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Preface: Understanding cross-cultural management Acknowledgements Publisher's acknowledgements



Introduction to Part One



Determinants of culture
Learning outcomes Concept L 1 Facets of culture Concept 1.2 Levels of cultures Conclusion Points for reflection rurliIer reading References Activities




2 Dimensions of culture in business
Learning outcomes Concept 2.1 National cultural dimensions in the business context Concept 2.2 Cultural dimensions according to GLOBE Conclusion Points for reflection Further reading References Activities





3 Business cultures in the Western world
Learning outcomes Concept 3.1 European cultures Concept 3.2 American and Australian cultures Conclusion Points for reflection Further reading References Activities






4 Business cultures in Asia, Africa and Middle East
Learning outcomes Concept 4.1 Asian cultures Concept 4.2 African and Middle East cultures Conclusion Points for reflection Further reading References Activities



5 Cultural dimensions and dilemmas
Learning outcomes Concept 5.1 Value orientations and dimensions Concept 5.2 Reconciling cultural dilemmas Conclusion Points for reflection Further reading References Activities

6 Culture and styles of management
Learning outcomes Concept 6.1 Management tasks and cultural values Concept 6.2 Other vl~ws on values Conclusion Points for reflection Further reading References Activities


Part One Final activity AU Developing cross·cultural effectiveness Part One Final activity A1.2 Galderma - a case study

Introduction to Part Two


7 Culture and corporate structures
Learning outcomes Concept 7.1 Organizational structures Concept 7.2 Corporate cultures


Points for reflection
Further reading

167 168 168 168 170

8 Culture and leadership
Learning outcomes Concept 8.1 Different conceptions of leadership Concept 8.2 Leadership in an international context Conclusion Points for reflection Further reading References Activities

174 174 174
182 188 188 189 189 190 195 195 195 199 205 205 206 206 207 212

9 Culture and corporate strategy
Learning outcomes Concept 9.1 Cultural view of strategy Concept 9.2 Strategic alliances and business cultures Conclusion Points for reflection Further reading References Activities

10 Cultural change in organizations
Learning outcomes Concept 10.1 Organizational change as a cultural process Concept 10.2 Organizational change in a global environment Conclusion Points for reflection Further reading References Activities


219 224 224
224 225

226 229

11 Culture and international mart\eting management
Learning outcomes Concept 11.1 Marketing in a cross-cultural environment Concept 11.2 Marketing communication across cultures Conclusion Points for reflection Further reading References Activities

235 242 242



2 Diversity and transcultural competence in organizations Conclusion Points for reflection Further reading References Activities 247 247 248 250 253 253 254 254 256 265 269 Part Two Final activity A2.1 Making cultural profiles of brands Part Two Final activity A2.1 Communicating in and between cultures Conclusion Points for reflection Further reading References Activities 14 Barriers to intercultural communication Learning outcomes Concept 14.1 Barriers in cross-cultural management communication Conclusion .2 Creating chemistry .1 Managing diversity in a global environment Concept 12. Points for retlection Further reading References Activities 15 Negotiating internationally Learning outcomes Concept 15.a case study Part Three CULTURE AND COMMUNICATION Introduction to Part Three 273 275 281 281 281 293 294 294 294 295 298 298 298 311 311 311 311 313 316 316 316 326 326 326 327 328 13 Business communication across cultures Learning outcomes Concept 13.contents 12 Cultural diversity in organizations Learning outcomes Concept 12.1 Approaches to negotiating in an international context Conclusion Points for reflection Further reading References Activities viii .

a case study Index 397 Supporting resources Visit www.pearsoned. downloadable Instructor's Manual @ Power Point slides that can be downloaded and used for presentations Ell i For more information please contact your local Pearson Education sales representative or visit www.2 Vechtel .co.1 Groups processes during international encounters Conclusion Points for reflection Further reading References Activities 330 330 330 340 340 341 341 342 346 346 346 358 359 359 359 ~1 17 Conflicts and cultural differences Learning outcomes Concept to find valuable online resources For Students Presentations explaining key concepts 1& For instructors Complete.pearsoned.Contents 16 Working with international teams Learning outcomes Concept 16.1 Understanding and dealing with conflicts Conclusion Points for reflection Further reading References ActMti~ 18 Developing intercultural communicative competence Learning outcomes Concept 18.1 Simulation: negotiating internationally Part Three Final activity A3.uklbrowaeys ix .1 Becoming a competent intercultural communicator CV!ldu~ivu 364 364 Points for reflection Further reading References Activities 364 375 375 376 376 378 384 388 Part Three Final activity A3.

Training in cross-cultural management has therefore become a 'must'. we must do. Even if they are confined to their offices. Students are exposed to approaches to cross-cultural aspects of business rather than being overwhelmed with detail about countries and their culture based on one theoretical framework. a cross-cultural component in management education and training can no longer be considered as a useful 'add-on' merely for those who might consider venturing abroad to pursue their career. At the same time. whatever the type of business education concerned. trainers and trainees. @ offers a broad. students are xi . It reflects the need we felt for a practical. Willing is not enough. When doing so. many of which are taken from the business media. organ­ ization and communication. Combining a concise overview of cross-cultural concepts and learning-by-doing activities is an approach to cross-cultural manflgement we have found to be effedive for both instructors and students. view of current thinking on culture linked to management. more and more managers are required to work effectively across cultural borders. as well as activities that n::4uire SOHle of the theories outlined to be applied to business situations and to the reader's own work situation. The approach of this book This book is the result of our experiences in educating international executives and post­ graduate students in the areas of cross-cultural management and cross-cultural business communication. e allows the theories and ideas mentioned to be applied to practice through the inclusion of examples and brief case studies from the business world. This is preferable to providing just one particular (theoretical) approach to cross-cultural studies or an encyclopaedic survey of the theories involved. if selective. we must apply. Johann Wolfgang von Goethe Preparing for globalbusin~ss Given the globalization of business and increasing diversity within the workforce of so many industries and organizations. they are more and more likely to interact with people from other cultures. they are asked to apply these approaches in a practical and relevant manner to a number of case studies. whether it be for aspiring graduates at the start of their career or for those senior managers who wish to increase their effectiveness in their present positions or their employability in the international market. Nowadays. hands-on approach to study in this area which: .Knowing is not enough.

Each chapter of the book ends with at least two activities. These con­ cepts address key ideas and theories developed by leading researchers and practitioners in the area of cross-cultural management. come to the fore. Cross-cultural conflict is given particular attention. its facets and the levels at which culture operates.Preface expected not only to use the concepts. It finally presents ~ model of culture based on cultural value orientations that affect managerial and professional activities. which encourages interaction between trainees. we believe that this book is also a valuable resource for self-study because it enables readers to extend and to deepen their cross-cultural awareness. The book is divided into three parts: @ Part One: Culture and management deals with the concept of culture. amI present overviews which we have developed. inc1l1dine slruc. the instructor helps the students not only to 'construct' their own understanding based on their knowledge and experience. Culture and international marketing. as are the skills required to be an effective intercultural communicator. the material enables the instructor to make maximum use of the environment in which the learning is taking place. @ Part Three: Culture and communication examines how culture affects the process of communication both within and between cultures. but also to apply their own intuitive insights and cross-cultural experience. This approach to learning reflects a concern we had when preparing a book that deals with culture: knowledge of oneself is as important as the knowledge of theory. • Part Two: Culture and organizations considers the influence of culture on aspects of organizations. corporate cultures and the role of leadership. As a facilitator in the process. itis hoped. The instructor will. The cultural factors involved in strategy and strategic alliances. This can be a rewarding experience for those concerned because the learning-by-doing activities themselves can reveal cultural assumptions and attitudes of those undergoing the learning process.tures. It explores cultural dimensions in the business context and examines the cultural dilemmas that arise for managers when making decisions. These allow the learner to apply the concepts through exercises of various kinds. as well as in fundamental organizational change. Moreover. are also addressed. Having said that. These are xii . along with the question of cultural diversity in organizations. but also to take advantage ofthe informal learning process through those activities. The 'exhibits' and 'case studies' included in the concepts of the previous edition have been replaced by spotlights and mini-cases (with questions) in order to improve the application of the theories being described. however. Various cross-cultural contexts are dealt with. The points for reflection given after the concepts encourage the readers to go beyond their knowledge of the subject matter and apply their skills to certain cross-cultural issues. appreciate the concise overview of theories and concepts relating to cross-cultural management while being provided with activities to facilitate learning. Following these are a list of publications for further reading as well as references. Each of these parts is made up of six chapters. including negotiations and international teams. The chapters in Parts One and Two each contain two cross-cultural concepts and those in Part Three each contain one.

. A further example: Chapters 9 and 15 can hI:' studied together and so allow the issue of company takeovl:u. if Chapters 8 and 18 an: sLudied one after another. or extend their knowledge of the areas in question. re I I I 6 Cultures and styles of management I I xiii . Being more extended in nature and incorporating the elements of each part. students are forced to consider their potential behaviour in the context described and learn from the choices they make.. A particular type of exercise which plays a prominent role in the activities is case analysis.. in d. Interaction with their peers and instructor when accounting for their choices compels them to talk about their experiences and feelings. so students are confronted with different ways of thinking.. Determinants of culture of re en )r. Although we would suggest that Part One be the starting point for any programme of study. Part One Culture and management Part Two Culture and organizations Part Three Culture and communication he ~xt 15. I I 3 Business cultures in the Western WOrld ~ 9 Culture and corporate strategy 10 Cultural change in organizations .. !TIt Ips [ge )se we to als intended for readers who wish to read more detailed accounts. they are intended to provide a broader perspective of the area in question..-­ 17 Confiicts and cultural differences 18 Developing intercultural communicative competence :S.. then the cultural aspects of leadership can be examined in terms of the communicative skills considered appropriate and effective in different national/organizational cultures. as given below. as well as the insights they have gained from reading the cross-cultural concepts in the book. I 4 Business cultures in Asia.Preface nd Ise les pts ng. !ct of he tal ng .. Confronted with a dilemma described in each case. the sequence of chapters in Part Two and Part Three. The cases deal with many cultural contexts. This is because we have found case studies to be a very effective learning tool. Flexibility of approach The arrangement of material is such that it allows flexibility in the sequence to be followed.. For example.. m !S. thereby helping them to develop transcultural competence. need not be followed slavishly. The final activities at the end of each part pull the strings together. The chapters may be re-arranged according to the priorities of the instructor and! or student. ~h Ii­ 7 Culture and corporate structures 8 Culture and leadership 13 Business communication across cultures i I I I 2 Dimensions of cultUre in business 14 Barriers to intf'rmltllral communication 15 Negotiating internationally 16 Working with international teams . aud mergers to be combined with the negotiating process involved.. I I i 11 Culture and international marKeting management 12 Cultural diversity in organizations I . Africa and llit! Middle East 5 Cultural dimensions and dilemmas I i .

co. offers additional teaching resources which allow instructors to use the book more efficiently and effectively. xiv .Preface The website (www. but which are still considered dedicated to the book. some suggestions as to assessment (such as open-ended exam questions) are given. This site contains extra materials which essentially consist of PowerPoint slides presentations based on the content of the concepts. Furthermore. In addition.pearsoned. the website includes anumber of cases which have been substituted in the second edition. as well as suggested answers to questions relating to the activities.

xv . but by no means least. to the readers/users of the first edition for their advice and ideas. through their patient dedication and efficiency.lal ~ly. Wim and Anke. we would like to thank our respective partners. whose coverage of international business has proved to be an indispensible source of recent business case studies for the new edition. have allowed us to draw upon a considerable number of updated information sources. for their patience and encouragement during the time-absorbing process of revising the book. We are particularly indebted to our colleagues in the university library who. Our thanks also go out to the numerous contributors to the book. We are also grateful to the editorial team at Pearson Education. for their unstinting professional support. The contributions made by Fons Trompenaars and alumni from our university deserve particular mention. and to the Financial Times. first and foremost. Nyenrode Business University for allowing us to prepare this book and to revise it for the second edition. tUS to :ed We would like to thank. Last.

tmcorp. Figure 15. Intercultufill Press (Hall.J. and Barsoux J. Copyright 2004 by SAGE PUBLICATIONS INC BOOKS.I.w. 34.108. V.1 from International Dimensions ofOrganizational Behaviour. FT Prentice Hall (Schneider S. 21.3 from Managing Cultural Differences: Strategies for competitive advantage.c.1 from http://europa. and Gupta. Figure 6.1974) p.11.) 2007) p.T and Hall..! 7. P. part 1. 103. Figure 17.H. Figure 18. and Barsoux J. 1999) p.2 adapted from Understanding Cultural and Quinn. (eds) 2004) p.B. 1993) p. W. and Mody.2 from Handbook ofInternational and Intercultural Communication.1. Figure 9. 12.1 from 'Negotiating with "Romans" '. R.BOOKS in the formats Textbook and Other Book via Copyright Clearance Center.edularabic-and-middle-east-studies/ islamic-societies-of-the-middle-east-and-north-africa-religion-history-and-cultureIImagesl middle-east-and-north-africa-political-map (Poell.1. B. 1. Prentice-Hall (Kolb. Culture and Organizations: The GroBE study of62 societies. 106. (Gudykunst.E. (Hoecklin. D. Javidan.2 from Managing Across Cultures. lOl. 35 (2). P. with Gundersen. R. Figure 2. 2006). R. Sage inc.. Inc.!.A. Figure 4.. 2003) p. reproduced by kind permission of TMC http://www.J.1 from Culture and Leadership Across the World: The GLOBE Book ofIn-Depth Studies of25 Societies. p.. Prentice Hall (Schneider S. Nicholas Brealey (Marx. 42.2 [rom Business Across Cultures. repwduced by kind per­ mission of Professor Cameron and Professor Quinn. P.1 from Managing Across Cultures. Reproduced with permission of TAYLOR & FRANCIS GROUP LLC . 1999) p. Addison-Wesley. Upper . M.H. Dorfman.W.1 from Middle East and North Mrica Political Map. 1st.~. D.We are grateful to the following for permission to reproduce copyright material: Figures Figure I. Sage Publications Inc (House. Hanges. Figure 7.c.. Reproduced with permission of SAGE PUBLICATIONS INC BOOKS in the formats Textbook and Other book via Copyright Clearance Center. http://ocw. 160. University of Notre Dame OCW. F. N. 1994). (eds) 2002) p. S. EC. Figure on page 47 from Poster celebrating Europe Day. Princeton Training Press (1992) 2. South Western (Adler. Printed and Electronically reproduced by permission of Pearson Education.1 adapted from Experiential Learning: Experience as the source oflearning and development.1 from Diagnosing and Clumgitlg Organizational Culture. 2003) p. Reproduced with permis­ sion of SAGE PUBLICATIONS INC BOOKS in the formats Textbook and Other book via Copyright Clearance Center.1 from Thomas-Kilmann Conflict Mode Instrument. Brodbeck. Figure 6. 54 (WeiSli. R. Figure 17. 1995) p. 128.3. Prentice Hall (Cameron.. E.BOOKS. Lawrence Erlbaum Associates (Chhokar S. 2008) p. P.2 from Leadership. Figure 11. 32. K. Copyright 2007 by TAYLOR & FRANCIS GROUP LLC . 1984) p. K. Copyright 2002 by SAGE PUBLICATIONS INC BOOKS.S. 2003) p. Figun. (ed.. Figure 2.htm. Figure 10. Sloal! MmUigement Review. Capstone (Trompenaars. 5th. © 1984. and Woolliarns.. Xicom (Thomas.J. and House. 2001.1 from Doing business internationally: The cross-cultural challenges ­ Participant Workbook.J. London. and Kilmann.nd. Figure 3.1 from Breaking Through Culture Shock. Figure 1.A.

reproduced by kind permission of Professor Pierre Casse. 23 (l).9 from Culture and Leadership Across the World: The GLOBE Book of In-Depth Studies of 25 Societies.J. N. R.S.H. Editions Eyrolles (Gruere. M. 2nd ed. (eds) 2003) pp.BOOKS in the formats Textbook and Other Book via Copyright Clearance Center.-e. Table 2.idrinstitute. Intel'l1ational Journal of Intercultural Relations. Reproduced with permission of SAGE PUBLICATIONS INC BOOKS in the formats Textbook and Other book via Copyright Clearance Center.RANCIS GROUP LT. awl Laurent.F. Table 10. . and holas ional . 14-18 .8 from Leadership.J.R. J. http. Y. Table 14. Bennett. New Jersey. P.L. Figure 18.c.\' . 993... lS. Sage Publications Inc.//www.p. R. Copyright 2007 by TAYLOR & FRANCIS GROUP LLC . A. Row.J. r.e.Publisher's acknowledgements Saddle River. permission of TAYLOR & FRANCIS GROUP LLC . Lawrence Erlbaum (Chhokar. lX J. Elsevier (Ghauri.on of ences. Copyright 2007 hy TAYlOR & F.BOOKS.E.3. Tables lS. 83-91.l1l:~ frlln~ais et communications interculturelles. . (2). Table 2.1 from Intemational Business Negotiations. ~r S.L. 1997). M. Doz..J. . R..1 from Education for the Intercultural Experiel1ce. Peterson and Company (Strodtbeck F. and McNett. SIETAR (Casse. (eds) 2007) p.1 adapted from Variations in Value Orientations.4 from Trainingfor the Cross-ClIltural Mind. per­ !tw'al 101.J.J. Mendenhall. 1994) p. P.BOOKS in tlw formats Textbook and Other Book via Copyright Clearance Center..J. 2nd ed. 1981) pp.c. J. R.. F. Macmillan (Evans. Brodbeck. and Kluckhohn F.. Bennett. Table 18.1 from CUi. and House. pp./gen1e11T il1 International Firms.4 from The art of cross-cultural management: an alternative approach to training and development. Mayfield Publishing Co (Bodley J. 1961) pp. 2nd ed.2 adapted from Culture and leadership across the world: the GLOBE book of in-depth studies. 21-28.109 (Casrnir. Reproduced with. Table 8. reproduced by kind permission of Dr M. and Usunier J.L. Bodley. pper xvii . reproduced by kind permission of Professor Pierre Casse. Lawrence Erlbaum Associates (Chhokar S.10 from Culture and Leadership Across the World: The GLOBE Book of In-Depth Studies of25 Societies. 1981) pp. Brodbeck. (House R. Table 5.-P.M. Culture and Organizations: The GLOBE study of 62 societies. 2007) 1037. 9. 1991). 11-12. Table 15. permission of TAYLOR & FRANCIS GROUP LLC .BOOKS.2 from Foundations for the study of intercultural com­ munication based on a third~culture model. Journal of European Il1dustrial Training. Brodbeck. Table 18. reproduced by kind permission of Professor Pierre Casse.W. 232-234. Tables Table 1.BOOKS. (Estienne. (eds) 2007) p. 29. E 2000) pp.J. 2004) p. . Table 2. Intercultural Press (Paige. and House.) 1993) p. Reproduced with permission of TAYLOR & FRANCIS GROUP LLC . Blackwell (Maznevski. 2nd ed. and Morel. 21 (1).4 adapted from Training for the Cross-Cultural Mind. J. Copyright 2004 by SAGE PUBLICATIONS INC BOOKS. Table 2.NCIS \oUP enter. .1 from Human Resource MUTu. P.2 from The Blackwell Handbook of Global Management. 13. H.L. P. 144-145.3 adapted from Cases studies on cultuml dilemmas: How to use transcultural competence f01' 1'econcili1lg cultural dilemmas. M..J. Lawrence Erlbaum associates (Chhokar S. Nyenrode University Press (Browaeys. M. Sage (eds) I with ~thf'r urope liddle udies/ :ages/ )arne ges ­ .1 from Cultural Anthropology: Tribes. States and tl1e Global System. and Trompel1aars. SIETAR (Casse. 18. SIETAR (Casse. icorn ional 002) mis­ k via lence 984. 'Towards Ethnorelativism: A developmental model of intercultural sensitivity'. 1981) pp. Copyright 2007 by TAYLOR & FRANCIS GROUP LLC .A. Table 16. Reproduced with.OI'gi Tllhles lS3.ional ~n. P. reproduced by kind permission of Dr J. Ee.. d: The ar S. and House.M. 1989) pp. (eds) 2004) pp.6 from Trail1il1gfor the Cross-Cultural Mind. Tabl!:! 5... 97-136.1999). 30. (eds). 140-141.BOOKS in the formats Textbook and Other Book via Copyright Clearance Center.. 140-141.J. (ed.

G.2 adapted from The challenge ofcross-cultural management. tions company in Latin America Nyenrode Business University (Danker.-T.M. 17 (l). Activity ILl adapted from Analysis of the Indian truck market. Activity 12. R. Extract on pages 106-107 adapted from Case studies on cultural dilemmas: How to use transcultural competence for reconciling cultural dilemmas. C. 2005). M. R.). F. 41-50. and Trompenaars F. Reprinted by permission. 2008).-J. 335-342.-J.) 1996). and Komin. Activity 11.2 from Case studies on cultural dilemmas: How to use transcultural competence for reconcil­ ing cultural dilemmas.). Nyenrode University Press (Browaeys.1 adapted from Diversity versus localization within a telecommunica. F. M. (eds) 2000) pp. study. F. A. Nyenrode University Press (Browaeys. Extract 7. M./. M. pp.a r. McKinsey Quarterly. M. D.1 from Case studies on cultural dilemmas: How to use transcultural competence for reconciling cultural dilemmas. Activity 9.2 adapted from Case studies 011 cultural dilemmas: How to use transcultural competence for reconciling cultural dilemmas. Case Study 5. and Vloet. M. Case Study on pages 137-145 from (.-J.4 adapted fromTwo Americas: Brazil and the United States have more in common than they seem to. http://power. (eds)) pp.1 from Case studies on cultural dilemmas: How to use transcultural competence for reconciling cultural dilemmas. All· rights reserved. www. Activity 4. The Financial Times.1 from Stress and worker suicides mean the future's not bright at Orange.. Nyenrodc University Press (Engelaer. and Trompenaars. Anrl Se:ife:rt. Activity 12. F. 2005). 2002) pp.htm (Quinion. Copyright Guardian News & Media Ltd 2009. Extract on page 250 from Case studies on cultural dilemmas: How to use transcultuml competence for reconciling cultural dilemmas. and Browaeys.t. (eds) 2000) pp. F.). Case Study'ma . E. pp.-J.aldp. (ed. and Trompenaars.-J.1 adapted from Case studies on cultural dilemmas: How to use transcultural com­ petence for reconciling cultural dilemmas.1 from Wiring design faulted for Airbus A380 production delays (Blog Article 14634). Copyright © 2008 McKinsey & Company. (eds) 2000) Case 7. (eds) 2000) Case 58-68 (Fisser. M. and Trompenaars. Extract 13. and Trompenaars. M.R. 25. Artivity 7. Activity 5. 19/09/2009.2 adapted from Case studies on cultural dilemmas: How to use transcultural competence for reconciling cultural dilemmas. and Trompenaars. Nyenrode University Press (Browaeys. Nyenrode University Press (Browaeys.2 from Why multinationals struggle to manage talent.-J. Editions Sciences Humaines (Joumet N. Activity A2.$f. Nyenrode University Press (Browaeys. (eds) 2000) Case 6. and Jones.1 from Meeting-room jargon: just fuel for buzzword bingo?.-J. 12/02/ 2009 (Goffee. 10-13 (Guthridge. (eds) 2000) Case 4. and Trompenaars. Nyenrode University Press (Browaeys.-J. 2010). Copyright © The: FinAnr:ifll Timl's J. (Davis S. 12/11/2009..Publisher's acknowledgements Text General Displayed Text on page 11 from La Culture. Nyenrode University Press (Browaeys.1 from The challenges facing leadership. 20-21. Activity 3. (eds) 2000) Case 9. F. 4. M. M. Activity 3.t(l. M. R. (eds) 2000) Case 10. 2006). Activity A2. M. p.-J.. Nyenrode University Press (Browacys. Nyenrode University Press (Browaeys. and Stal.) 1996) pp. The Economist.2 from Team learning on the edge of chaos. xviii .elecdesign. S. and Trompenaars. Activity 5. 31-32. Price. (ed. F. Nyenrode Business School (Sierkstra. The Learning Organization. ms-e. Case Study 5. Nyenrode University Press (Browaeys. This article was originally published in McKinsey Quarterly.-T.worldwidewords.1 adapted from Masters Thesis.2 adapted from The Challenges of Crass-Cultural Management.-J. Nyenrode University Press (Browaeys. F. RJ. M. and Trompenaars. Extract 10. Nyenrode University Press (Brow<le:ys. F. M.1 from Case studies on cultural dilemmas: How to use transcultural competence for reconciling cultural dilemmas.. The Guardian.

.2 ie adapted from Holiday groups target India's newly affluent travelling set.).. Copyright © The Financial Times Ltd. Financial Times. and Trompenaars. Copyright © The xix . 1.1 adapted from Masters of collaboration Financial Times.2 from Case Studies on Cultural Dilemmas. il­ Financial Times. R.). M. Case Study 3. and Trompenaars.2 from A nd tale of two Russian factories..1 from Le Patron. 02/03/2007.. M. Case Study 4.). Extract 13. (eds) 2000) Case 11.2 from Untangling alliances and joint ventures Financial Times. D. 03/06/2007. M. Case Study 3. 8 (Lester. Fil1ancial Tifflf1S.). ent. Case Study 1. Extract 4. Financial Times.2 adapted from Lloyd's of London hits at 'difficult' India. Copyright @ The Financial Times Ltd. Copyright © i) The Financial Times Ltd. and Trompenaars. Copyright e © The Financial Times Ltd. Extract 4.). R. (Nakamotot. Copyright © The Financial Times Ltd. B.3 from L'informatique a-t-elle un sexe?.-F. 07/10/2009. Case Study 4. de Case Study 3. A. 17/08/2009. T. Copyright © The Financial Times Ltd.).-L.). 10 (Maitland. 10 (Simon. 28/0612005. Activity 3. 05/02/2007.1 from Case Studies on Cultural Dilemmas.1 from Brussels launches probe into secret accounts. p.1 from English names catch on among Chinese: Young bridging a gap with West. F. J. A.). 8 (Lapper. The Financial Times.Le Monde Diplomatique. 9 (Kazmin. 11 p. 03/02/2010 (Reed.).). The Financial Times. . The Financial es Times. Nyenrode University Press (Browaeys. 04/0312010 4. 17 (Vives. 12.3 from A new generation of family firm.). !/ 18/05/2005. Box 2.. p.1 from Observer: Fake News. Activity 2.1 from Case Studies on Cultural Dilemmas. Financial Times. 09112/2004. Copyright © The Financial Times Ltd. The Flnam:iul 'l'imes. Activity 13. 3 (Collet. So). 07/07/2006. 09/01/2006. p. 10/03/200'/. 23/03/2010 (Lamont.4 from FT Report . J. Case Study 14. J. The Financial Times. X. Case ) Study 9. not Ltd .Qatar. The Financial Times. Activity 14. p. Case Study 17. S der Chef and the boss. 21 (Hall. p.1 from China suspends India power projects.E. and Leahy. I The Financial Times. J. I. B.). A). Financial Times. 1511212006. Copyright © The Financial Times Ltd. to clip wings of the chaebol.. p.-J. p. 14/08/2009 (Simon. (eds) 2000) Case 1. 03/03/2010. Activity 9.). reproduced by permission of the author.1 from Marriage after a century of cohabitation: Shell prepares for the next merger round. The Financial Times. M. 29/06/2007. Copyright @ The Financial Times Ltd. Activity 17. M.-J. The Financial Times. 16/07/2009 (Lapper.1 from Unleash the power of the Hispanic market by avoiding these pitfalls'. Case Study 4. Activity 8. 12 (Skapinker. 19/10/2006 (Manzoni. Case Study 10.1 adapted from Airbus and the damage done by '11economic patriotism.3 adapted from Australia: Proud of its seat at the top table.).-J. (eds) 2000) Case 8.). Copyright @ The Financial Times Ltd.. The Financial Times. use ess The Financial Times lies as.1 adapted from South Korea tries F.2 from Why financial "al scandals differ in the US and Europe. and Barsoux.2 from GM and Chrysler steer different paths to recovery. Boston Globe. 07/0412010 (Schafer. Nyenrode University Press (Browaeys. Activity 7. Financial Times. Financial Times. from Exercise misfires. Financial Times.). April (Baroutakis. M. 2010). ign 'am ore lies las. p. Activity 3. Quirk's Marketing Research Review. p. 16/07/2003.7 adapted 1 from Transfer of assets tarnished by elitism.1 adapted from Carmakers' alliance faces cultural chasm. F. p. 21. J. J.1 from France Telecom in long haul to raise morale and margins. 10. J. 12 (Lucas. 01110/2006 (Pocha.2 26/01/2010 (Smith.. p.).3 adapted ). 1 (Wallis.S.).4 from South American unity still a distant dream..2 aJapted from The capital gained from culture.. Extract 9. Financial Times. 13/04/2005. 9. Case Study 18.).Publisher's acknowledgements tN.. F. The Financial Times. 7. 2 (Field. 2000). p. reproduced by kind permission of Quirk's Marketing Research Review. Nyenrode University Press (Browaeys. W. Case Study 4. Activity 4. Case Study 10. P. and Reed.

