Managing In Developing Countries Strategic Analysis and Operating Techniques

by Austin, James E.

• ISBN13: 9780743236294
• ISBN10: 0743236297
• Format: Paperback
• Copyright: 2002-01-15
• Publisher: Free Press

Summary

As consumers, suppliers, competitors, and capital users, the 142 developing countries in the world are of major and growing importance to more than 140,000 Western managers who do business with the Third World on a daily basis, often as partners in strategic alliances. Yet, other than theoretical articles in the economic development literature, there are few sources to which these managers, faced with a very different and difficult business environment, can turn. Now, building on 25 years as a teacher, researcher, and advisor to companies, governments, and international agencies in developing nations, James Austin presents the most complete and comprehensive analysis of the dynamics of the Third World business environment available today. Seemingly insurmountable obstacles confront a Western company setting up operations in a Third World country: governmental controls, rampant inflation and devaluation, cumbersome bureaucratic procedures for obtaining import licenses, skill scarcity, difficulties with training new employees in new technology -- and not least, the possibility that the entire venture could go up in the flames of a revolution. Through his lucid Environmental Analysis Framework -- a powerful, field-tested analytical tool -- Austin first systematically and masterfully examines these economic, political, cultural, and demographic factors at the international, national, industry, and company levels. The second and largest portion of the book comprises Austin's detailed, brilliantly insightful analysis of the most critical strategic issues and operating problems that managers will encounter in developing countries -- in governmental relations, finance, marketing, production, and organization -- together with a battery of tested operating techniques illustrated with numerous experiences of multinational companies operating in the Third World, such as Cummins Engine, Mitsubishi, PepsiCo, Ciba-Geigy, ICI, Nestle, and Philips. In his concluding chapters, Austin returns to his Environmental Analysis Framework to show managers how they should determine the scale and scope -- the projected financial investment and the degree of managerial involvement -- of their activity in a particular developing country; how they should decide on ownership strategy and the use of joint ventures; and how cultural factors will affect the structure of the projected enterprise. Finally, Austin offers his perspective on the evolving business environment in developing countries.

Author Biography

James E. Austin, Dr. Austin holds the Eliot I. Snider and Family Professor of Business Administration, Emeritus at the Harvard Business School. His most recent book is Social Partnering in Latin America (Harvard University Press), a collaborative research publication of the Social Enterprise Knowledge Network (SEKN).

Table of Contents

Preface	xi
The Management Challenge	1	(28)
What Is Different About Managing in Developing Countries?	1	(3)
Whom Is This Book For?	4	(1)
How Is the Book Organized	4	(2)
How Important Are Developing Countries to the International Economic and Business System?	6	(14)
How Diverse Are Developing Countries?	20	(6)
Conclusion	26	(3)
PART 1 Analyzing the Business Environment
Environmental Analysis Framework	29	(10)
Overview: Multiple Factors and Multilevels	29	(2)
Environmental Factors	31	(1)
Environmental Levels	32	(6)
Conclusion	38	(1)
The Environmental Factors	39	(37)
Economic Factors	40	(17)
Political Factors	57	(5)
Cultural Factors	62	(6)
Demographic Factors	68	(6)
Conclusion	74	(2)
Interpreting National Strategies	76	(32)
Environmental Factors and National Strategies	77	(4)
Historical Perspective	81	(1)
Defining National Strategies	82	(5)
Public Policies and Policy Instruments	87	(14)
Country and Company Example: Cummins Engine in India	101	(5)
Conclusion	106	(2)
Understanding Industry Structure and Competitive Dynamics	108	(39)
The Competitive Strategy Model	109	(2)
Government as Shaper of the Competitive Environment	111	(4)
State-Owned Enterprises	115	(11)
Business Groups	126	(6)
Local Firms and Cooperatives	132	(3)
Informal Sector Businesses	135	(3)
Multinational Corporations	138	(3)
The Development Process and Competitive Dynamics	141	(2)
Conclusion	143	(4)
PART 2 Managing the Functional Areas
Business--Government Relations: Managing the Mega-Force	147	(38)
Understanding Government Needs and Power: Political Mapping	148	(5)
Meeting Government's Needs: The Search for Congruency	153	(13)
Managing Government Relations: Strategic Approaches	166	(10)
Managing Government Relations: Operating Issues	176	(8)
Conclusion	184	(1)
Finance: Coping with Inflation, Foreign-Exchange Exposure, and Capital Scarcity	185	(46)
Inflation	186	(11)
Foreign-Exchange Exposure	197	(16)
Capital Scarcity	213	(15)
Conclusion	228	(3)
Production: Managing Technology	231	(39)
Offshore Production	232	(2)
Technology Transfer	234	(3)
Technology Choice and Adaptation	237	(24)
Local Procurement	261	(7)
Conclusion	268	(2)
Marketing: Adjusting the Marketing Mix	270	(43)
Product Policy	270	(6)
Pricing	276	(6)
Promotion	282	(7)
Distribution	289	(6)
Market Research	295	(4)
Global Marketing	299	(4)
Making It in the Export Market	303	(3)
Social Marketing	306	(5)
Conclusion	311	(2)
Organization: Assessing Entry, Ownership, and Cultural Effects	313	(46)
Entry Mode	313	(13)
Ownership Strategy	326	(19)
Culture and Organization	345	(12)
Conclusion	357	(2)
Toward the Future	359	(16)
The Evolving Business Environment	359	(11)
Critical Managerial Capabilities	370	(5)
Appendixes
Appendix A our Dimensions of Development: Country Values	375	(4)
Appendix B Four Dimensions of Development: Country Rankings	379	(3)
Appendix C Income Distribution	382	(2)
Appendix D Economic Cost-Benefit Analysis: Project Example	384	(19)
Notes	403	(50)
Index	453