Understanding Culture defines culture and identifies why culture is such an important element of the international management context. International management is about leading people and implementing tasks with people across cultural borders. The starting point for effective international management behavior must be a deep understanding of culture. We set the foundation for culture as one of the important contexts of global management. We define culture, examine its different facets, analyze its impact on people, and explore important questions about the intersection of cultures and individual characteristics. Culture serves two important functions for groups. Culture makes action simple and efficient because it creates context for meaning, and it also provides an important source of social identity for its members.

In late 2017, the US economy was nearing full employment. Unemployment was at a 40-year low of 4.2%, yet President Trump and the Republican-controlled Congress embarked upon a policy of tax cuts. The Federal Reserve, seeking to avoid overheating the economy, tightened monetary policy, raising interest rates. In other words, the two policies were working in opposite directions. The dollar rose in value, making US exports more expensive to foreigners, making imports cheaper to Americans, and thus worsening the trade deficit. How and why these events played out motivates the development of the model in this chapter.

Further focusing on the topics from the previous chapter, this section identifies the factors within a school that potentially impact student engagement. It starts by illustrating the way that affective and cognitive engagement may affect behaviour within a school environment and then illustrates this concept by exploring the potential role of teacher–student relationships, curriculum and instruction, classroom environment, peers, opportunities for choice in areas such as uniforms and student governance, and feeling safe, especially in periods of transition across and within schools. In each situation, the chapter will examine the research for effective practice and connect various approaches to their influence on engagement.

Mapping Cultural Dimensions for Effective Interaction positions personal interaction at the center of global management. It focuses on high-quality person-to-person interactions across cultural boundaries in everyday situations and in teams. The Map-Bridge-Integrate (MBI) framework, a tool for engaging in effective cross-cultural interaction, is presented and explained. The chapter identifies the role of cultural mapping tools and recognizes strengths and weaknesses in different tools. It summarizes the multiple social maps that have dominated international management research and practice over the years, such as Hall, Hofstede, and Globe. The Aperian GlobeSmart tool provides an excellent combination of validity and practical application for mapping cultural work-style interactions. GlobeSmart maps five dimensions: Task vs. Relationship, Independent vs. Interdependent, Egalitarian vs. Status, Direct vs. Indirect, and Risk vs. Certainty. Each dimension is validated with survey data from people in that country, updated on a regular basis. The five dimensions help compare cultures, and the survey gives individuals an easy way to compare themselves with each other and with different cultural profiles. Maps of 22 cultures are presented.

We consider theoretical models of social preferences such as the Fehr–Schmidt model of inequity aversion; the ERC model; type-based reciprocity models; and hybrid models such as the Charness–Rabin model. Empirical evidence is used to evaluate the relative success of the models. Applications are given from behavioral political economy and from social identity in ultimatum games. We also consider issues of moral hazard and asymmetric information in the presence of other-regarding preferences. A range of complete and incomplete contracts, both short- and long-term, are studied. The evidence on alternative contractual forms, and on extrinsic and intrinsic motivation is outlined. Behavioral factors, such as reciprocity, often lead to low-powered incentive schemes that have greater empirical support relative to the high-powered incentive schemes predicted in neoclassical theory. Some of the main findings are: Bonus contracts may often dominate incentive contracts; even flat wage schedules may elicit high effort levels; incentives may crowd-out intrinsic motivation; moral suasion may dominate direct punishments; and incentives that are too high may lead to choking under pressure.

Our aim so far has been to formulate a real-life decision problem as a (mixed integer) linear optimization problem. The reason was clear: Linear functions are simple, so problems formulated with them should also be simple. However, two questions arise. First, is the world of linear functions flexible enough to model all real-life problems? Second, are MILOs the only simple problems we can solve quickly?

