Summaries: home page for business organization and economics

What is organizational behavior? - Chapter 1

Why is organizational behavior important?

To understand the importance of organizational behavior, it is important to look at history. Until the 1980s, business schools focused on the technical aspects of management, such as economics, financing and quantitative techniques. Human behavior and skills to deal with people were not seen as very important. But, since then, business schools became aware of the fact that interpersonal skills are very important when it comes to a manager's effectiveness. A lack of interpersonal skills can even lead to the top reason why employees fail to advance in their position.

In organizational behavior, one of the key principles is to improve interpersonal skills. When managers have good developed interpersonal skills, this will lead to attraction of more high-performing employees for the organizations. A second important benefit of studying organizational behavior is that it can help to make a workplace great, instead of just good. And, since it is known that companies that are seen as a 'good place to work' generate superior financial performance, it is good to make companies a good place to work. Thirdly, the quality of workplace relationships has strong connections to things such as job satisfaction, stress and turnover. Social relationships among coworkers and supervisors is also strongly related to overall job satisfaction, lower stress at work and lower intentions to quit. The fourth benefit of having knowledge about organizational behavior is that it can foster social responsibility awareness. This is important because corporate social responsibility (CSR) is an important topic. CSR will be discussed in Chapter 3.

Management and organizational behavior

The role of a

Chapter 1: International marketing within the firm

We are entering a new phase of globalisation in which an ultimate model for success does not exist and whereby companies from every part of the world compete. This chapter contains an introduction to globalization. We will discuss the process of developing the global marketing plan, the two main types of enterprises, the development of the concept of global marketing, global integration and market responsiveness, the value chain and global experimental marketing.

Globalisation: the trend of companies buying, developing, producing and selling products and services in most countries and regions of the world. It increases the companies’ competitiveness and facilitates innovation.

Internationalisation: doing business in many countries of the world, but often limited to a certain region, e.g. Europe. It is unlikely to be successful unless the company prepares in advance.

The process of developing the global marketing plan contains the decision whether to internationalize, deciding which markets to enter, deciding on the Market entry strategy, designing the global marketing programme and implementing and coordinating the global marketing plan.

There are two types of enterprises:

1. LSEs (Large Scale Enterprises): firms with more than 250 employees. Comprise 1% of all firms.

2. SMEs (Small and Medium-sized Enterprises): small firms have fewer than 50 employees; medium firms have fewer than 250 employees. Comprise 99% of all firms.

There are a few main qualitative differences between marketing and management style in SMEs and LSEs:

Resources:

• Financial: SMEs have a lack of financial resources due to limited equity.

• Business education/specialist expertise: SMEs have a lack of specialist expertise because managers are untrained in formal business disciplines.

Additionally, SMEs managers do not have knowledge about global marketing expertise. Therefore, the owners of SMEs are often closely involved with the firm’s processes.

Formation of strategy/decision-making processes: both the intended (or deliberate) strategy and the emergent strategy result in the realized strategy of a firm, Figure 1.3. LSEs mainly use the intended strategy and SMEs mainly use the emergent strategy. LSEs also use the approach logical incrementalism, Figure 1.4. They implement small adjustments, and when it is proved that they are successful further development of the strategy takes place. If the environmental change moves apart from the changes due to the incremental strategy, strategic drift arises. SMEs use

1. Does the company specify its target country?

Instead of targeting a region as big as, for example, Asia or Europe, company executives would be wise to specify which Asian country is targeted. Generalising a region would be unwise because customers are likely to identify on a national level. For marketing, bespoke marketing management is the keyword here because cultural norms, local laws, specific business practises and currency are different per country. Market research should be localised and focused on understanding local customer behaviour, market size, local competitors and where the company product can fit in this market matrix.

2. Is the company paying attention to internal data?

For a company to develop a global market strategy there are three important data points to look at:

1. What is the estimated opportunity available in that (specific) market?

2. What is the ease of doing business in that market?

3. What is the level of success already enjoyed in that market?

More often than not companies rely on external date for making decisions. But for question 2 and 3 internal company data is likely to provide a better answer. How much investment creates how many leads? What are the sales cycles? Answers to these questions are better sought within the company, since third-party data sources are not as familiar with the product, brand and customer of the company.

3. Are you adapting your sales and marketing channels?

Every company needs to tailor its channels to the local condition when entering a new market. Whatever might have worked in the home market, might not work abroad. When you are selling through social media, choosing the right platform per country is essential. Twitter might be popular in one country while another country has its own popular social channel. Another example is in countries with high cultural value attached to relationships, it might be wise to sell through local partners such as resellers instead of relying on direct sales methods. Relying in local data an in-country experts is highly recommended.

4. Are you adapting the product offering to the new