As a scholar, the best recognition is to receive Best Paper award. It is always my goal to receive such award so you can imagine how I jumped up and down when my pedagogical paper received the inaugural CUIBE award for Best Paper on “Teaching International Business” at 2016 annual conference of Academy of International Business (AIB2016). As an educator, I also feel proud that my instructional approach is recognized as innovative and valuable for the education of international business.
The conference paper has been improved and published at Journal of Teaching in International Business, titled Improving Intercultural Competence in the Classroom: A Reflective Development Model. In this paper, I propose a four-stage reflective development model to enhance intercultural competence for undergraduate students and implemented in my class of International Management. The model provides a pedagogical approach for motivating students to engage in intercultural interactions, for helping them learn to make sense of their environment, and for advancing their learning about intercultural interactions.
Here is my invitation for your company to participate this research: Organizational Cross-Cultural Adaptation.
We are conducting the survey to study the best practices of organizational cross-cultural adaptation of firms operating in foreign markets as part of our vision to reach out and service the business community. The project will provide a tremendous managerial implication to multinational firms who are facing challenges in their overseas operations and ultimately help to enhance their competency in the global market.
The project will be conducted through on-line survey. The company employees will fill out the survey and it will take them about 30 minutes to complete. As our appreciation for your support of the study, we will provide an aggregate report to assess the strength and weakness of the cross-cultural adaptation of your company, and our recommendation for the areas of improvement. The study would be used for publication in academic outlets. The publication will ensure anonymity of all participants and your companies.
Click above presentation for additional information about this project or contact me for more!
After the exciting and cheerful PhD hooding ceremony, I am now officially titled as a Doctor of Philosophy. I am delightful to achieve such a milestone in my life after four years of studying in the doctoral program in Georgia State University. I would not say that it has been easy for me to get here. I am yet to be a successful researcher in my field as I am still struggling with to get my first academia journal publication. However I would say that I had an enjoyable experience during these years pursuing my doctorate, while being a first-time mom to raise my son from a crying infant to a happy little man, and assisting my husband growing his photography business. I have been extreme fortunate in my path to achieve such milestone: I am fortunate to meet Dr. Tamer Cavusgil as an undergraduate student in Michigan State University, who is a distinguished scholar in the field of International business and led me to the path of PhD over a decade; I am fortunate to meet Dr. Leigh Ann Liu, my faculty mentor and advisor, who opened the door to the intriguing subject of cross-cultural management and inspired me in many ways as a researcher; I am very fortunate to have my supporting and hard-working spouse, Zac, who helps me getting through these years without complaining; and I am very fortunate to be in a doctoral program which allowed me balancing my life and study. Very soon, I will begin my new life as an assistant professor and face other new set of challenges. It is time for me to reflect what I have learned from my PhD program and hope I can apply them again in my future career and life. In particular, what are the most important factors to make my doctoral experience as a cheerful and memorable journey?
Spirit of Entrepreneur
Majority of doctoral program in the United State is very well structured with seminars. We learn various research methods and literature before we start our dissertations. However, we often have to deal with ambiguity and confusion during our study. At the beginning of my program, I had very vague idea about research and did not know what I would be interested in. Unless some advisors would like their students to carry on researches based on their agenda, it is often up to us to identify our own research subjects which interest and inspire us to explore and discover. Like entrepreneurs, we will identify opportunities and challenges, develop an actionable attack plan, grow “thick-skin” from rejections, seek for supporting resources, and learn the right way from many trials and errors. With such spirit, we can get away from all those frustrations from rejections and failures, and keep us going in high spirits.
Curiosity of New Knowledge
In my past education, I had various trainings in the subjects of management and business administration, from accounting, to finance, to process improvement, and to strategy management. However, I felt what I had been lacking is the knowledge of how people, individuals, or groups, or companies, make their decisions and behave in organizational settings. I expand my readings from management to sociology and psychology, which lead me to another world of knowledge about the software of the mind. It can be a curse for me as a researcher because I have a wide range of research interests instead of focusing on developing myself as subject expertise. However, I could not only enjoy conversing with scholars from other fields, but also apply the learning from other disciplines into my field. The continuous learning from broad (although lacking of breath) subjects enlightens me with the power of knowledge and keeps me pondering and seeking answers for my questions.