Financial Times.1 from Germans aim for a World Cup surprise: they're fun The Financial Times. The Financial Times. Copyright © The Financial Times Ltd. Extract 13. Activity 14. 04/01/ 2008 (Fifield. 31 (Lau. 22/05/2006. p. 02/02/2010.. Copyright © The Financial Times Ltd. Extract 16. 13 (Maitland. M). Activity 18. 09/11/2006.2 from A matter of interpretation. English-speaking culture brings communication problems.). 20/03/2010 (Kay. J. 19 (Leahy.). 27/03/2007 (Maznevski. Extract 10. 19 (Williamson.). p. J.. A.. 8 (Baithwaite. A.). 09110/2006 (Peel. p. Case Study ILl from Cadbury to raise India's role. Financial Times. Copyright © The Financial Times Ltd. 16 (Alicia Clegg). Financial Times.2 from Why English is de rigueur in many French boardrooms.2 from Third of companies think they have been hit by bribery The Financial Times. and we would appreciate any information that would enable us to do so.1 from Global communication..1 from Diversity in Teams. The Financial Times. J. John Kays way. Financial Times. p.1 from Straight-talking. C. The Fi11ancial Times. T.Publisher's acknowledgements Financial Times Ltd.2 adapted from Samsung sows for the future with its garden of delights.2 from Decision-making. Copyright © The Financial Times Ltd. Extract 16. and Smith. Copyright © The Financial Times Ltd. Activity 10.).. H. Copyright © The Financial Times Ltd. M. In some instances we have been unable to trace the owners of copyright material. p. The Financial Times..). Case Study 13. p. 01/06/2009. 25/03/2008. 09/09/2004. Activity 13. xx .).).


learned human behaviour. or behaviours Culture Is based on arbitrarily assigned meanings that are shared by a society I J ! Structural I Symbolic I 3 Source: Bodley (1994): 9. Family.1 Diverse definitions of culture I Tupical i Culture consists of everything on a list of topics. Those working in the field of cultural anthropology.. or rules for living Culture is the way humans solve problems of adapting to the environment or living together Culture Is a complex of ideas. religiuf1 and economy Culture is social hf'rltf. or categories. Although culture is reflected in individual behaviour. that Inhibit impulses and distinguish people from animals Culture consists of patterned and interrelated ideas.. work . which in turn serves as a framework for Part One. such as social organization. values. or learned habits. social. alone. the authors of this book consider that the fundamental aspect of culture is that it is something all humans learn in one way or another. psychological and linguistic data. The national culture and the particular region which people live in also help to shape a person's cultural profile. a way of life . based on their analysis of ethnological. Table 1. norms and values. that is passed on to future generations ! I Historical Behavioural Normative Functional Mental .. it is a way of thinking shared by individuals in a particular society that makes culture what it is.all these help to form this code and determine how people see themselves and the world. but rather a code of attitudes. .Setting the scen. culture is shared. for example.e This introductory chapter will give an outline of the research in the field of culture and management. Tile concept of culture Many experts in their fields have wracked their brains to COme up with what they consider to be their concept of 'culture'.lge. school. symbols. a way of thinking that is learnt within a social environment. It is not something people inherit.l) gives an idea of all the facets of culture that need to be taken into account from an anthropological perspective. friends.­ . The attempt made by Bodley (1994) to summarize these (Table I. the social environ­ ment. or tradition. Although acknowledging the multiplicity of cultures. have come up with a long list of definitions of the concept. ' ~ ~ Culture Is ideals.

Operating at a second level.the key dimensions . These are the cultural rules. Here.Introduction to Part One Observation Behaviour Figure 1. artefacts and attItudes can be observed in terms of architecture.' operates on three levels.can be ascertained from the work of the anthropologists Kluckholn and Strodtbeck. The underlying norms and values can be ascertained through interviews and surveys. In 1961. Exploring culture can be compared with exploring the ocean. This level is difficult to explore and what lies there can only be construed through interpretation of what is happening at the other levels. making contact.vllhle . based on one devised by Schneider and Barsoux (2003).and deepest level·· has to do with basIc assumptions. language. Giving dimensions to culture Assumptions in the exploration of culture . the first beinS on a level where it is obser. On the surface. they developed a comparative model with six cultural orientations: 4 . It is to do with Ihe question 'Why?' and the attempt to anSwer it with more than just a 'Because!' Figure 1. rituals and behaviour can be seen. The third .1 Navigating the seas of internatIonal business Source: Adapted from Schneider and BarSOLlX (2003): 21.or norms .1rf.1. artefacts.are statements of fact ahout t. eating and so on. contracts. as it t~ngible. The assumptions lying at the very bottom can only be inferred through interpretation.he wny things are. Culture operates on three levels. rituals. how things should be. culture is t. Values are to do with general preferences as to what is good or bad. These give an idea of what may be below. gives a visual inter­ pretation of these levels of culture and the ways they can be investigated. Interpretation involves trying to explain why we act according to particular rules or in line with particular values. Beliefs . which explain what is happening at level one and determine what is right or wrong. dress codes.o do with norms and values. Cultl.

Understanding c. the relationship to nature.In Hall Spaco: porsonal/physlcal Time: monochronic/polychronic Language: high contexVlow context Friendships Hofstede Uncertainty avoidance Power distance Individualism/collectivism Masculinity/femininity Figure 1. the concept of space (private/public). 5 . 6. These dimensions can help to define the cultural profile of people and discover the preferences that cultures have in relation to their environment. Adler. 4. 3. past. These cultural orientations have inspired researchers in culture and management.ulture and management The researchers referred to in Figure 1. the nature of people.2 have developed models relating to this area: Schein Relationship with nature Human activity Human nature Relationships with people Time Truth and reality Trompenaars Relationship with nature Relationships with people Universalism versus particularism Individualism versus collectivism Affectivity Diffuse versus specific Achievement versus ascription Relationship with time Adler nature Relationship with nature IndiViduatisVcollectlvist Human activity (being/doing) Space (private/public) Time (pasVprosenVfuture) HUJlIl. the temporal focus of human activity (future.2 Key dimensions of culture Source: From Schneider and Barsoux (2003): 34. such as Schein. present). the relationship to other people.Introduction to Part One 1. Hofstede and Trompenaars. 5. Hall. 2. the modality of human activity (doing and being).

Introduction to Part One ~ > € Edgar Schein examined the effect of the organization on culture. The approaches presented are intended not only to provide some understanding of culture and management in an international environment. e Nancy Adler pioneered the study of the influence of culture on organizational functions.1 National cultural dimensions in the business context. Concept 1. The levels at which culture operates . The chapter is divided into two concepts: «II Concept 2. an ongoing research project.are also described. The concepts presented in each chapter generally contain a number of spotlights and mini-cases.2 Levels of cultures. its facets as well as the role of norms and values. Edward Hall was one of the first to study the role of communication in management. the concept will analyse the meaning of value systems for societies . The activities which round off each chapter allow the reader to apply what has been learned from the preceding concepts to a particular scenario or extended case study. A spotlight is usually a short text that serves to illustrate a particular theme or subject developed in the concept in question.1 Facets. After giving a short definition of the word 'culture' and its various 'layers'. Part Two and Part Three are structured in a similar way and contain all the features described above. The five dimensions developed by Hofstede are explained. but also to help develop the attitudes and behaviours desirable in a specific cross-cultural context. Chapter 2 Dimensions of culture in business Chapter 2 explores cultural dimensions in the business context with particular reference to research by Geert Hofstede and GLOBE (Global Leadership and Organizational Behaviour Effectiveness). .llls that define them.of culture. particularly that devised by Hofstede. 'the chapter is divided into two concepts: fill Concept 1. Part One examines the effect of culture on management by examining the insights each of these researchers has developed. .n to society . A mini-case is essentially a short case study taken from business life and which requires analysis by means of questions posed afterwards.. Chapter 1 Determinants of culture Chapter 1 examines the very concept of culture. It also puts forward criticisms concerning the cultural dimension construct. and the extremes of each characterized in terms of management and business. This concept considers the levels of cultures ranging from national to organizational level and examines those elemp. Two final activities will close Part One. The points of reflection which follow the concepts are intended to consolidate the reader's learning by raising key issues arising from the subject matter presented. e Geert Hofstede and Fons Thompenaars both established dimensions to measure the impact of national culture on management. Many of these cases are based on (edited) articles from the Financial Times.from family through organizadQ.

® Concept 4.influenced by Hinduism. Concept 4. the one influenced by Confucianism. Concept 5.1 Asian cultures. This concept focuses on countries to which European cultures were 'exported'.Ountries in the Middle East. Elements in particular countries belonging to the European dusters are highlighted. The chapter is divided into two concepts: /[~ Concept 5. together with the reaction given by Hampden-Turner and Trompenaars to Hofstede's comments. an outline is given of the cultural elements shared hy Arah l. Africa and the Middle East The chapter will cover the remaining clusters outlined in the same metaconfiguration used in Chapter 3. and some similarities and differences between component countries noted. which is presented in Chapter 2. and highlights the dilemmas these raise in management decision-making. particularly those from the work of Fons Trompenaars. The countries in these clusters are examined in terms of certain similarities that set them apart from Western business cultures. Hofstede's review of these dimensions is outlined.2 Mrican and Middle East Southern Asia . the other . This concept explains the method devised by Trompenaars and Hampden -Turner for finding a way to resolve dilemmas when doing business with different cultures. ~ 7 .2 Reconciling cultural dilemmas. Two further countries are included in this concept­ Russia and Turkey. Latin America and Australasia. which carl be useful for the analysis of cultural differences in management. Chapter 3 Business cultures in the Western world This chapter. together with the cultural diversity of one economically important country. Its starting point is a metaconfiguration of the GLOBE culture dusters. Finally. A brief exploration of the Power Distance dimension exemplifies how societal values and practices affect organizational culture on all nine dimensions of organizational cultural practice. South Africa. The countries covered include those in North America. Chapter 5 Cultural dimensions and dilemmas Chapter 5 explores further cultural dimensions. The nine cultural practice dimensions devised by the GLOBE project are reviewed. The chapter is divided into two concepts: <iii Concept 3. Ijp Chapter 4 Business cultures in Asia.2 American and Australian cultures.Introduction to Part One fI Concept 2. This concept returns to the sources thnt inspired researchers in cross-cultural mallagt:lIH::nl. Concept 3. together with Chapter 4. European business cultures are examined in cluster terms. Particular attention is given to the Trompenaars' dimensiuIls.1 Values orientations and dimensions.2 Cultural dimensions according to GLOBE. The importance of tribal identification among sub-Sal1ara couiilrit:s in Africa is touched upon. gives an overview of business cultures in the world. Two clusters are considered in Asia.1 European cultures.

J. This concept briefly examines approaches to value-based cross-cultural theories. 8 . (1961) Variations In Value Orientations. subtitled 'An empirical study of cross-cultural relations between French. and Barsoux.Introduction to Part One Chapter 6 Cultures and styles of management This chapter proposes value orientations drawn from those presented in Chapters 1 to 5. Mountain View. you will gain more Insight Into: @ understanding the link between culture and management.H::lck. Harlow: FT Prentice Hall. • exploring ways In which cross-cultural effectiveness can be developed. Using this profile.H. This concept presents a model of culture based on cultural value orientations and examines their influence on managerial activities. CA: Mayfield. The chapter is divided into two concepts: • Concept 6. S. investigates how managers of three European cultures cope with cultural differences when they are working together. states and the global system. Three steps for developing cross-cultural effectiveness. readers are asked to outline strategies to enable them to operate effectively in a particular country. Schneider.2 Other views on cultural values. This study. allU SlIoul!. (1994) Cultural Anthropology: Tribes. References Bodley. After working through Part One. Klucklwlfl.C. IL: PetllrSOl1 Ruw.L.1 Management tasks and cultural values. Final activities Part One ends with two extra final activities: 1. 2nd edn. as well as other value orientations taken from the work of Edward Hall. • Concept 6. among others. (2003) Managing Across Cultures. F. The chapters of Part One are followed by a final activity in which readers draw up their own cultural profile. The Galderma case s~udy. 2. J. approaches that reflect the globalization of business. F. Evanston. German and British managers in an international company'. ·GJ determining the effect of culture on the management of business.

These two aspects of culture will be developed in this chapter. at the same time. a society is an organized group of individuals who share functional relations. Eut:h society defines iLs own norms and the way" ill which they an. These roles are determined hy culture. The complexity of present-day societies is increasing the roles for an individual and is. The relationship between culture.. According to Fleury (2002). u~aliz. historic or geographic characteristics. It can therefore be saId that culture is a structure that gives form to behaviour and fixes the framewurk of exchanges between the people of this group.1 will explore the notion of culture in society. Concept 1. Societies are organized politically into nations. <it. adaptation. What does culture really mean? One can never use the word 'culture' without being obliged to give a range of definitions that contradict each other! Even if this term had only one meaning. but within this national unity subcultures may exist with specific cultural characteristics. language and institutions.(. With the advent of globalization. organizations and management. The concept of culture at various levels. both national and organizational. The function of culture is integration. irrespective of whether it 9 . @ The concept of culture and the role of norms and values in determining culture.Culture is an integral part of all human societies. while Concept 1. and share their nationality. These groups use the society in which they are embedded as their framework of reference. diversifying the ways these roles can be interpreted. the notion of culture has taken on a broader meaning and has come to be an important element of organizations.2 will consider the influence of culture on socio-economic realities such as the management of companies. you will gain an understanding of: Iii.!u. while being delineated by their socio-economic. comUJunication and expression. Learning outcomes After reading this chapter.

Rather than look for an exact definition. There is no cultural standard whereby one group's perception of the world is intrinsically superior to another's. Norms are the written and unwritten rules of a society. determin­ ing what is good or bad with regard to behaviour. People are. It is passed down from generation to genera­ tion and is the basis of the socialization process in childhood when the norms ofbehaviour and the values on which these norms are based are learned. . it may be preferable to look for a meaning that is blurred but which somehow addresses the rather abstract idea of culture. such as those in Nordic Europe consider this sort of behaviour to be 'over the top~ but it is really just a matter of comparing the com­ munication styles of one culture with those of another. less exuberant cultures. use exuberant body language and facial f. these form the national characteristics of a culture. but sharp enough to reflect key elements of a culture. includes systems ofvalues. beautiful or not beautiful. sociologists.'xpressions. Norms are the rules of a society. the architecture. The second layer contains the 'norms and val\les~ Every culture has its o'wn system of norms and values. their concepts of organizations are the fruit of the representations carried by their ancestors'. Finally. the houses. he says: 'Culture. their behaviour at work.Chapter 1 Determinants of culture was aesthetic. Collective programming of the mind implies that members of a group are programmed by that group to perceive the world in a certain way. Can one therefore state that a change of culture would only be a change in representations? Anthropologists. national. It is what you notice immediately when you go abroad for the first time: the language. the food. for example. Although norms and values are generally presented as a unit. this definition implies that the group's culture is somehow learned rather than being innate. The first. Consider the implications of Hofstede's definition. the group shares meanings that hold them together. allowed a certain individual freedom of choice between what 'you should always do' and what 'you should never do'. organizational or managerial. a distinction must be made between the two. their visions ofwhat is good and what is wrong. Together. probably because it is blurry enough to encompass other definitions. The building blocks referred to earlier need to be examined more closely: the values that cultural groupings share and the resulting norms of behaviour. philosophical. Each culture can be seen as having three layers. A value is something experienced inwardly and which is not up for discussion. In other words. When elaborating on his definition. however. in this sense. the buildings and so on. Genelot (1998: 195) stresses that 'men are products of their culture: their representations. Other. Hofstede (1980: 25) refers to culture as 'the collective programming of the mind which distinguishes the members of one human group from another'. right or wrong. historians and philosophers have all put forward their definitions. and act as its framework of reference. but none of them seems to be sufficiently precise or inclusive. Values are what is con­ sidered important or unimpurtant. and values are among the building blocks of culture: This definition is frequently referred to in cross-cultural literature. outer layer is the 'behavioural' or 'explicit' level. it would only be a form of individual or collective representation. culture is to be seen as relative: no cultural group is 'better' in any absolute sense. The preference or· aversion it contains is taken for granted by its bearers. But it is also the communication style: Latin cultures. themselves and others included. Furthermore.

will be severely punished. however... In a number of countries. Anyone who attempts to launch a coup d'etat there. These are difficult to describe or explain. certain limits are neverthe­ less placed on wayward behaviour. Moreover. for example. involvement in a corruption scandal does not necessarily meal1 the end of a politician's career.. a politician must resign. where equality between the sexes has little chance .. in which religion plays an important role . since every culture is so deep-rooted.Concept 1. do people eat with a knife and fork or with chopsticks? Well. This is. the case in many Arab countries. manners and many other aspects of daily life. large families are encouraged. When you are asked to justify why you do this or say that. Politics and norms and values The il)nU~llU. for example.. . how they should do their hair and how they should enjoy themselves. birth control is encouraged and the authority of the state is recognized. Not every individual 'operates' from the same basis. but also from one part of a society to another.. the answer is often: 'I don't know. 3. 2. where the people are not happy and rather intolerant. uf lJuliliL~ U11 l1unll~ anu values is obvious when it comes to bringing global unity to humanitarian norms and vnltles. such as those in Scandinavia and the Netherlands. Whel1 an affair came to light between a US president and an intern working 11 . This is often the situation in ex-communist countries. tolerant and democratic. it is acknowledged that there is corruption in political life now and again. Post-modern society . conformity is rewarded and individualism rejected. A SOCiety in which survival is the primary concern. These arc formally laid down in the 'Universal Declaration of Human Rights'. what constitutes a scandal and what does not. is a typical example.. despite being investigated for embezzlement for example. nor do subcultures within a society. However. The freedoms a politician may enjoy in his/her private life are also different according to country. Rational society. where corruption is regarded as an ul1avoidable evil. that's the way people eat . because norms and values are always changing. The system of values and norms not only varies from culture to culture. a culture is never static. hl southern Europe. tl1ere are uegrees of acceptance with regarJ to what politicians in each country mayor may not do. 4. however. Traditional society. but in no way is it regarded as acceptable.. Sociologists who have compared the value systems of countries in terms of the way in which norms and values have developed in society. Germany . 2002: 339): 1.. Recent reports from Iran. for example. In Surinam. have concluded that there are four categories (Ruano-Borbalan. where materialism is predominant. politics also has a say in education. If caught out. and which lies at the core of 'culture' contains its assump­ tions and beliefs. Why..1 Facets of culture The third and innermost layer.. In Nordic Europe.. for example. the changes are never sudden or extreme and a certain constancy is maintained. in which the interests of the individual come first. for example. show the degree of polilical interference in people's lives there. Students from Iranial1 universities heavily criticized their llighest political leaders a11d the governmel1t's vice squad for persistently prescribing how Iranians should dress. Convi:!r~dy. A politician may be involved for several years in corruption proceed­ ings but stay in his/her post. dress.

His work is a useful guide in the examiIlation of cultural assumptions in a managerial cont. without their duality being lost. 2004: 14 In terms of external adaptation. sex scandals of this nature do not happen.! in the White House.which have evolved over time and are handed down from one generation to the next. . It had to do instead with the opposition between ideas. what is important in the forming process of European culture is the meeting of diversity. The impeachment process stumbled in the Senate and the president was allowed to complete his term of office. In France. After social norms and values COmes the third layer of culture: assumptions. political and social integration is taking place between countries. the French philosopher Edgar Morin (1987). religion/rationality.Chapter 1 Determinants of culturE. The questions raised by Schein on cultural assumptions of organizations imply that management in an international context has not only to take account of the norms and values of the specific culture of a company. of two different principles. but is particularly intensive within the European culture where there is an enormous amount of interaction and interference within areas to do with values. of opposite poles. declared that the creation of a European culture had nothing to do with dominant basic ideas (such as Christianity. asking: to what extent does management within a culture assume that it can control nature or to what extent is it con­ trolled by nature? This question is allied to that of the nature of human activity: is doing more important than being. however. e. 'Insiders' may have been aware of the double life being led by their country's president (an illegitimate daughter of his eventually emerged at his funeral) but. Put another way. this means asking a question such as: 'Are humans basically assumed to be good or evil'. The association of contradictory terms or concepts can form one complex phenomenon. their sexual orientation is again regarded as a private matter. but also of its cultural assumptions. Where a certain degree of economic. his extramarital relationship was regarded as a private matter. 12 . rationalism.g. a country where marriage between homosexuals is allowed by law.shared solutions to universal problems of external adaptation (how to survive) and internal integration (how to stay together) . mythical thought/critical thought. Homosexual politicians may not be accepted in many countries. but in the Netherlands. Schein. This 'dialogique' can be found in every culture. at the time. He takes mankind as an example: a human is both entirely determined biologically as well as culturally. or trying to determine whether relationships at work are more important than the task itself. and humanism/science. for example. the complementarity of ideas. can one talk of a movement towards a shared system of norms and values? Referring to the possibility of European countries sharing such a system. or science). humanism. This is what Morin calls 'dialogique': the union of two forms of logic. when identif. this means.ring organizational culture. for example.ext. acting more important than reflecting? In terms of internal integration. This layer is also referred to by Scheu). and offers insights into the question of managing relationships. He defines culture as: a set of basic assumptions . there was a call for him to be impeached because he had lied about his relationship with the intern during a formal investigation.

the terms 'culture' and 'nation' should be carefully distinguished. If 'culture' is defined as a set of historically evolved. A company or organization can develop its own culture. Iraq and Iran. At the micro level. as Tayeb (2003) makes clear. as Tayeb points OUl. be it language. This applies also for a collection of companies within a particular business or sector. This is an obvious example of one culture straddling the political boundaries of two or more nation states. must be taken into account by organizations going about their business. National culture Although cultural make-up has many facets reflecting experience in life and member­ ship of different groupings at different times in various environments. attitudes and meanings. the organization is influenced by cultural elements relating to employer­ employee relationships and to behaviour among employees. Although they are a people with a distinctive cultural identity. as Tayeb 13 . or for organizations in. ethnic origins or a shared historical experience in their development. culture can develop at different levels . have a bearing on the way organizations operate. CUlture and nation When cross-cultural matters are under discussion. These can range from specific employment laws and safety legislation to general economic and social policies. the public sector. then this has an influence on organizations at both macro and micro level. In this concept we will try to distinguish levels at which cultures develop. This culture/nation distinction can. Small groups without blood relations can develop the same closeness through sharing a pastime. learned and shared values. but also through the desire of the nation's rulers to share legislation at social and economic level with other nations within some kind of association. religion. share a life together and develop a certain togetherness through undergoing experiences inside and outside the home. In a business context. or a grouping of nations themselves when they share a common experience. for example. they nevertheless live in three nation states . provided that it has what Schein calls 'sufficient shared history' (1999). They have to consider the measures taken by the state to protect its interests and those of its inhabitants. or regions across countries. She takes as an example the Kurds. the nation.According to Schein (1999). This collective experience can be related to regions of a country. These macro level considerations are not only subject to change thwugh polilical changes in government. a culture stalts developing in a context where a group of people have a shared experience.within a department or at the various ranks of a hierarchy. say. in terms of its laws and economic institutions. At the macro level. there is. a hobby or occupation. Those wishing to introduce any changes with a view to improving management effectiveness or increasing productivity must take account of these elements when implementing such changes. Members of a family.Turkey. the experience they share may be rich enough to allow a culture to be formed.

. 'a constant thread .. She then refers to 'institutions' that contribute to the establishment of a national culture: a) Family. in turn. television and radio. the physical environment. regard this as being a threat to the distinctive cultural characteristics of a nation. but also in terms of spreading values. whose pro­ ducts and services can influence the way people llvt::. The value system on which education is based and the choices it makes in terms of the curriculum both help in the formation of a culture. The ever-increasing presence of mass media has given a new meaning to shared experience: newspapers.. Tayeb (2003) gives a list of these elements and considers their effect at both micro and macro level. especially those in other countries: this thread is our national-culture'. attitudes. Instead. She starts with two elements that contribute to the building of a nation and the creation of a national culture: . • the history the nation has undergone. e) The multinational company. through our lives which makes us distinguishable from others. Furthermore. particularly wh~re educational institutions are well deVeloped. In organizational terms he remarks on how cultural elements affect the way strategy is determined. but religion has helped in all sorts of direct and indirect ways to shape the environment in which people live. Edgar Schein (1999) refers to the power of culture on account of the extent to which it determines our behaviour individually and collectively. 'bring people closer together irrespective of their geo­ graphical locations. tastes. At the micro level. but it will contain enough elements which together enable a national culture to be created. This. Religious beliefs can have a significant effect on a person's view of the world. 14 . whose operations cun affect how and where they work. short. can deter­ mine the quality and versatility of human resources in the labour market. b) Religion. magazines. the multinational is also influenced by the preferences at national level with regard to product taste and form and the promotion of its goods and services. This does not mean that people need to 'believe'. the mass media have created a new common dimension in which people can share experiences if they choose to. goals are established and how the organization operates. The basic social unit where 'acculturation' takes place. c) Education. d) Mass communication media. the key personnel involved are influenced by their own cultural backgrounds and shared experience since these have helped shape their own values and perceptions. This national culture may be heterogeneous in nature. 2003: 20). culture' (Tayeb. where the culture of a particular environment is instilled in a human from infancy. the teaching approach used and the manner of learning can also affect future learning. Tayeb pays particular attention to the effect of recent advances in communication on the development of culture. meanings and vocabulary . however.Chapter 1 Determinants of culture (2003: 13) says. She does not. This is a powerful culture-building institution.

or developed by a given group.Concept 1. if an organization develops into a multinational conglomerate. and feel in relation to chosen problems. 15 . as well as offering mutual support panies set clear goals. ensure the success 01 a Joint venture between 2. to showing concern This is apparent in the way Bulgarian com­ for colleagues. CorporatecultLJre The term 'corporate culture' takes the question of organizational culture a step further. to than those in Sl. 3. or the national/regional culture or a combination of the two. carefully measure the and understanding. more so than their Slovak and Dutch counterparts. they are seen as less open to (self-)critlcism and less likely to take risks. A study made on joint ventures between the Netherlands. innovative and Source. we can say that organizational culture is the acceptance in a tacit or formal way . Innovative climate: East and West European companies.of norms of specific behaviour by the members of an organization. the Slovak Republic and Bulgaria revealed some key problems in the following areas: market-oriented than their Bulgarian or Dutch equivalents. Mutual support climate: When it comes. a firm involved in a joint venture with a company from another country may well find that the presence of the 'foreign' partners influences the underlying culture of the firm. the partners The degree to which employees consider their need to establish mutual trust as well as develop organization as being innovative is much respect for their mutual differences. the culture at headquarters may influence that of subsidiaries abroad. Drawing on this definition. higher among the Bulgarians and the Dutch than among the Siovakians. companies in the Slovak as well as monitor the efficient and effective Republic appear to be much less supportive use of materials. Extract (adapted) from: Browaeys and GObbels. discovered. both in solvinq work and performance of the company and its employees. (d) that has worked well enough to be considered valid and. 1999: 243-251. Slovak companies are considered to be less flexible. In the same way. for example. The main conclusion of the study is that. As Meschi and Roger (1994) point out. Goal-directed climate: Bulgarian employees consider their com­ panies to be particularly goal-directed. 1. non-work problems. Organizational cross-cultural challenges Setting up joint ventures between East and west European companies has involved a number of cross-cultural challenges. (c) as It learns to cope with its problems of external adaptation and internal integration. (b) invented.2 Levels of cultures Schein (1990: Ill) develops his definition of culture when defining organizational culture: (a) a pattern of basic assumptions. therefore (e) is to be taught to new members as the (f) correct way to perceive. think. What evolves over time in terms of 'corporate culture' can have as its basis the 'original' organizational culture.Jlgaria and the Netherlands. Moreover.

