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Essay, 18 pages (4500 words)

Crosscultural management

Cross-Cultural Management ResearchCross-Cultural Management Research Riordan Manufacturing (Riordan) is a fictional multinational company that opened a facility in Hangzhou, Province of China (Scenario: Riordan Manufacturing). Global Organizations are companies that have the scope and presence of a working alliance with different countries (Dictionary. com, 2012). Learning Team A has researched eight companies: Cisco, Fed-Ex Corporation, General Motors, Hershey Company, Krispy Kreme Doughnut Inc., Nike, Inc.

, and Nestle??™ and Starbucks. The managing conflicts, cross-culture initiatives and strategies within these organizations have been researched, analyzed, and compared and contrasted against Riordan and with each of the other organizations. On October 2007 and October 2008 the supply chain for expenses in the United States rose from $750 million to more than $825 million; however the stores in the United States dropped 10 % within that same period. Because of operational cost rising and sales falling, Starbucks, similar to Riordan must develop a strategic plan to cut cost, improve the supply chain performance, and prepare for future success.

Starbucks??™ three-step plan included a plan for reorganization. Starbucks??™ success was fast and the company had to keep up with the pace of expansion.??? We had been growing so fast that we had not done a good enough job of getting the [supply chain] fundamentals in place,??? said Peter D. Gibbons, executive vice president of global supply chain operations (Cooke, 2012). The process of implementing a strategic plan began with reorganization and selecting key leaders. The noted efforts to cultivate diversity impact both organizations. In the strategic plan the companies saw that language was a barrier, however, ??? closely related to language barriers are cultural barriers (Hodgetts, Luthans, & Doh, 2005, p.

189). The companies??™ response is to fully implement a strategic plan. The next phase for both is to simplify the complex. Starbucks??™ approach is to align the supply chain functions by plan, source, make, and deliver. Separating divisions created the foundation for both Starbucks and Riordan to implement the plan and rollout the organizations structural changes. From this the ??? make??? and ??? deliver??? functions were established. The Make function was responsible for production and the deliver for transportation of products.

The establishment of the two divisions afforded the company leaders time to research contracts. The supply chain??™s functions revealed that further reorganization was due. As the transformation occurred, Starbucks began to reduce cost and improving efficiencies. Simultaneously, the manufacturing side created efficiencies in the model used in delivering to the processing plants in the global manufacturing division. Starbucks and Riordan have established a concept; a single global logistics system. Bringing coffee from Latin America, Africa, and Asia, companies must implement cultural differences affecting negotiations.

With China in the forefront for Riordan, negotiations are critical. Collectively both companies required a strategic plan to complete operations; however without appropriate global negotiation as part of the strategic plan delays, which impact sales, would become the outcome. Cisco??™s environment and approach to culturally sensitive employees is part of the company??™s communication plan. Cultivating processes on an ongoing basis is a systemic approach for achieving communication through a culturally integrated and efficient workforce. Noted in the Riordan scenario and with Cisco this process is a task for both companies, however through achieving communication that connect departments is integral to production. With Cisco everyone on staff is empowered to act on behalf of the customer with Cisco??™s operations system.

In response to this issue Riordan wants to ensure this does not affect relations or production. Riordan promptly utilized Robert Lord??™s skills in Hangzhou (Apollo Group, 2012). Riordan??™s proactive approach to achieving successful communication with various nationalities is to offer perks such as, free cafeteria meals and performance-based incentives. Riordan began by assessing the input and desires of the workforce. Knowing that through motivation, training, and communication the strategic goals are achievable. Cisco states they are capable of connecting outsources supports, services, and product delivery due to the company??™s ability to communicate (Cisco, 2012). Common to both Cisco and Riordan, global change is imperative to growth.

