Nintendo: Cultural Dimensions, Corruption Risks, and Corporate Social Responsibility

This article examines Nintendo's operations in different countries based on Hofstede cultural dimensions, corruption risks, and corporate social responsibility. It also discusses the company's intellectual property protections, entry mode, and organizational structure.

Running head: Nintendo
Nintendo
Name of the Student
Name of the University
Author Note

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Contents
Examine the countries where your company does business according to where they rank on
the Hofstede cultural dimensions...............................................................................................3
Think of some examples of how a U.S. manager would need to modify his or her behavior
when communicating with associates from one or more of these foreign countries.................4
Does your company operate in any countries that are considered very politically or
economically risky?...................................................................................................................5
Does your company primarily operate in civil law or common law countries? What are some
of the implications of this?.........................................................................................................5
Has your company purchased any insurance from the U.S. Overseas Private Investment
Corporation (OPIC)?..................................................................................................................5
What are some key intellectual property protections, if any, that your company possesses?....5
When do these protections (e.g., patents) expire?......................................................................6
How does your company intend to recoup lost revenues due to any patent or other intellectual
property protection expirations?................................................................................................6
Find the Corruption Perceptions Index (CPI) score for two countries where your selected
company does business, one country with a relatively high score and one country with a
relatively low score....................................................................................................................6
Search for news stories about corporate financial scandals in these two countries...................6
Prepare a short summary of news stories about financial scandals in these countries...............7
Briefly describe what you perceive are the risks of corruption, such as paying bribes, that
your selected company might face in these countries................................................................7
Determine your company’s mode of entry into foreign markets. This should be based upon a
serious analysis of your company’s risk-return tradeoff............................................................7

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In your opinion, has your company taken the right approach?..................................................8
Does your company have an exit strategy? Recall that exit strategies are to be determined
before entry into the foreign market, rather than after entry......................................................8
Critically and objectively evaluate how ethical your company’s global operations are and
determine if they are good corporate citizens (i.e., do they have a well thought-out corporate
social responsibility program for the long term?)......................................................................8
What is the corporate mission statement of your target company, assuming it has one?..........9
How well do the company’s actions adhere to its stated mission?............................................9
With respect to its strategy formulation, would you categorize your company as a shareholder
model or a stakeholder orientation? Why?.................................................................................9
Is the company a stateless corporation? If not, is the company on its way to becoming a
stateless corporation?.................................................................................................................9
What type of organizational structure is the company currently using?....................................9
Do you think the company may benefit from a hybrid or matrix structure? Why or why not?
..................................................................................................................................................10
References:...............................................................................................................................11

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Examine the countries where your company does business according to where they rank
on the Hofstede cultural dimensions.
Nintendo operates in 33 countries across Americas, Europe and Asia Pacific regions.
Each country has specific scores in Hofstede Cultural Dimension scales (across 6 aspects,
namely: power distance, individualism, masculinity, uncertainty advantage, long term
orientation and indulgence. The table below shows the scores as retrieved from hofstede-
insights.com (hofstede-insights.com, 2018):
Country Power
Distance
Individualism Masculinity Uncertainty
Advantage
Long term
Orientation
Indulgence
USA 40 91 62 46 26 68
Canada 39 80 52 48 36 68
Mexico 81 30 69 82 24 97
Brazil 69 38 49 76 44 59
Japan 54 46 95 92 88 42
South
Korea
60 18 39 85 100 29
Taiwan 58 17 45 69 93 49
Hong Kong 68 25 57 29 61 17
Australia 36 90 61 51 21 71
New
Zealand
22 79 58 49 33 75
Austria 11 55 79 70 60 63
Belgium 65 75 54 94 82 57
Czech
Republic
57 58 57 74 70 29
Denmark 18 74 16 23 35 70

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Germany 35 67 66 65 83 40
Spain 57 51 42 86 48 44
Finland 33 63 26 59 38 57
France 68 71 43 86 63 48
Greece 60 35 57 100 45 50
Hungary 46 80 88 82 58 31
Italy 50 76 70 75 61 30
Netherlands 38 80 14 53 67 68
Norway 31 69 8 50 35 55
Poland 68 60 64 93 38 29
Portugal 63 27 31 99 28 33
Russia 93 39 36 95 81 20
South
Africa
49 65 63 49 34 63
Sweden 31 71 5 29 53 78
Switzerland 34 68 70 58 74 66
UK 35 89 66 35 51 69
Ireland 28 70 68 35 24 65
Think of some examples of how a U.S. manager would need to modify his or her
behavior when communicating with associates from one or more of these foreign
countries.