. said. . said 'management by stress' was not uniquely French.·· 16 . .f a neW trend acress Eurepe. . ' Thespateofsuiddesthat haS rbck~d Franc~ . ..:ere deliberately brekenup to. ~puttlngthehumah at the heart afaur ol'ganisatlen'." .. but also by internal cultural factors.' said Gervais Pellissier.· DldierLombard.r compulseryreassignments. . " France Telecom France.we shbLlIdbec6me cit better.r pestings.longt:. addressingi! in the proper wa'y.They must also. autonomy to. is important.chlef executive.. Sourc~:Extractfrorn 'Stress and wOfkersGicides mean the future's not bright at Orilnge'.of staff taking their lives at Renault.qivlngmorp.. work {er its 100. Urveas. falls tqSb~phaneRictiard. the qperator IsstHI 27 percel1tewned bythe~tcJte. ~t1ief financial ~fflceh 'By bringing it eut Intoth~ open and. Teams v. aCGT Brittany union representative. 'It's net change. .. The Guardian. but part o.. .the deslgnategsucce. letal managers. staff while protectingiIS ICmg-termper. FranteTele~pm'sseniqrexecutives are belatedly. This is determined 110t just by external cultural factors such as the national and regional cultures.isparticularlYsensltlve to workplace suicides after patterns . fewe. she ide~tified feelings ef tieing undervalued and 'lew self-esteem' running from directery inquiries. the cut-throat ways ef a privatisederiterprise. and a chbice. right up to. particu­ larly the culture of the company itself.relnlll.cttheempl~yees. Although it is useful to know where the countries in question lie on the dimensions of national culture when working with other cultures. caU-centre staff and sales assistantsinmebile. .formance in ahincreasingly cempetitive market.lse. rhelrpriorcity. Mr. quell the pelitical fljfere everthe crisis. ..Telecemsince the summer has left its managers with a dlff!cLlltchalienge: howtOmakethe fermer menopoly abellerplace to. . there are other factors at play. TheJ6t1af flestilngout and implementing a 'new secialcentract' fer thecempany'semployees . 'It~saserious issue. senler managers. . instructions and the presence of long-standing employees.Chapter 1 Determinants ef culture The extent of the influence of corporate culture is disputed among experts in the field.luuring the culture efteam-worklng. Peugeot and the electricity giant EDF in recent years. Lambard In 2011. ..phene shops. The extent of cultural control.more effective carnpaI1Y. " .sketched out several ideas yesterday fer. manuals. leave werkers Iselated and feeling like failures· in aperfermance-driven system.. .Menique Ci"inon. Others consider a flexible culture to be the key to success because it can adapt to. 19 September 2009: 25. A secielogist..jstop'rote.. . as he described It. crltlcswauld say-aware ef what is atstake.000 . . . a local/national environment. But Gaelle. . And they must qctqu1ckly to.. whq w~s put III charge aHhe cempany'? dpmestlCoperatj(lnS en Mahday.ssar to. Some regard a dearly defined corporate culture as key to a (multi-}national company's success..ef jebs fer· employees whose post is sc[appedarofficeclesed. His proposals inClupe . .. . and respond more effectively to. it's the way it's being handled'. nat least bee al. preventt:jamage tatHecempany's eperatlenal perferman~e. Seme argue that the remaining public sector workers at the cempany are having difficulty adapting to. through company goals. After interviewing acress-sectien ef France Telecem and Orange staff.

there are the 'operators' who are directly involved in production of goods or the provision of services. p. there are the 'engineers'. the people who design and monitor the technology behind the production and/or provision of services. Schein (1996: 237) talks of three professional cultures in management. By Ben Hall in Paris Source: from France Telecom in long haul to raise morale and margins. It is individuals who ultimately form the culture of an organization. Financial Times. The question of how these professional cultures co-exist within an organization preoccupies many scholars. social and national environment.Con~ept 1. Third.000 people . How do the executives handle the 'operators' and 'engineers'? How best to manage conflict constructively? To what extent is delegation and empowerment desirable? What styles of management are appropriate? . First. organizational and corporate culture. Those who share this culture tend to show a preference for solutions where systems rather than people are involved.estimated by one insider at 5. Questions 1. 21 (Hall B. Which factors do you consider to have been the most Influential in this case? The nature of the line of business the company is in may have an important influence on the corporate culture as well as the professional culture attached to key positions within the organization. however. Professional culture is essentially to do with the set of values shared by people working together professionally. 'The paradox is that we must re-introduce more Indlvidualisation to create the collective: Mr Lombard says.while maintaining the performance of the rest. 07/10/2009. and partially through the professional. Second. eventually. It is up to management to take into account the diversity of people in an organization and to manage their cultural differences. culture and management At the basis of all the cultures mentioned lies the individual's culture. .2 Levels of cultures The bigger challenge for leadership is to adapt its management practices to accommodate less productive staff .000 to 10. The values they embody as members of an organization are formed partially through the family. The company hopes that treating its staff more like real people with different contributions to make will.). make France Telecom a stronger business. Lhe seniur managers who shan: tadl assulUpLions regarding 'the daily realities of their status and role'. Which factors can you distinguish in this case which relate to national culture and corporate culture? 2. there are Lhe 'exewLives'. In an international context. what does cross-cultural management mean? 17 . Unions and management agree that the combination of a rigid military command structure inherited from the public sector and personal performance targets taken from US practices has destroyed the sense of collective endeavour.

Then answer the question: Can a corporate culture b~ managed? If so. they all need to be analysed in cultural terms. seeks to understand and improve the interaction of co-workers. These will be dealt with in more detail in Chapter 2. perhaps most Important. not only within organizations.Chapter 1 Determinants of culture Nancy Adler (2002: 11) gives <a definition of what cross-cultural management is about: Cross-cultural management explains the behavior of people In organizations around the world and shows people how to work In organizations with employees and client populations from many different cultures. 'organizational r. In which ways do the meanings of culture differ? 2. Managing an organization also involves managing human resources. but also where difficulties may be encountered when companies are working together. This level. executives. compares organizational behavior across countries and cultures: and. particularly in Concept 2. culture can also be considered at various levels. Give your comments on the statement given above. partnerships or strategic alliances. Chapter 'I has shown how difficult it is to give a definition of the word 'culture'. 1. Apart from the multitude of definitions. This implies that cross-cultural management has to take into account all of these contexts.:ulture'. takeovers. 18 . which examines the influence of national culture on organizational culture. and alliance partners from countries and cultures around the world. organizational or professional. or be replaced. according to Schein. These resources are not static: employees can move to another position. clients. the deepest of which. explain what needs to be done for It to be managed. suppliers. This chapter also shows that the individuals in a group form a culture that can be national.2. such as when people talk about 'national culture'.. explain why. This chapter has given a brief overview of the levels at which culture operates. but also In relations with companies of different countries. The question of business culture will be addressed in Chapters 3 and 4. If you believe it cannot be managed. The importance of cross-cultural management is evident in a world where all kinds of co-operation between companies in many countries is on the increase. any newcomers will adapt to the culture of the company or at least respect it. The word 'culture' is used in many ways. Whether these are mergers. can also be found in the culture of an organization. according to Edgar Schein contains 'assumptions'. or leave an organization. 'political culture' or 'youth culture'. Ideally. managers. Cross-cultural management describes organizational behavior within countries and cultures. not only to determine where benefit can be gained.

and Barsoux. in Knapp.H. Management International Review. Paris: Gallimard. J. This book develops understanding of how culture influences management practice and also guides teams and organizations as to how to be more effective in international business. (2003) Managing Across Cultures. K. 3rd edn. Harlow: P~arson Education.H. (ed. Theoretical foundations are linked to practical applications. in Administrative Science Quarterly.J. A. 4th edn. (2002) 'Valeurs et cultures: allons-nous devenir post-modernes?'. (2003) international Management. 19 . D.. (2002) La culture. G. (eds). Meeting the Intercultural Challenge. B. L. and Barsoux. (1994) 'Cultural context and social effectiveness in international joint­ ventures'. London: Sage. M. in Journet. Ruano-Borbalan. E. (1980) Culture's Consequences. Auxerre: Sciences Humaines Editions: 335-342. M. (1999) The Corporate Culture Survival Guide. (1987) Penser l'Europe. J. (2003) Managing Across Cultures. J. and Salo-Lee. E. San Francisco.-L. References Adler. (1990) 'Organizational culture'. Tayeb. Browaeys. Genelot. Harlow: Pearson Education.c. 2nd edn. (1999) 'Impact of national business cultures on East and West joint ventures'.Further reading and References Further reading Schneider..H. American Psychologist. Fleury. Morin.-L. Schein. and Gobbels. Schneider. Thomson Learning. 34 (3): 197-215. E.). Paris: Editions Brea. 42 (2): 109-119. S. E. and Roger. CA: Jossey-Sass. (1998) Manager dans la complexite. Schein. S. Meschi.C. Harlow: Pearson Education: FT Prentice Hall.H. K. Paris: INSEP Editions. Schein. M. Berlin: Verlag Wissenschaft & Praxis: 243-251. (1996) 'Culture: the missing concept in organization studies'.-J. E. Schein.-C. N. Hofstede. La culture. Ohio: south-Western.-X. N. Eubet Kasper. F'T Prentice Hall. San Francisco: Jossey-Bass. Kappel. J.E. 41 (2): 229-240. P. (2004) Organizational Culture and Leadership. (2002) International Dimensions of Organizational Behavior.

2. To what extent could the national culture have an influence on the organizational behaviour of this company? Examples @ Tr locat 4. 'w natio scien Pr UAE' or th. Its directors and possibly the way It is organized. shou 1. discovered. What are the basic assumptions within the organization? 2. Schein. its mission statement. Task 2 Compare your findings with those of your peers.e. If you have access to the Internet. think. serlo from sugg. 'It' done peopl (j. Pi and t by a M. 1990: 111 Using Schein's definitions. to try to answer the following questions. a Mu~ 'It'~ expat not a~ stay r . Li for tt featL Task 1 Select an organization you are familiar with (I. or developed by a given (d) that has worked well enough to be considered valid and. one where you have worked or where you would like to work). (c) as it learns to cope with its problems of external adaptation and internal integration. Where do you think these assumptions come from? 3. you can click on 'The Company' section for the annual report and read through the section on 'Governance'.5 tl If you look at the website of Marks & Spencer. as quoted in Concept 1.marksandspencer. If you look at its corporate website (www. 'F of pc and In AI Is jobs. you can click on 'About Shell'. Shell is another example. then 'who we are' to discover the company's vision. for example (www.For By" The cont therefore (e) is to be taught to new members as the (f) correct way to perceive. discl Defining an organizational culture Schein's definition of organizational decl. vCllues dnd leadership. do the following tasks. is as follows: (a) a pattern of basic assumptions. and feel in relation to chosen problems. (b) invented. you could examine the annual report of a company.

As the country continues to grow and accept foreigners at an astounding pace. have been discussed in the past. The issue has become so pressing that President Sheikh Khalifa Bin Zayed al-Nahyan declared 2008 UAE national identity year. There were voices that were asking since the mid-70s [about the loss of national identity] when the country started construction: says Ebtisam al-Katbi. the population of nationals increased 45 times while the expatriate population increased almost tenfold. The conference. where the cultural values are markedly different. or from similar cultures. the culture. and that increased childbearing should be a national strategy. This is the state of our nation: Meanwhile. Participants spoke their minds.Foreign influences: Expats force locals to ask who they are By Nada EI Sawy The UAE is unique in that expatriates constitute more than 80 per cent of the population. but this is still a Muslim country: 'It's not a matter now of labour. 'But they have misused their freedom here. Emiratis worry that their national identity and culture are at stake. what should be done and what should not be done. chairman of the National Human Resources Development and Employment Authority (Tanmia). Last month. a professor of political science at United Arab Emirates University in AI Ain. a two-day forum on national identity took place in Abu Dhabi to debate such issues openly for the first time. You cannot limit that.' she says. Russia or the Balkan countries. He advocated reducing foreign workers from any single country to a maximum 25 per cent of the population. You can limit labour. The problem now is that we are selling properties to expatriates. but it attracted foreigners early on due to its strategic trade location and with the discovery of oil. Why 99? Five years is enough: th lid to 111 to n :k Jt 21 . lagging education and a lack of sensitivity towards Emirati cultural and religious values. The UAE is a young country. they are not aware of the people's values. she says. 'We are giving 99 years for those who are buying the properties to stay here. but are now taking centre stage. most foreigners coming to the UAE were initially Arab or Muslim. created in 1971. They come. also a professor of political science at UAE University. not as permanent reSidents. I've never seen people who go to work or malls with this kind of dress. Lieutenant General Dahi Khalfan Tamim. more are coming from the west. organized by the Ministry of Culture. During the period 1975 to 2004. Prof al-Katbi says several factors have exacNbatcd this problem. 'We Ilad this problem before. I'm not calling for conservative action. Issues such as the demographic imbalance. youth and Community Development. Today. First.' says Prof al-Katbi. the disappearance of the Arabic language. Dubai's police chief. featured more than 30 high-level government and private-sector speakers. Foreigners should be welcomed on a temporary basis. an Emiratl student is being taught Islamic studies in English by a Pakistani. Ahmad al-Tayer. warned that there would be serious security issues if demographic balance was not restored. competition over jobs. according to press reports. 'It's not their fault. 'People here have the feeling that we are losing our own country if this double-digit [expatriate percentage of population] growth continues and if the government does not address the problem and address it squarely and urgently.' says Abdulkhaleq Abdulla. said: 'Today. He also suggested that property ownership be opened mostly to Emiratls and Arabs.

.... . .. . . How do they distinguish themselves from other Arab countries? ... t How wouldyou describ~thehationalldentity of the UAE.... .... . 2. . . .. .. ....... Whatdo yout!1ink the Inhabitants there need to do to 'preserve their own identity'? .

well o Be acquainted with criticisms of Hofstede's concept. Concept 2. ® Become familiar with the idea of clustering cultures according to their similarities.leue d::. The concept gives particular attention to GLOBE's findings with regard to the 'Power Distance' dimension.2 takes the notion of cultural dimensions a stage further by considering the more recent projection of cultural dimensions developed by the GLOBE project. as the culture construct definitions of more recent research by the GLOBE project. with the five dimensional model developed by Huf::. Learning outcomes After reading this chapter you will: Iii Understand thE'! r.1 will first outline a model of value orientations drawn from social anthropology that has proved to be influential in the development of a dimensional approach to cross­ cultural comparisons. ~ Have some insight into the relationship between societal values and practices and the culture of organizations working within a society. 23 . paying particular attention to the fifth dimension (short-term/long-term orientation). using the metaconfiguration proposed by the GLOBE project. These are concepts that allow variations between the attributes of cultures to be quantified. Attention will be given to the reflection of these cultural dimensions in the business environment. as well as the methods used in the research to determine values and practices at both organizational and societal level.onr. particularly the metaconfiguration of clusters devised by the GLOBE project.This chapter explores the conceptualization of culture in terms of 'dimensions'. in particular. t/!l Be familiar.f>['lt of rultllral dimensions. The concept will finally pinpoint some criticisms of Hofstede's model. Concept 2. The notion of culture clusters is introduced. It will then summarize the dimensions developed by Geert Hofstede.

:..."''-'-. Moreover..': "'{-~ ""{:--: ­.-.. together with the possible range of responses.... . Moreover."::':":'... drawn from the field of social anthropology...~'ri?:. for example.:. If awareness of cultural differences is consciously raised. The characteristics that define each cultural group can offer international managers considerable insights when it comes. if a culture has the future as its time focus.Chapter 2 ...."-.~~..l.. more recent models relating to cross-cultural management..Dimensions of culture In business One important hypothesis underlying much research into culture is the stability of a culture's characteristics.o-I ·What·... .--.... . the model has proved to be the source of inspiration for many other researchers into cross-cultural matters.' :. including 'frompenaars (see Chapter 5) and Hofstede. . they each remain constant in the sense that they maintain certain notions about the world and attitudes towards their fellow humans. suggests that a particular cultural grouping will display a certain orientation to the world in response to questions relating to those given in the table.-. then it is likely to put more emphasis on the preservation of the environment for the sake of future generations than a culture that focuses on the past or present.. An adapted version of this is given in Table 2..'....--::· ". Nevertheless. but also to other concerns in life. It does not claim.. then the ability to analyse the effectiveness of employing business policies in differing cultural environments is considerably improved.--"·therelaiio!iShJP·. to co-operating with companies from other cultural backgrounds.1.. it does enable a comparison to be made along certain dimensions of different cultures. This model. As Diana Robertson (2002) suggests. Kluckholn and Strodtbeck (1961) devised a model based on responses to questions concerning the human condition.i. it is worthwhile considering a comparative model developed in the early 1960s that has been influential in other.c. ' . ""~'~"~~~""-'--~=~:"""'..­ 'Ofjnar{ t_bjt.-.L~:".-.'. These value orientations tnflucnce not only attitudes LO work. that all individuals within a particular grouping will respond in the same way. ) . . however. .-. it does not account for so-called sub-cultural groupings or for the way organizations in a particular cultural environment respond to the questions.-. Before examining cultural differences in the business context.. Although cultural groupings all undergo change over time according to the ways they deal with the challenges laid down by their environment. f .

Hofstede used the results of his research to produce a comparison between cultures on four and eventually five dimensions: ~ Power distance (high/low): attitudes to authority. @ Uncertainty avoidance (high/low): the degree of tolerance for uncertainty or instability. His theories are not only frequently quoted and applied in cross-cultural research. Short-term versus long-term orientation: fostering virtues related to the past and present or virtues related to the future. Hofstede developed a dimensional approach to cross-cultural comparisons through his pioneering studies into how management is affected by differences between cultural groupings. Hofstede. who had founded and managed the personnel research department of IBM Europe. as well as the statistical methods used by Hofstede. the loyalty towards oneself and towards a group. but also used (often indiscriminately) in prescriptive works on dealing with other cultures. five of them being non-managerial and two managerial. Individual versus group orientation: independence and interdependence. they present orientations adopted by the majority of members of a cultural group­ ing in normal situations. took a database of scores resulting from attitude surveys among IBM employees worldwide and re-analysed the figures. as we will see later.Geert Hofstede's research in the area of culture and management is known worldwide. relationships). including students in 23 countries. They describe tendencies within a certain cultural grouping. 25 . commercial airline pilots in 23 countries and civil service managers in 14 countries. consideration of Hofstede's work is indispensable to any study on culture and management. The research set-up. He conducted extensive studies into national cultural differences. Despite. or maybe because of. $ @ E! It should be stressed that these dimensions form a general model and are not necessarily applicable in specific circumstances. his work has provoked much criticism from theorists and practitioners alike. The surveys had been developed as a management tool to examine issues relating to the work situation (determined beforehand through interviews with personnel). the distance between individuals in a hierarchy. was applied by other researchers to other groups. the first being across employees working in subsidiaries of a multinational corporation (IBM)in 64 countries. advancement) compared with personal goals (co-operation. Nevertheless. Masculine versus feminine orientation: importance of work goals (earnings. Hofstede later developed a fifth dimension to account for value orientations that emerged from research carried out from a Chinese perspective. The original respondents in these surveys were matched groups (Hofstede. These studies together identified and validated the first four dimensions of national culture differences described in this concept. They do not account for cultural differences in absolute terms but in relative terms. its prominence. 1980) in seven occupational categories.

How subordinates view their superiors depends on a combination of factors. it may be that who you are is more important than what you do . this dimension reflects how a culture relates to authority of one form or another. i. If they show great respect for status and life experience. Low/high power distance 'Power distance' refers to the extent to which members of a culture expect and accept that power is unequally distributed in society. but some are more unequal than others' (Hofstede and Hofstede. their family and their connections.e. decisions and instructions to be subject to discussion and may even challenge them. which he wrote with his son. regardless of how the latter are chosen. they will consider that person's judgements. In relational terms. of course. This leads to the question of how subordinates deal with their superiors. 2005: 137). on research identifying centralization as a characteristic of organizations (Pugh. which are then accepted without question. greater importance is attached to a person's competence and experience. As the Hofstedes' book says: 'Power and inequality. When examining these cultural dimensions this book will focus on the workplace. If they consider their superior to be more of a first among equals. their age. It was developed by Hofstede on the basis of earlier research concerning preferences for power among different cultures and. in particular. the business context. In others. are fundamental facts of any society and anybody with some international experience will be aware that all societies are unequal.Chapter 2 Dimensions of culture In business In the second edition of his publication Cultures and Organizations (2005). and this combination can vary considerably from one culture to another. In some cultures the status of superiors is important: their position in the hierarchy. the comparisons made between cultures on this dimension convey the extent to which subordinates are dependent on their bosses.2 Extremes of Hofstede's 'power distance' dimension . Hofstede examines' differences between cultures not only at society level. Table 2. they may be reluctant to show initiative and prefer to be given instructions instead.or vice versa. education and the workplace. In short. but also in terms of the family. 1976).2. The extremes of this cultural dimension are characterized in Table 2. Essentially.

. 'We' mentality ' .. Close tics may develop between the two. In individllt11isl cultures. but this does not Jiminish Table 2.' versa. Loyalty to those within the circle of relations and friends is considered essential and is rewarded in many ways. Relations outside the family need to be built on face-to-face social encounters.who are dependent on their superiors . They are inaccessible and enjoy privileges their power gives them. The extremes of this dimension are characterized in Table 2.. particularly sociology. anthropology and psychology. Collective achievement is the focus. The relations between subordinates and superiors are more horizontal than vertical: superiors are accessible and try to make out they are less powerful than they are. I I i I Identity is based on one's social group Identity is based on the individual Decisions are based primarily on individual needs Tasks prevail over relationships Focus is on individual initiative and achievement Value standards apply to all (universalism) i Decisions are primarily made according to what is best for the group : Relationships prevail over task Focus is on belonging to an organization Values differ according to the group (particularism) 27 . In low power distance cultures. These relationships may well be within an extended family. apparent in ancient civilizations and to be found at the heart of much philosophical thought about the nature of the state and the individual. if necessary. To what extent are individuals in society autonomous and to what extent are they embedded in the group? This particular construct.3 Extremes of Hofstede's 'collectivist/individualist' dimension Colle(:tlvlst ... rather than thf' attainment of individual goals and careers. Managers expect employees to fulfil the terms of a con­ tract and vicE. This dimension is essentially about the importance that a cultural grouping attaches to relationships. so that blood-ties guarantee trust and loyalty.. If things go wrong. the focus is more on rights and the achievements of lhe:: iuJiviJual.1 National cultl:lral dimensions in the business context In high power distance cultures. . .concept 2. the subordinates . on the other hand. Individualism/collectivism This dimension concerns itself with the relationship between the individual and the group. effective managers are more oriented towards the people in an organization and allow them to participate more in making decisions.are usually to blame. . to undergo contractual obligations. some form of personal sacrifice may be necessary for the sake of the common good.. It was Hofstede who subjected this construct to empirical investigation on a large scale and eventually produced a ranking of societies in individualistic/collectivistic terms.. effective managers are essentially benevolent autocrats who are focused on the task. the system is more to blame rather than the indi­ viduals involved. Individuals are expected to achieve their own Boals and to do so are willing. If anything goes wrong. Some cultures place more importance on personal relationships rather than the task to be performed or the deal to be completed. Indeed. continues to be given much attention in many disciplines. 'I' mentality .:: Indl~idual!st ..3.

2004) or to incorporate features of this dimension into one relating to assertiveness. when a culture is examined in terms of the work environment. this dimension allows dear distinctions to be made between cultures in terms of their attitude to work.--'--"-. thus allowing them to meet their goals and needs. Quality oflife is a prime concern. Perhaps the very explicit use of the term masculine/feminine exacerbated matters. Highly feminine cultures' give more attention to the broader picture.. The stress is on performance. assertive' .... Mana. Nevertheless. Table 2. Live towbr.. This dimension is one that Hofstede (1998: 11) himself characterized as 'taboo' since he saw the 'duality of male versus female' as a problem always under discussion. Masc IJ lin ityIfem i ni nity From his initial studies at IBM. Hofstede developed a dimension whereby certain societies could be characterized as being either assertive and competitive (masculine in nature). Within this sort of environment.4). offering the possibility ofhigh rewards and recognition.".. amongst 'mascu­ line' countries where there was considerable stress on political correctness and concern about sexual harassment. he felt. or more caring and therefore more feminine. not just in terms of how the work is performed but also in terms of what the work achieves.. Hofstede does stress rather traditional roles of the sexes: masculine values such as achievement and exercise of power are used to characterize cultures along this dimension as are feminine values: caring for others.-.gersare expedEld toj:)e decisive and . as long as these are in line with those of the organization within which they are working. on competing with others to achieve goals.:"'_. consensus .4 Extremes of the 'maSCUline/feminine' dimension .. Highly masculine cultures see work as a challenge.k . particularly to rela­ tionships with others in the workplace. competition between individuals is encouraged. ' . The characterization of the two extremes of this dimension show how dramatic these distinctions can be (Table 2. SYITlPathY forthesu~2essful a~hieJer ' lndependente ideal. being less self-centred. The taboo was greatest.Chapter 2 Dimensions of culture in business the value of the contractual arrangements.. and answers to which cause wide-ranging discussion. as evidenced in the tendency of other researchers exploring the phe­ nomenon to talk of 'gender egalitarianism' (House et al.

power distance and uncertainty avoidance. They perceive that there are not always answers to problems and that laws are not always effective or necessary in dealing with deviation . To that end they tend to resist innovation or anything that deviates from the known. 2005: 63 Table 2. managers cannot possibly be the source of all wisdom and may need to draw others into their decision-making who are more competent. particularly those focusing on relations between the leader and the led.~oncept 2.5 Extremes for Hofstede's 'uncertainty avoidance' dimension Uncertainty is a fact of life: take things as they come Deviance is not a threat Ambiqulty is tolerated Readiness to take risks Toleration of Innuvi:lLiull The fewer rules there are the better Competition and conflict can be constructive Belief in generalists and common sense Hard work as such is not a virtue Uncertainty In life is threatening and must be reduced Intolerant of deviant persons and ideas Predictability and clarity are preferable Concern about security Formal rules and requlations are necessary Consensus is better than conflict Belief in experts and their knowledge There is an inner urge to work hard 29 . to have precise answers to questions and to give exact instructions. Two dimensions. They may be willing to accept familiar risks but not the danger of the unknown. To what extent do they feel threatened by ambiguous. and tolerate differences generally.1 National cultural dimensions in the business context Uncertainty avoidance This fourth dimension measures the extent to which people in a certain culture avoid uncertainty.they may be changed if deemed ineffective. Managers in cultures with low uncertainty avoidance would be expected to uphold or establish rules only as absolutely necessary (most problems can be resolved with­ out strict rules anyway). As Hofstede and Hofstede themselves say: Both dimensions help answer two fundamental questions: Who should have the power to decide what? What rules or procedures should be followed in order to attain the desired ends? Hofstede and Hofstede. risky situations? To what extent do they prefer predictability in their lives. who lay down rules to prevent ambiguities. They appre­ ciate authorities who have the 'right' answers. clearly prescribed rules and procedures in their work? Uncertainty-avoiding cultures perceive life as a battle against anxiety and stress. The two extremes of this dimension are characterized in Table 2. Hofstede's initial four dimensions have had an enormous influence on the development of management theories in many management areas. Cultures with low uncertainty avoidance are not disconcerted by ambiguity. are particularly important in this respect. Managers in uncertainty-avoiding cultures would be expected to maintain the rules and regulations of an organization.5.

