjustment occurs

when someone is cut off from familiar
surroundings and culture after moving
or traveling to a new environment.
Culture shock can lead to a fl urr y of
emotions, including excitement,
anxiety, confusion, and uncer tainty.

Fidan Hajiyeva
 Most common cases:

 Diff erent Attitudes Toward Confl ict

U.S. vs Eastern countries

 Diff erent Approaches toa Completing Tasks

Asian /Hispanic vs European-Americans

 Diff erent Attitudes Toward Disclosure

6. Differences in Negotiating Style

Nihad, Nazrin, Fidan

 7. Piracy of intellectual property rights &
other merchandise
In international business, considerable revenue is lost when fi rms in
other countries illegally copy and sell products

 Dendy (Russian: Д е́нди) is a series of home video game

consoles, an unoffi cial hardware clone of Nintendo's third-
generation Famicom. Dendy was produced by Steepler in late
1992, and assembled in Taiwan from Chinese components. It
was mainly sold in Russia and many surrounding countries.
(1994-75 million USD)

Nihad Pashazade
8. Coping with dangerous & defective products

Defective products harm children, men, and

women everyday:

 Medical Devices and Pharmaceutical Products

 Vehicles and Equipment

 Child-Related Products

Nazrin Mirzazade 9/8/20XX 22

FORD SUVS
POWER TRAIN
I n J u n e 2 0 2 2 , t h e N H T S A ( N AT I O N A L H I G H WAY
T R A F F I C S A F ET Y A D M I N I S T R AT I O N ) i s s u e d a
s a f e t y r e c a l l i nvo l v i n g 2 . 9 m i l l i o n Fo r d ve h i c l e s .
T h e i nvo l ve d S U V s h a ve p o t e n t i a l l y d e f e c t i v e
gear shifting devices. As the recall explains, the
bushings that attach the shifter to the
t ra n s m i s s i o n " m a y d e g ra d e o r d e t a c h . " A t
p r e s e n t , o n l y a f e w a ff e c t e d o w n e r s h a ve
reported injuries or property damage.
Nazrin Mirzazade
 Methods of
entry into
world markets

Fidan, Nihad, Nazrin

 Methods

 Expor ting  Licensing and franchising

 Local assembly and packaging

 Strategic alliance & joint ventures

 Global star t-up

 Direct foreign investment

Fidan, Nihad, Nazrin

 Market-entry
strategy used in the
different countries
by Starbucks

9/8/20XX 26
Fidan Hajiyeva
 Success
factors in the
global
marketplace

Nihad Pashazade
Think globally, act locally Recruit & select talented nationals

 -By
-Multinational
teaching the
corporations
overseas
implementing
managers the a
values
local and
market
traditions
focus
face
of the
the
fi rm,
challenge
you enable
of adapting
those a
product to to
managers local
better
trends
achieve
and
preferences
corporate objectives

 Best example: Mc Donald’s

Nihad, Nazrin
Hire & Develop Multinational
Research & Assess potential markets
workers
 -To help workers and their family
 -Basic success strategy in
members become multicultural,
international markets is to acquire
companies off er cultural training
valid information about the fi rm’s
target market.

Nazrin, Fidan
Globalization
Nihad, Fidan, Nazrin
The Advantages & Disadvantages of Globalization

Industries Benefi ting from Disadvantages of Globalization

Globalization
 T h e g e n e ra l c o m p l a i n t a b o u t g l o b a l i z a t i o n i s
that it has made the rich richer while making
 1. Telecommunication Industr y
t h e n o n - r i c h p o o r e r. “ I t i s w o n d e r f u l f o r
 2. Transpor tation Industr y m a n a g e r s , o w n e r s , a n d i nve s t o r s , b u t h e l l o n
w o r ke r s a n d n a t u r e .”
 3. Manufacturing Industr y
 F r e e t ra d e w h e r e a l l b a r r i e r s a r e e l i m i n a t e d b u t
 4. Agriculture Industr y
t h e r e a r e s t i l l m a ny b a r r i e r s
 5. Education Industr y  T h e b i g g e s t p r o b l e m f o r d e ve l o p e d c o u n t r i e s i s
t h a t j o b s a r e l o s t a n d t ra n s f e r r e d t o l o w e r c o s t
c o u n t r i e s .”

