The impact of impatriates managing marketing strategies abroad

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Southeast University

Term Paper

THE IMPACT OF INPATRIATES MANAGING MARKETING STRATEGIES ABROAD

School of Economics and Management

Name: Luis Arango

Supervisor: Dr. Qiu Bin

June 30th, 2009

THE IMPACT OF INPATRIATES MANAGING MARKETING STRATEGIES ABROAD

Luis Arango

School of Economics and Management, Southeast University, Nanjing, 210096, Chinalarangomaster@gmail.com

Abstract

As globalization becomes the normative strategy for organizations, one of the critical success factors centers on amassing an adequate number of competent global managers to implement successful strategies. A successful global manager must possess a complex amalgamation of technical, functional, cultural, social and political skills (Harvey, Novicevic, 2000)that will allow that manager to acquire and/or improve the knowledge, weather tacit or explicit, needed to perform in a global, multicultural environment
Keywords: Tacit – explicit knowledge, multicultural environment
Today’s global manager is envisioned to act as a versatile boundary spanner between the home and the host country organization and, at the same time, the globalorganizational network’s need for consistency and the contextual requirements of the host country’s “local” market place knowledge (Bartlett & Ghostal, 1994; Ghostal & Bartlett, 1997) in order to implement the marketing strategies designed by the headquarters.
When a company decides to go abroad and manage operations in other countries, it finds difficulties regarding language, consumer behavior,marketing strategies, cultural differences, and logistic channel management, among others. These difficulties are of particular relevance due to their tacit or intangible nature; for example in China, a manager must develop what local Chinese call “Guanxi” which refers to the durable social connections and networks a firm uses to exchange favors for organizational purposes (Flora F. Gu, Kineta Hung,David K. Tse, 2008) that will give him/her the local network knowledge of how things are done.
The foreign firm’s unfamiliarity, which is often denoted “liability of foreignness” (Zaheer 1995), creates high levels of uncertainty that impede effective decision making and leads to difficulties in dealing with local governments and partners (Torben Pedersen and Bent Petersen 2003) when tryingto implement the marketing strategies designed by the company.
Thus, some factors as pointed by (Johanson and Vahlne 1997) like preferences, cultures, and business systems increase the odds between the firm and the unfamiliar market and the result of these odds are mistakes of the foreign firm.
These difficulties find its roots in the lack of local market knowledge of the foreignfirm (Johanson and Vahlne 1997) and the more uncertain the management of such firm is about how it should conduct business in a foreign market, the less chances it has to successfully implement its marketing strategies.
This lack of knowledge is directly related knowledge like “pre-entry familiarization”, “post-entry familiarization”, “knowledge characteristics”, “product characteristics”coined out by Torben Pedersen and Bent Petersen (2003).
During the post-entry familiarization, people who work in a specific foreign market discover the problems and opportunities intrinsic to that market. The learning process needs to take place post-entry, and opportunities for pre-entry learning are correspondingly low (Carlson 1975; Johanson and Vahlne 1977; Johanson and Wiedersheim-Paul1975), therefore an expatriate will find very difficult to effectively perform and implement marketing strategies in such environment.
This way of familiarization process goes hand-by-hand with the kind of knowledge that is characterized by its “tacitness” and so can only be acquired by acting. As Hall (1993); Klein, Edge and Kass (1991) pointed out, this concept of “tacitness” is of...