edu/homepage!class/Psy365M/Merrltt/HOFcharts..6 summarizes the influence of the four dimensions on issues of management and business.Ambition -gettingahescd· ~----~--~~~~~~--~--~~~~ . Hofstede (2001) maintains that this dimension was not found in the data used to determine the original dimensions because the questions used in the surveys were designed by Westerners.6 The effect of Hofstede's four dimensions on Issues in management and business Competition 5een as advantageous Flexible Saana!.··Getting the tctskdone . ~~~--~~~~--~~----~~ Important for relationships ... Seryicl.ltoothers -. .psy.. dimension. Maintaining relationships . fifth. accessed 8 April 2007.Look after employees individual/Based on merit Universalism Employees look afterselvps .htmi. .lrds Netwqrking.• Individual Rewarq systems Ethics/values .~~ ·Irnportant f()rperforn1anc~ . Basis for motivatl9n< . damaging Inflexible Tight Avoid Individualist . Source: http://homcpage. Table 2. Only when an investigation was made into values suggested by researchers with what Hofstede calls 'Eastern minds' did this additional dimension come to the fore.. Organizational concern· . Villued rewi. ~~~~~--~--~~r-~~~. . The fifth dimension: short-term versus long-term orientation The dimensions outlined above were supplemented by this.utexas.~~--~~~~--~~ InterpersoAalfoc~s ·. 30 . Group-based Particularism . .Chapter 2 Dimensions of culture in business Table 2.

speaking for peace and universal love among humankind. The instrument which they developed . espedally respect for tradition. clan or ethnic group within the Chinese population. Confucius.e deemed short-term in nature are oriented towards the past and present and are more static. especially perseverance and thrift. humans could create within themselves the same wisdom. They are kept small to enable this family control to persist since non -family employees are unlikely to have the necessary loyalty to the enterprise. ordering relationships by status. The companies are owned by the family and usually run by one dominant family member. The family is the prototype of all social organizations. The fifth dimension [WIll Bond's studies is defined by Hofstede as the shorL-Lenn versus long-term orientation. not spending more than necessary. It should be noted that one end of the dimension is not to be considered better or worse than the other . A person is not primarily an individual. Virtue with regard to one's tasks in life consists of trying to acquire skills and education. Although all the values to be found along the dimension are hlken from the teachings of Confucius. whereas those deemed to he long-term are oriented towards the future and are more dynamic. It was these forefathers who had a perfect understanding of the order in heaven and on earth: by following their rituals. A short-term orientation includes fostering virtues related to past and present. In relation to the business context. 4. reflecting those values upheld by Confucius and his followers.1 National cultural dimensions in the business context This fifth dimension emerged from a survey. The stability of society is based on unequal relationships between people. preservation of face and fulfilling social obligations. thos. Humans. His teachings. 3. If such companies decide to co-operate with other companies they do so through a network of personal relations based on (extended) family members.they are simply orientations towards life. being patient and persevering. 2.Concept 2. China. He lived during a time when China was divided into small states locked in endless conflicts and power struggles. village. educator and philosopher. carried out around 1985. was a political figure. form the basis of subsequent Chinese thought on how the ideal man should live and interact. rather.7. among students from 23 countries. This was initiated by Michael Bond and associates who were attempt­ ing to measure value orientations from a Chinese perspective. born in 551 Be in the province of Lu. Virtuous behaviour towards others consists of not treating others as one would not like to be treated oneself (the Chinese golden rule is negatively phrased!). The Confucian virtues of thrift and persistence are 31 . preserved by his followers. he or she is a member of a family. Gordon Redding (1990) shows how Confucian dynamism works and how the values in this continuum are reflected in the way the Chinese run their businesses outside China.contained an element called the Confucian dynamism scale. He spent many years travelling from state to state. and having a sense of shame. In his study of overseas Chinese. could eventually reach a state of perfectibility through learning from the Chinese past and attain a state of orderliness and peace by adopting the traditional values of their forefathers. Confucius believed. The principles of Confucian teaching are summarized by Hofstede (2001: 354) as follows: 1. A long-term orientation includes fostering virtues oriented towards the future.the Chinese Values Survey (CVS) . working hard. this dimension can be characterized as in Table 2. as well as how society and government should be formed.

self-determination Loyalty towards others can vary according to. so has the robustness of Hofstede's reactions to them.IBM .hash. However. Hofstede has been subject to criticism from fellow researchers and from humble mortals who are wrestling with day-to-day problems arising from cross-clllturf'll co-operation in an increasingly glubal world. Possibly tired of the occasional but persistent criticism of his work.. that using only surveys at one company . Hofstede prefers not to use the Confucian label since.up research projects and the employment of facts and figures produced by economic institutions to back up his findings. since the publication in 1980 of his major wurk. both opposing poles of the dimension contain Confucian values' (2001: 315).h uften reflect those of Hotstede's original research has helped to increase his stature in the field. of his research cannot yield inform. the majority of the countries where the fifth dimension was found are 'unfamiliar with Confucius's teachings. he responds to the reproach made that culture cannot be boiled down to so few dimensions.tion about entire national cultures.Chapter 2 Dimensions of culture in business Table 2. 32 . Hofstede even lists a number of the reservations made about his work in the second edition of Culture's Consequences in 2001. Confucius nevertheless permeates the values of a number of countries in Asia. that using nations as units of analysis is not the most appropriate. the needs of business People should be rewarded according to their abilities stress is on short-term profits Managers and employees are in different camps ' Need for accountability. The two virtues are combined in the way the Chinese move their capital round the world to take advantage of low risk and high profitability. The very simplicity of Hofstede's framework of analysis is seductive: he has come up with a minimum number of dimensions to enable cultural observers and analysts to pinpoint features to which they and their readers can relate. as Chapter 4 will show. As criticism has grown. The fact that the results of replicated reseclH.. in his view. Culture's Consequences. aided and abetted by the results of many follow. These deal with the criticism that using surveys to measure culture is unsuitable. self-discipline Develop and maintain lifelong personal networks Large sodal and economic differences should not be tolerated Stress is on future market position Owner-managers and workers share the same aspirations I evident in their cost-conscious approach and in their patient accumulation of wealth. and the . Finally.7 Hofstede's fifth dimension Need for achievement. yet it offers insight into values which the latter do not account for. Bond (1988) chose to label these values as Confucian since they generally reflect the teachings of Confucius. The fifth dimension may be less categorical than Hofstede's original four dimensions.

Even if the idea is accepted of one organizational culture within IBM. and this allowed a comparison to be made of cultural values across the subsidiaries. basically: if others can find more dimensions that are independent of those he has devised and which can be validated . or French. 1991: 252 To make the assumption that there is homogeneity within IBM is. he maintains. McSweeney (2002: 98) remarks that that person 'was just as likely to have studied zoology. however. are learned through socialization at school or university' (Hofstede. including many replications of his research. the results of the surveys show considerable variation within the samples in each country. for many critics. 1991: 182). 33 ..2. Hofstede. is such a culture. considered this to be an advantage to his research because the company is homogeneous in nature. Hofstede believed he had been able to isolate nationality: The only thing that can account for systematic and consistent differences between national groups within such a homogeneous multinational population is nationality itself . you can separate its organizational and occupational cultures from the national cultures present. A number of critics point out that the respondents could not be called representative because they were taken from only one location in each country and from only one company (IBM) and its carefully selected employees. As for someone in marketing at IBM. By ensuring that respondents to his questionnaires shared one organizational culture as well as one occupational culture (if their responses were matched). can one talk of a homogeneic occupational culture in the company? McSweeney is one of Hofstede's staunchest critics. then the national culture should display a similar homogeneity. his reaction is. MtSweeney argues that if it is important for there to be a sameness in organizational and occupational krIllS. however. He agrees that nations are not always appropriate units of analysis. Hofstede. but they are the only sort of unit available. concerning a number of aspects of Hofstede's research in terms of reliability and validity. 2001: 73). When it comes to the criticism concerning the use of data from IBM. McSweeney wonders whether employees from different nations who share the same occupation can really be said to share uniformity of culture: courses purporting to deliver similar qualifications can differ considerably between countries as well as within a country. or anthropology.. Hofstede cun only resort to using cultural average tendencies when comparing nations. according to McSweeney. rather than talking of cultural uniformity whereby each inhabitant of a nation embodies the same cultural values. particularly if.Concept 2.. As he puts it: 'Candidates are welcome to apply' (Hofstede. to do with perceived common practices rather than the values of the employees concerned? (This issue is discussed further in Concept 2. As for cultural homogeneity.. However. as "marketing" itself'. as Hofstede maintains. As for the reproach made that his five dimensions cannot possibly tell the whole story.fine. the well-matched samples obtained and the correlations with other data. Surveys are suitable. Therefore. a questionable one. but should not be the only method used. as Hofstede maintains. Can one really talk of one organizational culture at IBM? Hofstede had not investigated this question carefully and acknowledged in his later work that organizations could contain different types of organ­ izational culture. Pursuing Hofstede's notion that 'occupational values . Doubts remain.1 National cultural dimensions in the business context Hofstede counters these criticisms with authority.) Even if Hofstede hus mutched the results of the survey at lDM on an occupational basis. he reminds his critics of the detailed and thorough research methods used.

. Situations cause one or the other end to come to the fore.such as individualism and collectivism .e king hCjd fled the cQllntry. There were eveh com: region had declCjred independence.. then McSweeney's words below are particularly pertinent: If somehow the average tendency of IBM responses are assumed to be nationally rep­ resentative then. or rather equal implausibility. But Guy Verhbfstadt. . broa~tasts. This is a country where Dutch-speaking Flemings. massage parlour.teievlsion broadcasterRTBF bad Joke. they argue. critics cast doubt on the indeperident nature of each of Hofstede's dimensions: how can we be sure. it must also be assumed that this would be the same as the average tendency In every other company. This very small country has recently . McSweeney (2002) takes up this point and refers to the work of scholars who maintain that the opposite ends of any dimension .a Chapter 2 Dimensions of culture in business Ifwe therefore add to this criticism the points made con~rning the source of Hofstede's data.also said to . Although this position reflects an 'average teneJ.. Even though Hofstede himself acknowledges that this unit of measurement is not perfect. Finally. 2002: 101 The dimensions Hofstede uses to delineate cultural differences have also undergone many critical reviews. .ln which. that these dimensions do not interact? There is also doubt expressed about the way Hofstede differentiates between cultures on each dimension according to their position on a continuum. tr. senQlng newsdf the 'spUt' news show· declaring thaUhe power. Source. there are questions about Hofstede's notion that cultures are territorially bound. received much attention within Europe because of the political tensions there.claimed· frightening thing is that. French-speaking Walloons and German-speaking Belgium's public .. political party.eir hoinecountrles. Some ambassadors were . . McSweeney. one calls>. branding the· Show a .h. What is the status of Hong Kong's profile now that it has become part of China? Is it now to be regarded as a subculture within a much larger entity? What about the cultural profile of (former) Yugoslavia? Do all the independent states that once comprised the country now 'deserve' separate full-blown cultural profiles? Then there is the question of Belgium. Fin·ancialTimes.12. socialist party and fascist party within the same country. particularly in the light of recent world developments. prophecies: • channel with p. .ency'. .co-exist in allof us. its representative nature and the questions around the homogeneity of organizational cultures. was Unamused. it does not account for which situations cause cultures to emphasize one extreme of a continuum rather than the other. . p. . breakll'lg upparlsons toOrsOh Welles' War or the Worlds the nation. knitting club.fooled~hol.the(FI~mish) prime 15/12/2006. who besieged the Frehc. with equal plausibility.fuIFlemish .one frustrateci official said: 'The a reporter outside the Joyal palace . was In hot water yesterdayafterro~nlng a hoax have been fooled.: from Observer: Fake News. objections continue to be raised about the validity of national cultural profiles. tennis club. wjthali thetemslOn. Apart from questioning whether just five dimensions can really encapsulate all the complexities ofa national culture.. mln'fster. to th.lsaiids things like· this CQuid b~come sE)lf-fl.:h-Ianguage .llfilling of viewers.. The30"minute proQramme.

so that the responsfs would indicate actual practice. 'the wfly Wf' c'lo things'. this was done by asking respondents questions as given in the second column of Table 2.1 National cultural dimensions in the business context Belgians live side-by-side with their distinct identities. (2008) entitled Culture (lild Leadership Across the World: The GLOBE Book ofIn-Depth Studies of 25 Societies. Dimensions of socjetalculturaJ variation During the first phase of the project.1)? In short. i. languages. u number of which han: lheir origins hi those identified by Hofstede. operationalize.11ialiull. Another point 35 . The nine dimensions which GLOBE developed are given ill lht: fir~t column of Table 2.8. Many of Hofstede's findings have been confirmed by those of the Global Leadership and Organizational Behaviour Effectiveness research programme.tallevel. social and economic development of twenty-five countries which took part in GLOBE's extensive research.:/value5 C01'l5t1'UCt at ImluliLrial. 01'!}11"iiZaliunal ann ~()dp. organizational and leadership effectiveness. 'the ideal way of doing things'). The dimensions were used to examine the Vl'aLlile. as well as one federal parliament. the GLOBE project. These studies examine the historical.10).e. not only by scholars. Table 2. the validity and applicability of Hofstede's model is called into question by a number of critics. What is the value of a set of statistics that waters down crucial differences between the 'subcultures' of Belgium and presents itself as a cultural profile of 'Belgium'? What would happen to this cultural profile if Flanders (the Flemish region of Belgium) or Wallonia (the French -speaking region) actually declared independence from the rest of Belgium (see Spotlight 2. in short. cultural bodies and regional parliaments.:. along with the definition of each. the investigators developed a range of dimensions of sodetal cultural v. The first two phases of the project are described in House et a1.9 gives some of the scores on these dimensions for those countries that feature in the follow-up GLOBE publication by Chhokar et a1.9 where the scores of the country are compared with the highest and lowest scores from the original list of countries under investigation (as listed in Table 2. The chapter featuring India includes Table 2. (2004). test and validate a cross-level integrated theory of the relationship between culture and societal. These questions were first phrased in terms of 'is' and 'al'e'. GLOBE is a long-term programme designed to conceptualize.concept 2. We will return to criticism of Hofstede's work in Chapter 5 when comparing Hofstede's dimensions with those devised by Trompenaars. One point worth noting from the table is that India's scores in terms of 'As Is' are high for all dimensions except for Gender Egalitarianism and Assertiveness.8. The same questions were later rephraseJ Lt!>iug '~hullIJ' and put to the respondents at a later stage to enable a response that indicated the value(s) held by each respondent (Le. but also by practitioners in the field of cross­ cultural management training who feel uneasy when applying Hofstede's dimensions to 'the real world'.

" ·.' "­ "-"" Boys areenc()uraged (should be encouraged) more than girls to attain a higher education (scored inversely) More people live (should live) for the present rather than for the future (scored inversely) students are encouraged (should be encouraged) to strive for continuously . loyalty and cOh. et at. to. Upholding traditional values entails 36 . . ' cOlfectivisml.8 Culture construct definitions and sample questionnaire items HJm~meocieht~tion:'tl:1~degteeto which .. altruistic. '.1. are visualized. generous: caring an'akindtoothets . All the societies covered. In Figure 2. Future ". Hou. that I't' Pnwf'1 Distance. d~gr¢e ··tow.confromatlonaland aggressive in tl:1eir relationships with others' .hI9h jndividu~lsexpre$spride.a.belngfalr.rewards .. . Although Chinese managers show themselves to be very tolerant of inequality of power in society.5 delaying gratification.9 l>liuw that tht! 'As is' scores were higher than 'Should Be' scores in all countries. the scores of societies on one particular dimension.performance impri:JvementaQdexcelJence Source.tiVISm).e.10) is the highest discrepancy of all the scores for China. (2008).'-:.04) Rcore and its 'Should 'Be' (3. it appears.the··degre~ •.distrlbutionof resourGeSand. These and other issues are touched upon in Chapter 4 where features of non-Western societies are described. Chhokar et al.. .that are at play in Chinese society. The discrepancy between this society's 'As Is' (5. want more equality than there actually is.heirorgan:iza. The reader will see that flll the scores in Table 2.plannlng and investing in the future Performance ?rientatiqn!the degree to Which a collective encourages andrewardsgrouprnembers for .indlvlduals engage in fut(Jre-qriented behaviours such a. Such discrepancies come to the fore in many of GLOBE's findings.~ollecUve encourages·and. orga izatlonal(lndSpdetaiinitliutlona I pradlcesencoura gearid' rewar~'~ollective . emerging fro111 this lable is the considerable discrepancy between the 'As Is' score and the 'Should Be' score for Power Distance. 2 (in-gro!1P' coilectivism):th.esiyeness i~ internal and one external .tjons o(familles Assertlveness. assertive. they consider that power should be spread more equally. This goes particularly for China.. n Collectivism ." -..' " .Gen(ier ~ga/itarianism:Jhedegreethwhkh a collective min\mizesgenderinequaiity " .for.lhe degreetowfiichJndividuals are .' ' orientatiori:theextenttowhich .. wh Ich. (2004): 30. improved performimce .individuals... as exemplified in lhe second illustration taken from Chhokar et al.collectlveactioll (instltutioniJltol!eC.Chapter 2 Dimensions of culture in business Table 2. . (2008) consider this to be a possible reflection of the two forces .

(Hungary) 5.53 (Denmark 2.16 (Switzerland) Institutional Collectivism (Collectivism l) In-Group Collectivism (Collectivism \I) (32) 5.18 (Egypt 4.61 (Thailand) .20 (Thailand) 5.1 National cultural dimensions in the business context Table 2.73 (29) 5..60 (29) 4.~ and Future Orientation Gender Egalitarianism :m in n the ieties igher lUore i Humane Orientation [Performance Orientation I ween :)f all nt of I I Power Distance lally. (2008): 993. ~rn~l Uncertainty Avoidance ltails Source: Chhokar et al.07 (Singapore) .94 (Switzerland) .19 (15) 290 (55) 4. Africa Black Sample) 5.20 (Greece) 3.37 (Switzerland) -.49 (New Zealand) 4.28 (44) 6.80 (Morocco) 5.92 (4) 4.25 (23) 5.04 (Colombia) 3.Iy) he Je usly ~0aiJan) 2.92 (S.concept 2.15 (29) 6.08 .05 (26) 2. 37 .22 (Sweden) 3.33 (Denmark) 3.5.23 (Zambia) 4.52 (EI Salvador) 6. th Performance Orientation Power Distance Uncertainty Avoidance I I I tain .50 (South Korea) 3.65 (EI Salvador) 6.25 (Greece) 3.36 (Phllip~lnes) I Future Orientation Gender Egalitarianism Humane Orientation 5.51 (36) 5..18 (Germany 3.17 (England) 6.88 (Russia) 5.32 (50) 5.65 (S.9 Societal Culture 'As Is' and 'Should Be' '!d to ion cted ---' . 4.57 (9) 4.66 (Turkey) 3.38 (25) I 5.47 (16) 4.88 (Russia) 2.09 (Nigeria) 6.ullectlvlsm I) In-Group Collectivism (Collectivism II) 4.94 (SWitzerland) 4.83 (Georgia) 4.~ :es Jrage) lals Institutional Collectivism (.58 (EI Salvador) 3.64 (38) 4.89 (Denmark 2. Africa Black Sample) 2.

... - ..1 GLOBE dimension of societal culture practices ('As Is') and values ('Should Be'): Power Distance Source: Chho~.:1..!!Ii!_ 1 -----.-.. (2004): Societal cultural practices "As is" .!"....w ---- ------ ---- -----.'ill Fnmce Mexico Russia " Algentfll8 Turlrey India G""""...- ~ .. H<mg Kong \J Chills 3 Germ.iiSA­ Nether!... Genn......-----i The 25 (+1)* countr es cJvered in !his volume and in House et al..----- ----....-E Germ.. _Zeal. Figure 2.-W = West Germany before 1990......oJD..------ " -----~~-...-----. ..- .. and values ·Should Be" \If::".------ ----~- ---~-------------- - ----- .SIngapore Hong Kong ChIna Medium 4 .. --~ Low FmIand iii - AUsiita -­ SMdIzeIf.-E = East Germany before 1990.. House et aI.-eland ..­ . - ..'t:J. S-Afrika.. and values "Should BI'I' The remaining 35 GLOBE countries (cf.... .. 2004): Societal cultural practices "As is' 0..._'::. Spain 2 __ _ t....1.- 1oIeIherI.- ..-W .- . .. Cultural practices "As is· and values "Should be • E)··' et al... The range of scores for each of the ten culture clusters are framed.- .... ------------~ Sou!h Africa (white sample)..CD tv 7 ( Power Distance: As Is ----. USA Auslralia .-­ Zeal... .----6 High Argentina Should Be --- "C D ~ ----- ----~- ----- . _ England Portugal France India 5 Finland Sweden AusIrla --------~I--- Ireland Switzer!. (2007): 108..-G"nIlA" /I ------~~ ~Afrlka-w Colombia Russia I\Iexico Greece Turkey ..- .. __ S-Af!j/gJ:1f_ _ Potfuga/ ~ England AusIraIis f.

be it a very general one. Although a large number of respondents were involved in the project. One reservation concerning GWBE's findings should be mentioned. (2004) have followed in the footsteps of Ronen and Shenkar (1985) and Hickson and Pugh (2001) by devising a 'metaconfiguration' (Figure 2. Figure 2. in.2 Clusters of cultures Source: House et al. They have used the findings of the GLOBE project. . he was able to reduce their number to five. When faced with a cornucopia of cultures.2 with regard to changing corporate culture. of similarities and differences between cultures. multinational employees were not involved in the surveys. After using factor analysis. Despite the praise. which in turn can hold.1 National cultural dimensions in the business context superiors being held in great respect. Doing so enables those involved in multicultural operations to gain a perspective. House et al. given to the GLOBE project for the scale and thoroughness of its efforts. Pressures from outside China. . Even Ho£~tede (2006) himself is critical of GLOBE's need to use nine dimensions. there has been criticism of the constructs deviqed. This question of competing values will be examined further in Concept 10. Chinese leaders back in their attempts to promote economic efficiency.2).Concept 2. They were excluded in order to ensure that responses came only from representatives of the country in question. (2004): 2001. to consider merit rather than superiority of age or position. on the other hand. it is natural to try to establish some sort of order that allows cultures to be clustered in terms of their similarities. . When re-analysing their scores he found a significant correlatioll between the dimensions. This went for all three industrial sectors and all the medium to large companies being investigated. criticism which echoes some of the doubts described earlier concerning Hofstede's model. are forcing these leaders to become even more competitive. This particular finding with regard to China reflects those of the GWBE project generally: societal values and practices had a significant effect on organizational culture on all nine dimensions of organizational cultural practice.

short-term and long-term orientation . Religion. languages. Historical developments and economic similarities are also seen as playing a crucial role in the clustering. The result is a configura­ tion on an East-West axis. It has also outlined the many criticisms of Hofstede's research method. The significance of Hofstede's fifth dimension . 40 .particular the nine dimensions referred to earlier.10. geography and cthnicity are considered relevant factors. as well as the results of previous empir­ ical research projects. This dimension is of special significance bearing in mind the increasing importance in .has also been described.Chapter 2 Dimensions of culture In business Table 2.cur­ rent business of the relations between the Western countries and those in the East.:e in societal culture dimensions The Anglo and Sub-Saharan clusters are placed in the centre since they show mid-level scores on the nine dimensions used. especially China. This chapter has explained the cultural dimensions of Hofstede and the relation!\hip between national cultural values and those of orQanizatlonal CLJltlJr~!\. particularly the reliability and applicability of the findings.10 The countries composing each cluster . with the clusters arranged according to calculations relating to the average distam. The countries featuring in the clusters are given in Table 2. The: chapter has also expldined how the researchers involved in the GLOBE project have expanded this five-dimension model to eighteen and used a survey method which allows for a better understanding of the relations between organizational practices and social values. as are work-related attitudes and values.

J. G. and Hofstede G. Assen. Hofstede. and Strodtbeck. Culture and Organizations: The GLOBE study of 62 societies. (1990) The:: Spirit of ChiM.J.J.J. and House.S. (2006) 'What did GLOBE really measure? Researchers' minds versus respondents' minds'. (2002) 'Hofstede's model of national cultural differences and their consequences: c triumph of faith . London: Penguin. Hickson. D. (1980) Culture's Consequences. V. 1st edn. O. G. 55 (1): 89-118. G./> Capitalism. G. Gruyter. (2005) Cultures and Organizations: Software of the Mind.. Hofstede. F. (eds). IL: Row.'. in Hofstede. R. 10 (3): 435-454. Journal of Personality and Social Psychology. NY: Lawrence Erlbaum Associates. 55 (6): 1009-1115.J. New York. M. R. Hanges. Robertson. G.. House. Thousand Oaks.H. CA: Sage. P. (1985) 'Clustering countries on attitudinal dimensions: a review and synthesi Academy of ManBgement rfeview. Javidan. European Contributions to Organization Theory. F. Kluckholn. Oxford: Blackwell: Chapter 18. Hofstede.S. Pugh. P. D. 2nd edn. (1998) MaSCUlinity and Femininity: The Taboo Dimension of National Cultures.C. (2001) Management Worldwide. Thousand Oaks.J. M. CA: Sage. and Shenkar.S. Beverly Hills: Sage. M. (200~) 'Business elhics across culturel. 37: 882-896. G. Human Relations. (1961) Variations In Value Orientations. London: McGraw-HilI.I . 42 . Hofstede. and Gupta.. Thousand Oaks. (eds) (2008) Culture and Leadership Across the World: The GLOBE Book of In-Depth Studies of 25 Societies. Ronen. K. B"lIlin and New Yorl\. in Gannon. The Netherlands: Van Gorcum: 62-7E Rli!ddlng. Chhokar. G. (1991) Cultures and Organizations: Software of the Mind. S.J. and Kassem. Brodbeck. Dorfman. M.S (eds). F. McSweeney. G.W. Journal of International Business Studies.Chapter 2 Dimensions of culture in business References Bond. B. 2nd edn. Hofstede. (2001) Culture's Consequences. and Pugh. anc:l Newman. D.. (1976) 'The "Aston" approach to the study of organizations'. Peterson. CA: Sage. D. Blackw€ Handbook of Cross-Cultural Management.a failure of analysis'. (1988) 'Finding dimensions of individual variation in multicultural studies of values: the Rokeach and Chinese value surveys'. London: McGraw-HilI. (eds) (2004) Leadership. Evanston. Hofstede.

. . growing rapidly. collapse of the DaimlerChryslerlink as salveforwounded pride. ex-Rover patriots today will see. M. In contrast. those masters of collaboration. 43 . Nationality! religion or corporate culture may be the. contrasting vividly with many overseas rivals. but the hoped-for results will only materialize if operating staff at all levels in Birmingham are ready · and able to work with their opposite numbers. . successfUl collaboration . . . remains a rare beast. 2nd edn. may be agreedinMurribai with great enthusiasm at board · level.happens bY accident rather than design. Wherever it occurs. R&D and finance as between the R&D teams of two partners. By Tom Lester III Read the article below and answer the qUestions . No doubt. and ordinary staff therefore need to understand and learn from different cultures to achieve the right level of. . the World: Associates. Failure was the inevitable and bitter result. Back.s . Too often. able to work effectively anywhere in the world with any nationality. Thousand Masters of collaboration Its'mlnds'.of a learning culture prevented them from obtain­ ingthe real benefits. which stemmed in part from national'culturaldifferences and traditions between German and US managers. J€!IICC5! I!l sem. A foreign joint venture or alliance. head of the Warwick Manufacturing Group. Rather like.S. we must collaborate or die.both internal and external..' . of the this: in the modern world. · managed to form. n:62-78. have made their species some of the most successful on the planet.. in many UK companies. and are in grave danger bfextinction. Later. the someMhatsimilar . in 1992/ when BMW boughtthe ROVer buslness. Rover isa tragic example. Rover nonetheless . the failure to understand can be disastrous. say.a partnership with the Japanese group Honda to fill its vital new model programme. The message for busine!'.Lord Bhattacharyya. Satisfying customers at home demands an unprecedented level of co-operation unimpeded by rigid hierarchies and departmental boundaries.values: the ): 1009-1115. . 0. The truly multinational executive. . . according to Professor. near zero. Business operations are becoming steadily more flexible at every level of the dogged •by poor cbllaborationand infighting. andnetworks of indi­ viduals may stretch halfway round the globe and connect only electronically. however. in the 1980s.tigers walk alone. Rover. and procurement has become a worldwide activity centred on China.. BLlt the arrogance of the ROVer managers and the lack. when shop-floor collaboration in the UK car industry was. big hurdle/but itis important to also realize that even within the same organization wider cultural gaps can exist between. Non-core activities are outsourced. Culture eterson. collabdration . Flatter organizations depend not on authority but on teamwork for effective action. DaimlerChrVslerw. communication with the German managers was even worse (exacerbated by political infighting on the German side). There are good reasons why effective collaboration is. '3lackwell nthesis'. Ants. for example.