Nihad, Fidan, Nazrin

 The scope,
competitive
advantage and
potential
problems of
managing

Nazrin Mirzazade
 Scope of diversity

Explanation: Example:
 A diverse workforce does not inevitably
 T h e t ru e m ea n in g of va lu in g
contribute to increased business, such as
diversit y is to respect a n d en j oy a
the experience with Denny's restaurant.
w ide ra n ge of cu ltu ra l a n d in div idu a l
diff eren ces. To be diverse is t o be
 Deutsche Bank, a signatory and founding member of
diff eren t in som e m ea su ra ble way
d i ve r s i t y c h a r t e r s i n G e r m a ny, S p a i n a n d L u x e m b o u r g .
( w h eth er or n ot th e diff eren ce is
A b o u t 4 2 p e r c e n t o f i t s e m p l o ye e s a r e f e m a l e . E i l e e n Tay l o r
v isible) . T h e diversity u m brella is
o f D e u t s c h e e x p l a i n e d , “ We a r e i n 7 5 c o u n t r i e s a n d w e h i r e
su pposed to in clu de ever y body in a n t h e b e s t t a l e n t i n e a c h l o c a l e . D i ve r s e t e a m s a n d c o m p a n i e s
org a n iza tion . m a ke b e t t e r d e c i s i o n s .” D e u t s c h e B a n k w o r k s w i t h a n o n -
g o ve r n m e n t a l o r g a n i z a t i o n t o t ra i n p e o p l e w i t h d i s a b i l i t i e s
t o w o r k a t t h e c o m p a ny

Nihad Pashazade
Competitive Advantage of Diversity

Presentation Title
1 . M a n a g i n g d i ve r s i t y w e l l o ff e r s a m a r ke t i n g
a d va n t a g e , r e s u l t i n g i n i n c r e a s e d s a l e s a n d
2 . C o m p a n i e s w i t h f av o ra b l e r e c o r d i n
p r o fi t s
m a n a g i n g d i ve r s i t y a r e a t a d i s t i n c t a d va n t a g e
in recruiting talented people

3 . E ff e c t i ve m a n a g e m e n t o f d i ve r s i t y c a n
4 . Wo r k f o r c e d i ve r s i t y c a n p r o v i d e a c o m p a ny
reduce cost
w i t h u s e f u l i d e a s f o r f a vo ra b l e p u b l i c i t y a n d
advertising.

5 . Wo r k f o r c e d i ve r s i t y, i n c l u d i n g t h e s e r v i c e s o f
c u l t u ra l l y d i ve r s e a d ve r t i s i n g a g e n c y, c a n h e l p
r e d u c e c u l t u ra l b l o o p e r s a n d h i d d e n b i a s e s . 6 . Wo r k f o r c e h e t e r o g e n e i t y m a y o ff e r a
c o m p a ny a c r e a t i v i t y a d va n t a g e .

Competitive Advantage of Diversity

Fidan, Nazrin, Nihad

 Potential problems

1. I t c r e a t e s m u l t i p l e l a ye r s o f
a d m i n i s t ra t i ve m a n a g e m e n t t o
juggle.

2. G e n d e r d i ve r s i t y i s s t i l l n o w h e r e
near where it could be.

3. I t m ay c r e a t e a n i n i t i a l s u r g e i n
resignations.

4. Some companies see an increase in

complaints when focusing on
d i ve r s i t y.

5. D i ve r s i t y p r o g ra m s a r e o f t e n l e f t u p
t o t h e C E O.

6. There can be communication barriers

t h a t m a ke p r o d u c t i v i t y m o r e
c h a lPl er ensgeinntga .t i o n T i t l e
Fidan Hajiyeva
THANK YOU