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How Didi Fought Uber in China and Won: Next, Taking on the World
Your discussion this week will focus on the case study about Uber and its competitive entry into the Chinese market (p. 560 in the textbook).
Reflecting on this week’s content focusing on ethical leadership, strategy, and alliances, discuss the following questions.
Why did Uber find the Chinese market so appealing?
What ethical considerations should be considered in addressing the decision made by leaders within each company?
Discuss the pros and cons of the merger between Didi and Uber China?
A case study is like a puzzle to be solved and here is a strategy for formulating your initial post:
Read the case study to identify the key issues and underlying issues. These issues are the principles and concepts of the course module, which apply to the situation described in the case study.
Study the facts and focus on relevant information; the case may have extraneous information not relevant to the current module.
Describe actions that would address or correct the situation and who should act upon what.
Draw from experience, course readings or real-life experience.
Discuss the concepts, principles, and theories from your textbook. Cite your textbooks and cite any other sources if appropriate.
Your initial post should address all components of the question with a 500 word limit.
Reply to at least two discussion posts with comments that further and advance the discussion topic.
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Chapter 11
Management Decision and Control
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Learning Objectives
• Provide comparative examples of decision
making in different countries
• Present some of the major factors affecting
the degree of decision-making authority
given to overseas units
• Compare and contrast direct controls with
indirect controls
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Learning Objectives (continued)
• Describe some of the major differences in
the ways that MNCs control operations
• Discuss some of the specific performance
measures that are used to control
international operations
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Global Online Retail: Amazon versus
Alibaba
• Competitive strategies
– Alibaba is a conglomerate, whereas Amazon
specializes in business-to-consumer sales
– Alibaba acts as a facilitator for third-party sellers,
whereas Amazon acts as a direct merchant itself
• Geographic positioning of both companies
affects their potential future growths
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Managerial Decision-Making Processes
• Involves choosing a course of action among
alternatives
• Often linear but looping back is common
• Degree of managerial involvement depends
on the:
– Structure of the subsidiaries
– Locus of decision making
• Can be centralized or decentralized
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Figure 11.1 – Decision-Making Process
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Table 11.1 – Factors That Influence Centralization or
Decentralization of Decision Making in Subsidiary Operations
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Cultural Differences in Decision Making
• How managers view time in the decisionmaking process
– French managers tend to spend ample time on
searching for and evaluating alternatives
– Danish managers want to act first and take
advantage of opportunities
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Cultural Differences in Decision Making
(continued 1)
• Germans and Scandinavian countries both
have codetermination
– Codetermination: Legal system that requires
workers and their managers to discuss major
decisions
– Germans tend to be fairly centralized, autocratic,
and hierarchical
– Swedes focus more on quality of work life and the
importance of the individual in the organization
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Cultural Differences in Decision Making
(continued 2)
• Japanese are different from Europeans though
they employ a long-term focus
– Use the following decision-making processes:
• Ringisei: Decision making by consensus
• Tatemae: Doing the right thing according to the norm
• Honne: What one really wants to do
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Research Findings on Decision Making
• Swedish teams
– Higher team orientation, flatter organizational
hierarchies, and open-minded and informal work
attitudes
– Transparent and less formal decision making
• German teams
– Willing to accept a changed or unpopular decision
and have clearer responsibilities for the individual
– Faster in decision making as it is largely dominated
by the decision authority of an expert in the field
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Total Quality Management (TQM)
• Organizational strategy and accompanying
techniques that result in the delivery of highquality products or services to customers
• Critical to achieve world-class competitiveness
• Has a big impact in the manufacturing area
– Employs concurrent engineering or interfunctional
teams to develop new products
• Used by MNCs to tailor their output to
customer needs
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Total Quality Management Techniques
• Employee empowerment
– Empowerment: Gives individuals and teams the
resources, information, and authority needed to
develop ideas and effectively implement them
• Rewards and recognition
– Merit pay, discretionary bonuses, pay-for-skills
and knowledge plans, plaques, and public
recognition
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Total Quality Management Techniques
(continued)
• Ongoing training
– Takes a wide variety of forms
• Ranges from statistical quality control to team meetings
designed to generate ideas for streamlining operations
and eliminating waste
– Objective is to apply kaizen, which is a Japanese
term for continuous improvement
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Decisions to Attack the Competition
• Examples
– Ford Motor Company’s decision to challenge other
automakers and to be a major player in
developing markets, such as Asia and Africa
– Audi company’s decision to target younger
professionals in established markets
– BMW company’s decision to focus on providing
more options and personalization for consumers
– Mercedes company’s decision to go for a lowestcost strategy
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ISO 9000 Certification
• Indirectly related to TQM
– To ensure quality products and services
• Examines design, process control, purchasing,
service, inspection and testing, and training
• Necessary prerequisite to doing business in
the EU
• Screening criterion for getting business in the
U.S. and around the globe
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Decision Making and Controlling
• Interlinked functions
• Controlling
– Process of evaluating results in relation to plans or
objectives and deciding what action, if any, to take
– Types of control
• Internal and external control
• Direct and indirect controls
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Figure 11.2 – Models of PC Manufacturing Traditional Model
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Figure 11.2 – Models of PC Manufacturing Direct Sales Model
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Figure 11.2 – Models of PC Manufacturing Hybrid Model
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Control Problems
• Conflict between the objectives of the
overseas operation and the MNC
• Disagreement in the objectives of joint
venture partners and corporate management
• Variance in the degree of experience and
competence in planning among managers
• Basic philosophic disagreements in the
objectives and polices of international
operations due to cultural differences
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Internal and external control
• Internal control – Focuses on the things that
an MNC does best
• External control – Ensures that there is a
market for the goods and services that it is
offering
– By finding out what the customers want and be
prepared to respond appropriately
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Table 11.3 – Impact of Internal- and ExternalOriented Cultures on the Control Process
Source: Adapted from Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding
Diversity in Global Business, 2nd ed. (New York: McGraw-Hill, 1998), pp. 160–161.