As Riordan has mirrored Cisco??™s concept of low labor, high production, and effective communication both companies achieve this. ??? The global environmental challenge transcends borders and impacts us all. It is one that no single country, region, or group can solve alone. Cisco works to combine the power of innovation with collaboration to create a sustainable model for addressing global environmental challenges. Innovation is at the heart of what Cisco does, and collaboration– both internally and externally–helps fuel new ideas across Cisco along with customers, industry consortia, governments, and non-governmental organizations (NGOs)??? (Cisco, 2012). This would not be possible without the use of achieving communication both internally and globally. Using the right language; in the right means yields outcomes for both companies. According to Craver from the Winston-Salem Journal (February 2011), Krispy Kreme Doughnuts Inc.

has a growth strategy that included doubling its international stores (para. 1). ??? Jeff Welch, the president of the company??™s international-store operations, said the goal is to have close to 1, 000 international shops, up from 421 on Oct. 31??? (Craver, 2011, para. 2). Krispy Kreme??™s dilemma is convincing international markets such as China, Kuwait, and Turkey that Krispy Kreme doughnuts is a lifestyle and not just an occasional treat.

Many analysts are skeptical of Krispy Kreme??™s initiative because of cultural differences and values. Michal Lord, an associate professor of management at Wake Forest University, said, ??? But maybe even more significant is that the model also taps into local entrepreneurs??™ deep knowledge of the specific country markets, including key issues such as store sites and local customers??™ tastes.??? Krispy Kreme is unique in that they are a franchise organization. The company allows individuals to own stores under the Krispy Kreme Franchise Agreement. Krispy Kreme has developed a department specifically with the intention of supporting and training international store managers.

The international franchise operations managers and director provide direct support to operations teams for the Krispy Kreme international franchise area developers. The international franchise operations director is responsible for ensuring continued development in the market. Krispy Kreme provides International Management Development courses in each of its foreign locations. An international sourcing manager oversees and administers purchasing strategies that ensure international franchise customers are receiving the best prices and quality products needed for the success of the international franchise. Krispy Kreme??™s international teams work to make operating a store more manageable for international stores. Each region that Krispy Kreme markets in has an international franchise operations director who is the organization??™s operation consultant dedicated to the success of the international location. The international operations director assists with store level strategic planning, consults on marketing strategies, assists in store training, identifies opportunities for the franchisee to build customer-focused teams, and helps to implement efficient and effective directives from corporate. Each director is trained to understand the franchise region in which they working to provide the best resources and support for the international store.

According to ??? Nike, Inc.??? (2012), Nike works in more than 160 countries. Nike employees close to a million people through suppliers, shippers, retailers, and other service providers. This includes more than 35, 000 employees across six continents. Nike believes that each of its employees make their own contribution to fulfil the company??™s mission statement: ??? to bring inspiration and innovation to every athlete in the world??? (para.

5-6). Understanding Nike??™s diverse base of suppliers is significant while defining its people strategies. Nike understands that diversity and inclusion mean different things to different people in different regions. According to ??? Nike, Inc.??? (2012), ??? We believe diversity drives innovation. And if done effectively, managing diversity and working together can lead to a competitive advantage??? (Doing Business with Nike, para. 2).

Nike??™s dilemma is how the company becomes globally diverse and inclusive. Nike??™s strategy is based on three objectives; how the company attracts the best talent in the world, how the company retains talent and how does the company create a work environment that maximizes employee potential. According to ??? Diversity And Inclusion??? (2012), ??? We can achieve our goal of recruiting and retaining a best-in-class diverse workforce by investing in new approaches, policies and processes, implementing new systems, and changing the way behave??? (p. 2). Nike relies on partnerships with external agencies to enhance the company??™s ability to be a stronger internal partner. Developing partnerships will help to create diverse and inclusive teams. Developed teams will generate the creativity and innovation necessary to enhance consumer experiences.

Nike has recognized the necessity for upgraded systems and structures. The company has implemented a global data management system that helps the company to collect, analyze, and report business information. As Nike has grown domestically and internationally a better understanding of respect for diversity and inclusion has come into play. For Nike to continue to be competitive, the company relies on real data provided by employees. According to ??? Diversity And Inclusion??? (2012), Nike has ??? developed diversity metrics focused on representation, hiring promotion and retention of women globally, and people of color in the U. S. ??“ two communities of employees that we felt were underrepresented in leadership roles??? (p.