'Put five English-speakers in a room to agree a set of tasks. Fons Trompenaars. and London expands even further as an international financial centre. Add in personal fiefdoms. and the American Craig Storti.----- . 2. The more sophisticated the communications systems. however. The text mentions that within the same organization wider cultural gaps can exist between. and with foreign counterparts. found that trying to impose a single corporate culture around the globe did not lead to better collaboration. is not the only cause of non-communication. 8 (Lester T. Rover's main factory. Accenture's executive partner for global sourcing. Accenture's Mr. On another b) How could score differences on these other dimensions also influence collaboration between the four cultures mentioned? Give concrete examples. and the different patterns that they display when transferred to the UK. and each will come away with a slightly dif· ferent perspective: he says. unh "f Peo cou . a) Look up the scores of these same countries on the remaining cultural dimensions on www. BMW and Daimler-Benz managers in collaborating with their opposite numbers at Rover and Chrysler respectively. such as training UK managers to work together. Germany and Japan on these dimensions to Illustrate the differences. R&D and finance as between the R&LJ teams of two partners. companies can set up the infrastructure and telecommunications links between units relatively as well as business colleagues . In real terms. SOUl w: adapted from Masters of r. 2. ancient IT systems and complex and inappropriate organization and reward structures. The cultural guru's great contribution may lie less in detailed analysis of deeply held cultural attitudes and more in helping companies anticipate and understand behaviour patterns that their foreign managers may display in their home territory.the Japanese score 92. including IBM.are loose or tight. Two of the five 'cultural dimensions' that Prof Hofstede derived from his database go some way to explain­ ing the difficulties faced by Honda. One is individualism. uncertainty avoidance . the Americans 46 and the Brits 35. De: (th. To what extent can Hofstede's cultural dimensions be used to explain such cultural gaps? Qt 1. Interest in their work is currently reviving after some big companies. the more room there is for misunderstanding. 29/06/ f\ sign and wen T forg Chir me" wer prai eng not att. Rei: Pu AC pinl whi.ollaboration Financial Times. notably a fellow Dutchman. As immigration grows. What is more difficult and time-consuming are the soft issues. exceeded only by the US with 91. Wadia finds that with modern technology. the Germans 65. He has since been joined by others. 44 . 4. may have made the BMW team uncomfortable from the outset.Chapter 2 Dimensions of culture in business The outcome in both cases will have come as no surprise to Professor Geert Hofstede.). the lack of precise rules and procedures at Longbridge. have no such problems. and vice-versa. The text gives the 'scores' of the UK.----~~-. who 30 years ago pioneered the study of cultural diversity In 56 countries using IBM's worldwide database. and effective collaboration will sink rapidly. Germany is a little above the European average at 67. 3. The UK score as assessed by Prof Hofstede is 89 out of a possible 100. defined as the degree to which ties between individuals . but Japan scores 46. p. if possible. say.the degree to which individuals feel uncomfortable in unstructured environments . dis E Questions 1. Nationality. indicating a high degree of individualism. and not even the main cause. points out Kris Wadla.geert-hofstede. USA. 'Individualism' and 'Uncertainty Avoidance' are the two dimensions proposed by Hofstede which are mentioned in the ll::!xt as influential factors in international collaboration. it becomes an important skill to be able to work effectively with and through executives of widely different backgrounds. Ants .

9 11 i till 1M. Before contracts could bf. These chains relied on local suppliers for their pizza boxes and were unhappy with the products supplied. --'­ _~__ ____~~. It had pinpointed one particular area where it could supply pizza boxes to half a dozen chains of pizza restaurants 'which operated home delivery servicl:!s. to be followed by an authentic Chinese dinner. . the Canadians had managed to filld a parkaginq manurdcturor near Shanghai that .. it was agreed that both the Chinese and Canadians should visit each other's headquarters and meet face-to-face to establish complete contidence In their venture and to settle finAl details. Atanadian packaging company wished to extend its activities in the area of convenience foods. Considerable attention was paid to all the details involved . Read the information on the fifth dimension one more time. !~ 11 '~. 'I: \'. what would that word be? 4..-7' 45 . the irregular delivery and. they said very little and the attempts by the Canadians to keep the social conversation going eventually ended in silence on both sides. Questions 1. Try to explain the Chinese author's analysis by using the values described in Concept 2.. ts ). . . During the meal the Chinese did not seem to appreCiate the effort put into the food they were served.ago )een . Canadians expected the Chinese to behave? t ~ tti ft .~. Despite being promised an exotic Chinese floor-show after the dinner. were to visit Canada and the Canadians WE're to fly to Cilina two weeks later. . a. Why do you think the Chinese behaved the way they did? 3.B . could proville pizza hoxes at u very I ~asonable price in line with the specifications and quantities required "~ahddeliver them within the deadlines set. i~ " ~ . Moreover. the cost. Read the case study and answer the questions below. Eventually the big day came and the Chinese guests were whisked by limousine to the hotel where they were greeted by the Canadian company's president and management team. above all.'. The Canadians were surprised and disappointed. .1.some of the Ingredients for the meal had even been specially imported for the occasion. !the Ie in ldde and l1ay nes ldS. . Through intensive online research and consultation with the commercial section of the embassy of lhe People's Republic of China.2.-~. r. If you had to choose a word to describe Chinese culture.' signed. .'~_ _ _ . and the bonhomie everyone tried to engender.c. ~hey arranged an elaborate welcome ceremony in a five-star hotel.. the delegation made their excuses (they were tired after their journey) and quietly retired to their rooms. " . Why were the Canadian hosts surprised by the behaviour of the Chinese? How do you think the . the Chinese remained reticent and very formal in their behaviour. What had gone wrong? ness 100. The ChineSe .1. out :lif­ lte nd "Ie s 35. Despite the lavish words of praise from the Canadians in front of the hundred guests present.!' . however. Negotiations by email and phone had taken place and a deal seemed imminent. The Cunadian company decided to pull out all the stops to give their visitors a reception they would never forget.<. lain­ )site pulling out all the stops . . 1.g to ..

~ Understand why Russia and Turkey have been handled in this chapter along with coun­ based but rather one founded on the e\'ents Europe is generally considered to be a community that is neither racially nor lingmstically French historian Doroselle (1990) states succinctly : 'History has created n re<~j Emope'.2. tries in the European clusters. Discover which characteristics bring together countries in a number of clusters within the Western half of the GLOBE metaconfiguration. American. Turkey is iii similar case: although the GLOBE project has positioned this country In the Middle East cluster. but also in terms of other factors. The following two chapters will take aspects of each of the GLOBE clusters relating to history.The clusters devised by the GLOBE project which were presented in Chapter 2 will be the starting point for this and the following chapter.2 shows how the clusters have been positioned not only In terms of the similarities and dissimilarities between the clusters on the basis of the cultural dimensions. and Australasian countries. Russia and Turkey. and will feature certain countries within each cluster. 46 . It will also consider two coun­ tries.should be included in our deliberations concerning Europe as a whole. which have been placed in two different clusters in the right hemisphere of Figure 2. Chapter 3 will deal with clusters within the left hemisphere and the related cultures In Western European. geography and religion. includ­ ing those to do with history. Figure 2. (I. We consider that Russia . we b@lieve that it should be included in this ChaptGlr. Gain awareness of some of the problems arising from cooperation between and within these clusters.along with the other countries placed in the East Europe cluster . religion and work-related values and practices. particularly on account of its application for membership of the European Union. Learning outcomes After studying Chapter 3 you will: (j.

. . as do those of a parallel institution. They were both set up to bring peace and prosperity to a continent whose countries had been at war with each other.. autonomous entity.Concept 3... Not having ever been a stable. Turkey) are depleted in grey.~ .. Originating as a common economic market that allowed a number of (West) European countries to trade fairly. ""-.. As this chapter will show. it has developed into a body with common institutions at economic... Hvatska..... -" EI DJazalr Member states of the European Union are depleted in blue.. the Council of Europe. its identity has never been clearly established either culturally. socio-cultural.. Candidate countries (F'YROM. -'... The historical roots of the EU lie in the Second World War. ..1 European cultures Although traditionally designated as one of the world's seven continents.. Europe's eastern borders in particular remain somewhat arbitrary.-. The aim of the Council ofEurope -----. The most recent development in terms of relations within Europe is the European Union.. politically or geographically. 47 . Europe has been portrayed in many different ways down the ages according to the cultural and political relations prevailing.. The European Union Source: The European Commission ©.. and political levels to which the member countries have delegated some of their sovereignty..

another talks of the need to preserve Europe's many cultures. in 2005. particularly thanks to the effects of the ED.bfsolh:larity and shared standards.. human rights and it is ultimately through intercultural dialogue and theTulc oflaw impllespmmotlnga relationship· action lh~t responses can be found to increas­ with culture. interdependence and diversity. social and legal benchmarks for new applicant countries.pdf. the rule of law and democracy. traditional and contemporary. this organization itself has a rather ambivalent attitude towards the concept of a European culture: while one EU body talks of its wish to develop a unified cultural entity. to eliminate all forms of discrimination as well as to foster co-operation with other international and European organizations and institutions. A European Union poster celebrating Europe Day Strengthening democracy. . contribute to sustainable local development and the development of creative industries and the information society. those denying the existence of Europe see nothing more than institutional structures binding a hotchpotch of different cultures (Spotlight 3. Different forms of cultural expression. to eradicate torture and inhuman and degrading dg4/cultureheritage/About/Culture_soul_EN. . accessed 1 September '2010. However. which Europe was founded. Nevertheless. The Council of Europe's cultural and heritage policies receive regular encouragement from Europe's political leaders. t) facilitate co-operation between European countries and help to integrate member states into the practice of European democracy. forglnga· Europe .culture plays a part . . Culture is at the heart of the mission of the Council of Europe This vital role of culture has expanded steadily with a recognition of its importance in fostering processes of democracy. With Its liose links tothe values on ingly complex international issues ..Chapter 3 Business cultures in the Western world is to establish and promote fundamental values such as human rights... help interpret social realities that are increasingly marked by globalization. . to what extent can one talk of a European culture based on such values and practices? There is certainly an increasing uniformity in the way affairs are organized and in the way people run their lives. The council has come to playa special role in the development of the EU by laying down economic.. . as exemplified by the Action Plan adopted at the 3rd Summit of HeadS of state and Government. By doing so it is creating a European identity based on common values and practices. Source: Council of Europe: http://www. Those who shout '1 am a European' may be essentially exclaiming an ideal based 011 a desire for EuropeaJ.1). 48 . manage diversity In a democratic way and support creative expression.coe. " ensure that living heritage Is passed on. in .l unity (or stating a fairly obvious geographical fact). These pOlicies cOl')cern activities intended to: .

in an agrarian economy with limited money exchange. Roman and Judeo-Christian streams in its culture. their will on unwieldy closed hierarchies. but clear cultural differences still survive. there is a more personal approach to managing and organizing. political power was dispersed among lords who in turn granted vassals authority over particular lands. but the layers of hierarchy and the procedures involved in getting things done are so formalized that working round them is quicker and in the end more efficient. however. There is often a tension between this dependency on and loyalty towards authoritarian figures and a distrust of authoritarian systems in general. largely independent communities with their own laws and hierarchies was another. cultural differences between regions and countries h~ave not been eradicated. does not necessarily give the enterprise manager the kind of mandate that would allow him to playa proper co-ordinating role. The Roman Empire had the greatest effect on countries below the river Rhine. That is why there is a reliance on family and personal relationships and connections to work around the system. Nevertheless. Some historians have maintained that a much more united Europe existed in the early Middle Ages (from around the fifth to tenth centuries) when a number of its countries shared common features of a feudal society. As Morin (1987) declares.:ur()pe Latin Europe Managing and organizing in societies characterized by Romance languages dose to Latin. Some shifts may occur over time. the one depending on the other. the EU is becoming more heterogeneous. by Roman-style legal systems and strong Roman Catholic churches still differs from other societies where the Romans held little or no sway. This. The Roman Empire with its strict hierarchies and its codified system of laws was one. The regional differences mentioned earlier have a lot to do with the influences that events in history brought to daily life. With no strong central authority. the political and cultural Europe of today is the result of the disruption of this feudal system and the ensuing conflict. In Latin Europe. and despite shared representation and legislation. As Boisot indicates (1993: 222) in his article on management in Spain: The need for a strong leader and a hierarchical leader. the case can be put forward that as a result of its increasing membership. LatinI NorthernandWesterne. the boss is the boss. as well as its Greek. Prominent figures may exploit this tension by showing their ability as leaders to impose their stamp.Concept 3. the invasion of the Vikings who maintained local. These two influences will be the starting-point of an overview of the djfferences between European dusters. Those peasants who tended particular landholdings were obliged to supply the lord with labour and/or part of the land's output.1 European cultures Despite the domination of Rome and the predomination of Christianity over centuries. There may be a highly developed bureaucracy present in Latin countries. and the authority of that person rests on the need of a country's people for strong rule. despite increased co-ordination and co-operation between European countries. Cultural values of a society are still being handed down from generation to generation in the same way as those of an individual. to bend the rules. is what makes Europe unique. 49 . Indeed. This was a system essentially based on man-to-man relations.

tolerance and support extended to others. he believes. In the eighteenth century.. (2004). Unlike the other countries in Latin Europe.proclaimed during the French Revolution. focusing his attention on what is happening within the company while still keeping an eye on the world outside.': Latin countries of the . New World. In her book on Italian management. however. France became the model of European culture. If he is not moderate when enacting his power. The other assumes the role of manager in the traditional sense. social or regional categories. Nevertheless. The one plays the role ofleader and spends most of his time with external contacts in search of information that will allow him to adjust com­ pany objectives. Such power involves not only fulfilling contractual obligations. in terms of consideration for family. the French idea of universal culture and its concept of a unity of cultural com­ munities within French society. the family concern is even more in evidence in tbl. Nordic Europe The presence of the VIkings who swept down from Scandinavia and occupied parts of northern Europe is still felt. They helped to reinforce the contrast between the cultural characteristics of the Northerners and those of the Roman Empire. prevalent in Latin culture because the economic dimension is perceived to be little more than an expression of the political culture. but also through its language. consisting at the start mainly of Celts (the Gauls). but also preserving the status of the position. contrasts strongly with the notion held in other European countries of a national culture essentially based on compromise (d'Iribarne et al. self-interest is high.. The country came into being after the separation of Francia Occidentalis (the West Frankish kingdom. They had no over. the countries concerned are collectively inclin~d. is alone at the top. who share each other's confidence and complement each other.riding 50 . 1998) calls the category of 'little bosses'. showing greater loyalty and cohesiveness to their family. Romans and Germans (the Franks). or to talk of one culture for one people. other European clusters. now France) from Francia Orientalis (the East Frankish kingdom. As will be seen later in this chapter. As a cluster with low humane orientation practices. not only through the dissemination of the universal values . a couple as it were. France was formed by a wide range of peoples. This humane orientation construct addresses lhe degree of COD­ cern. Vidal (1992) distinguishes two types of business leaders in Italy. 1998). the Latin European cluster is characterized as being low in terms of humane orientation practices. when looking at Latin America. A leader in France.liberty. if he lacks breadth of vision or is seen as mean-minded. although humane orientation scores in terms of values more closely resemble those of . Examined in terms of the cultural dimensions put forward by House et al. of 'French-style' bureaucracy when describing the friction between two professional categories within a state-owned enterprise. In short. then he is seen to belong to what Segal (d'Iribarne et al. for example. Even the French talk. he keeps an eye on what is happening inside the company. This problem of managerial legitimacy is one. now Germany).Chapter 3 Business cultures in the Western worid Managers lack the legitimacy to perform their role effectively and can be perceived as devious exploiters of the economic system. the term 'culture' in France is applied to the description of customs relating to certain profes­ sional. A company is run by two people. However. equality and fraternity . as is lack of consideration for others. While doing so. It is perhaps the historical role of France as the upholder of universal cultural values that has made it reluctant to envisage a plurality of cultures.

they maintained large independent communities. the final decision often lies in the hands of the team leader.their approach to authority. Germanic Europe House et al. bosses are seen more as team leaders and group facilitators as opposed to being decision-makers who delegate tasks to others.e. argue that had Germania not asserted itself and so allowed the Romans to continue their occupation up to the North Sea coast. With the annihilation of three Roman legions. the hierarchical positions are not as easily separated from the persons occupying them Germania and the English language The Romans conquered 'Germania' and trained its inhabitants to become loyal warriors in Rome's wars of expansion and even entrusted them with guarding the Roman emperor. Instead. The Rhine bec:ame the boundary rather than the Elbe. egalitarianism and democracy is reflected in the way present-day business is carried out in Scandinavian countries. with more emphasis put on the job being done than the position in the hierarchy. A number of authors. then the tribes would have eventually adopted Latin. The Viking heritage of self-sufficiency. This is reflected in a general preference for company employees to work in groups rather than making solo efforts. question their decisions and expect to be consulted on issues affecting them. Those managing and being managed are less far apart socially than in Latin Europe. As such. Their inhabitants do not regard those in authority as remote persons whose word is to be accepted unquestioningly. They would have brought this language to Britain Instead of the Germanic language which lies at the base of the English language. it was one of these loyal warriors.1 European cultures hierarchy. for example. 51 . who organized a revolt against the Roman armies in the Teutoburg Forest as they were turning lower Germania into a Roman province. These characterizations are reflected in the position of Nordic European countries on the cultural dimensions relating to power distance as devised by both Hofstede (1993) and the GLOBE project (as described in Chapter 2). fairness. this does not mean that. Sweden. each with its own laws and governing bodies. the Germans are as informal as the Dutch (included in the Germanic cluster) in their behaviour towards each other. Finland and Denmark. In most companies. The countries of Nordic Europe share one distinctive feature . However. However. no elaborate systems of control. Germanic countries show lower power distance than their other fellow Europeans. employees are often encouraged to express their opinions freely at meetings and everyone's opinion is given consideration when making decisions. in Norway. Arminius. Along with the Nordic countries. including Lendering (2003). Managers are not regarded as being expert in all matters but are expected to make effective use of the expertise among their co-workers. i. Result: Germania retained its distinctive culture and language and until the nineteenth century retained a collection of small principalities. However.Concept 3. English might never have existed without the revolt of the Germanic tribes. In Germany. the empire recognized that it had reached its limit. They face up to them. (2004) admit that the cultural separation of Germanic and Nordic Europe is not as great as among other clusters.

This can be seen in the way personnel are selected.who. Using Hofstede's cultural dimensions. That is why. which is used to describe people from the British Isles as well as those who emigrated to North America and Australasia. the British handle it in a very pragmatic way. rather than taking bureaucratic prescription too far. The job is a job. this area became known as England. England eventually became the dominant part of a larger political entity. but also Hofstede's dimension of uncertainty avoidance. German companies rely heavily on experts and their knowledge to minimize insecurity and. of which they are sceptical. settled in large numbers in 'Britannia'. a task to be performed impersonally. The relaxed British approach to management contrasts strongly with the Latin and Nordic approach. for the same reason. along with other tribes from Northern Europe. As Hickson and Pugh (2001: 50) indicate: Characteristically.Chapter 3 Business cultures in the Western world as they are in the Netherlands. which includes Wales. as Hoecklin (1995) notes. regarded as separate from one's personal life. It was Anglo-Saxon tribes the Angles. The use of the term 'British' reflects the union of these peoples and the amalgam of elements that constitute their culture. With the eventual consolidation of the various settlements and kingdoms. The very nature of its deregulated liberal market economy. Although the selection process may appear the same across European countries. they balance its potential rigidities by day-to-day pragmatism. enta. The concern for detailed codes and written rules could be seen as reflecting not only the concept of 'universalism' as described by Trompenaars (see Chapter 5). working things out as they go along. now known as the United Kingdom of Great Britain and Northern Ireland. A respectful formality tends to prevail between company employees operating on different levels and in different areas of responsibility. This ties in with the very individually oriented nature of the British. the province that the Romans had established on the lowlands of the British mainland and later abandoned.ils less consideration being given to the employmt:nl needs in the longer term. and instrumental in creating Britain's economic success in the nineteenth century. Hence it has been said that the British see an organization as a 'market' In which people neQQtiate what has to be done. They do not try to manage uncertainty by issuing regulations and declarations. The latter will be dealt with once the Anglos have been characterized in the European context. Scotland and Northern Ireland. where the goal is maximization of profit in a relatively short time. it is normal for intelligence and skills to be measured and assessment centres to be employed. tend to adopt a longer-term perspective when making strategic decisions. Compared to other European countries generally. 52 . according to her. is on the extent to which the individual concerned can contribute to the tasks of the organization. The Anglos The term 'Anglo' is an abbreviation for 'Anglo-Saxon'. while at the same time being more individualistic and more ambitious/aggressive than their counter­ parts on the continent. Although bureaucracy is the most common form of organization. the British can be characterized as having less power distance and lower uncertainty avoidance than their European neighbours. the emphasis in Anglo-Saxon cultures. Saxons and Jutes . Britain is reluctant to invest in training for the longer term.

can those countries that prefer state institutions to have significant influence on their economy work together with countries that prefer minimum state interference in the workings of the market? So-called rational arguments used in policy discussions are often hased on the distinct preferences shared by the inhabitants of a country. rather than just being a sophisticated free trade area with an unambiguous legal and financial framework. preferences which mayor may not be shared with other countries. is deplor~J by many countries in present-day Europe. The stability of careers in Germany contrasts strongly with the job­ hopping tendencies and short·term perspectives of British p. more focus is placed during the selection process on the extent to which the applicant will fit into the group of employees concerned. To what extent.umpf' itSf'lf has a C1. is on interpersonal skills and tests of personality and communicative competence. and this in turn has raised the matter of whether F. expressed of a 'watering down' of cultural identities as the EU expands further east. the (potential) employer and employee are not just concerned with the present requirements of a company. with the 'universalist' approach of the British. prevalent in Anglo-Saxon countries. but in a much broader and long-term context. therefore. there is equal con' cern for the appropriate technical skills. Anglosaxonization This focus on short-term profit in a deregulated environment.1 European cultures Selecting employees Some comparisons between the British and countries from the Latin and Germanic clusters are relevant here to highlight differences with regard to recruitment and employment gener­ ally. cultural norms and values. The emphasis. As Hillmert (2002) indicates. In Germanic cultures.within a 'web of relationships and hicrllrchies'. 53 . This applies also to the future expansion of the ED. In Latin countries.Concept 3. The different attitudes to the EU as reflected in economic policy reflect explicitly or otherwise.mploYI:'I:!' who do not benefit from a cO'ordinated training provision from the state. Whereas the occupation of a British employee is closely connected to the firm where he/she works. Hoecklin (1995) points out the tendency for the French to use one-to-one interviews rather than panel interviews and to make IJse of references much less than the British. Political leaders of some EU countries often use the term 'Anglo-Saxon' when referring to the increasing commitment among the newer members of the EU to profits and free markets at the expense of sod<ll responsibility. These leaders are afraid that the social fabric of their countries will crumble through the increasing predominance of market forces. where the concern is not just about skills criteria but also about operating successtully . Fear has often been . This anxiety reflects the wish of some of them for the EU to develop into a tight body of nations with a serious political commitment. employers and trade unions. including the USA. but also with the longer-term occupational career of a candidate. where more reliance is placed on more objective criteria about applicants' intellect or technical skills to determine whether they fit into the organization. She contrasts the 'particularist' approach of the French. Referring to a survey comparing French and UK methods of selection.litural identity that must be preserved or protected. that of the German employee is considered more as a step in the development of a career that involves further (state-supported) vocational training and inter-firm mobility. for example.

nt (EEM came into force. later the e:C and the EU. The Ef rA established Il framework for closer nomic co-operation between Western European countries. Liechtenstein. often silen as thp. in 1994. He is said to have replied: 'I would start with the culture. mainly Muslim.later the EU ­ declares that. He was allegedly asked by a reporter what he would do differently if he had the chance to start over again with the development of the community. the traditional border between Europe and Asia. a joint EC. Istanbul.d the European Free Trade Association (EFTA). straddles the Bosphorus.- Chapter 3 Business culture'> in the Western world Free trade in Europe: EFTA. together with its capital Ankara.score.Iceland. It m·ay show a strong focus on In-group collectivism: its 'As Is' score is one of the highest among those calculated and is almost equalled by the 'Should Be'. Jean Monet.nnsisting of four countries . co-operation of whatever sort can clearly only work if there is a willingness to do so at cultural leveL Observers of the developments in Europe have noted this from the start. whereby thfee of the EFTA countrilils wr::rf! able to participate In the EU's internill market. callp. its smaller western jJart in europe. 54 . with countries that aspire to EU membership. Although negotiations for it to become a full member began in 2005. Their one fundamental concern is that Turkey is not European. have been vt the core ot EFTA ilclivities from the beqlnning. Proponents of Turkey's membership argue that the country Is European: It Is successor'state to the partitioned Ottoman Empire which stretched from the Red Sea to the gates of Vienna. Opponents maintain that if Turkey eventually became a full member of the EU. Turkey has been an associate member of the European Union since 1963.' These words resound as strongly nowadays as they did when first reported_ Turkey and the EU Turkey I!. which later developed into the European Union (EU). In the 1970s the EFTA states concluded free trade agreements with the EC. Although . it has to be European. EFTA has since developed a number of free trade agreements involving Middle East countries round the Mediterranean.only now r. including one of the founders of the original European Community. The GLOBE project places Turkey in the Middle East cluster. This particular sfandpoint has forced Europe as a whole to consider its own identity. pop­ ulation would threaten the Judeo-Christian cultural homogeneity of the continent. Norway and switzerland· it was originally created as a counterbalancp. Although the founding treaty of the EEC . lies in Asia. for a country to join. to the more politically driven European Economic Community (EEC). but was gradually deserted by many of its members who joined the EEC!EU Instead. as such it played an influential role in the history of Europe for over four centuries. Relations with ttle EEC. a number of EU countries have made it clear that they do not consider Turkey would be a suitable member. Those remaining later concluded free trade agreements with the EU and. but its cultural profile displays both Eastern and Western values. "Ln- Whatever agreements may be reached at economic or social level. culturally or geographically. in 1994 the European Economic Area Agreemp. the treaty gives no actual definition of theierm 'European'. The country's largest city. bridge or crossroads between Europe and Asia. EU and EEA There Is a grouping of countries within Europe . its large. Its largest and most populated part.

motion that led to the dismantling of the country. dvvlillop . for and i1Qilin::. With the political collapse of the Soviet Union. This 'new' country._. Turkish business is very competitive and places great emphasis on efficiency and performance. The post-revolution regimes in particular had a profound effect on Eastern European countries. especially by those who grew up and worked under the . Do you consider Turkey to be part of Europe. This transition has. the same question arises which is troubling those dealing with Turkey's potential membership of the EU (see Mini-case 3. Furthermore. Furthermore. 15 republics emerged. Questions 1. Using YOUI I ~~ource!l.. countries under Soviet sway were characterized by highly autocratic. caused considerable unrest. old regimes. and where most of the population is centred. although the vast majority of its inhabitants practice Islam.concept 3J Europeall cultures At the same time. has also been struggling since 1991 to replace the social. however. in geographic terms. pleaded for the building of a 'common European house'. some [eastern European) managers argue that faced with competitive threats and conditions of economic decline or Instability. of which Russia is the largest. who as president of the USSR set many of the reforms in. Close association with the EU is seen as an important way of developing the Russian economy. political and economic features of the Communist era with a more democratic political system and a market-oriented economy. Before the Iron Curtain eventually fell. Asia or of the Middle East? Justify your opinion. develop self-confidence and learn how to deal with a more open.t Turkey's full membership of the European Union. 2. Eastern Europe A big influence on East European cultures has been the Russian Empire and the Soviet hegemony. in ideological terms. The transformation of highly bureaucratic and centralized economies has taken much longer than anticipated. The legacy of the communist system of administration is what the societies of East and Central Europe have had to contend with since the early 1990s.1): is the country really a European nation? If. The opportunity to take on roles and responsibilities similar to those of their Western neighbours is still seen as a threat. greater centralization and stronger controls are needed. they live in a state that has been a secular demol:fdLy since 1923. can that part of Russia to the west of the Urals. Although the 55 . The withdrawal of centralized control has increased feelings of uncertainty and helplessness. less merciful environment. As Schneider and Barsoux (1997: 101) report: Despite the prevailing wisdom that organizations need to be less hierarchical and more flexible. but membership is a step too far for many Russians who fear their independence being swallowed up in a greater Europe. which spans Europe and Asia. instead they must battle their own way through. the border of Europe is considered to be the Urals mountain range. and there is still a longing for how things used to be among those unwilling to adapt to the new environment. be considered as 'European Russia'? Mikhail Gorbachev. centralized organizations with many bureaucratic levels.:lrgllmt!l'nt!'. Individuals and companies can no longer rely on the 'system' to help them out. when Western political and economic practices were introduced. reflecting the presence of a dual hierarchy (politics and business worked hand-in-hand) and an obsession with state planning.