Passion of Discovery
It is more important to choose research subjects that we are passionate about. There are roadblocks and challenges in the path of researching. Many tasks are tedious and repetitive. The paper revising process is frustrating and endless. I have to confess: I have projects sitting in my file-drawer and feel reluctant to revisit. However, for the projects I am truly interested in, I could stay motivated and excited with the small new findings and progress. It is the passion of discovery keep me going to overcome the challenges and to stay focused.
Relax Whenever Necessary
We have very limited time, while we have so many things to do with our family, teaching, researching, and socializing. We barely have time to take a break. But I would suggest anyone feeling burnout to take a break once a while. If we feel that we are stalled and going nowhere, why not stop reading, writing, cleaning, and anything we are planning to do, but watch some comedies or take a long night sleep. Yes, we need to work hard because we have pressure of publication and tenure, but we should also enjoy our life as a spouse, a parent, a child, and a friend, and spend time with people important to our life. We should treat ourselves fair, if not nice. Taking a break from what we are stressed about can often give us a new look later on.
The list can go on, but those learning is the most important for me to help me through my doctoral program. I believe those thoughts will continue to help me enjoy my future career as a scholar. But most important of all, quote from Dr. Cavusgil’s key-note speech during the hooding ceremony, “Take what life gives you. Don’t hesitate to embrace chance.”
In the era of globalization, Foreign Direct Investment (FDI) has become the prevalent internationalization strategy for multinational enterprises (MNE). As cultural distance remaining a barrier for firms to achieve desired performance in their foreign operations, it is less informative as to how firms can reduce the problems caused by cultural distance from the host environment. Using the context of Chinese firms operating in the USA, this study is designed as a multiple-case study oriented toward theory development. Through the examination of the structure of the organizational social networks in the host country, I aim to arrive at a conceptual synthesis to define cross-cultural adaptation to an organization, establish its process and demonstrate its crucial role for firms to successful develop and maintain a stable, reciprocal and functional relationship with the new cultural and institutional environment. The framework contributes to the body of global management knowledge. It also provides a tremendous managerial implication to firms who are coping with the issues brought by cultural distance with the host environment and ultimately helps to enhance their competency in the global market.
Keywords: Cross-cultural Adaptation, Cultural Distance, Social Network Theory, Local Adaptation
Both cases illustrate the typical challenges facing western retailers success in China. The big-box retailers not only need to face the challenges from their local competitors and the different practices in Chinese retail industry, but also to adapt to Chinese consumption culture. Facing the complex operating environment, both companies need a long-term vision and commitment to strengthen their brand image and create values for their customers.
Brownfield Entry in Emerging Markets
Author(s): Klaus E. Meyer and Saul Estrin
Source: Journal of International Business Studies, Vol. 32, No. 3 (3rd Qtr., 2001), pp. 575-584
Greenfield: A Greenfield project gives the investor the opportunity to create an entirely new organization specified to its own requirements, but usually implies a graduate market entry. It is a start-up investment.
Acquisition: An acquisition facilitates quick entry and immediate access to local resources, but the acquired company may require deep restructuring to overcome a lack of fit between the two organizations.
Brownfield: A Brownfield is a foreign acquisition undertaken as part of the establishment of a local operation. From the outset, its resources and capabilities are primarily provided by the investor, replacing most resources and capabilities of the acquitted firm. It is a hybrid mode of entry.
Two frameworks establish determinants of entry mode choice
Resource requirement based on transaction and integration costs
Managerial applications: Decide the entry mode based on transaction and integration costs and resources
1. The relationship between institutional variation across countries and emergence of brown strategy.
2. Incorporate brownfield into analyses of both determinants of entry mode choice and the impact of entry modes on subsidiary performance
First of all, I am so sorry for not being available to write the business blog for a while. So what have I being doing recently?
