Identify the country cluster (as identified in the text) for both your Domestic and Global environments; choose different clusters.

Must focus on Delta Airlines

Must have at least 400 words and 4 academic and scholarly sources cited in APA format.

Prompt:

1. Identify the country cluster (as identified in the text) for both your Domestic and Global environments; choose different clusters.

2.Include sociocultural factors that may help and hinder the company and its operations in 2 different cluster countries.

3.Evaluate their successes and/or failures.

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Lessons  Lesson 6: The Sociocultural Environment  Lesson

Lesson 6: The Sociocultural Environment Lesson

 

The Socio-Cultural (S-C) Environment

In Week 6 we will discuss the impact of the Socio-Cultural Environment (S-C) on our selected Best and Worst companie

domestically and in “country clusters” where they choose to compete. After completing these assignments, you should

have added to your repertoire as a brilliant conversationalist at cocktail parties.

We all probably had an intuitive sense of what we mean by the S-C Environment, but perhaps this may have changed o

become enhanced as result of our Forum discussions and researching our written assignments in previous weeks. Most

US multi-nationals have developed a vast amount of corporate knowledge and expertise as a result of operating

globally for years. Many US companies have addressed their concerns about navigating the S-C Environment in foreign

markets by hiring foreign nationals and consultants and/or partnering with foreign companies to make entry into

foreign markets more successful. Small businesses and entrepreneurs often lack this knowledge and may,

unfortunately, be uninformed about such matters.

The S-C Environment in Country Clusters

The concept of country clusters probably took some of you by surprise. US multi-nationals tend to think (and report

financial results) in terms of clusters when developing strategy, marketing plans, staffing plans, etc. and actually are

required by the SEC to disclose financial results in clusters. A country cluster is a group of countries, not necessarily

contiguous, where the countries and their consumers may share quite similar S-C Environments. Canada and the US are

an indisputable example of a cluster, and some would argue that all, or most, of North and South America are one big

cluster.

The EU has tried to develop a similar homogenous S-C Environment to reduce trade barriers and thus become more

prosperous.  This has proven difficult, as culture, nationalism, language, currency, borders, taxes/tariffs and many othe

S-C differences have proven formidable obstacles. Other country clusters like South America, Asia and Eastern Europe

have their own S-C Environments and issues that make working with them challenging, and IMHO they cannot be

treated as homogenous clusters. For example, the S-C Environment in Japan, India and China are no way similar, even

though some consider them part of an Asian cluster.

It’s interesting to note that most US multi-nationals report their financial results by country cluster (or perhaps just US vs

non-US) rather than by individual country. It may be that regulatory bodies like the SEC and the FASB recognize that US

multi-nationals consider the details of their financial results at the country level highly proprietary and competitively

sensitive information and do not want it disclosed. The financial results may also be broken down to a “lines of

business” level of detail in the US, but probably not for country clusters. Again, this might be considered too sensitive

to disclose to the public and competitors. “Line of business” reporting breaks revenue (but usually not expenses) down

by some classification that makes sense to their operations.  For example, GE might report revenues by categories like

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Major Appliances, Jet Engines, Lighting, etc.

 

What  Classical Business Theorists Say About the S-C Environment

The Assignment Instructions suggest you use Geert-Hofstede as a framework for discussing the S-C Environment with

respect to the best and Worst companies you choose and the “country clusters” the operate within. Gerard Hendrik

(Geert) Hofstede (born October2, 1928 in Haarlem) is a Dutch social psychologist, former IBM employee, and Professo

Emeritus of Organizational Anthropology and International Management at Maastricht University in the Netherlands,

well known for his pioneering research on cross-cultural groups and organizations.

His most notable work has been in developing cultural dimensions theory. Here he describes national cultures as

describable along six dimensions: Power Distance, Individualism, Uncertainty Avoidance, Masculinity, Long Term

Orientation, and Indulgence vs. restraint. He is known for his books Culture’s Consequences and Cultures and

Organizations: Software of the Mind, co-authored with his son Geert Jan Hofstede.

You may find Dr. Hofstede’s work a little outdated. Not that his theories weren’t spot on         “back in the day”, but they

are not exactly revolutionary today. Another familiar, and even older, theorist is Abraham Maslow, creator of his

“hierarchy of needs”. Maslow and Hofstede together form the underpinning of how we think about societies and

consumers, domestic as well as foreign.

Another Classification of Theorists – the Futurists –Their Views on the S-C Environment

What is a futurist and why would I choose to discuss them in the context of “business theorists”? As I stated in another

lecture, most business theorists are more properly classified, in my not so humble opinion, as either economists

(Galbraith) or business practitioners (Jack Welsh). I will add another classification, the futurists, notably Alvin and Heidi

Toffler (“Future Shock” and “The Third Wave”), Steven Hawking (“A Brief History of Time”) and Thomas Friedman (“The

World is Flat”).

The Toffler’s shocked the world in 1970 with the publication of “Future Shock” (it rocked my world). In it, they

predicted startling new developments in science, technology, society and culture, most of which have already proven

true, others are on the horizon. More importantly, they advanced the viewpoint that the increasingly rapid pace of

change would disorient societies and obsolete, or at least destabilize, most of what we considered “truth” in 1970.

Toffler famously said “change is the only constant”. How right he was.

Tom Friedman is an author and op-ed columnist for the New York Times. In his book, The World is Flat, Friedman

recounts a journey to Bangalore, India, when he realized globalization has changed core economic concepts.] In his

opinion, this flattening is a product of a convergence of personal computers with fiber-optic micro cable with the rise o

work flow software. He termed this period as Globalization 3.0, differentiating this period from the previous

Globalization 1.0 (in which countries and governments were the main protagonists) and the Globalization 2.0 (in which

multinational companies led the way in driving global integration).

Steven Hawking may seem out of place in this list to many of you. He was best known as a theoretical physicist who

wrote books that were baffling to the layman (“A Brief History of Time”). In these scientific writings he was the first to

propose the existence of “black holes” in space and extensions of relativity theory. More recently, Hawking has begun

writing on topics of more general interest (and more readable) regarding trends (many of them S-C trends) taking place

and predictions on future developments.  These writings, while theoretical, may have great practical application to

business theory, strategy and policy.

As business students, you should become familiar with the works of the theorists I’ve mentioned and many more. You

may not see the practical, day-to-day application of these theories in business yet, but I would predict this knowledge

will give you increased confidence as you climb the corporate ladder or help start and develop new businesses.

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N E X TB A C K

Week 6 Take-Away

The take away this week is simple.  if you are involved in global business or are planning to enter a global market, plan

on having to deal effectively with the S/C Environment if you hope to prosper. And the concept of “country clusters”

may be a useful method of thinking about strategic issues, but beware of taking that concept too literally and ignoring

major differences between individual countries within a cluster.

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