The transformation of its nature from being based on moral and ethical considerations to having an explicit financial expression is a phenomenon in Itself. they note. it came to be more associated with caring and sharing. The authors see the country as power distance. which enabled individuals to deal with the scarcity of goods and services of a centrally planned economy. Although the word blat was originally associated with small crime. and the The 'active networking' referred to in Spotlight 3.2) 56 . Even if Russia's presence on the European business stage is becoming increasingly dominant. They point out that the perception there of bribery and corrup­ tion is a different one: people are more tolerant of wayward practices. competing political and economic aims and interests appear to have gained the upper hand. The latter.Chapter 3 Business cultures In the Western world EU and Russia have been exploring the idea of developing a common European economic space. If mutual favours need to be made they should be done on a small scale and between individuals.5 appears to be one feature of society in Russia that has survived the recent transition and which continues to play an important role in Russian life. help to explain why the GLOBE researchers have placed Eastern Europe in the Eastern hemisphere of the l11etaconfiguration (see Concept 2. (2008) also reflect a trend evident in 'As Is' and 'Should Be' scores for institutional many other societies: a move towards lower collectivism. is often exploited the authors consider to be a severe decline in by criminal structures. Russia: a decline in collectivist values? Recent findings from the GLOBE project. With the increased uncertainties of post-Soviet reforms. educational. they argue. lead. common understandings and (implicit) rules of behaviour were established which allow favours of many kinds to be reciprocated. social responsibility. These relationships were built up over time. They reveal a considerable difference between the et al. Russia and Europe. The GLOBE findings on Russia In Chhokar traditional collectivistic values in Russia. scarce. financial and legal levels are weak. Blat is becoming a negative word again with criminal undertones.ial fragmentation. with helping and being helped through a network of personal relationships. there are many who question whether Russians have the same regard for essential values (such as democracy. ing the authors to question whether Russia can alism and sor. as active networking used for survival on the other drawn up by Grachev et al. These considerations may. This is a form of social networking called blat.of order in society. Michailova and Worm (2003) advise business people intent on doing business in Russia to beware of blat. are unlikely ever to share such cultural values. and mutual trust. Michailova and Worm (2003: 517) argue that its nature has changed: [Blat] is becoming increaSingly materialized. show what hand. (2008). on the one hand. and employees and managers consider it an important element of conducting business. However. the gap between moving along the path to increasing individu­ 'As Is' and 'Should Be' remains substantial. dominated by pragmatism and market­ governed. blat has continued to flourish. essentially to reduce the uncertain nature of a society where services at social. They also detect a striking contrast between balance moves towards democracy with the increasingly individual behaviour and low maintenance. human rights and freedom) as countries in and close to the EU. or nonexistent.

on the other hand. 9.aI. People here have real responsibility: Vadim Klassen. thrown back on itself and dependent on Soviet communism. He says all workers at GM-Avtovaz are encouraged to show initiative and make suggestions.2 ) 2. to produce its slick-looking Kalina model. But as one foreign executive puts it: 'What these guys do not understand is that it is not about a car.' says Evgeny Berezin. 'You can build the same factory as the one here. it Is about people. If we go down our own path. On the other is 1i liiodcrn-lool(lng factory. On one side are grey and crumbling concrete factories. it is about people. military-style security and unsmil­ ing worke~s. 57 L .' .1 European cultures c r Y 11 • J. A tale of two Russian factories It takes less than 10 minutes to drive from Avtovaz.Concept 3. maker of Lada cars. It is clear that the aftermath of the Second World War involved Europe being divided into two. 07/07/2006.sia :ale JP­ md ced ~. who has worked in both plants. But to make the Journey feels like crossing the border between the Soviet Union and the West 20 years ago. Eastern Europe became closed off. but it is all in the mind. I like working here because I can see the result of my work. says: 'If we learn from [foreign carmakers) we will catch up quickly. Igs be ed . Wt!lwrning worker5 io hlilf! overalls aM a canteen where managers and workers eat al lilt! &arne tables. Inside. which can be quickly taken on board.' he adds. to its joint venture with General Motors. Comment on the last paragraph of the case.almost unchanged. 'Avtovaz makes the same model for 10 years . :ty nt :tIs he ng )S. Workers in both places are Russian and live in the same city. Western Europe. The car we make here today is different from the one we made a couple of years ago. went under the very strong influence of the US. its taste for risk and championing of individual rights (see Mini-case 3. its enterprising mind. equipped with the latest German and Italian machinery. Financial Times. Do you agree with Vadlm Klassen? We now move from the European clusters to what could be called 'exported European cultures'. with low-I{ey security. rather than including the countries there in one of the European clusters. with a top-floor restaurant reserved for managers. we never will. the differences do not lie in technology: Avtovaz has a new assembly line. assembly manager at GM-Avtovaz. first as evidenced in Anglo-Saxon countries and later in Latin America. the discipline. p. Spending $5bn or even $10bn in the same environment will not make a good carmaker: The real distinctions between Avtovaz and its jOint venture lie in management approaches and relations between managers and workers. But one factory is stuck in the Soviet era while the other is part of the modern world. Any suggestion at Avtovaz usually gets lost In bureaut:I dty. Could you explain what the foreign executive means by saying: 'What these guys do not understand is that it is not about a car. But you have to want to learn and know how to learn: Source: from A tale of two Russian factories. 'Here everything is different: the work culture.2). rm et­ cal Ifat Questions 1. the attitude. An office block towers over the plant.

as well as the profound social change which Latin America is undergoing as a result of the influence of industrialization on these values. as interpreted by the Supreme Court. and the Supreme Court to check the power of both by referring to the .. He saw a link between the self-denying ethos of the Protestant sects and the behaviour patterns associated with capitalism. They too became intent on achievement and improvement. and the concern that such a development was diminishing the sense of social responsibility inherent in many European countries. first published in German in 1905 and translated into English in 1930. In his influential book The Protestant Ethic and the Spirit of Capitalism. The values which these people took along when they emigrated have had a significant influence on the shape of US culture. whether a public bus company can compel you to listen to piped music •.rule­ book of the Constitution. run an undertaker's firm and also hold stock in an insurance company . but they adopted the ethic. America was created by philosophy: The parameters for realizing such a dream were consciously developed by the US founding fathers when they were deciding on how society was to be organized. 58 . He argued that modern capitalism was born from the spirit of Christian asceticism in its speci­ fically Protestant form. Although this work ethic is considered by some observers to be dying a slow death in Europe. Anglo-America The term White Anglo-Saxon Protestants or WASPs is the term often used in North America lo describe the people who made IIp most of the population of the USA when the country was still in its infancy. where large numbers of immigrants from the British Isles (including Ireland). above all those to do with hard work.. look at the old stately document and decide whether you can. These rules must also be applied in the same way to the drive for individual achievement. The many immigrants who followed the early settlers were not all in any sense Protestant in their religious beliefs. as well as other west European countries such as France and Italy. UK Prime Minister from 1979 to 1990. The president was to check the power of Congress and Congress to check the power of the president. determines whether businesses are operating against the interests of the individual. as reflected in a number of institutions which checked and balanced each other. on realizing the 'American Dream'. The original settlers in North America brought with them what Max Weber referred to as the Protestant work ethic. it is still regarded as being a driving force within US business. Canada and Australasia areas of the world. guards the rights of the citizen. set up home and business. they adopted the principle of equality.= The previous concept referred to 'Anglosaxonizatiuu'.. the competitive and aggressive will to succeed in business. say.. Rejecting the privileges from which many of the immigrants had wished to escape. This explicit determination to build a society on such ide­ als reflects the comment made by Margaret Thatcher. The strong common values of the Latin cluster will also be described.. The US constitution. in the US. that 'Europe was created by history. This concept will examine the Anglo-Saxon approach to business outside Europe. As the reporter and broadcaster Alistair Cooke (1973: 145) pointed out: [The justices of the Supreme Court] •. Weber studied the psychological conditions underpinning the development ofcapitalist civilization. the increasing focus wilhin the EU on profits and free markets.

One clear difference that is frequently referred to when British and American businesses are being compared is the way they look at the future. Although French and English are the two official languages of Canada. particularly Chinese. Thriving on competition is a feature: strong competition keeps a company on its toes and encourages innovation. however. without it. Anglo-Canadian society. On the other hand. An1ericans are much more concerned about the bottom-line in the short term. The general optimism prevalent in US business concerning the future . in which different cultural groups tend to be socially intact and maintain their cultural identities. This is not to be seen as inflexible. to a wudd wht'l'e schedules. The 'impersonal organization' is predominant. A vital indicator of success for US businesses is the 'bottom-line'. the province of Quebec has the majority of French speakers and it is they who almost succeeded in getting the province separated from the rest of Canada in 1995. self-advancement is itself in danger. pragmatic approach is needed to deal with uncertainty. originally the territory of the Indians and Inuit. but still maintains within its borders clear French Canadian and Anglo-Canadian identities. Just as the constitution can be 'interpreted'. However. A common sense. memos ann agendas are less adhered to. A strong. Hickson and Pugh (2001) refer to the US organization as a 'negotiated order'. but those higher on the ladder can be addressed by those on the lower ranks and the rules questioned. and time is the key instrument. was first explored by the French who set up their first colony around Quebec. Canadians who are not French-speaking. advancement and continuing commitment to the company. with a clearly defined hierarchy.Concept 3. Money engenders money. so can the rules and regulations. their ways are Anglo. There may be a clearly defined hierarchy with explicit responsibilities for all concerned. but also many continental Europeans and Asians. Despite what many Canadians consider to be the overbearing presence of the US their style of management is more British in the sense that it is less formalized. i. shared commitment among a company's employees allows for considerable delegation and decentralization to he established more easily. us companies are contmually aware of tiJe interests of said to contrast strongly with the more nuanced view of British business about future developments. Canada became independent in 1867. especially among those who believe that investments of whatever kind often need time to bear fruit. less driven by individual goals and more aware of society as a whole. After all. The British also set up colonies and it was they who eventually took control of Canada through settlement and warfare. Canada Canada. Dealing with Freud I Canadians entails coming to terms with latin attitudes tu m.e. This makes it easier for a company 10 contend with uncertainty ('Inn allows for an attitude towards the vicissitudes of the market that is more relaxed than in other 'Anglo' organizations.and future success . This is particularly important in a country that is proud of being a 'mosaic'. This attitude engenders considerable criticism. Although financial reslllts are crllcial to all Anglos. just as in other Anglo countries.magcmcnt. Two multicultural tests that Anglo-Canadian business people undergo relate to getting on with the neighbours. the overriding concern is the advancement of the company. including the way they manage. comprises not only those of British origin.1 European cultures Within companies themselves there are strict rules and procedures to be followed. Time must be harnessed as effectively as possible to enable progress. This has frequently led to political clashes between the two communities. where conviviality and connections arc more important than time-planning 59 . rather than being a 'melting-pot' as the US claims to be.

60 . but not at the expense of trade. the Canadian Department of Foreign Affairs and International Trade launched a 'Dialogue on Foreign Policy' in the form of a public discussion paper and an extensive programme of consultations. http://www. accessed . While the dialogue was underway. boastful. but that there tionship with the IJS is in Canada's economic were some issues where Calldcia had to go its ilnd s~curity interests. They lead Canadians to expect institutions and. modest and cautious Canadian.html. Relations between the Anglo-US and Anglo-Canada have proved to be very fertile ground for many Canadian writers and commentators. Most partlcif. 6.Inada-US border should be maintained.Jants in the dialogllE' acknow­ 3. a former Canadian prime minis'!'!!.. accessed 1 September 2010 This comment reflects the contrast often made between the pushy. 1. approach to relations with the US andtreat Its 1 September. Canadians are only too aware of the need to stand their own ground. We're different people from you and we're different people because of you. rather than being rt.Oincide.I Chapter 3 Business cultures in the Western world - arid punctuality. pOlicies that replicate those of the US . spoke of another aspect ofUS-Canadian relations: Americans should never underestimate the constant pressure on Canada whh. one is affected by every twitch and grunt. relationship with the US with greater respect. observes that: American students have been conditioned from Infancy to think of themselves as citizens of one of the world's greatest powers. optimistic American and the low-key.pdf. 5.. despite the fact that they speak the same language.:h the mere presence of the United States has produced.liveabroad. to counter the tendency of Americans to assume that Canadians are just like them. Canadians are conditioned from Infancy to think of themselves as citizens of a country of uncertain identity. No matter how friendly and even-tempered is the beast.countries frequentlv (. have similar lifestyles and share a similar frame of reference. The increase in American investment and the prevalence of American cultural products in Canada are a threat to Canadian identity. Working to maintain stahlI': rel. Canada should avoid a 'holier than thou' en/final_feport/index.!cla_buildingtheknowledgeeconomy_final. accessed 1 September 2010 Love thy neighbour In 2003. Pierre Trudeau. Calldda should reduce Its economic depen­ dence on the US and stqp using the US as a reference point in defining Canadian culture. a confusing past and a hazardous future.caf 2.html#relations. Canada should be seeking common ground ledged that the values and interests of the two With tl. The security of the Ci'. com!projects!www. A final report on the dialogue was eventually published inthE' same year on: http://dataparc.cla.2010. When dealing with Americans. It published a bulletin· online (no longer accessible) in which it gave advice on Canada-US relations: 4. Northrop Frye... US.presentative of Canada. US foreign policy positions are constantly evolving: Canadian policy toward the US should not be based solely on the realities of the current administration. if I can call it that. One of the most famous. Policies should be created with the long term in mind. own wav. Living next to you Is in some ways like sleeping with an'policy-dialogue.

but since there is a general distrust of authority. In New Zealand these were predominantly UK whalers and traders. remote from other continents. Just as importantly. which means decision-making can be rather slow and drawn-out. particularly of people who tend to 'flaunt' it. has been the first to acknowledge the increasing ethnic diversity created by more recent waves of immigration from other non-European countries. the Australian Aborigines and the New Zealand Maoris. 61 . Further waves of British migrants were welcomed with open arms. Australia. However.Concept 3.:l1 cultural herltaQe within in overriding commitm@nt to Australia's demnr:ratic foundations and to English as the national lanQuage. it is into its 18th year of uninterrupted economic growth. The Australian govern­ ment states explicitly on its website: Australia accepts and respects the rlQht of all Australians to express and share their indlvidu. on migration flows of professionally qualified South Africans and East Asians. they still retained their essential Anglo-Saxon identity. The business culture in Australia and New Zealand remains very much Anglo-Saxon in nature. and an unemployment rate a little more than half the 10 per cent plaguing the US and eurozone. rising exports of key commodities sLich as Iron ore and coal. a robust banking sector. A prerequisite for selection for immigration is still proficiency in English. accessed 1 September 2010 New Zealand now has a predominantly European population. Britain claimed Australia as a colony in 1788 and New Zealand became a separate UK colony in 1840 after first being administered by the Australian state of New South Wales. The typical hierarchies are in place in most organizations. www. Australia has long struggled for relevance on the world stage. Its fortunes were boosted by a large federal government budget surplus quickly deployed to stimulate the economy. After skirting technical recession. In Australia these were first convicts from the UK and later free immigrants. The country now sees multiculturalism as being at the heart of its society. Australia's long-term goal to have a stronger international voice was boosted when tile crisis elevated the G20 to the dominant economic grouping. But the financial crisis provided it with an opportunity to assert itself. deepening trade ties with China. however. When both countries became independent of the egalitarian approach is preferred when colleagues Australia: Proud of its seat at the top table By Peter Smith As a mid-sized economic power with a small population. a modest. The economy has been a top performer in the developed world during the dowhturn. while other Europeans of non-British origin were expected to shed their particular cultural identities and integrate with the host population.html.1 European cultures Australasia Australia and New Zealand were both colonies of the UK. although immigration policy has focused more on the micro-states of the South Pacific and. particularly from countries in South-East were irrevocably changed by the European settlers. the work environment tends to be more collaborative than in the UK or US. The lives of the early inhabitants of this remote part of the world. most recently.dfat.

). 'In Kevin RUdd [Australian prime minister since 2007] you have someone who is not only focused on global issues.' he says. Russia. studying in Australia. To what extent Is the pragmatism of the Angio-Saxon business culture of Australia reflected in the mini-case? 62 . have been strained. However. 'They are similar political figures. 0 political b!. Canberra hil5 also had to repair relations with New Delhi followin\j a strinQ of brutal attacl. 'Rudd has used that to move Australia into the front of the pack: He adds that the G20 forum will probably undergo 'mission creep' and move on to discuss geo-political issues relevant to Australia. managed Australia's alliance with the US adroitly and developed a strong relationship with Barack Obama. Questions 1. a skills shortage is set to push wages higher.s on Indian:. and will promote religious fundamentalism.' he says. 'If you look at ~ho is powerful it is the Brie countries [Brazil.:ientlst at the Australian National University. is an advocate ur nuclear disarmament and championed a new Asia-Pacific community grouping that includes the US. As Australia grows. Japan. says Australia Is locked into the G20 top toble. Source: adapted from Australia: Proud of its seat at the top table. the country is plagued by infrastructure bottlenecks in its road. US president. which last year regained its position as the country's biggest two-way trading partner. has also been irritated by Canberra's focus on China and a lack of action on activists targeting Japanese whaling boats in the Antarctic. teething problems will emerge that will test Mr Rudd's standing.Chapter 3 Business cultures in the Western world Michael Fullilove. particularly in its regional backyard where it relies on strong trading ties. And the government continues to ban uranium exports to India. a federal election due this year is expected to result in Mr Rudd's Labor party winning a second term. . and it will take years for the national budget to return to surplus. ( . describe briefly the evolution of Australia since its foundation. Australia talks up its role but without the substance to back it up. 'Chind is growing In economic and political wPight and it is determined to exellttlat welgl'lt: he says.hilf"1 McKinley. sees problems ahead. 'Our foreign economic policy is about turbo-charged free trade. unlike a rival Japanese proposal. adding that Australia lacks membership of important regional groupings such as the 10-country Association of Southeast Asian Nations (Asean). MIr. The government last year forecast a 60 per cent rise in the country's population to 35m people by 2049. 2. a Mandarin-speaking former diplomat to China. FinanCial Times. 26/01/2010 (Smith P. rail and port networks. Compared with structural problems besetting many developed nations as they claw their way back from recession.' He says Mr Rudd. but that is also his obsession. director of the global issues programme at the Lowy Institute in Sydney and a vbiting fellow at the Brookings Institution in Washington.' Mr Fullilove says. However.J However. He adds that Australia's international influence is often overstated. Relations with China. Australia's longest-standing regional trading partner. . newly elected. Australia'S appear much more manageable. Australia has also encountered problems. The Australian government is also lobbying to win a seat on the UN Security Council. He believes dislocation leads to instability and social problems. both pragmatists from the centn"-Ipft. If you get that it will lead to social dislocation. India and China]. Using the Information in the concept and in the mini-case. Mr Fullilove says many countries grapple with China anrll?ncounter diplomatic tensions. and they share an in tel est In similar issues.

which was a Portuguese colony before being given independence in the nineteenth century. the arrival of conquistadores/colonists from Spain and Portugal. Hou~c ct·nl.2). The gulf between rich and poor is considerable and difficult to bridge. brought their cultures to Central and Southern America. however. (2004) rh. The common linguistic. Furthermore. the first rich America.h·riz@ Latin Am~I'lci:l as a collectivist culture. often arising from clashes of interest between the indigenous and 'Hispanic' parts of society. 63 .:lr. conflicts between the many countries of the continent are still prevalent.1 European cultures are dealing with each other. The term 'Latin' is believed to have been devised by the French in the nineteenth century to reflect the difference between Anglo-Saxon North America and Spanish/Portuguese South America. which places great value on pride. and to a smaller extent from France. social and cultural ties with the European ex-ruler are still strong.Concept 3. be more direct and critical than their British counterparts. and implanted them in foreign soil. cultural and religious heritage is still strong and is seen in the many activities shared between the 'mother country' Spain and its former colonies. but less velue on institutional (. conflicts within some of these countries. the term used to denote arrogant people who 'show off' by talking frequently of their own accomplishments. Central governments a're strong and societies are generally highly stratified. Strong belief in the Catholic religion is a facet of South American society that reflects the importance of the family as well as the distinct male and female roles in society. i. Purtuguese is the official language. is a deeply divided continent that has not been able to elllLllale its Ilurlhern neighbours. collective dislriuution of resources and collective action. centralistic regimes and increasing exposure to other European cultures. ranging from intensive trade to football tournaments. loyalty and interdependence in famlllc!:. also a Latin country. Those in the lower social classes are poorly educated and hlck the skills that cOllntries still in the throes of industrialization badly need. but have been watered down through increasing industrialization.The term allowed for France. Although recent attempts to create some sort of unity at trading level have apparently been successful.e. Latin America The Latin American cluster lies next to the Latin European cluster in the GLOBE clusters of cultures in Chapter 2 (Figure 2. They can. to claim a role in the develop­ ment of a continent where a number of countries were demanding independence from thl'ir Spanish masters. and economic. the end of authoritarian.01­ lectivism. As happened with the Anglos emigrating to America and Australasia. culturnl values are shared. although may not take so kindly towards outsiders joining in the criticism. Similar cultural ties are also to be found between Portugal and Brazil. have prevented countries developing economically and socially in the way they would prefer. This other America.:ll". particularly those whom they consider to be 'tall poppies'. with a preference for teasing others. however. In South America. Despite the differences between the countries of Central and South America. such values still predominate. These features were clearly evident in the Iberian peninsula until recently. Humour is an indispensable ingredient of communication.

ment that wl'l~ to hf! signed symbolically on WednesdaY in Cuzco. and the Andean Community. Peru. would expect its smaller neighbours to adapt to its positions.' says Lucia Maduro. an independent consultant and former Brazilian diplomat. an economist with the National Industrial Confederation in 5110 Paulo. South America has found It remarkably difficult to forge a united political and economic idontity. the union will not have a separate Institutional presence. which will eventually free tariffs on currently extremely limited intra-regional trade.l Smith American Community of Nations does. And it is surely significant that neither Argentina's President Nestor Kirchner nor his counterparts from Uruguay and Paraguay even attended the summit. For now. that Brazil will win international support. the creation of so loose. In recent years the US has increas­ ingly dealt with individual countries. Surinam and Guyana were also expected to sign the deal. Why do you think it Is difficult to make economic agreements between South American countries that appear to be culturally homogeneous? 2. says the US has adopted a hub-and-spoke strategy as 'a way of picking off trading partners and generating momentllm towards an FTAA'. Bolivia and of the old Inca empire . Peru and Ecuador. Nelson Cunningham. a Washington based Latin American specialist. 64 . Rubens Barbosa. the customs union comprised of Bri::lLiI. made up of Venezuela. Chile. agreeing a bilateral deal with Chile. Source: from South American unity still a distant dream. 'We have had very little participation and the results are weak and vague.). Uruguay and Paraguay. try to find how Mercosur has developed in recent years. 09{12/2004. On the surface.Chapter 3 Business cultures in the Western world II I I South American unity still a distant dream By Richard Lapper For a culturally 110mogeneou$ region. Financial Times. and another with Colombia. Wednesday's deal is a merger. Thp prnhlpm i~ thAt thp agn?p. either. We are watching a tascinating game 01 global chess'" Many Brazilian executives complain that the deal is politically driven and that they have not been properly consulted. Questions 1. and negotiating two others: one with seven Central American and Caribbean countries. over 15 years. 'This is a major deCision in terms of political will: says Mr Barbosa. Colombia. Peru . as its proponents claim. says a unified South America as distinct from a unified Latin America has long been a goal of Brazilian policy and Its achievement would demonstrate real 'political will' in favour of regional Integration. At its core. 8 (Lapper R. energy connections and other infrastructure designed to allow trilrlitionilily Atlantic-orientated countries such as Brazil and Argentina to conduct business more easily with their PaCific-facing neiqhbours. Using resources available. by far the biggest Latin American country. It Is not clear. In this context Wednesday's agreement can be seen as 'a shrewd counter-move to the American negotiating position. Brazil. of South America's two existing free trade agree­ ments: Mercosur. but it could allow South America to take a common stance in international forums. so long-term and so tangential to most intra-regional trade that it could be overtaken by broader negotiations with the US. Argentina. The deal also provides for radical improvements in transport. Argentina has refused to support Brazil's bid for a permanent seat on the United Nations Security Council and is locked in trade disputes with Brazil within Mercosur. seem to represent something of a 'historic moment'.

where the middle class has grown in line with successful industrialization. This chapter has examined some of the characteristics that bring together a number of European countries as well as other countries in the world which are historically linked to Europe. including Australasia and the Americas. 1. Harris and Moran (1996) give Mexico as an example of a country undergoing profound social change. The first concept of this chapLE:!r considered culture clusters in Europe. It has also shown that countries which may share certain similarities do not necessarily enjoy a harmonious co-existence. including East Europe. Just as with other Latin Americans. Authoritarian behaviour is expected and respect shown. What do you consider to be the reasons for giving Anglosaxonization such attention? 2. It showed how the European clusters in question. their warm. Its middle classes are asserting themselves more and more. Do you think the whole continent of America could be seen as having one business culture? Refer to the information in the chapter.Conclusion and Points for reflection The patrol1 exerts considerable power in all aspects of daily life. however. such authoritarian behaviour is becoming less prevalent. 65 R . Can Russia and Turkey therefore each be assigned to a particular cultural cluster? Give arguments to explain your answer. whether it be in politics. It gave examples of the cultural features that countries within each cluster share. social mobility has increased. Russia and Turkey are each in fact two countries: one belonging to Europe. In those countries. The second concept of this chapter showed the influence of European business cultures worldwide. Although the country still retains its orientation towards the family. With his high status he can command unquestioning loyalty from those beneath him. Considerable prominence has been given in the two concepts to the 'Anglos' and their approach to business. the church. the other belonging to Asia. remain ambivalent cum:ernlng the extent to which countries within the clusters should strive for some kind of unity. The difficulties involved in drawing Europe's boundaries were also addressed. It has been argued that. however. person-oriented engagement with others is a feature of doing business. and this in turn causes tensions between them and the underprivileged as well as revolutionary elements within the country. since both countries span the continents of Europe and Asia. 3. particularly with regard to countries such as Russia and Turkey. although aligned within European institutions. and there is now a rapidly expanding middle class which is asserting its power through hard work. agriculture or business generally.