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To communicate with associates from one or more of these countries, a manager from the
US, needs to understand the culture of the country the associates are from, and develop
cultural competency to interact with those associates.
Does your company operate in any countries that are considered very politically or
economically risky?
None of the countries where Nintendo operate can be considered as politically risky.
However, the economic conditions of Greece might be a challenge.
Does your company primarily operate in civil law or common law countries? What are
some of the implications of this?
The company primarily operates in civil law countries. This system utilizes abstractions,
develops general principles, and differentiates procedural laws from substantive laws, and
considers case law as secondary to statutory laws. It can also be paired with inquisitive laws.
This can imply that the legal frameworks of these countries are based on specific codes, the
legislative enactment is considered binding for everyone, have significant influence on
courts, and has less freedom of contracts (worldbank.org, 2018).
Has your company purchased any insurance from the U.S. Overseas Private Investment
Corporation (OPIC)?
Nintendo did not purchase any insurance from OPIC, as OPIC helps only American
businesses to gain foothold in emerging markets.
What are some key intellectual property protections, if any, that your company
possesses?

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Nintendo protects its intellectual properties through the Copyright policy, intellectual
property rights, copyrights, trademarks, patents, counterfeit policy, Mod Chip policy and
Independent Publishers/Licensees/Licensed Property Owners policies.
When do these protections (e.g., patents) expire?
The copyrights expire in 75 years from the date of the first publication of the intellectual
property as per the US copyright laws.
How does your company intend to recoup lost revenues due to any patent or other
intellectual property protection expirations?
Nintendo plans to recoup the losses from Intellectual property expiration by filing more
patents and renewing copyrights for properties which can still generate revenues.
Find the Corruption Perceptions Index (CPI) score for two countries where your
selected company does business, one country with a relatively high score and one
country with a relatively low score.
Out of the countries where Nintendo operates Canada has the lowest corruption (Score
82/100, rank 8/180) and Mexico has the highest corruption (Score 29/100, rank: 135/180)
(transparency.org, 2018).
Search for news stories about corporate financial scandals in these two countries.
The Canadian Foundation for Advancement of Investor Rights (FAIR) report on financial
scandals between 1998 to 2009, includes the following financial scandals in Canada: 1. Brost,
Sorenson et al. Fraud (1999-2005), Earl Jones (1986-2009), Essex (1994-1999), Farm Mutual
(2003-2007), Fulcrum (2004-2005), iForum (2005), Andrew Lech (1999-2003), Manna
(2005-2007), Norbourg (2000-2005), Norsheild (2004-2005), Portus (2003-2005), Weizhen

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Tang (2006-2009), Ian Thow (2003-2005), Triglobal (1997-2007), Vantage (1998)
(faircanada.ca, 2011) and Valeant (2015).
In Mexico, the scandals include the Bribery Scandal (2017), Toallagate (2001), and
Pemexgate (2000).
Prepare a short summary of news stories about financial scandals in these countries.
According to the National Observer, the Valeant scandal can be considered as the
sleaziest scandal in Canada. Valeant is a big pharmaceutical company in Canada
(nationalobserver.com, 2018). The company scrapped off its R & D wing in 2008, as it did
not generate enough revenues, and instead focused on acquiring companies that already had
products in market, and then started reducing the costs and increasing the prices to maximize
profit, and the spending was reduced to 3% of sales, causing layoffs of almost half the
workforce (fortune.com, 2018; newyorker.com, 2018).
In Mexico the Bribery Scandal where the chief executive Emilio Lozoya, of the state oil
company Pemex to bribes of 10 million USD from Odebrecht to acquire favorable contracts
(financialtribune.com, 2018).
Briefly describe what you perceive are the risks of corruption, such as paying bribes,
that your selected company might face in these countries.
The practice of bribery and corruption can result to disadvantages to companies willing to
practice its business ethically, and can give undue advantages to companies with unethical
and illegal practices. This can adversely affect the success of the disadvantaged companies.
Determine your company’s mode of entry into foreign markets. This should be based
upon a serious analysis of your company’s risk-return tradeoff.

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Entry into the foreign markets can be determined by the ratio of risks to return from
operating from the country. This ratio is affected by factors such as corruption index, trade
laws and Hofstede Cultural Dimensions. Based on this Nintendo also licenses its products in
foreign countries to capture the market.
In your opinion, has your company taken the right approach?
I believe that the approach taken by Nintendo to capture foreign markets through
Licensing is pretty effective.
Does your company have an exit strategy? Recall that exit strategies are to be
determined before entry into the foreign market, rather than after entry.
To maximize its benefits and minimize losses, Nintendo uses an exit strategy that aims to
sell its copyrights to its products.
Critically and objectively evaluate how ethical your company’s global operations are
and determine if they are good corporate citizens (i.e., do they have a well thought-out
corporate social responsibility program for the long term?).
Nintendo have pledged to ethical standards in its manufacturing operations
(gamesindustry.biz, 2018). It follows the American Code of Conduct which determines how
the company manages Conflicts of Interest, Insider Trade, Antitrust, Foreign Corrupt
Practices Act, Bribery, Kickback and Frauds and ensures compliance to ethical standards
(.nintendo.com, 2018). However according to the Ethical Consumer Organization, Nintendo
has the worst ECRA rating in environmental rating and supply chain management, allowing
oppressive human rights policies in its subsidiaries, poor rating in the sourcing of raw
materials, and tax avoidance practices (ethicalconsumer.org, 2018). This shows that the
organization does not have a well thought out corporate social responsibility programs.