My PhD study in Marketing and International Business has started in August so I have been adjusted myself to get used to this challenging while intriguing student life. Very different from the learning in my MBA, which is quite practical for a business professional, the PhD learning is quite theoretical while beneficial for my future research. I am also glad for my choice of moving my concentration from supply chain management to international marketing and business. With my interest in international trading and global cultural, this transition provides me a broader platform to fulfill my career goal to comprehend international conflicts and to promote global conversation and fair trading.
As a Chinese origin, I of course will pay more attention to the growth of Chinese economy and its relationship with other nations. Recent frictions between Chinese and U.S. over Chinese currency appreciation and penalty tariffs against each other draw my attention. As an advocate of fair trading, I hate to see this kind of political game between nations which only hurt businesses and consumers as a result, especially between two important trading partners. However, there are too many misconceptions and misleading information regarding the root causes of job loss in American manufacturing, China obviously became an easy target to blame and be used as a scheme for political goals.
There are also much focus on the growth of China and many articles have discussed this new challenge to China. After decades of leapfrog growth, China is facing significant challenge to remain its double-digit annual GDP growth. A very recent HBR blog Will China’s Growth Slow Over the Next Decade by Liu Shengjun points out there are four dividends behind the growth miracle: population, reform, opening and resource. Facing the diminishing return of those dividends, Mr. Liu recommends the following consideration for China to create new dividends:
Eliminate discrimination against private enterprises.
Further reform state-operated enterprises
Those recommendations are well analyzed and right to the point. However they may not be easy for the Chinese government to make such huge turnaround in the near future. Corruption at all levels of central and local governments will not allow such reform to be easy because many people in power will lose their advantage of authorization and grey income. To encourage innovation, China needs to first fight against the challenge or habit of plagiarism and copyright infringement, and establish a stronger IP protection law. Otherwise, the innovations by the enterprises are not able to be protected thus discouraging their investment in R&D. Overall, China needs a political reform in order to create those dividends. Right now, I do not see such push from the central government.
What will happen among nations and how will China and the U.S. can grow together? I do not know yet. We are now living in a flat but quite complicated world. I hope my future studies will soon bring me more knowledge to solve those puzzles regarding global trade issues and challenges. And of course, I wish to see my future research contributing to a “flatter world”. I will keep everyone posted!
I am reading the article by Dr. Dan Steinbock, Apple iPhone4 Success Masks Global Strategic Challenges, posted on Harvard Business Review blog. Dr. Steinblock compares Apple and Nokia in their global presence, and states that although Apple enjoys a huge success in the United States for the smartphone market, Nokia has advanced in l strategical development toward a global market, especially in emerging markets. The article concludes that “Apple needs to adopt a dual business model, one for the advanced economies which enjoy high living standards but relatively slow growth, and another model for emerging economies which have relatively low living standards but enjoy high growth”, and that “global leadership requires success in the advanced economies and the emerging world.”
While I can fully respect Dr Steinbock as the Research Director of International Business at India, China and American Institute (USA) and Senior Fellow at the Shanghai Institutes for International Studies (China),as a highly respected expert in the field of international business and global strategy, I pause to wonder if Dr. Steinbock is an iPhone user, or is familiar with it. I am not a big fan of Apple, but I happen to use an iPhone and know about this product; I believe that I may be able to present some valid arguments to justify why a dual business model is not necessary for Apple.
First,let us conduct a side by Side comparison for Apple and Nokia according to their 2009 annual report.
It is not necessary to discuss the gap of the market capital and the stock price between Apple and Nokia. Our comparison will rather review each company’s operational key performance indicators. Apple reports two billion more in revenue than Nokia, but to clarify, the Apple data includes products beyond Smartphones such as iPods and Mac Computers. The iPhone accounts for 30% of the total revenue. Apple’s gross profit margin for 2009 is 41% with an income before tax of 28%. According to the analysis from iSuppli Corp, iPhone has a profit margin of almost 52% for the cheaper model. Comparatively, Nokia, a manufacturer of mobile devices, has 32% of gross profit, with only a 2.3% income before tax. Nokia’s R&D cost is high at 13% vs. only 3.1% for Apple.