M. M. and Globokar. V. Management in Western Europe: Society. (?OO1) Management Worldwide.J.J. S.. f. Schneider. Culture and Orgimii . V. R.. Society. 16: 675-701. Rogovsky. Lendering. It provides a detailed understanding of similarities and differences between these cultures in terms of leadership practices and values. European Management Journal. Employment. P.w.. J. NY: Lawrence Erlbaum Associates. M. R. P.).. and Gupta. Vidal. Morin. and Pugh. in Hickson. teutoburg07.J. Javidan. House.. S. Brodbeck. J. Paris: Gailimard. A. http://www. L.livius. Culture and Organization in Twelve Nations. NY: Lawrence Erlbaum Associates.Chapter 3 Business cultures in the Western world Further reading Chhokar J. and Rakltski.H. D. Javidan. (1973) Alistair Cooke's America. Hillmert.e. J... and House. (1996) Managing Cultural Differences.-L. R. Cullure and LeaderShip Across the World: The GLOBE Book of In-Depth StwiiP5 6f 25 Societies. F. New York. (1987) Penser I'Europe. Paris: Editions du Seuil.). The book focuses on the international manager's world. N. The first (House. Hofstede. (2007) 'Wiring deSign faulted for Airbus A380 production delays: http://power. Cooke. (2003) 'The battle in the Teutoburg Forest (7)'. Harris. Culture and Organization in Twelve Nations. S. Mlchailova. Davis.. . ami House. Ubrairie Academique Perrin & Bertelsmann Lexikon Verlag. Henry. Dorfman. V.T. 66 . article 14634.V. (2Cl02) 'Labour market integration and institutions: an Anglo-German comparison'. P. (eds) (2008) Culture and Leadership Across the World: The GLOBt Book of In-Depth Studies of 25 Societies. (ed. accessed 1 September 2010. B. and Moran. nnd I louse. accessed 1 September 2010. Management in Western Europe: Society.S.J.S. E. A" Segal.html. D.5.J. Dorfman.. (2003) 'Personal networking in Russia and China: blat and guanxi'. S. Hanges.. M. and Gupta.R. R. J. Hoecklin.elecdesign. RrodbeGK. and Worm.G. P.::. J-P. Hemel Hempstead. Wokingham: Addison-Wesley.J. Grachev. Harlow: Pearson Education. d'iribarne. Hanges. F. Tayeb.J. P. References Boisot. (eds) (2004) Leadership. 1I1e World: The GLOBE Book of In-Depth Studies of 25 Societies.S. London: British Broadcasting Corporation. lions: The (. (1997) Managing Across Cultures. (ed. (1995) Managing Cultural Differences: Strategies for Comparative Advantage.J. Chevrier. New York. D. (1998) Cultures et mondialisation. Brodbccll. P. The main theme of the book is 'going international'. This second volume focuses on quantitative and qualitative data from 25 of the countries covered in the first volume and contains in-depth analyses of these cultures from different perspectives. and Barsoux. R. D. Thousand Oaks.LOBE s!udy of 62 societies.J. (1993) 'Intercultural conflict and synergy in Europ\:!'.. G. Culture and Organizations: The GLOBE study of 62 societies. UK: Prentice Hall. This is the second volume of articles to emerge from the GLOBE project (described in Chapter 2). (1992) Le management a I'italienne. Houston: Gulf. S. (ed~) (2008) Culture and LMdershlp Auu::.S.J. NY: Lawrence Erlbaum Associates: 803-822. CA: Sage) was referred to in Chapter 2. (2003) International Management. (eds) (2004) T. London: Penguin.W.. Thousand Oaks CA: Sage. (ads). (1993) 'Spain: the revolution from outside: Spanish management and the challenges of modernization'.c. R. M. Berlin: Walter de Gruyter: 205-228. 21: 509-519. (2008) 'Leadership and culture In Russia: the case of transitional economy'.C.J. in Chhokar. F.P. (1990) L'Europe: Histoire de ses peuples. Work. examines cultural differences and their effect on the functioning of organizations. Berlin: Walter de Gruyter: 1-8. Paris: InterEditions. III HicKson. New Yorll. HICKson.. Chhokar.V..

com/store/mm_reposltory/pdf/atto0007006/media_objecUile_The_Alrbus_Way_The_corporate_brochure. read the extracts that follow.pdf. Barcelona.. The article was written by Xavier Vives. reduce the costs of production and the time between conception of planes and their intro­ duction into service. merged their plane-making assets in 2001 to form Airbus SAS. by doing so. to be joined later by Spanish and British companies. traditionally the workforce at the aircraft manufacturer is geographically distributed in proportion to national ownership stakes. When outlining the history of the company. to close plants and to outsource many more aircraft parts. It is-an instance of 67 . The company has produced a series of successful aircraft. Source: www. collaborating in the interests of a greater market share. Germany. It is hard to make sense of this from the point of view of productive efficiency. 15): . a professor of economics and finance at lESE Business School. sharing development costs. the most technologically advanced plane in the world today. These are taken from articles written by interested observers concerning the problems at Airbus.Problems at Airbus You will be asked to address a number of questions relating to the problems experienced by a company which has its roots in several European countries: Airbus SAS. It began as a consortium of French and German companies. A two-year delay and a consequent loss in profits of €2 billion forced the company to make drastic cuts in the size of its work­ force. The French. as outlined In the first article.. Indeed. According to the company's document ('The Airbus Way'. there were considerable problems in bringing the A380 to the market. and bringing the benefits of real competition to airlines. double-deck A380. passengers and crews. TI1e final extract is taken from a brochure publislll:!d by Airbus Itsl':'lf. changing the face of the business. accessed 1 September 2010 The development of such highly sophisticated aircraft required a reorganization of the company to improve Co-ordination. This includes the . British and Spanish partners.. the [Airbus] fleet has evolved progressively in response to market demand. The extract below is taken from an article in the Financial Times published on 2 March 2007 and entitled 'Airbus and the damage done by economic patriotism'. Onc!:! you /:II a ramiliar with the history of the company. made clear that the restructuring of Airbus must maintain 'absolute equilibrium' in employment and technology.alrbus. the German chancellor. The pain of 10.000 planned job cuts has been shared this week between France. and even agreeing a common set of measurements and a common language' and. German. the Airbus website (http://events. Including the world's first twin-engine widebody jet.. Spain. who had operated independently. France's president Jacques Chirac and Angela Merkel. Airbus was formally established in 1970 as a European consortium whose goal was to gain a share of the aircraft construction market dominated till then by the US.asp) talked of 'overcoming national divides. the UK and Spain.

Source: Davis (2007) ( 1. Hamburg.. gives an insight into co-ordination problems: Engineering design of a superjumbo jet aircraft is anything but easy. fuselages in Germany. is another extract from 'The Airbus Way'. was created.000 connectors. 2 March 2007: 17 One of the causes of the delay in the production of the A380 was the design of the complex wiring system for the aircraft. parent company of Airbus. 68 . Specialist facilities around the world include engineering centres in Beijing. local understanding With its head office in Toulouse.200 functions to control the plane. Because of the wiring design software compatibility issues. Strategic motives include national security or attempts to capture rents abroad in monopolistic markets. Miami and Beijing. cost-cutting measures are delayed as state aid comes to the rescue of the champion. a Joint venture engineering centre in Moscow. Germany. 'It was an execution failure: Nick Cunningham. Japan and North America. Finally. Further complicating aircraft design . Nazalre (Frnnce) for final assembly in Toulouse (France). In other cases. Here. including 16 main development and manufacturing sites in France. the tWin-headed structure was maintained even after the crisis caused by problems in the development of the A380 began. The market for corporate control suffers as takeover threats from potentially more efficient foreign companies are removed. Washington. Global knowledge.000 models. the UK. Economic motives include the preservation of employment or the attraction of economic activity to a certain area. Airbus's reputation has been dented and it has fallen behind Boeing. but that is what has happened. 'What happened in Germany certainly was not just a technical problem In the narrow sense. an analyst at the Panmure Gordon brokerage firm in London said it was connected with 'their lack of integration in engineering'.' author Hellemans notes. Engineers in Germany and Spain used the older V4 version of the CAD program to design the wiring whereas engineers in France and England used the newer V5 version. the Airbus A380 aircraft designers can attest to that. and all those must be kept in sync by mismatched computer-design systems in different countries. Although the software developer said the two versions were compatible. Airbus' A380 aircraft sections will be transported on a special ship from sites in Broughton (UK). or competition is distorted because government-supported companies have privileged access to Infrastructure and procurement contracts. which takes 98. and 130 field service offices at key customer locations. Planes scheduled for delivery in 2006 may be up to two years late .some airlines have already cancelled their orders. Another complication: the French were familiar with the software whereas the Germans did not have as much experience with it. The digital design system has 500. To understand why wiring is critical. state-of-the-art training centres in Toulouse. As a result. The damage caused by economic nationalism includes inefficiency and poor corporate governance. deSigning the aircraft was much more difficult than antiCipated. it was headed by two chief executives. You wouldn't expect a wiring problem to delay delivery of an airplane.. finally. Airbus operates out of over 160 international locations. but its endurance derives from protection of the interests of local lobbies.Chapter 3 Business cultures in the Western world economic nationalism. whereby governments distort private transactions among economic actors by discriminating against foreigners in the name of the national interest. 2 3 4 5. Hamburg (Germany). Beijing and Singapore. This extract from a web log by Sam Davis on Electronic Design's Power Management website. Politicians benefit from the revolving door between political office and the boardroom or by catering to a clientele with a view towards re-election. Source: Financial Times. Spain and three wholly owned subsidiaries in China. you have to know that there are almost 1.000 wires and 40. problems arose when incorporating wiring changes in the fuselage sections in Germany. fast response spares centres in Hamburg. As reported in the January 2007 IEEE Spectrum article 'Manufacturing mayday: by Alexander Hellemans. data was lost when transferring flies from one system to the other. In many circumstances the patriotic approach proves ineffective because it conflicts with economic efficiency. national efforts end up being self-defeating as other countries react in kind. Puerto Real (Spain) and St. When EADS. Wichita and Mobile (from 2006). neutralizing the initial attempt to gain an advantage. wings in Great Britain and tails in Spain. German and French. Frankfurt. In spite of the fact that tensions flourished.nose sections are built in France. FranCe..

manufacturing and procurement) that are necessary to deliver complete aircraft sections and which are co-located across Airbus' main development and production sites in Europe and North America. sharing experience and know-how and developing expertise together in a stimulating environment. But diversity at Airbus is about more than nationality. Such cultural diversity could be seen as a challenge. What is your reaction to Airbus' statement in its brochure 'The Airbus Way' that the cultural diversity of the company is 'the key to Airbus' success'? 5. which include all the skills (such as engineering. expertise and creativity available among its employees. Today. over 55. where national roots are valued but where many different cultures mix. sell and support aircraft. At the heart of Airbus lies a core of human talent.pdf. This transnational approach enhances flexibility and promotes continuous Improvement throughout the Airbus family in every aspect of design and production. The company ensures at least 20 per cent of graduate recruits are women. the Airbus organization Is designed to realize the full potential of the enormous mix of experience. Increasing numbers of women are being employed in what are seen as traditionally male roles such as This means that Airbus benefits from a unique workforce that encompasses more than 80 nationalities and speaks over 20 different languages. People who Join Airbus know they will be part of a truly Inter­ national organization. despite the merger of the national components In 2001? 3. It also streamlines production by delegating responsibility and clearing channels of accessed 1September 2010 Questions 1. customers. To Airbus. what began as a remarkable joining of forces In Europe has grown Into a global network. What elements in these texts about the Airbus consortium are reflected the description of the culture clusters in this chapter? 69 . Such cultural diversity is the key to Airbus' success. Why do you think that intercultural team-building sessions and the reportedly Improved perceptions which the different cultures within Airbus have of each other has not necessarily helped Airbus In Its problems round the production of the A380? 4. build. In 35 years. A good example of such multicultural team working are the Airbus centres of excellence. How would you define the concept of 'economic patriotism'? What role do you think It may have played In the problems besetting Airbus? 2. vision and hard work which keeps the company at the forefront of tho industry. a network of multifunctional teams. To what extent do you consider that the wiring problems with the A380 were a reflection of the way the Airbus company was organized.000 people of more than 80 different nationalities work for Airbus. Growing together Airbus knows that it is people who design.Activity 3. Indeed. Source: www. suppliers and industrial partners. it represents an invaluable competitive advantage and the lifeblood of the company.

Mr. The Enron misdeeds were aimed . the average chief executive was earning more than $6m. of which 66 per cent was In eqUity. the dairy group. chief executives. 'During early periods. Brussels was banning pharmaceutical ingredients regarded as perfectly safe in the US. He cites stUdies demonstrating a relationship between how extensively companies use options and the likelihood ot their falling victim to fraud. When it came to business. money appears to have been siphoned off for the benefit of particular individuals. 'John Coffee. 'Managers engaged in income smoothing. In 1990.lfl <.11m IlIl:!d by rapid fluctuations: By the late 19905. was 'yes'. they attempted to align top managers' interests with theirs by granting them share options. Mr. earnings from future periods to create an 'earnings spike' to meet market expectations and prevent the share price from taking a dive. Friedman's film made it plain that Europeans inhabited a different world from Americans. According to a recent paper by John Coffee of Columbia law school. Friedman asked: 'Is this the end of the west?' Quite possibly . he concluded after pottering around the Continent looking increas­ ingly worried.ssrn.' Prof Coffee writes. the US and Europe are so far apart that they even suffer from fundamentally different corporate scandals. rolling the peaks in one period over into the valley of the next period. By 2001. they can exercise their options and bailout. In the US. This traditional form of earnings management was intended to mask the volatility of earnings and re-assure.cfm?aostracUd=694581 70 .'" Take two emblematic examples: Enron in the US and Parmalat in Europe. European competition authorities had stamped on the ambitions of US companies from Microsoft to Coca-Cola. At Parmalat. asked in a documentary on the Discovery Channel last week. were doing something different: 'stealing' . he portrayed a Europe whose bureaucrats plotted endlessly to make life difficult for US companies. The prevalence of share options substantially changed US chief executives' attitudes to presentation of their companies' earnings. 'Although such spikes may not be sustainable. the New York Times columnist. of which 92 per cent was in cash and 8 per cent in equity. the typical company's shareholders are a widely dispersed group.25m (£660. corporate managers possess asymmetric information and. by contrast. Being too fragmented to exercise day-to-day control over executives. US managements famously employed "rainy day reserves" to hold back the recognition of income that was in excess of the market's expectation in order to defer it until some later quarter when there had been a shortfall in expected earnings: Prof Coffee writes.investors Wll0 migllL h<Jva ual. Prof Coffee argues. anticipating their inability to maintain earnings growth. The answer. http://papers. 'A theory of corporate scandals: why the US and Europe differ'. the average chief executive of an S&P 500 Industrial company earned $1. The divergence reflects underlying differences in the way US and European companies are organized. From the war on terror to attitudes to maternity leave. His narrative punctuated by the sort of menacing soundtrack film-makers reserve for those moments before dad opens the door to discover that his family has been murdered by machete-wielding maniacs.000). stuffed with share options. at boosting and maintaining the energy trader's share price.Chapter 3 Business cultures in the Western world Why financial scandals differ in the US and Europe By Michael Skapinker 'Does Europe hate us?' Thomas Friedman.and it gets

~-.-.. - . He was thinking about his next trip to Moscow.. where he was trying to sell flowers. ~ . for example. --- .-- . - . his feet resting on the piles of paperwork on his desk. Instead of executives manipulating earnings.. Friedman. often have controlling shareholders or groups of shareholders. 13/04/2005.. but it is a·different sort of fraud and different people perpetrate it. . p.. - . who do not need indirect mechanisms such as share options to control management.. the US and I:JJrope. who was also watChing the plane.Activity 3. But they also have less incentive to do so. on the other hand. Suurce: [rulTI Why fimlilcial scarrdals differ In.._ ... 'I'm not looking forward to going.. he says. the author underlines the difference between committing fraud in the US and Europe..12 (Skapinker M. . on ensuring that independent audit committees deal with the auditors._ .' Prof Coffee says... _ . A second objection to his argument that European fraud is different from the American variety is that there are prominent exceptions.. He watched a jet flying low over the greenhouses as it came in to land at Amste~dam airport.. Question Fraud seems to be a universal phenomenon.. 'It's frightening over 71 . Regulators could require auditors to report to minority shareholders. He confesses he does not have a simple suggestion on how to prevent European-style frauds.. I suppose we should take some comfort from the small number of Europeans and Americans imitating one another's misbehaviour..3 European companies...-. but that manipulation either happened in their US subsidiaries or in companies such as Vivendi that turned themselves into US-style con­ glomerates and therefore took an American form. however...' he told his financial director Rob. they should adopt dif­ ferent ways of preventing it. What of Tyco... Fraud still occurs in Europe. In this case. Because European and US companies are vulnerable to different types of fraud. but he appears to accept this is unlikely to have many takers. a US company where the top managers allegedly appropriated assets for themselves? Prof Coffee acknowledges that the differences between US and European companies are overall tendencies rather than iron-clad rules. one suspects that they would have likely been dismissed at the point at which they began to monitor earnestly.)... 'Although diligent auditors could have presumably detected the fraud at Parmalat . this might be less effective in Europe where the board struggles to escape the controlling shareholder'S influence. What about Ahold and Vivendi? Were not these European companies whose scandals Involved earnings manipulation? They were. European chief executives have less freedom to manipulate their earnings. which his company grew under glass. dominant shareholders use their control to help themselves to the company's assets. --~------ .. -.. Prot Coffee says.. Financial Times._ . Can you explain how this difference comes about? Read the following case study about the problems of exporting flowers to Russia and then answer the questions. To Russia with love Jan de Rover sat back in his chair. They can simply tell them what to do. While US corporate governance reforms have concentrated. In the polarized world described by Mr._ .. .

If this happened in his own this instance. altemative Emdings . to make sure that the flowers get loaded on to local transport before they start wilting. . The most succG'ssfulOrazilian multinational of ali may. Even then. There is no such thing as a hyphenated Brazilian. Nor is he happy about the fact that the eventual payments for the flowers take ages to reach Holland. you never know beforehand whether they're going to accept the bribe. A recent influx from neighbouring countries completes the mix.o . And you never know where you are with them. Both were colonized by small European seafaring nations bef. two hundred employees. a Pentecostal outfit that keeps being inv~stigated for overenthusiastic marketing and c 1.Chapter 3 Bus-iness cultures in the Western world .gets up to. The time factor plays an important role here since flowers will not survive any long transport delay. if anything.11 there. thee canl so. Do you know there was a shooting incident last week .about flowers. North and South America. Jan believes that paying bribes Is the only way to overcome the problems caused by the poor infrastructure In Russia. He exports 120 million flowers to all parts of the world. including seasonal workers. including Eastern and Southern Europe. The difference in price is given to the mafia. sin~ pub a fe f to ( the pro Lui Questions 1.' said Rob to his boss. even more successful than America's. Rob is not happy with these 'facilitation payments' either. The prices of flowers sent to Russia are automatically set 30 per cent higher. otherwise the flowers would never arrive at their destination on time. it is easy to imagine that you have been transported into one or those novel~ will'. Brazil's melting-pot is. For Jan this is the only way to overcome the problems caused by the poor infrastructure. early colonists and African slaves.acres of greenhouses.and then without any excuse or apology. Is this really the only way of tackling these problems? tio tht qu An 2. Both are continent-sized countries in the western hemisphere with federal democracies in which state governments have considerable power. Their tentacles are everywhere. for example. about how the United States might have devE'lored if a few things had turned out differently. be the Universal Church of the Kingdom of God. 'I reckon the Russians and the mafia are in it together: Jan nodded his head in reluctant agreement. Forty dozen flowers are sent to Russia each week. How do you explain Rob's comment that 'the Russians and the mafia are In It together'? WE nc Two Americas ~razil cc and the Unitt:1d states have more in common than they seem to Living In Brazil. he leaned over his desk and said: 'You won't believe what the Russian mafia . Bribes are the only way. Their populations are made up of the descendants their original inhabitants. however. a dozen trucks to transport the flowers to the flower auction just round the corner. In some cases it has taken over a year before the money has been transferred . topped up later by European and then Asian migrants. with different Christian sects competing vigorously for believers. as Jan explains to his financial director. Both countries seem surprisingly religious to European eyes. gaining independence within 50 years of each other. and the office building where everything is managed. you know?' Sitting up. 72 . 'If you ask me.. the company would stop any further deliveries. would you believe it!' Jan's company is all about flowers . they're so unpre­ dictable.

though. 14 November 2009 (edited). Both places show a strong preference for consumption over saving when times good. This country has sophisticated economic licymaklng and financial markets. Brazil is more left-wing. Even most of the money the government spends goes to people who are comparatively wealthy. and where three-quarters of the population turns t to vote. ~il does not. compared with 23 per cent for America. Like America. Special Report 'Two Americas'. Many of the younger businessmen and bankers In Brazil hav!:! IJU!:. from the free-floating real and autonomous central bank to the privatization of state-controlled firms that have since flourished. Above all. are unconvinced. Brazil's imports and exports taken together re equivalent to 22 per cent of its GDP in 2007. according to the article? Which fundamental differences remain between the USA and Brazil? Refer to Concept 3. America likes Its capitalism as unbridled as possible. It runs on shi and is usually suntanned. Quite a few hold views that would not be out of place at the I~rican Enterprise InstitlJte or other free-market think-tanks. Brazil is more left-wing in 'Jry than in practice. but it looks for inspiration to America more than It does to its 1ish-speaking neighbours. Brazil is so big and varied that it often seems to contain at least two separate countries. To his credit. as many feared he might. Brazil poor.Activity 3. President a has not reversed these changes. Brazil has a culture all of Its own. Next year's presidential election is likely to come down to a choice between a dldate from the left-wing Workers' Party and the centre-left Party of Brazilian Social Democracy. :ing Brazil's still fairly high import taxes. If America's doubts about free markets and Brazil's confidence in them both continue to grow. lace of paradoxes yet the differences are stark. Even President Lula now denounces protectionism. e of these is a place with ten land borders and no wars where people speak a single language in com­ ~ssed time zones.razilians also have a more American approach to capitalism and free markets than they might appear It first sight. though many foreign governments. 73 . are ducts of a similar way of thinking about what economic arrangements work best. Brazil prefers its markets with a strong ernment presence . the two y shortly meet. Source: The E. . with election results announced the following day. and some of these distinctions become blurred.conomlst.2. 'We live in a paradoxical situation of a government that spends a lot and benefits !w: said Antonio Palocci on becoming finance minister in 2003. as well as a growing collection of world-beating companies.ook more closely. . Brazil N seems confident that a more open economy will not condemn it to a role as coffee-maker to richer mtries. where there is no religious conflict. The biggest lie reason for the difference in income distribution between Brazil and America is more regressive ·lic spending in Brazil. America is rich. Jestions Which of the differences between the USA and Brazil are becoming blurred.4 ~ue book-keeping.lYldduate llifications from American business schools. America fights wars. Many of their country's success stories of the past 15 years. fhe clash between a growing middle class and a government that often seems to be blocking its aspira­ 1S is creating a rather American story about the determined little guy being constantly pulled back by dead hand ot bureaucracy.

one feature which both clusters share and that is to do with the way relationships are managed. however. This first <. has undergone the influence of Confucian ideology. Confucian Asia and Southern Asia. relating to the history. although both countries are positioned in the right (Le. so everything must be done in a courteous. (2008). Confucian ASia.2) which the GLOBE project has devised on the basis of the cultural dimensions developed from its research. Africa and the Middle East will be discussed and its reflection in work-related values and business practices will be described. Unlike the West.:oncept will examine the two Asian dusters featuring in the GLOBE configuration: . a clear distinction needs to be made between these two clusters. viz. business in Asian countries is as much to do with .The previous chapter discussed the Western clusters in the left hemisphere of the meta­ configuration (Figure 2. According to Chhokar et al. Southern Asia. This entails paying considerable attention to building trust and establishing respect while displaying the utmost courtesy. Chapter 4 will cover aspects of the other clusters and countries in the right hemisphere as outlined in the same metaconfiguration. Sub-Saharan Africa and the Middle East. This will be done in a similar way to that used in the previous chapter: a cultural feature. We explained our reasons for including these two countries in the chapter. on the other hand. as its name implies. This chapter also included Russia and Turkey in its considerations. There is. geography and/or religion of one or more countries from each cluster in Asia. The Southern Asia cluster. the relationship between the parties concerned as the actual transaction itself. The Confucian Asia cluster. Harmony between the participants of any meeting is required. contains many different religions and ethnic groups which live in peaceful co-existence. particularly towards those in senior positions. 74 . Eastern) hemisphere. • Have some insight into the cultural factors that have an influence on business. Learning outcomes After reading this chapter you should: • Be able to distinguish essential differences and similarities between four Eastern culture clusters devised by GLOBE.

but also .. dep. This entails maintaining good relatioils not just with customers and suppliers. let alone any attempt by the Westerner to impose a deadline on any deal. When guanxi with someone has been achieved. Confucian AsiC! The Chinese and guanxi Relationships in China are the key to business success. As Westerners have discovered. irreversible advantage. deals are made. finding business partners and eventually new deals.trtmcnt will be com:. if it can. humble discussion style are all pragmatic strategies to secure. Patience is of the essence: time is needed to establish a relationship. is the preoccupation of Chinese businessmen. to decide whether a deal can be made and. According to Lewis (1996: 293): Asian correctness and courtesy ••• [and] apparent compliance and reasonable. confidence and trust will build and this in turn will form the basis of consensus and eventual agreement on a deal. A member of Maft' or wholp. so that transactions made between people in close relationship do not need to be made in contractual form. as a way of developing new relationships. then the business of penetrating the Chinese market is made easier. to actually make the deal.1 Asian cultures deferential manner to ensure that nobody is offended or loses face. guanxi goes much further than an elaborate network of relationships. assuming that vigorous handshakes and tales of past successes will immediately put them in a good light. so go for the hard sell. and more and more joint ventures are formed.Concept 4. They often have to try to make deals under time pressure. All these elements cause Westerners considerable frustration when trying to do business in Asia. In fact. Its origins are disputed. Those Western companies in business in China are aware of the continual need to develop and maintain these special relationships and will pay them explicit attention in the organization of their activitie. Japan and (South) Korea. financial institutions and tax offices (Burns. referred to as guanxi. whenever possible. 1998). relationships between Asia and the West do develop. Asians are always interested in a good deal. We will examine the question of relationship-building a little more closely with regard to China. although it does reflect many of the features of traditional village life in China. 75 . Such a network is indispensable as a source of information and expertise. Building up a strong network of such relationships. It appears to have developed on a large scale as a way of dealing with the state bureaucracy. Egocentric. Nevertheless. brash behaviour does not encourage the establishment of a harmonious relationship. Trust and confidence are vital elements of such relationships.. and to have flourished during the recent opening up of China and consequent economic development.yith local authorities. The basis has Lo be right: a good relationship has to be established to allow gentle haggling to begin.t:rned with guaMxi or public relations administration. Those in the network both grant favours and expect eventually to receive favours in return. it can be difficult setting up relationships without using others who are them­ selves owed favours. If harmony is maintained..