2). Nike has separated the function of diversity and inclusion from human resources. The company added the position of vice president of Global Diversity and Inclusion with the departmental responsibilities to include leading the company??™s diversity and inclusion strategy to help growth the business and leverage workforce synergies. Nike??™s chief executive officer challenged the leadership team to identify and drive diversity and inclusion opportunities. According to ??? Diversity And Inclusion??? (2012), as managers increased their awareness and understanding and we began to link diversity and innovation to the business case, the dialogue expanded from a compliance approach to a broader one of connecting deeper with diverse communities??? (p.

2). When people think of chocolate candy bars, most people will think of one of the most infamous one, Hershey??™s, born in Hershey, Pennsylvania. From a humble beginning of creating chocolate covered caramels, as Milton Hershey??™s Lancaster Caramel Company to becoming the Hershey Chocolate Company with 114 different types of candy just two years later. Hershey Chocolate Company has annual revenue of more than five billion dollars.

Hershey??™s plan is to cut 15 hundred jobs and moving about ten percent of their operation outside of the United States into Mexico. This will be a three year restructuring plan where is it will save about one hundred and 99 million dollars per year. This plan also includes building a new plant in Mexico. Hershey will shut done one of the sections in Hershey, Pennsylvania and also closing down the operations of the plant in Oakdale, California. They will be moving these jobs to Monterrey, Mexico.

In order to make this new plant a success it will be important to hire the right people for the jobs. Like Riordan Manufacturing the Hershey Chocolate Company must be able to create culturally sensitive work environment, since more than just Mexicans live in Mexico. There will need to be a respect among the different cultures in the company. Once the employees have been hired it will be important for Hershey to have a working relationship with them. It will also be a good idea to create a way to measure if the goals of creating a culturally sensitive employee and to make sure they still remain efficient. The issues that plague Hershey Chocolate Company are the same one that plagues any company that decides to outsource jobs to other countries. It quickly becomes a public relations nightmare.

When the Hershey Company in Oakdale, California closed down, this put the whole plant of five hundred and seventy- five workers out of work. The town has an annual event called the Chocolate Festival every year, which draws many people too. One man in particular wore a t-shirt stating, ??? Where did ??? the great American candy bar??™ go??? On the back of the t-shirt answers the question, ??? Mexico!??? Nestle is the world??™s leader in nutrition, health, and wellness.

Nestle??™s mission is ??? Good food, Good Life.??? Nestle operates in eighty different countries, and have about 500 facilities which produce a variety of their products. When most people think of Nestle their first thought is their famous Nestle Crunch bar. Many people might not understand that they also produce baby foods, bottle water, cereals, coffee, quick meals, dairy, drinks, healthcare nutrition, ice cream, pet care, sports nutrition, and weight management. If it can be consumed, then most probably it was produced by Nestle Company.

There is no wonder why they are willing to invest in Brazil by opening a new beverage factory in the state of Rio de Janeiro. This project will create more than one thousand jobs in the job market. This will be one of the thirty one production factories Nestle has opened in Brazil, and the third one in Rio de Janeiro. Once the factory opens it will time to hire the needed man power to get it up and running.

This will create one thousand jobs that will directly and indirectly with the company. According to the Chief Executive Officer of Nestle Brazil states, ??? The State of Rio de Janeiro is of increasing importance for us. This factory will allow us to supply the market in Rio de Janeiro and the states of south east Brazil even more efficiently.

??? Along with Riordan Manufacturing it will be important for Nestle to establish a cultural tolerant work environment to ensure that every respects each other??™s cultural differences. Rio de Janeiro has a wide variety of cultures when it comes to their workforce. This will mean in order to have harmony with all their different cultures it will be important for the company to instill an aspect of cultural tolerance amongst their employees. Having 31 production factories in Brazil, Nestle has an effective relationship with their workers in their factories. They will need to make sure they create a way to measure is the company is meeting their goals to creating a cultural tolerant environment. Fed Ex is one of the largest transportation companies providing fast, reliable delivery to more than 220 countries and territories (About Fed Ex, 1985-2012). Fed Ex also known as Federal Express Corporation was founded by Fredrick W. Smith in 1971 (Fed Ex Corporation).

