Culture, Management Style, and Business Systems

Chapter 5

Adaptation to customs
Adaptation
The willingness to adapt to other customs is essential in international marketing Degree of Adaptation:
This does not mean that businesses discard their methods of conducting business, rather that executives need to be aware of differences and willing to adapt to the differing customs

Types of Customs
3 Types of Customs
1. Cultural Imperatives
Business customs and expectations that MUST be met in order to conduct successful business transactions in other countries/cultures

2. Cultural Electives
Business customs and expectations that are OPTIONAL, in which business executives may participate/conform in, but is not required. May help to establish rapport and respect when participation occurs Majority of customs fall into this category

Types of Customs
3. Cultural Exclusives
Customs that are reserved exclusively for the locals, where foreign participation is EXCLUDED
Example: Foreign business people criticizing local politicians, business practices where it is acceptable for the local to do so

The Impact of American Culture on Management Style

Most widely accepted views regarding U.S. culture:
Master of destiny viewpoint Independent enterprise as the instrument of social action Personnel selection and reward based on merit Decisions based on objective analysis Wide sharing in decision making Never-ending quest for improvement

Management Styles around the World

Types of Decision Making Approaches
1. The authoritative approach
Top level management decision making is usually found in smaller businesses where centralized decision-making is possible

2. The delegated approach

Decentralized decision making is usually found in large size businesses with highly developed management systems (U.S.) Allows executives at different levels to exercise authority over their own functions

3. The committee approach

Decisions are made by consensus or in a group (Japan)

Management Objectives & Aspirations

Understanding how managers objectives and aspirations affect their business outlook is critical 4 Important areas to understand:
1. Security and mobility
Importance of security and definition differ in many countries (can mean good wages and training; maybe lifetime employment )

Management Objectives and Aspirations

2. Personal life
Personal life takes precedent over other motivators (wages, status)

3. Affiliation and Social acceptance

Accepted by peers
Important element of the group decision making process

4. Power & Achievement

Communication Styles
Edward T. Hall ideas on Communication Styles:
Crossing Borders 5.2 pg. 133 A Classic Edward T. Hall s Language (Symbolism) of Space Exhibit 5.2 pg. 135 Contextual Background of Various Countries
Face-to-face communications
Low Context: depends heavily on verbal communication (Swiss, Germany, U.S.) High Context: depends heavily on nonverbal communications See Crossing Borders 5.3 pg. 136 When Yes Means No

Importance of Communication when adapting to business customs

Communication
Translation and interpretation
(See Crossing Borders 5.4 pg. 137 You Say You Speak English )

Formality and tempo P-time vs. M-time

M-time (monochronic) concentrate on one thing at a time P-time (polychronic) completion of a transaction is more important than sticking to a schedule

Gender Bias in International Business

Is there a gender bias against women managers when operating in International arenas?
Most evidence indicates that when women are trained and backed by their corporation, resistance from other cultures is either minimized or negated completely Comparative statistics of women in managerial positions worldwide (approximations):
U.S. 43% Britain 33% Switzerland 28% Germany 9.2%

Business Ethics
Bribery & Extortion
Bribery
Voluntary payment offered by individual(s) seeking an unlawful advantage
SEC regulates U.S. Companies domestically and internationally Transparency International organization dedicated to curbing corruptions worldwide See Exhibits 5.4 and 5.5 pg. 145

Extortion
Payments are extracted under duress by someone in an authoritative position (host country)
See Crossing Borders 5.6 pg. 146 Bangladesh at the bottom

Business Ethics
Subordination & Lubrication
Subordination
Involves giving large sums of money

Lubrication
Involves giving small amounts of money, or gifts

Foreign Corrupt Practices Act (FCPA)

Important act that prohibits U.S. businesses from paying bribes openly or using middlemen or agents to bribe on behalf of the U.S. business