International management: An institutional perspective
Few firms remain untouched by the globalisation of markets, supply chains and information. More than ever before, managers are required to sell and buy goods and services in other countries, to manage integrated operations around the world and to work with individuals and firms from many different countries. The balance of economic power is also shifting with many predicting that China and India will soon come to dominate the world economy. At the same time, there continue to be important and complex differences between countries in the way businesses are structured and managed and in the legal, economic and political structures that managers and firms in those countries have to deal with.
It is common to talk about cultural differences between countries and how these affect business and management. This is only part of the picture, and possibly the less important part.
In this free course, we focus on a different perspective: institutional differences between nations and regions. There is evidence that institutional differences may be more important and far reaching in their effects on how businesses are structured and managed than national cultures. We will consider below what we mean by institutions in some detail. In brief they are the ‘social facts’ of the world in which we live; they rest on relatively self-sustaining patterns of social attitudes and behaviour. Examples of institutions include money, marriage, legal frameworks, government, higher education, schools and management. These social facts are facts only so long as enough of us believe in them. However, these institutions vary in systematic ways between different social groups, not least between nations.
In the first section, we will look in some detail at what we mean by institutions, how they may vary between countries, and the implications for leadership and management. We will look in particular at one important set of ideas about national institutions: the ‘varieties of capitalism’ approach. The varieties of capitalism approach is concerned with how capitalist forms of social, economic and political organisation vary between countries.
This OpenLearn course is an adapted extract from the Open University course.