In 1984 Fed Ex Corporation aggressively entered the International Market (Fed Ex Corporation). Fed Ex Corporation similar to Riordan has operations in China and has cultural issues. Fed Ex Corporation staff includes people of various origins and nationalities at every level and every sector (About Fed Ex, 1985-2012). Fed Ex Corporation was recognized Most Popular Employer in China December 2011 (Fed Ex Corporation). Fed Ex Corporation faced its cultural issues by signing a corporate diversity resolution. The corporate diversity resolution is promote diversity via its social policy and human resources management (About Fed Ex, 1985-2012).

The outcome of the resolution after it was launched in 2004 was incorporate nondiscrimination in their workforce strategies (Fed Ex Corporation). The resolution took place first in France and brought partnerships that resulted in 280 new employees (Fed Ex Corporation). Expanding overseas proved to be a difficult move for Fed Ex Corporation. Fed Ex Corporation lost $ 74 million dollars in 1985 to 1989 (Fed Ex Corporation). Fed Ex Corporation??? s organizational structure believes in best practices. The best practices include relationship stewards, a sourcing group, and monthly meeting (Levinson, 2006). Relationship steward is Fed Ex appoints a person to look overreach vendors relationship.

Sourcing Group is to ensure that Fed Ex is getting the best deals from their vendors. Monthly meetings- the vital information shared -discussing of practices that work when selecting potential vendors. The Fed Ex Corporation??™s background to manage a global network of people and technology demands that they face every day. Fed Ex works hard to lower any barriers to free trade in the countries (About Fed Ex, 1985-2012). Fed Ex strives to be the best in the environmental industry. Fed Ex is proud to be one of the first companies to make investments in large scale solar power, renewable energy purchases and hybrid electric trucks and other environmental efforts (About Fed Ex, 1985-2012).

General Motors (GM) is an American multinational corporation (GM Company, 2012). GM is the world??™s largest auto company by production volume (GM Company, 2012). One issue that GM is facing that is shared with the Riordan scenario is cultural issues.

One of GM??™s cultural issues consists of ethics and compliances. GM focuses on leveraging a training and communication program. GM developed two training modules for its employees.

After training the parties are speaking to each other in a comfortable way. Communication brings understanding of the workforce environment. Another similar characteristic is that GM??? s plant in China is the best selling auto maker. Shanghai GM, a joint venture between Chinese company SAIC and General Motors was created in 1997 (General Motors Corporation). The results that GM made promised to make fundamental changes.

Fundamental changes consist of turning around its poor decision-making processes (General Motors Corporation). GM provides a positive environment with diversity of different cultures, experiences, ideas and backgrounds (General Motors Corporation). GM??™s organizational structure consists of design, build, sell and reinvest (GM Company, 2012). The structure explained in detail- Design is when research and development team helps reduces some products (GM Company, 2012). Build in an environmentally and socially responsible manner (GM Company, 2012). Sell- Offer a variety of vehicle choices to the customers (GM Company, 2012).

Re-invest-to enhance the community at-large by giving back. A multinational organization faces challenges of competition which adapts flexibility. GM adapted five principles to guide them in everything they do: Safety and Quality first- vehicles are tested extremely in the lab (GM Company, 2012). Create Lifelong customers- Listen to their customers??™ requests and suggestions (GM Company, 2012). Innovate- Challenge to lead in everything they do.

Deliver long ??“ term investments- Operating on the highest integrity can offer the customers the world??™s best vehicles that are dependable, smart, and affordable. Make a positive difference- Always find new ways to improve an area, or achieve as a team to in the workforce to keep the momentum a positive change. Key Findings; Compare and Contrast ??? Global firms need an understanding of cultural dynamics to plan their strategy, to locate production facilities and suppliers worldwide, to design and market culturally appropriate products and services, as well as manage cross-cultural interaction throughout the organization??? (Hodgetts, Luthans, & Doh, 2005, p.