From this comparison, we may conclude Apple has a business strategy of “Differentiation”. Apple enjoys a high profit margin from the well-designed high-end Smartphone. Apparently, Nokia is heading toward a different strategy to become a “cost leader” to focus on more low end products with lower margin. My speculation is further articulated by the article, Nokia to Halve Smartphone Production in 2010, Official Suicide Watch Starts Now. Nokia announced it would halve production of its Smartphones in 2010, to gear itself toward a concentration on ‘dumbphones’, or “mid to low end Smartphones.” Nokia Smartphones’ R&D also “cut down unnecessary differentiation”. While I choose not to comment on whether Nokia is choosing the right business strategy, it seems a fair assumption that their focus on low-end Smartphones is directed toward a global focus met to face an increasing demand in emerging economies.
It seems paramount that we should ask this question: Why is the Apple R&D cost is so low in comparison to Nokia? I believe that the answer lies hidden within Dr Steinbock’s article. Nokia is a device manufacturer however Apple uses OEM (Original Equipment Manufacturer) Foxconn to produce their Smartphones. Although I do not have inside information, I believe Apple collaborates with Foxconn for product development. Utilizing the supplier’s technology and production expertise, Apple is able to focus on their core competency of product design and software program development and achieve such low R&D cost. Apple has only one model of iPhone with some variation of memory size, which is naturally easier for mass production, and allows the achievement and maintenance of lean inventory management. This results in a lower COGS (Cost of Goods Sold) and a higher gross profit margin. Nokia, on the other hand, released 13 Smartphone models in 2009, which increased not only their R&D cost, but added a level of complexity to its supply chain and increased the capital investment required to manage the vast array of models.
So when iPhone is considered a luxury product in the Smartphone market, why would they require different pricing strategies for different markets? It is my belief that it is not required. Just as Louis Vuitton for purses or Rolex for watches, premium brands do not require different prices for different markets. This is especially true for the Chinese market, where premium brands are considered to be an indicator of personal social status. I cannot speak for the Indian market without further research, but Chinese consumers are willing to pay for premium and trendy products. Before Apple settled an exclusive sales agreement with China Unicom for the exclusive right of iPhone sales, iPhone had been sold throughout China on the black market at a premium price. Many Chinese consumers asked their friends or family in U.S. to buy unsubsidized iPhones for them to use in China. The iPhone initially failed in China, not because of the cost barrier but because of GSM (Global System for Mobile Communications) compliance, thus forcing Apple to redesign the iPhone for China to meet the Chinese wireless network requirements. Even after prices were cut to 3,000 yuan ($439.46) in April by the carrier China Unicom, Chinese consumers are still paying significantly more than U.S. consumers for an iPhone without subsidy from the wireless network carrier. However, contrary to what Dr Steinbock claims in his article that Apple flopped in the Chinese market, Apple’s Chinese iPhone sales exploded and largely contributed to the growth of Apple last quarter sales, with estimated 2.1 million iPhone sold in China within 6 months.
A lot has been said, I believe I have answered the questions:
Does Apple need a global strategy? Absolutely, yes. Apple should establish and expand the distribution channels in different nations, with possible redesign to meet local market requirements. It is also crucial for Apple to work with its suppliers to meet its increased demand.
Does Apple need a dual business model for the advanced economies and emerging economies? I do not believe so. iPhone sales are disappointing in India or other emerging markets due to different consumer behavior, so be it. There is still much room for growth in the global high-end Smartphone market. Smartphone users typically replace their phones every two years as contracts expire. Apple enjoys such high profit margin from a single Smartphone model, so it is not necessary for Apple to add additional resources to develop a low-end model for those markets and dilute its premium brand image, just like we can not imagine Louis Vuittonor or Rolex producing a low end product for low-income consumers. Being a global leader does not necessitate becoming the leader of market share in quantity while struggling with profit margin. Apple is definitely a leader in the Smartphone market with their product design mission to “be sweet to customers and vicious to rivals”. I foresee that we will continue to see the growth of Apple in the Smartphone market.
