PEST is an acronym for Political, Economic, Social and
Technological. This analysis is used to assess these four
external factors in relation to your business situation.
Basically, a PEST analysis helps you determine how
these factors will affect the performance and activities
of your business in the long-term.
Social Responsibility
Includes the expectation that corporations concern
themselves with the social and economic effects of their
decisions.
Social Responsibility – Integrated Approach
Organizations agree what should constitute moral and
ethical behavior
Emerging because of the development of a global
corporate culture
Result of socioeconomic interdependence
Provide a basis of judgment regarding decisions and
situations
Moral Universalism
Unlikely to become a reality
Ethnocentric
Relativism
Codes of conduct
Respect workers’ rights to unionize
Do not regularly require more than 48-hour work weeks
Pay wages sufficient to meet worker’s basic needs
Safe working environment
No child labor
Ethics in Global Management
Globalization has multiplied the ethical problems facing
organizations
Business ethics have not yet globalized
Nike’s 2005 report
The company audited hundreds of factories (in 2003
and 2004 and found cases of abusive treatment in more
than a quarter of its South Asian plants.
• In more than half of Nike’s factories employees
work more than 60 hours per week. In up to
25% of the factories, workers refusing overtime
were punished. Wages were below the legal
minimum at up to 25% of factories.2
One of Nike’s new corporate citizenship goals is “to
effect positive, systemic change in working conditions
within the footwear, apparel and equipment
industries.”
What’s communication?
• Describes the process of sharing meaning by
transmitting messages through media such as:
– Words,
– Behavior,
– Material artifacts.
Cultural noise in the communication process
The more dissimilar the cultures of those involved, the
more the likelihood of misinterpretation.
When The message it reaches the receiver, it
undergoes a transformation in which the influence of
the decoder’s culture becomes part of the meaning.
Ethnocentric attitudes are a particular source of noise
in crosscultural communication
Organizational culture represents those expectations,
norms, and goals held in common by members of that
group.
Power distance
• It is the level of acceptance by a society of the
unequal distribution of power in institutions.
uncertainty avoidance,
 Refers to the extent to which people in a society
feel threatened by ambiguous situations
Individualism
 Refers to the tendency of people to look after
themselves and their immediate families with
less emphasis on the needs of society
Collectivism
 There is more emphasis on group achievements
and harmony, and the importance of the
extended family or group
Masculinity
 Refers to the degree of traditionally
“masculine” values that prevail in a society
Long-term orientation
 Seeks and proposes long-term objectives and
results
What is negotiation?
 Skill widely considered one of the most
important in international business.
 It describes the process of discussion by which
two or more parties aim to reach a mutually
acceptable agreement.
 Cultural differences produce great difficulties in
the negotiation process
Important differences in the negotiation process from
country to country include :
• The amount and type of preparation for a
negotiation,
• The relative emphasis on tasks versus
interpersonal relationships,
• The reliance on general principles rather than
specific issues, and
• The number of people present and the extent of
their influence.
Process of negotiation
Preparation
 A distinct advantage can be gained if
negotiators familiarize themselves with the
entire context and background of their
counterparts.
Relationship building
 Process of getting to know one’s contacts in a
host country and building mutual trust before
embarking on business discussions and
transactions.
Exchange of information
 Each side typically makes a presentation and
states its position; a question-and-answer
session usually ensues, and alternatives are
discussed.
 Focusing on the entire situation confronting
each party encourages the negotiators to assess
a wider range of alternatives for resolution,
rather than limiting themselves to their
preconceived, static positions
Persuasion
 Studies of negotiating behavior have revealed
the use of certain tactics, which skilled
negotiators recognize and use, such as
promises, threats, and so on.
 Other rough tactics are designed to put
opposing negotiators in a stressful situation
physically or psychologically
Concessions and agreement.
 Well-prepared negotiators are aware of various
concession strategies and have decided ahead
of time what their own concession strategy will
be.
 At the final stage practices determine how
these agreements will be honored.
American negotiators.
 Respects the “opponents”
 States his or her position as clearly as possible
 Knows when he or she wishes a negotiation to
move on
 Is fully briefed about the negotiated issues
 Has a good sense of timing and is consistent
 Italian negotiators
 Does not hide his or her emotions
 Reads facial expressions and gestures very
well
 Has a feeling for history
 Does not trust anybody
 Is concerned about the bella figura—the
“good impression”—he or she can create
among those who watch his or her behavior
Is good at being obliging and simpatico at all
times
 Is able to come up with new ways to
immobilize and eventually destroy his or her
opponents
 Handles confrontations of power with
subtlety and tact
 Knows how to use flattery
Peruvian negotiators
 THE PRIMARY RESOURCE IS BARGAINING
 INFORMAL. (The place of negotiation is not
always an office)
 Uses flattery to achieve what he/she wants.
 Punctuality is not very rigorous.
 Prefers to establish friendship relation
before starting.
 Informs himself about their counterpart
before negotiation.
 Does not like to take risks before hand.
 Does not trust anybody.
 Keeps his/her cards close to his/her chest.
And has an extra one.
 Always wants to win.
 Cunning when closing a deal.
 Easy-going but distrustful during the
negotiation.
 Does not transmit security when speaking
 Closes business at an amicable meeting.
 Does not keep space to other opinions.