167). Each company previously benchmarked is in different phases of its organizational evolution. There is a variation of multiculturalism and diversity in each company that is directly dependent on the phase that the company is in. Managing multiculturalism and diversity successfully will ensure competitive advantage within each company??™s industry. ??? Success in the international arena often is greatly determined by an MNCs ability to manage both multiculturalism and diversity.

19 Both domestically and internationally, organizations find themselves leading workforces that have a variety of cultures (and subcultures) and consist of a largely diverse population of women, men, young and old people, blacks, whites, Latinos, Asians, Arabs, Indians, and many others??? (Hodgetts, Luthans, & Doh, 2005, p. 165). ??? Culture can affect communication in a number of ways, and one way is through the impact of cultural values??? (Hodgetts, Luthans, & Doh, 2005, p. 192). It is important for each of our benchmarked companies to understand that when dealing with people from other countries it is imperative that cultural values are understood prior to expanding business in other countries.

The impact that culture has when doing business with other companies is significant. Cultural differences may create misinterpretations of what was being conveyed, may affect every day activities within the business, and may create a difficulty of interpretation. Cisco, Fed-Ex Corporation, General Motors, Hershey Company, Krispy Kreme Doughnuts Inc,, Nike, Inc., Nestle??™ and Starbucks have all incorporated a formal process of identifying cultural values among international regions and incorporating them into the organization??™s business strategies. The companies illustrated in this paper demonstrate the readiness of global organizations to adopt and develop cross-cultural initiatives. ??? Understanding that communication is the process of transferring meanings from sender to receiver??? (Hodgetts, Luthans, & Doh, 2005, p. 180).

On the surface, this appears to be a fairly straightforward process. Cisco, Fed-Ex Corporation, General Motors, Hershey Company, Krispy Kreme Doughnuts Inc., Nike Inc., Nestle??™ and Starbucks have all incorporated a communication plan or protocol. Information is transferred via communication, both oral and written. The meaning or context of the communication is relevant with the companies examined.

From every level of each organization reviewed critical though was taken with respect to the communication protocols. Each company assessed demonstrates the usefulness of verbal styles in the company to support global business. Doing business globally, companies have to become prepared to communicate directives and strategies to subordinates. ??? The primary purpose of the manager-initiated communication flow is to convey orders and information. Managers use this channel to let their people know what is to be done and how well they are doing. Doing business in Asian countries one must note that downward communication is less direct than it is in the United States (Hodgetts, Luthans, & Doh, 2005).

When addressing non-native speakers, use language that is simple and easy to understand in the workplace. The conversation should allow for the listener to ask questions. Conversely upward communication ??? is the transfer of information from subordinate to superior. The primary purpose of this subordinate-initiated upward communication is to provide feed-back, ask questions, or obtain assistance from higher-level management??? (Hodgetts, Luthans, & Doh, 2005, p. 186). For communication to work in the companies evaluated ??? organizational culture has been defined in different ways.

In its most basic form, organizational culture can be defined as the shared values and beliefs that enable members to understand their roles and the norms of the organization??? (Hodgetts, Luthans, & Doh, 2005, p., 154). As seen in the analysis, all of the companies evaluated depend on manager to instill the culture of the company.

The way a company manages multiculturalism and diversity solicits engagement from the workforce. The management of the organization describes the manner in which employees work along-side one another. It is noted that some companies embrace two separate cultures to prevent the influence of one business culture on another (Hodgetts, Luthans, & Doh, 2005). Doing business in Asia is vastly different from business in India. Knowing the importance of recruiting the right supports to ensure compliance with international laws, a communication plan, and a culture that embraces diversity is part of the barrios and success with Cisco, Fed-Ex Corporation, General Motors, Hershey Company, Krispy Kreme Doughnuts Inc., Nike Inc.

, Nestle??™ and Starbucks. Both Krispy Kreme and Nestle both are trying to open more facilities throughout the international marketplace, in order to do this they will need make a big impact on better understanding the impact of cultures. According to the World Business Culture, who offered their experience with business culture, states that, ??? when working in the global commercial environment, knowledge of the impact of cultural differences is one of the keys to international business success.

