Summary Comparative Management

1.Please explain why the contingency approach is important for international comparative management research: The contingency approach is important for international comparative management research because…

Answer: The contingency approach has conceptualized and operationalized a number of other important factors that can cause differences between organizations and management approaches. By controlling for these, those differences that are related to nationality, geographic region, or culture, can be identified.

2. Logical empiricism stresses the importance for the researcher of keeping separated from the object studied, in order to avoid bias as much as possible. Hermeneutics puts this on its head, and emphasizes that the researcher has to become immersed into the object studied. Please explain what the implications of both philosophies of science are for the study of cultures.

Answer: Logical empiricism (etic) assumes that the researcher can describe cultures independently of his/her own culture, from an objective point of view. This approach prefers research methods that allow for measurement of cultures in a controlled, standardized way. According to Hermeneutics (emic), no neutral/objective perspective is possible, another culture can only be understood in the light of one’s own culture. Hence, this philosophy of science leads to research methods that bring the researcher into close contact with the culture studied.

3.Outline the main differences between the shareholder approach and the stakeholder approach to corporate governance.

Answer: Shareholder approach: -Application of agency theory -Shareholders own the firm -Managers are the agent and shareholders are the principal -Goal is to maximize shareholder wealth -Focus on negatives  managers may act in their own self-interests at the cost of shareholders. Keep managers in check through incentive align- ment, internal control, and external control stakeholder approach: - rejection of the agency theory - stakeholders are any group or individual who can affect or is affected by the achievement of the firms\' objectives - a firm should balance and take into account the legitimate interests of stakeholders: profitable and socially and environmentally responsible - look at positives: joint value creation with stakeholders. Help managers articulate the shared purpose of the firm

4. What is National Innovation System? What are the key features of the American Innovation system?

Answer: NIS is a system of actors and relationships that shape a country’s innovation patterns. Major actors in a NIS include companies, banks and venture capital firms. The key features of the American innovation system include enormous scale, big innovative companies.

5. Please discuss the differences and similarities between the research methods employed by Hofstede and Schwartz.

Answer: Both are representative of the etic approach to culture, and are large-scale, questionnaire-based studies. Both also have identified dimensions of national cultures The questionnaire used in Schwartz’ study is more strongly based on previous research than that by Hofstede. Schwartz’ study is broader, focusing on societal values more in general, while Hofstede focuses on work-related values. All Hofstede’s respondents were from one company, Schwartz uses samples consisting of school teachers and pupils.

6. What is the main assumption underlying the contingency approach

Answer: The characteristics of organizations (formalization etc.) depend on contingency factors like size, task, environment, age of the organization etc.

7. Please explain how the culture of a country influences the institutions in that country, and vice versa.

Answer: Culture influences institutions because the rules and regulations can be seen as expressions of the preferences of a people. But the institutions also influence culture, as some institutions play an important role in the socialization of young citizens.

8. Two key characteristics of Japanese management are the seniority system and the life-time (or career) employment system. (a) Please describe the seniority system and the lifetime employment system.

Answer: The seniority system implies promotions and pay-raises on the basis of the number of years spent in the firm (rather than performance). The lifetime employment system means that core employees are recruited directly from college and expected to stay within the firm until their retirement.

8. Two key characteristics of Japanese management are the seniority system and the life-time (or career) employment system. (b) Explain why these two “pillars” of the Japanese management are strongly linked.

Answer: If you recruit employees for their entire career, it’s better to promote them in small steps, and you don’t want to discourage people, so everybody can continue to make small steps ahead.

9. Explain the role of trust in economic development

Answer: Trust provides options for control in social networks, it is linked with the facilitation of highly uncertain transactions, and reduces the uncertainty involved in these kinds of transaction, especially the relational risk involved