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What is the corporate mission statement of your target company, assuming it has one?
Nintendo is strongly committed to produce and market the best products and support
services that can be availed. The company also believes that its not only the quality of the
products that is the key to success, but also customer satisfaction due to which they should be
treated with respect, consideration and importance. The company also aims to develop a
positive work environment, where employees can coordinate effectively, and are committed
towards the company’s objectives, and the employees be treated with same respect as a
customer.
How well do the company’s actions adhere to its stated mission?
The company is well known for the production of quality products (that is gaming
consoles and games), and has dedicated customer base. This shows that the company is able
to adhere to its mission.
With respect to its strategy formulation, would you categorize your company as a
shareholder model or a stakeholder orientation? Why?
Based on the mission of Nintendo, it can be categorized as a stakeholder oriented, as it
can involve consumers or customers who has interest in the performance of the company.
Is the company a stateless corporation? If not, is the company on its way to becoming a
stateless corporation?
Nintendo is a multi-national or a stateless corporation that operates in more than 30
countries.
What type of organizational structure is the company currently using?

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Nintendo uses a system of corporate governance to monitor and inform the business
practice (nintendo.com, 2018). The Organizational structure involves The Board of Directors
to whom the executives, management committees, audit department, and accounting
departments report to. The executive officers, in turn report to the directors or president
(nintendo.co.jp, 2018).
Do you think the company may benefit from a hybrid or matrix structure? Why or why
not?
The company would definitely benefit more from a matrix structure, since that would
allow two chains of commands (horizontal and vertical). This can allow decentralized
decision making, better coordination in the projects, better environmental monitoring and
responses to change, allows a flexible utilization of human resources and support services.
This can also help the company to cope up with increased environmental stresses and develop
competitive strategies. However, it should also be understood that such a structure can also
incur a higher administrative cost compared to hybrid structure, and can lead to confusions
over responsibilities, authority and can increase interpersonal conflicts.

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References:
opic.gov (2018). OPIC : Overseas Private Investment Corporation |. [online] Opic.gov.
Available at: https://www.opic.gov/ [Accessed 1 Jun. 2018]. opic.gov (2018). OPIC :
Overseas Private Investment Corporation |. [online] Opic.gov. Available at:
https://www.opic.gov/ [Accessed 1 Jun. 2018].
transparency.org. (2018). Transparency International - Search. Retrieved from
https://www.transparency.org/search
faircanada.ca. (2018). List of Financial Scandals. Retrieved from https://faircanada.ca/wp-
content/uploads/2011/02/List-of-Financial-Scandals-Appendix-A-IS-
500pm_Final.docx
financialtribune.com. (2018). Mexico Hit by Major Bribery Scandal. Retrieved from
https://financialtribune.com/articles/world-economy/70624/mexico-hit-by-major-
bribery-scanda
nationalobserver.com. (2018). Canada's sleaziest corporate scandal. Retrieved from
https://www.nationalobserver.com/2015/12/14/news/canadas-sleaziest-corporate-
scandal
fortune.com. (2018). Valeant: A timeline of the big Pharma scandal. Retrieved from
http://fortune.com/2015/10/31/valeant-scandal/
newyorker.com. (2018). The Roll-Up Racket. Retrieved from
https://www.newyorker.com/magazine/2016/04/04/inside-the-valeant-scandal

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financialtribune.com. (2018). Mexico Hit by Major Bribery Scandal. Retrieved from
https://financialtribune.com/articles/world-economy/70624/mexico-hit-by-major-
bribery-scandal
gamesindustry.biz. (2018). Nintendo. Retrieved from
https://www.gamesindustry.biz/articles/foxconn-puts-up-suicide-nets
nintendo.com. (2018). | Nintendo - Corporate Information | Nintendo of America's Code of
Conduct (Summary). Retrieved from https://www.nintendo.com/corp/coc.jsp
ethicalconsumer.org. (2018). Nintendo. Retrieved from
http://www.ethicalconsumer.org/scoredetails.aspx?ProductId=266344
Nintendo.com. (2018). | Nintendo - Corporate Information | Corporate Mission and
Philosophy. Retrieved from https://www.nintendo.com/corp/mission.jsp
nintendo.co.jp. (2018). Corporate Governance. Retrieved from
https://www.nintendo.co.jp/ir/en/management/governance.html
worldbank.org (2018), Common vs civil law, retrieved on 1 June, 2018, from:
https://ppp.worldbank.org/public-private-partnership/legislation-regulation/
framework-assessment/legal-systems/common-vs-civil-law
hofstede-insights.com (2018), Hofstede Score, retrieved on 1 June, 2018, from:
https://www.hofstede-insights.com/product/compare-countries/

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