It wasn’t for the project which I am currently working on for a China plant tissue culture (TC) company, I would never have experienced the challenge from the weakness of Intellectual Property (IP) protection in the Chinese market.
It is the first time that I am working so closely on IP issues in China. The plant Tissue Culture company, Jin Bei (aka, JBSbio), based in Shanghai, China, has been focused in the Chinese domestic market for the past two decades. They have been very successful as a market leader in the region with a reputation of reliable high quality. Last year, with a new investment of $4.5 million into world class new equipment, the company was ready to expand into the overseas market. Through a friend’s connection, they asked me to help them break into the U.S. market.
I have been traveling for the company to meet the potential clients, not only to promote the propagation service that the company can provide with its’ Tissue Culture technology, but also to connect with the U.S companies who are interested in getting their products into the Chinese market. With the booming economy in China, needs for gardening and landscape are booming as well, in parallel with the rising market of housing and public construction.
So anyone would think that selling into China will be an easy task once we have good products. The answer is no, absolutely not, because of the weak protection of intellectual property in China. Piracy in China is not something new. It’s sad for me to say this as a Chinese, but China has a reputation of counterfeiting design or content of patented products. We are all familiar with those knock-off products such as luxury handbags, watches, electronics, and clothing. The knock-offs are sold at a much lower price, so consumers can choose to pay much less for fake premium products if quality is not a concern to them. There are even some tragedies that people consumed counterfeit food and were poisoned! Many foreign companies come to China and have been fully challenged by the culture of deficient IP awareness. So, China, a country of invention only in ancient times, becomes a well-known country of “stealing” IP. Even though more regulations and laws are created after China entered the WTO, the IP control has not become easier for many investors.
I am facing a huge obstacle to introduce new horticultural products into the Chinese market. Breeders normally spend thousands upon thousands of dollars in developing a new plant variety through years of experiments and growing. That is why we can see more and more beautiful, colorful plants around us. In the past 30 years, the IP regulation has been well developed in U.S. so most businesses are playing the game by the rules. However, the Chinese market is like the Wild West, which can be easily out of control for horticulture products. Think about it, any plant grower can take a branch of a plant and duplicate it through cutting technology. Learning from the painful experience of losing IP in the Chinese market, some companies choose to give up on China altogether, or only bring to market the second tier quality products, which in result make my objective of introducing new products to the Chinese market more challenging! When I see those beautiful new flowers and plants which can be easily duplicated, I can’t help to feel regret about the fact that Chinese consumers may not have much chance to enjoy those nice and beautiful flowers in the near future.
However, the existence of risk does not mean one should not take any risk at all. Actually it is a good thing the Intellectual Property issue is not a hidden risk so we all know it is out there and we just need to take more cautious approach when we go to the market. The following are my suggestions on how to deal with the IP issues in China:
First, choose a reliable partner with a good reputation. It may not be an easy thing sometimes because Chinese hardly says “No” to opportunities. So, if a company tells you “No” for some reason, it is actually a good sign that this company is doing business honestly. At the same time, spend time to research the background of the potential partner, to visit their facility, and to observe how the owner or manager works and treats their employees. A company that treats their employees well will also respect their business partners, which is potentially a long-term trustworthy business partner. Don’t feel frustrated if you have a bad experience in the Chinese market. There are plenty of honest businesses out there looking for a long term partnership.
Second, utilize key technology to prevent easy counterfeiting especially when R&D is a big part of the product development. Intel is a great example for this approach. No one can counterfeit their CPU due to their technology. A company can develop complex products unique characters from which core technology cannot be duplicated.
The third approach is to use the trade mark and a branding strategy. Believe it or not, China has a culture of brand awareness and will pay a premium for a brand which is associated with high quality and a high social status. Not to mention those well-know consumer goods, JBSbio, the Chinese Tissue Culture company, uses the branding strategy for their own breeds and has been successful to protect their products in their homeland. The foreign company going into the Chinese market should definitely use a branding strategy at the beginning of entering the new market to establish their name and increase brand awareness.