We begin with the theoretical and empirical foundations of happiness economics, in which the aim of economic policy is to maximize self-reported happiness of people in society. We also discuss the economic correlates of self-reported happiness. We outline some of the key insights from the literature on behavioral industrial organization, such as phishing for phools and the effects of limited attention on the pricing decisions of firms. When products have several attributes, we explain how some might be more salient than others. We also explain the effects of limited attention on economic outcomes. We introduce the basics of complexity economics. Here, people use simple rules of thumb and simple adaptive learning models in the presence of true uncertainty. We show that the aggregate systemwide outcomes are complex, characterized by chaotic dynamics, and the formation of emergent phenomena. The observed fluctuations in the system arise endogenously, rather than from stochastic exogenous shocks. We introduce two kinds of learning models – reinforcement learning and beliefs-based learning. Finally, we critically evaluate the literature on competitive double auction experiments.

The distribution of the world’s natural resources is highly unequal. Norway is blessed with an abundance of oil, making it among the richest countries in the world, whereas its equally cold neighbor Finland has to live by its wits without such resources. Much of Algeria and Namibia is arid desert, whereas Brazil and Indonesia are lush and tropical. Chile is loaded with copper and Australia with iron ore and coal, while South Korea and Bangladesh are bereft of any natural resources.

The automobile industry has long captured America’s imagination. Not only are cars an iconic part of national culture, but they are also essential for moving around – unless you happen to live in New York City.

When you switch on your smartphone, you are probably not aware of all the minerals that have been dug up around the world to make the electronics work. An iPhone screen has been polished with lanthanum and cerium, a magnet inside is made with neodymium and praseodymium, the circuitry in semiconductors uses arsenic metals, rechargeable batteries depend on cadmium, and light bulbs and heating elements rely on tungsten. It turns out that these so-called “rare earth” minerals are essential for modern life and are used in products ranging from smartphones to MRI machines to advanced defense technology to hair dryers.

Perhaps the most frequent, yet understated, interactions we create with students are when we communicate with them directly. As Charles, Senter and Barr suggest, ‘relationships are built on communication and easily destroyed by it’. In this chapter, we will examine how verbal and non-verbal communication techniques can be used throughout your classroom to strengthen your students’ relationship with education. This chapter explores how every time we communicate, verbally or non-verbally, we are creating an interaction between our students and their relationship with education, and if we can do it to enhance clarity, immediacy and credibility, then we have a much better chance of increasing student engagement.

Pathways to Mindful Global Leadership identifies the mindset and competences required of global leaders and introduces the paradox thinking mindset. It illustrates why and how global leaders need to develop mindful application of this comprehensive skillset and a deep understanding of culture. It defines the concept of the global mindset and differentiates the four domains of the global mindset. The Pyramid Model of Global Leadership summarizes the key skills and knowledge required and illustrates how they build on each other. The three dimensions of Global Leadership Competences – perception management, relationship management, and self-management – are described. Students can analyze their own strengths and development needs. The global-local paradox in management dilemmas and the collaborative processes for resolving them are described.

This chapter makes progress towards theoretical explanations of the anomalies of the EDU model, and we show how to estimate discount rates. The focus is on applications of present-focussed preferences, which typically lead to self-control problems. The framework of multiple selves is employed, where it is critical to specify the current-self’s degree of awareness about the self-control problems of future-selves. We give a concrete application of hyperbolic discounting to the lifecycle model in macroeconomics, and we show how people optimally make consumption and saving choices over time. The effect of present-focus on the retirement decision and the role of legislation, such as a mandatory retirement age, are considered. We also use present-focussed preferences to explain procrastination and preproperation using activities that have current costs and future benefits, as well as activities that have current benefits but future costs. We also present an alternative revealed preference approach to modelling temptation preferences. Finally, we present a more general psychological approach to decision making over time that does not fit into existing models in economics.

Americans are big consumers of sugar, eating and drinking some 66 pounds each of it per year, on average. This is not just a dietary issue; it is also a big trade issue. The United States imports sugar from the tropical climes of the Caribbean, which has the natural conditions suited for growing sugar cane. But sugar imports are much less now than they once were – not because Americans have cut back on sugar consumption but because low-cost imports were hurting domestic cane producers in Florida and Louisiana. To help them out, the federal government began restricting imports decades ago. (Just ask any representative or senator from those states whether they believe free trade in sugar would be a good idea.)