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forwarded, distributed, or posted on a website, in whole or part.
Direct and Indirect controls
• Direct controls – Use face-to-face or personal
meetings for monitoring operations
– Example – Top executives visit overseas affiliates to
learn of problems and challenges
• Indirect controls – Use reports and other
written forms of communication to control
operations
– Example – Monthly operating reports
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Financial Statements Required from
Subsidiaries for Indirect Controls
• Statements prepared to meet the national
accounting standards and procedures
prescribed by the host country
• Statements prepared to comply with the
accounting principles and standards required
by the home country
• Statements prepared to meet the financial
consolidation requirements of the home
country
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Approaches to Control
• Major differences among countries
– Great Britain
• Financial records were sophisticated and heavily
emphasized
• Top management tended to focus on major problem
areas and not involve in specific matters of control
• Control was used for general guidance than for
surveillance
• Operating units had a large amount of marketing
autonomy
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Approaches to Control (continued)
– Germany
• Managers employed very detailed control and focused
attention on all variances
• Managers placed heavy control on production and
stressed operational efficiency
– France
• Managers employed control systems closer to that of
Germans than to the British
• Control was used more for surveillance than guidance
and was centrally administered
• Less systematic and sophisticated system
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Approaches to Control: U.S. Firms
versus European Firms
• U.S. firms
– Measure quantifiable,
objective aspects
– Need precise plans
and budgets in
generating standards
for comparison
• European firms
– Measure qualitative
aspects
– Need high levels of
knowledge about
appropriate behavior
in supporting the
goals of the firms
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Approaches to Control: U.S. Firms
versus European Firms (continued)
– Need large central
staffs and centralized
information-processing
capability
– Require less
decentralization of
operating decision
making
– Favor long vertical
spans between parent
and subsidiary firms
– Need capable
expatriate managers
willing to spend time
abroad
– Require more
decentralization of
operating decision
making
– Favor short vertical
spans between parent
and subsidiary firms
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Performance Measures for Control:
Financial Performance
• Measured by profit and loss and return on
investment
– Profit is an important part of ROI calculation
• Amount of profit is directly related to how well or
poorly a unit is judged to perform
– Can be affected by fluctuations in currency value
• If a country devalues its currency, subsidiary export
sales will increase
• If a country revalues its currency, export sales will
decline
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Performance Measures for Control:
Quality Performance
• Quality control (QC) – Major function of
production and operations management
– Achieved through quality circles
• Quality control circle (QCC): Group of workers who
meet on a regular basis to discuss ways of improving
the quality of work
• Example
– Reasons why Japanese goods are of high quality
• Minimal worker error, effective use QCCs, use of early
warning systems, use of training overkill, and use of
cutting edge technology
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Performance Measures for Control:
Personnel Performance
• Common approach is the periodic appraisal of
work performance
• Variations are found across countries in:
– Methods used in evaluations
– How the control actually is conducted
– How rewards and monitoring of performance are
handled
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Performance Measures for Control:
Personnel Performance (continued)
• Assessment centers: Identifies individuals
with the potential to be selected for or
promoted to higher-level positions
– Involve the following simulation exercises:
• In-basket exercises that require managerial attention
• Committee exercises that require candidates to work as
a team in making decisions
• Business decision exercises that make participants
compete in the same market
• Preparation of business plans and letter-writing
exercises
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World’s Most Admired Firms
• Common themes based on the analysis from
the consultants at the Hay Group
– Top managers take their mission statements
seriously and expect everyone else to do the same
– Success attracts the best people, and the best
people sustain success
– Top companies know precisely what they are
looking for
– Firms see career development as an investment,
not a chore
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World’s Most Admired Firms (continued)
– Whenever possible, these companies promote
from within
– Performance is rewarded
– Firms are genuinely interested in what their
employees think, and they measure work
satisfaction often and thoroughly
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Be the International Management
Consultant
• If you were a foreign investor, would you want
to invest in a consumer electronics company
in Japan?
– Does the fact that the company has had past
problems requiring government intervention
affect your initial decision?
– How does it impact your decision that you would
be competing with a government-backed
company during the bid process?
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Review and Discuss
1. A British computer firm is acquiring a smaller
competitor located in Frankfurt
– What are two likely differences in the way these
two firms carry out the decision-making process?
• How could these differences create a problem for the
acquiring firm?
– Give an example in each case
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Review and Discuss (continued 1)
2. Which cultures are more likely to focus on
external controls?
– Which cultures would consider direct controls
more important than indirect controls?
3. How would you explain a company’s decision
to use centralized decision-making process
and decentralized control process,
considering the two are so interconnected?
– Provide an industry example of where this may
occur
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Review and Discuss (continued 2)
4. How are U.S. multinationals trying to
introduce total quality management into
their operations? Give two examples
5. Would a U.S. MNC doing business in
Germany find it easier to introduce TQM
concepts into German operations, or would
there be more receptivity to them back in the
United States? Why?
– What if the U.S. multinational were introducing
these ideas into a Japanese subsidiary?
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Review and Discuss (continued 3)
6. In what ways could an accelerated decisionmaking process harm a company?
– Using Figure 11–1, which stage(s) do you think
would be most in danger of being overlooked?
7. A company does a personnel performance
evaluation by reviewing the financial
decisions the management has made,
specifically focusing on ROI
– How is this approach beneficial to the company?
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forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 4)
– Which aspects could the company be neglecting?
– Which cultures are most likely to employ this
method?
– Which cultures would avoid this tactic?
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