The last strategy will be entering the market with a second tier product or with products which are going to be out of patent if an IP violation is inevitable. Charge premium prices at the beginning of market introduction and then lower the price when the market is flooded with knock offs. Meanwhile, introduce the market quickly with new products to sustain its market leader status..
As a conclusion, it can take another decade for China market to have Intellectual Property regulation well enforced. However this obstacle should not become a barrier for any international business to wait for a safer environment and miss the growth opportunity. Understanding the market risk and taking the appropriate approach to go with the flow and capture the opportunity in a new market can be highly rewarding and profitable.
They seem to be totally two unrelated incidences. First, there was a very interesting news story on Dec 5th, 2009 at NPR, What The ‘Garlic Bubble’ Means For China’s Economy. The news discussed a very interesting scenario of “garlic bubble” when “garlic prices in one Chinese province have shot up as much as 40 times the going rate”. China is the biggest producer of garlic so this bubble definitely shakes the food industry. There were three reasons which caused the bubble:
Due to the collapse of the global economy, there is less demand for garlic, so garlic farmers in China produced 50% less garlic.
Due to the wide spread concern of swine flu, Chinese started to buy loads of garlic to keep them from getting sick.
The Chinese government stimulus plan pumped its banks full of money and made lending very easy.
Therefore, limited supply ran into unforeseen high demand. “Smart” people saw this as a great opportunity thus “the garlic frenzy was turning into some kind of gold rush”. Many people borrowed easy money from banks, and started stocking tons of garlic in the warehouse and waiting for garlic prices to rise. The bubble hence created. Government stimulus plan caused an unintended result. I haven’t read follow-up story how this garlic bubble broke in the end. I can only imagine how a purchasing agent from food industry jumped out of his/her office chair seeing the garlic price increased dramatically in short time. It’s also funny to think that every restaurant or food company has to reduce the portion of garlic ingredient and probably pray for the “garlic bubble” to burst.
Another story made me think about the impact of “uncertainty” to supply chain and related supply chain risk management. I was discussing supply chain in the horticulture industry with an industry expert. I was told that the demand for next year is almost out of question to forecast and that whole supply chain seasonality almost doesn’t exist. The big box retailers, such as Wal-Mart and Home Depot, keep pushing out their order forecast to growers since they couldn’t decide what to buy for next year from their weak 2009 point of sales (POS) data. This uncertainty put growers at a huge risk as they face the challenge of missing growing season. If I were a grower, I might be forced to hold up my purchasing decision to the very last minute, facing the risks of higher purchasing costs for rush orders or even not able to obtain the materials I need. If I went ahead to make my own “speculated” forecast, I would face an even bigger risk of ordering the wrong products and put the business in total loss.
In the blog of Supply Chain Risk Literature: a complete review, Jan Husdal summarized the typology of supply chain risks. Among them, “uncertainty” is the biggest cause of all risks. Every company is fully exposed to today’s global economy, consequently it’s even more difficult to predict or forecast with high level of “certainty”. Unfortunately, I don’t have a good solution to avoid such risks brought by “uncertainty”. All I can suggest is to realize those risks associated with supply chain, and increase communication with all trade partners. Communicate! Communicate! Communicate! Only doing so will break the organizational silo, minimize the exposure to supply chain risks, enable organizations to act quickly to unexpected incidences, and hence minimize the financial loss caused by supply chain uncertainty.
So, what can a garlic buyer in the food industry do to minimize the loss from this garlic bubble? Fly to China and buy a warehouse of garlic immediately! No, I’m kidding, although it can be one possible option. First thing the buyer needs to do is to prevent the situation of out of garlic. Not only he/she need constantly communicate with the suppliers about pricing fluctuation, inform factories or restaurant to check current on hand and incoming inventory for allocation, but also need start searching for other supply sources. They might not able to get a lower price in short term, but, hey, our consumers can still have garlic in our tasty food, perhaps several cents more expensive than they used to be, but we don’t feel it.