Regardless of the sector in which you operate ??“ finance, technology, or computers and consumer electronics ??“ global cultural differences will directly impact on you and the profitability of your business. Improving levels of cultural awareness can help companies build international competencies and enable individuals to become more globally sensitive.??? Just like Riordan, both Krispy Kreme and Nestle are trying to open new facilities overseas. It is important for these companies to be able to convince the international markets that they will be able to adapt to the different cultures. It will become essential for the upper management to start a plan to ensure that these facilities to be able to train their managers to be ensure that they instill the need to be more culturally tolerant of other cultures.

Krispy Kreme believes that it is important to have International Management Development courses in each of its foreign locations. This will ensure that they teach the importance of the respect of cultural differences. According to Nestle, ??? As of 2011, a modular training program will be rolled out on the various components of the Corporate Business Principles. The depth and focus of the trainings will be established in accordance with the materiality for the different functions within the company.

??? This will help train managers and employees to help teach them in human rights and the respect of cultural differences. It will be important for Riordan to come up with a similar program to help with the training of their upper management to help with the culturally tolerance in the workplace. With these facilities there will be more than one cultural presence, but the presence of many different cultures. It will be important in the success of these companies to be able to have cultural patience. Organizational culture is a profile that shares worth and certainty of an organization.

Hershey??™s profile is the global leader in chocolate and sugar confectionary (The Hershey Company). Fed Ex Corporation??™s profile is a fast, reliable delivery service that delivers packages around the world. General Motor Corporation??™s profile is one of the world??™s largest producers in the automotive industry. Nestle??™s profile is world??™s leading nutrition, health and wellness company (Nestle- Good Food Good Life).

Missions are used to identify an organization??™s profile: ??? Respect and Promote Diversity- Hershey: We must all work to create a positive and diverse workplace (The Hershey Company). ??? Fed Ex Corporation: Corporate diversity is strategized through best practices. ??? General Motors Corporation: Diversity is integrated as part of our culture and success (GM Company, 2012).

??? Nestle??™s to evolve and adapt to a changing world-reflect the ideas of fairness, honesty and general concern for people (Nestle- Good Food Good Life). Mergers and acquisitions within the international industry create integrations that consist of different organizational cultures that can be a critical concern in international management (Hodgetts L. &., 2005). There are rumors that Hershey Company merged with Nestle??™s (Gammtloft, 2010). ??? Mergers and acquisitions are a future enabler for Nestle??? said CEO of Nestle Jim Singh (Gammtloft, 2010).

Fed Ex Corporation had acquired Kinko??™s and it claimed to give them access to business lacking regular pick up from a Fed Ex driver (Fed Ex Corporation, 2012). General Motors Corporation and Chrysler LLC have had talks of negotiation of merging together and it??™s still in the works of 50-50 chance (Chrysler General Motors discuss Merger and Acquistion, 2008). The strategies of managing across cultures presented by the benchmarked companies include commitment to globalization imperative. Globalization imperative is belief worldwide approach of doing business is the key to both efficiency and effectiveness (Hodgetts L. &., 2005). Examples: Nestle??™s: At all stages of the product life cycle we strive to use natural resources efficiently (Nestle- Good Food Good Life).

Fed Ex Corporation: Chinese Panda touchdown in Paris safely on Fed Ex Express-Fed Ex Corporation subsidiary (Fed Ex Corporation, 2012). Conclusion Riordan must mitigate cross-cultural opportunities at the Hangzhou Province facility to ensure a competitive advantage within the plastics industry. ??? As a result, international management, the process of applying management concepts, and techniques in a multinational environment, is rapidly gaining importance??? (Hodgetts, Luthans, & Doh, 2005, p. 2). Learning Team A team members have individually identified, benchmarked, and analyzed successful international organizations that have experienced issues similar to Riordan. Cisco??™s, Fed-Ex Corporation??™s , General Motors??™, Hershey Company??™s, Krispy Kreme Doughnut Inc.

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