Transcript Study tour preparation

Study Tour Preparation
Part 1: Macro research
Sirp J. de Boer
17 July 2015
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Background
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International Management section
request from Study Tour Committee
research manager
supervisor(s)
goal: a valuable study tour
purpose: framework for investigating the
environment of organizations to be visited
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Contents of the presentation
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macro study relative to the overall study
introduction to the PEST-model
example of China
assignment and time schedule
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Macro research
 purpose: insight into a society in order to sketch
a proper stage for a study tour
 environment 'around' Micro en Meso
 Macro = country
 Macro context can be subdivided into:
 national context
 context for companies to develop
 international context
 influences economic development of a country
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Macro in context
Study Tour
Porter's
Diamond
Macro
Different research levels
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Meso
PEST
Micro
Quick
Scan
National level
International
level
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PEST (1/4) - four areas
 Political aspects
 politics - national & international
 Economic aspects
 economics - national & international
 Socio-cultural aspects
 social, cultural, education - national
 Technological aspects
 research, innovation - national
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PEST (2/4) - plus two areas
 Geography
 topography, climate, nature
 demography
 History
 chronology until a recent major political event
(~ 25 years ago)
 major political and social-cultural events
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PEST (3/4) - conclusion
 conclude each area with major
characteristics / key issues
 conclude macro chapter with:
 comparative table of country X and the
Netherlands
 remarkable similarities & differences
between country X and NL
 implications of findings for study tour theme
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PEST (4/4) - application
 possibilities
 provides an overall picture
 considers many aspects of society
 enables comparison with own country
(making the implicit reference explicit)
 limitations
 focus is on averages, hiding the deviation
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Structure of Macro research
? Macro research question
Research areas
G
H
P
E
S
T
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....
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....
....
....
Section conclusion
Comparative table
Chapter conclusion
Comparative table
Key characteristics
of country X and
the Netherlands
answer to the macro
! Overall conclusion (=research
question )
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Example: China - Geography (1/3)
 Major cities
 Beijing (Peking,
capital), Shanghai,
Hong Kong, Xi’an.
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Example: China - Geography (2/3)
 Population breakdown
Ethnic makeup
1%
1%
5%
Zhuang
Hui
Population age breakdown
Other
Han
0.3
0.6 80+
2.7
Age
5 60-79
17.4
15.7
-10
Male
10.9
40-59
10.8
-20
93%
20-39
17.5
0-19
17.3
0
10
Female
20
Percentage
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Example: China - Geography (3/3)
 Other aspects
 % in urban areas: China: 32 % (NL: 89 %)
 birth rate: 110 male - 100 female
 Conclusions
 large reservoir of cheap labor
 limited natural resources
 male surplus
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Example: China - History
 earliest civilization: 2200 BC
 historical periods indicated by dynasty
 Ming (1368 - 1644), Qing (1644 - 1911)
 Conclusions
 relatively long history
 unity of nation is highly valued
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Example: China - Politics (1/2)
 Corruption
Perception
Index
0=highly corrupt
10=very clean
 Government
type
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Corruption perception index 2003
Country
CPI score
Finland
9.7
Netherlands
8.9
United States
7.5
China
3.4
Indonesia
1.9
Government type
Country
Netherlands Constitutional Monarchy
United States Federal republic
China
Communist state
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Example: China - Politics (2/2)
 Other aspects
 China Communist Party rules since 1949
 elections on low levels of government
 privatization challenge for the government
 Conclusion
 one-party state.
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Example: China - Economics (1/4)
GDP in China
1999
2000
2001
2002
2003
Real GDP, $ million
1 037 054 1 120 018 1 201 779 1 298 310 1 416 589
Real GDP at PPP, $ million
5 190 902 5 606 174 6 015 424 6 498 600 7 090 640
Real GDP per capita, $
827
887
942
1011
1096
Real GDP per capita at PPP, $
4 141
4 441
4 713
5 059
5 486
China’s GDP trend
Origins of GDP
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Example: China - Economics (2/4)
 Economic Freedom Index
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1 - 1.99 : free
2 - 2.99 : mostly free
3 - 3.99 : mostly unfree
4 - 5 : repressed
Economic Freedom Index 2005
Country
Netherlands
1.95
United States
1.85
China
3.46
Cuba
4.29
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Example: China - Economics (3/4)
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Example: China - Economics (4/4)
 Conclusions
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scale and size is large
speed of development is high
attractive - lots of opportunities
high competition
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Example: China - Socio-cultural (1/3)
 Hofstede’s dimensions:
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Power Distance index
Individualism vs. Collectivism
Masculinity
Uncertainty Avoidance
Long Term vs. Short Term Orientation
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Example: China - Socio-cultural (2/3)
 Hofstede's scores
Hofstede's dimensions
Country
PDI
Netherlands
38
United States
40
China
80
World Average
55
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IDV
80
91
15
43
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MAS
14
62
60
50
UAI
53
46
50
64
LTO
44
29
114
45
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Example: China - Socio-cultural (3/3)
 Conclusions
 considerable cultural differences between
China and NL
 different language: one written form, different
pronunciations
 proud of country, history & culture - "Middle
Kingdom“
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Example: China - Technology (1/3)
 Technology achievement index:
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Technology creation
Diffusion of recent innovations
Diffusion of old innovations
Human skills
Technology achievement index
Country
TAI
Netherlands
0.630
United States
0.733
China
0.299
Indonesia
0.211
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Example: China - Technology (2/3)
 R&D expenditure
R&D expenditure as % of GDP
Country
%
Netherlands
2.0
United States
2.7
China
1.0
Sweden
3.8
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Example: China - Technology (3/3)
 Other aspects
 space technology: 2 persons in orbit (2005)
 developing own standards
 Conclusions
 technology is popular (unlike the Netherlands)
 busy catching-up rapidly
 ambitious
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Example: China - summary table
 comparing China with NL and USA
 use key indicators and aspects
Summary table
Aspects
China
Netherlands United States
GDP, $ billion
7 091
461
10 990
GDP growth, over 2003 in %
9.1
-0.7
3.1
Economic Freedom Index (1-5)
3.46
1.95
1.85
Imports, $ billion
484
218
1 260
Exports, $ billion
485
253
715
R&D exp. as % of GDP
1.0
2.0
2.7
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Example: China - Conclusion 1/2
 China is big: many inhabitants, large area,
big businesses
 China develops fast: economic growth,
exports, technology (space travel) incomparable with e.g. the Netherlands
 China is a different society in many ways:
culture, political, etc.
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Example: China - Conclusion 2/2
 What are/could be the implications of the
conclusions on the study tour theme?
 E.g. “Choice for China” (HRM):
 HRM practices are introduced from all over the world
 Existing western HR practices are combined with
Chinese culture developing own practices
 Though many inhabitants, few talents: Competition over
these talents between companies
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Assignment
 make a Macro analysis using the PESTmodel
 each group analyses an area using
various indicators
 use the structure of the handout
 find information and only use the relevant
information
 make proper references
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Time schedule
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….. submit draft versions of papers.
….. oral presentation in English plus feedback.
….. submit final version of Macro paper.
….. evaluation and grade.
 Questions: contact the manager.
 Good luck !!
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