(2008) suspect that this may well be that Chinese managers are more tolerant of the case. Fu et al. a global business player China is becoming more and more active in giobal business. The discrepancy between the 'As Is' and Confucian values are vying with external pres' 'Should Be' scores was the highest of all the sures to be competitive. China Is also increasing business with its Central Asian neighbours. As such. reformations However. when compared with the scores of within the system now allow people to seek their all 61 countries surveyed in the GLOBE proiect. it is to do with your personal and public reputation. It Is no longer confining itself to business with the West. The parallels between guurtxi and the Russian blat (as described in Chapter ::l) are immediately apparent. According to the French newspaper Le Monde (Pedroletti. Although the traditional nine pairs of scores.Chapter 4 Business cultures In Asia. although there are differences. ! ' Related to this is the notion of mianzi meaning 'face'. Denmark. Greenland and Norway) were eqvally impressed by China's pragmatic approach when participating as observer in a recent Arctic Frontiers conference on circumpolar resources. these countries were particularly impressed by the 'wisdom' shown by China during negotiations over the trans' Asian oil pipeline. this may indicate Fu et al.. Moreover. to be maintained at all cost and to be used to influence other people in their decision-making. Apart from Its rapidly expanding activities in Africa. own employment rather than the authorltlfls the Chinese 'As Is' result puts their managers telling them where to work. Direct criticism or confrontation of anyone related to business activities is not only an invitation for some kind of damaging retribution. suooesl results. showing a strong wish respect for and obedience to seniority and amongst the respondents for greater equality. authority are still deep-rooted. including Kazakhstan. Africa and Middle East I ~ I Tradition and reform Has Western democracy had an influence on in 41st position and the 'Should Be' result in the norms of younger present-day Chinese? 12th. particularly with regard to the cultural that there may well be opposing forces at play: dimension Power Distance ('As Is' and 'ShOUld internal pressures to conform to traditional Be'). despite their wish GLORI: constructs produced some interestinq for less inequality. Their research ill Shanghai using the power inequality in society. 2009). guanxi is a much older tradition and the reflection of Confucianism's notions that individuals. China. The same newspaper reports (True. The need to maintain your own dignity and that of others has already been mentioned as a general characteristic of rela­ tionships in Asia. as social beings. According to Fu et aI. In China this is taken a step further. Canada.all republics of the former Soviet Union (USSR). but also results in damage to the mianzi of the person who has made the criticism and thereby harmed the other. 76 . Ouzbekghistan and Turkmenistan . Here. As Michailova and Worm (2003) indicate. USA. 2010) that countries belonging to the Arctic Council (including Russia. each have their place in a hierarchy of relationships.

of their responsibility for a problem. In Europe and the US. Akio Toyoda. Blat. Throughout. faced television cameras wearing a surgical the company's chief executive. the spirit of harmony. The Japanese and wa Harmony is also a term that can be applied to the culture of Japanese society. of Vorhaus Communications crisis reputation companies have botched their message to consultancy says: 'Toyota has gone from a family consumers at their peril.:. Robbie Vorhaus.Concept 4. there were lags last­ jng doys betwcen Toyota's confirmation that it Source: adapted from Exercise misfires. one of its first public state­ accelerator pedals and communication of the ments was made by a Japanese executive who details to the public. Tokyo on what they could and could not say. founder and chief executive In past crises surrounding faulty products.even to the relationship with nature. one applied to all relationships .~ millitlll vehicles h~ the uS to repair potentially faulty accelerator pedals. 03/02/2010 (Recd J. Financial Times. whatever the> facts friend to a stranger'. This spirit is reflected in the considerable degree of collaborative behaviour and consensus-building within an organization.ed U'le recall of around 2. has been mask. This action followed one made in September 2009 wllell duuul 4. The managers Damage control In January 2010 Tuyuld dliliounr.le:> were recalled in conl~ecliun wilh the risk of C!lc:c:eleretor pedals getting caught in the CClt'pet under the pedals. The Confucian nature of this culture is apparent in its focus on building relationships. The concept of wa. world 01 the recall 01 Its planned to rp. on the importance China gives to establish­ ing harmonious relationships.1 Asian cultures helping friends within a network is a moral and social obligation: not doing so entails loss of face and prestige.el'lli milliOns 01 cars with ~Li~ky cars in January. This behaviour is fundamentaf to decision-making in business and involves proposals being discussed informally on the work-floor before being pushed up through the organization's hierarchy where each level of management gives its input and suggestions. although it also entails making commitments. Wisdom and pragmatism are words often used when describing China's role in present-day global business and its business culture generally.l. The crisis season.2 IlIilliuli v~lii(. Exercise misfires By John Reed III Wilen loyota told thP. is more to do with emotions and self-serving pleasure. However. as officials company that has bungled aspects of its com­ in regional offices awaited instructions from munlcations with clistomers in the crisis. 77 . It is more analytical in nature. crisis management experts has opened a rare window on communications are seizing on the image as a metaphor for a within Toyota's sprawling operation. confined to smaller networks and more often pursued on a one-to-one basis. Masks are common during Japan's cold almost absent from the public eye. is a principle of Japanese thought.

The South Koreans and the chaebol Throughout most of its history.9tkey 'industrieS ·KK17Dg01.(17 November 2009) to Although.peing ore . along with the Japanese disdain of individualism and self-assertion. :-:~go\1efhij\en~:'spe!1finaI"lYY~~r~HJild(dg·. according to the journalist. and Japan's eventual defeat.up·~. similar.ofthect:laebol '.' . North Korea remains outside the global business environment. relationships which the working Japanese have experienced in their lives . West' Thrswas the headline of.' otJf:le'pc\ssil:)le . Its Choson Dynasty ruled the country for more than five hundred years and made Confucianism the state religion. when the implementation phase of a deal is reached. have Sees the role :10 th. an . influenced and fought over by its larger neighbours.given' the . Eventually the proposals reach the top and are acted on. USSR-backed North Korea and the US-backed South Korea. This interdependent relationship follows on from other.with products for which there is a high demand. The individual employee identifies with his/her colleagues who. so South Korea will be the focus here.activities . One invader that changed Korean norms and values was China. Its focus on family life and the need to protect family members and to enhance family fortunes has in turn influenced the way South Korea has developed its economy. school and university. Some observers see a greater loyalty behind these relationships. In some larger industrial companies this mutual com­ mitment can be for life.. The whole process of consensus-building may seem long and drawn out to Western eyes. Korea has been invaded. the employer will provide job security. In return for an employee's loyalty and commitment to an organization.copomy. ~Koreanmodeltriumphs over.hiringof. which in turn identifies with the economic needs of Japan.raciforsiTheduringthe crisis. as a group identify with the company. including China and Japan. The Second World War.TbeaythOf:Qf t\1earticle:didgl$te. meant the end of Korea's last occupation but also the division of the country into the communist.a'tim~s:com/atimes/Korea/ c6ordinatingthe. as'~" developed economy because of this very "WhiChb~g~njn 200B. Building a consensus within the organization may take time through the need to go into detailed discussion and to give everyone the feeling that they are participating in the decision­ making process. It must.experts have questioned South Koreas's status tively unscathed fromthE?gIObal'financialctisis '. All of them require mutual commitment and loyalty.)POIl~y)theapproach appears to. everything happens quickly and enthusiastically.Clccessedl S~ptember2010 . Africa and Middle East are to be seen more as facilitators in making decisions rather than the actual decision-makers. on Asia Times Online.nd' ::S()\Jft~~htt~:rlwww. be taken into account when doing business in Japan. . . .on the·~anuf~(. "Cls. This idea of wa is also reflected in the relationship between the organization and its employees. Western describ~how South Korea has emerged rela. that ofloyalty to the country.·comparative advantage . 78 .·a. whichfbcused .htm! . however.Chapter 4 Business cultures in Asia.

The finance ministry argues that any efforts to tame the chaebol would potentially hobble an already slowing economy. Now. €65bn. They are owned by families and run by family members. Under the proposed revision. At the same time. 'The chaebol have become too powerful: argues Kwon Oh-seung. relations between members of the clan are strongly communitarian. South Korea tries to clip wings of the chaebol Many believe the conglomerates should be reined In but the government plans only to ease regulations that govern them and their tangled shareholding structures. is a combination of companies held together by cross-ownership and cross-subsidies. But Mr Kwon. the cross-shareholding limit will be relaxed to allow companies to hold up to 40 per cent In affiliates. chaebol affiliates with assets of more than Won 2. helping to transform it from one of the world's poorest countries into an Asian tiger. Mr Kwon says the current limits can already see affiliates control 40-45 per cent of a chaebol company while owners technically hold just 5 per cent.' 79 .1 Asian cultures The meteoric rise of the South Korean economy since the 1960s is in no small part due to the role of the extended family in the development of a network of conglomerate businesses. often with formal shareholdings of 5 per cent or less. South Korea is the world's 10th largest economy yet the family-run conglomerates have become what some see as untameable beasts in need of reining in. The National Assembly is due this month to consider a change that would see the number of companies subject to cross-share holding restrictions fall from 343 units of 24 chaebol to just 24 companies belonging to seven groups. As with any family in this part of the world. Indeed. or chaebols. By Anna Field In the 1960s and 19705. 'The affiliates of large business groups can survive even if they are not competitive: he says. £1.14bn. But rather than pursue a crackdown on the chaebol. the chairman of the Korean Fair Trade Commission and the anti-trust regulator leading the charge to stop what he sees as the conglomerates' distortion of the Korean economy. Under the current regulations.Concept 4. South Korea's government is pushing a plan to ease the regulations that govern the conglomerates and the often tangled shareholding structures via which their controlling shareholders control vast industrial empires. of which there are around 60. are each active in a large number of business sectors. These conglomerates. only chaebol with assets of more than Won 10. Furthermore.000bn will be affected. South Korea's chaebol propelled the country's explosive growth. Each chaebol. within South Korea there is a fear that the country's GDP would not grow without the chaebol. 'I wanted to make the market function properly so that all those who make quality goods can survive in the market.OOObn are pro­ hibited from holding more than 25 per cent of shares in an affiliated company.000bn ($2.09bn) belonging to groups with assets of more than Won 6. whose efforts to push through stricter cross-shareholding limits have been stymied by the government. argues the new rules will Simply help distort the Korean economy further. the leader is autocratic and at the head of a very strict hierarchy.

According to C.. Hyundai Motor. 80 . 2 (Field A. with McGregor J. especially as Samsung and Hyundai Motor prepare to install third-generation chairmen. Africa and Middle East Many analysts say it is time for Korea to wean itself off Its dependence on both the chaebol and on manufacturing. and to allow small and medium-sized enterprises . Germany. Lee Seung-chol of the FKI chaebol club argues that the restrictions on large business that the FTC wants to pursue are simply ·wrong'.Chapter 4 Business cultures in Asia. This is due in no small part to the influence of a number ofthe world's leading business gurus who are of Indian descent. a business consultant in Seoul. singling out Sam sung. Questions 1. a process aided by complex webs of cross­ shareholdlngs. I see that large business groups here have the power to hamper the functioning of markets so I am very con­ cerned: Mr Kwon says. a trend in the business world is the development of a certain infatuation with Indian philosophy. 'puts the individual at the centre of the universe'. Why do you think it has not done more to reduce their power? 3. The huge size of the chaebol is being called into question. Samsung. including the basic notion that executives should be motivated by more than money alone.' Source.' Companies should not be shareholder-driven.ranging from hotels and a securities trader to shipbuilding and petrochemicals . Prahalad. grow. Prahalad. 05/02/2007. according to Prahalad.K. What other methods could the government have chosen to reduce the power of the chaebol? According to an article entitled 'Karma capitalism' in the US magazine Business Week (30 October 2006).). LG. The chaebol have vehemently resisted attempts to curb their power. now has more than 60 affiliated companies . quoted in a Business Week article entitled 'Karma Capitalism' (Engardio P. market share does not equate to market power: he says. Financial Times. 'Even though big companies dominate the domestic market they don't dominate international markets. 'The resources that the chaebol can deploy are massive compared with their potential competitors: says Hank Morris.K. adapted from South Korea tries to clip wings of the chaebol. SK and Doosan as the main offenders. such as c. Mr Kwon argues that in Korea 'power is concentrated in too few hands'. the biggest chaebol. but stakeholder-focused. Their work contains common themes. Ram Charan and Vijay Govindrajan.which employ 80 per cent of the working population . A capitalism needs to be developed that. for it to start developing the service sector. showing concern for society and the environment as well as those directly involved in their activities. open economy. In a global. But analysts see logic in Mr Kwon's calls for stricter monitoring. 2006): 'It's the idea that corporations can simultaneously create value and social justice. 'When I compare Korea with other countries. Why do you think the South Korean government wants to reduce the power of the chaebol and what method hiils it chosen? 2. 'So it makes sense for the government to play referee and be on the look-out for dirty tricks.and accounts for almost a quarter of the Korean stock market's capitalisation and more than 20 per cent of total exports. the UK. like the US. Hyundai Group.

concept 4.1 Asian cultures

Apart from India, Thailand also has a business culture that embraces the principles of the Buddhist religion. These two countries are characterized below.

The Indians and family
India's culture, while displaying many of the features shared in Asia, places particular emphasis on the family. Every company employee works for the family to maintain and enhance its fortunes. Loyalty to the (extended) family takes priority over loyalty to the company, although here, too, a strong loyalty may develop towards the professional group involved. Loyalty to both family and group can become entwined: success in your profession will give your family added status. This goes, of course, particularly for those who are engaged in a family business. It is in the family business environment that the hard-working nature of Indians is particularly evident. Material success is important, not so much for the individual, but more for the sake of maintaining the family's honour and ensuring a sound future for the family's offspring. To be successful involves not just working long hours but also being creative, coming up with new ideas and trying them out with panache. There may be failures but this is less to do with personal competence, more to do with fate. The Hindu religion, shared by three-quarters of the popUlation, has engrained a deep sense of fatalism into its followers, and as Lewis notes (1996), this removes any stigma attached to failure. This attitude is reflected in business where, generally speaking, Indians are not reluctant to take risks. The phenomenon of family businesses is one that India shares with the other Asian cultures. Whether you are in India, in Malaysia or in Indonesia, you will find the same preponderance of family firms, and this holds true in all the economic sectors. However, this does not mean that these companies are not without their problems, especially when they break with tradition.

The birth of India and Pakistan
After a long campaign of civil disobedience India was eventually granted independence by the British Parliament in July 1947 and Jawaharlal Nehru, leader of the National Congress Party, became its first prime minister. Along with independence came also partition: in accord­ ance with the demands of the Muslim League led by Muhammad Ali Jinnah , the areas where Muslims formed the majority of the population, were partitioned to form the separate state of Pakistan which was composed of two geographical areas - East and west Pakistan. The mainly Hindu dominated areas became India, although a substantial Muslim minority still lived within the new borders. After the accelerated departure of the British, India and Pakistan were left to deal with the problems resulting from the path of the border between the two countries. Even today the area of Kashmir, where around three-quarters of the population Is Muslim, is in dispute.

Just as Imliam accept the hierarchy of gods in their rcligiol'l, so they accept the strict sodal hierarchy in their society llnd the hierarchies in the business environment. They show considerable respect towards their seniors in all aspects of their lives, but also expect these


Chapter 4 Business cultures in Asia, Africa and Middle East

to fulfil the obligations that power bestows. The father is obeyed, but is expected to do everything to promote the family's well-being; the manager may behave in an authoritarian way, but is expected in turn to show care and consideration towards his employees. During research carried out among Indian companies it was remarked that 'many of senior executives mentioned that the levels of hierarchy had to be respected and were an important consideration in relationship-building in North India' (Zhu et aI., 2005). Chhokar (2008), who reports the India-specific findings of the GWBE project, refers to the many ongoing changes in the nature of Indian society as reported by recent Indian surveys. He refers to the weakening of the caste system, as well as the liberalization and restructuring of the economy. Nevertheless, a manager has to contend with both collectivist and individualist values within a formal system of management. With its high 'As Is' scores on Power Distance and In-Group Collectivism (see Figure 2.9), Chhokar typifies Indian culture as 'vertical collectivist'. According to Gelfand et aI. (2004), in vertical collectivist cultures, people emphasise the integrity of the in-group, are willing to sacrifice their personal goals for the sake of in-group goals, and support competition between the in-groups and out-groups.

Tourist industry woos Indian travellers
By Amy Kazmin In New Deihl
The full-page, colour newspaper advertisement looks irresistible - top Bollywood stars romancing against the stunning backdrop of Swiss mountains and meadows. Sponsored by Switzerland Tourism, the city of Lucerne and the Indian arm of Kuoni Travels, the advertisement urges Indians to 'experience the magic' themselves, by Visiting the locations where the well-known Bollywood films were shot. On the very next page of the same pdper, COx bi Kings, the newly li~tQd Indian travel wlllpany, haS its own full-page advert promoting tours to a wide range of destinations, includinq the US, Europe, E.gypt, Turkey, Australia and Kenya. The duelling ads ft!flect the new competition among countries and global travel companies to catch the fancy of Indian travellers, who are increasingly using their new-found affluence to take overseas fnmily holidays - once the preserve of a privileged few. 'Indians are tired of seeing Manhattan only in Hindi films: says Suhel Seth, managing director of Counselage. 'Today, he can be part of the scene by going there - so he is going. It's no longer impossible. The average Indian is discovering a world beyond: Indian overseas travel still lags far behind the 4Sm Chinese travelling abroad each year. But the World Tourism Organisation estimates that by 2020, about SOm Indians will be taking foreign holidays each year. It may represent a tiny proportion of India's population but It Is a huge new market for the global travel industry. Industry professionals say overseas travel is often far better value. 'It's cheaper for me to travel abroad: Mr Sanjeet says. 'A five-star hotel is cheaper In Macao and Holland than New Deihl and Mumbai. Plus It's great 'show-off' value. In your peer group, that's a great status symbol to go out and see what is happening in other parts of the world: For all the desire of Indians to see the world, however, travel executives say they can be finicky about some things, especially first-time travellers from India's less-cosmopolitan smaller cities. 'The most Important Is the Indian food,' says Kashmira Commissariat, chief operating officer for SOTC, an Indian subsidiary of Kuoni. 'Wherever they would go, they require that.'
Source: adapted from Holiday groups target India's newly affluent travelling set, The Flnanc/al Times, 03/03/2010, p. 9 (Kazmln A.), Copyright ~ The Financial Times Ltd.


Concept 4.1 Asian cultures

Lloyd's of London hits at 'difficult' India
By Michiyo Nakamoto In Tokyo and Joe Leahy In Mumbai
India is among the most protectionist countries in the insurance industry in the fast-growing Asian region, the chairman of Lloyd's of London said, in a forthright criticism of the country's regulatory system. India, which imposes a 26 per cent ownership limit on foreign investors in insurance companies, is reviewing raising this to 49 per cent but legislation has become bogged down in parliament. India is 'the one place I would complain about. India is a very, very difficult market', Lord Levene said in an inter­ view on Thursday. 'It's one of the few places in the world where I blame regulation [for keeping foreign insurance companie!'; out]: Lord Levene, who was in TokYo to open the Lloyd's insurance market's new office there, said he hoped to increase its business in Asia from about 8 per cent of total premium income to about 15 per cent over the next decade. 'It would be nice, in 10 years' time if we had 15 per cent in Asia,' he said. However, while Lloyd's expects moderate growth in Japan, one of its top 10 markets, and China, where it opened 3n office two years ago, it has failed even to obtain a licence in India. Lloyd's opened an office in India several years ;;100 but soon sr.aled it down after rcolising that r&gulatory change Nas unlikely to ,"Olllti qulLkly. Like many other industries, India's insuranCe sector is mirprl in red tape relating to foreign ownership restrictiol"l~. Jverseas companies complain these are onerous, but domestic operators view them as necessary to allow them to

a foothold in their respective industries. In China, Lloyd's also faced tough negotiations but after two or three years of difficult talks it was able to obtain 'In China you need patience, in India you need more patience,' Lord Levene said.
Sour~e: adapted from tloyd's of London hits at 'difficult' Indl;),

l re-insurance licence.

The nnancial Times, 04/03/2010 (Nakamotot M. and Leahy J.l, Copyright © The Financial Times Ltd.

. How could business in India be characterized? :. What differences between other Asian countries mentioned in the Mini-case are apparent?

Although they may accept the hierarchies of religion, society and business, the Indians do not accept their lot without showing their feelings - unlike other Asian cultures. Indians are renowned for their readiness to express their frustration if their efforts in life are not successful, or the joy experienced when their hopes or ambitions come true. The emotive dialogue in the many films from India's Bollywood film industry are testament to this extensive verbosity. This is a feature of Indian behaviour that foreign business representatives have encountered when pushing their products or services in India, particularly when their audience has the impression that these people are being patronizing. Equivalent products in India may not be as well produced or delivered, but it is not the role of foreigners to tell them this.

Thailand and karma
Unlike Cambodia, Laos and Vietnam, Thailand was not colonized by it European country. One reason for this was its role as a buffer state between the French and British colonies. Thailand, originally called Siam and then changed to Thailand in 1949 (Thai meaning


Chapter 4 Business cultures in Asia, Africa and Middle East

[ >[



freedom and also the name of the main ethnic group) has a long tradition of commerce, particularly with Western countries. At the beginning of the twentieth century it developed a new social class composed of merchants and functionaries. Buddhism plays a dominant role in the values of Thai society. This religion is practised by more than 90 per cent of the population and for its lay followers it is pragmatic in nature, prescribing more than it proscribes. Although nirvana, with its sublime ideals, is the ultimate goal, many Buddhists are content to improve their lives by pursuing ethical principles and by asserting personal and social responsibilities to ensure peace and serenity. By doing so, they hope to accumulate sufficient positive karma (action and result) and so ensure their rebirth in another, happy, state of existence. This notion of karma, defined succinctly by Scarborough (1998: 82) as 'the cumulative net effect of merit and demerit over the span of an individual's lives that determines his inter­ mediate and ultimate fates', contributes to the development of a particular kind of paternalism evident in Thailand. The person in a position of leadership is considered to have attained that status thanks to the accumulation of good rather than bad karma. Leadership requires exercising personal responsibility towards the community, being its leader and servant. In an interview with Chamlong Srimuang, former Bangkok governor, at the East Asia economic summit in Kuala Lumpur (Bangkok Post, 9 October 2002: 11) the question of leadership comes to the fore. Chamlong Srimuang considers that leadership whether in politics or business - requires:
self-sacrifice or selflessness In one way or another. Such leadership or power over the people lasts longer than the leader's life. Jesus Christ, Mohammed and Buddha, to name a few, are clear examples of such long-lasting spiritual leadership.

'Sui 199 on I mal hail pro

sue corl to r. pos is c. sho

not fina fror the oth,
fee! sup of t

In his view, people are not trained/formed to become leaders, but good leaders, which means being able to see clearly the benefit of being hard-working, economical, honest, self-sacrificing and grateful. Trying to be the best is not the key to success. Having personal gain as the only goal is useless or even dangerous. Being the best is aboul 'being true to oneself, one's conscience'. The newspaper article in Mini-case 4.3 describes the development strategy in Thailand based on Buddhist principles, an approach approved by the United Nation's main develop­ ment agency.


low wer
offi< of d

Thai Buddhist economic model
By Kalinga Senevlratne In the last two decades, Buddhism's appeal has grown in the West, drawing people seeking a calm not found In the fast-paced world of Internet-driven commerce and communications. Its economiC model has been endorsed by the United Nations. Bangkok, Thailand - While Bhavana (Buddhist meditation), has become a form of modern psychotherapy and influ­ enced Western lifestyles, is there anything in the religion's 2,500-year-old teachings that could influence modern economics? According to Thailand's much revered King and lately members of the [new military installed] government and a growing number of economists and grassroots development activists, the answer is, yes, there is. They call it

mo( adv will


1. I

2. \

3. I


Concept 4.1 Asian cultures

'Sufficiency Economics', a term coined by King Bhumibol Adulyadej in the midst of Thailand's economic meltdown in 1997. It embraces the three pillars of Buddhism - dana (giving), sUa (morality) and bhavana (meditation) - and is based on the Buddhist principle of the 'Middle Path', that is avoidance of extremes (of greed). The Thais have recently got a strong endorsement of this Buddhist development strategy from the United Nation's main development agency. In a report released in January, the United Nations Development Programme .(UNDP) hailed Thailand's new 'Middle Path' development model as a key to fighting poverty, coping with economic risk and promoting corporate social responsibility.... For communities, Sufficiency Economics principles are fundamental to empowerment and building resilience, such as setting up savings groups, revolving credit lines, and local safety nets. For private business it means, 'taking corporate responsibility to the next level' by using this approach as a guide to management and planning. 'This approach encourages them to focus on sustainable profit, to adhere to an ethical approach to business, to pay speCial attention to their employees, to respect nature, to have careful risk management, and to grow where possible from internal resources: the report explains. And for the third pillar; the government, the Sufficiency Economy is central to alleviating poverty, promoting good governance, and guiding macroeconomic policies to immunise against shocks. The UNDP report gives many examples of how the Sufficiency Economy model has been implemented in many parts of Thailand, encouraged by models set up under royal patronage across the country. One such example is of Chumphon Cabana resort, which shows that the benefits of the sufficiency approach are not just confined to the agrirlJlture sector, In the crisis of 1997, this rF!50rt on the east coast of the peninsula suffered financial difficulties like so many other businesses. In a desperate attempt to stay afloat, the owner took inspiration from the sufficiency approach. As a start, she began to plant rice, vegetables, flowers and fruit trees on land within the resort project. To improve the sandy land without the cost of chemicals, she experimented with making organic fertilizer from hotel waste and other matcrials. She planted a local variety of rice and installed a rice mill. The husk was used in making the fertilizer and for animal feed. As the resort's land was not enough to supply all its needs, she got the co-operation of surrounding villages to supply the deficit, and also helpetJ train them In making fertilizer and othcr practices of organic: farming, Thp. Flmployees of the resort wt!r€ especially encouraged to participate. Next she invented a just-in-time system of supply by posting th€' following day's requirements of various articles on the local school's notice board. Local production expanded beyond food to include various cleaning materials made from local materials. As production increased, these articles were also supplied to other resorts in the area. The resort benefited from low production costs and reliable supplies. Surrounding farmers had a secure market and good prices because there were no middlemen. Soon the resort gained a reputation with the result that other resort owners, farmers, NGOs, and government officials came to I,earn - which gave the employees a sense of pride. As the owner concluded, 'I think this Is a kind of development which makes everybody happy: In a 1998 statement on the essence of the Sufficiency Economics model, King Bhumibol said: 'Sufficiency' is moderation. If one is moderate in one's desires, one will have less craving. If one has less craving, one will take less advantage of others. If all nations hold to this concept. without being extreme or insatiable In one's desires, the world will be a happier place:
Source: Lanka Dally News, 20 March 2007, accessed 1 September 2010,

1. In what way does the Chum phon Cabana resort illustrate the Sufficiency Economy model?
2. Which characteristics of this modol relate to Buddhism? 3. In what way does the notion of 'corporate responsibility', referred to twic:e in the text, reflect Buddhist Vallle~? How is this notion being applied in concrete terms?


Chapter 4 Business cultures in Asia. Africa and Middle East

This concept has highlighted some features of the two culture clusters in Asia and has mentioned a few of the countries in these clusters. Nevertheless, it is hoped that clear differences between these cultures have become apparent, as well as the contrast with the Western cultures dealt with in Chapter 3.


Atl ce: Th

For the purposes of this concept, we will consider Africa in terms of Sub-Sahara Africa, including South Africa. This has been done because North Africa is seen as closer culturally to the Middle East.

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The countries in all of Africa had their frontiers defined by West European colonists who divided the continent between themselves at the start of the nineteenth century. Ethnic groupings, or tribes, found themselves divided hy political boundaries drawn on a map. National identities are difficult to pinpoint, with various tribes inhabiting one arbitrarily defined country.


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Sub-Sahara Africa
Africa's inhabitants are diverse in every way -languages, religions, dwellings and economic activities. They live in a wide range of societies, some archaic, others advanced. The majority of its peoples live outside towns and cities in primitive cultures where archaic, animist religions determine the social order. This organization is based on the patriarchal family following a strict hh::ran;hy in which the patriarch has absoluLe authority over the whole community of the lineage or clan. This authority is generally handed down through the lineage of the patriarch (Braudel, 1987). With increasing economic activity and improved local transportation, people migrated to towns from the country to get work and to support their families back in the countryside. Education, imported Christian religions and Islam have often supplanted animist religions in developing urban areas. Despite this increased mobility there is still identification with tribes, although this is weakening over time. Europeans to some extent developed the lands they colonized, but since moving to independence the dictatorships that arose in individual countries have nullified most of the economic advantages created by development. Only recently has the continent started to make the transition to democratically elected governments and privatized businesses (Spotlight 4.6). An example of a country that has recently been undergoing rapid business development is Nigeria. Here a Western-style 'professional' order has been imposed on relations between co-workers in companies. The workers have responded positively to the hierarchical organization, which runs parallel to the hierarchy within their family. Despite their flexible, easy-going attitude to time they are also responding to the need for regularity and punctuality in work routine.







Concept 4.1 Asian cultures

Why Africa?
By Sir Bob Geldorf
To establish a type of nationwide government, [European] colonial administrators effectively set about inventing African traditions for Africa, that would make the pro­ cess more acceptable to the indigenous population. The most far-reaching inventions of tradition in colonial Africa occurred when the administrators believed they were respecting age-old African custom, whereas a commentator notes: 'What were called customary law, customary land-rights. customary political structure and :'0 on were In fuct all Invented by colonlol codification: By creating an image of Africa steeped in unchanging tradition the colonizers condemned the continent to live in a reconstructed moment of its past A vast continental theme park - Africa-land - thal hindered development for decades. But perhaps the most pernicious of the traditions which the colonial period bequeathed to Africa was the Mliull ul TrlhallSrTl. Just as every European belonged to i:l nation, every African must belong to a tribe, a cultural unit with a common language, a single social system and established customary law. In Zambia the chief of a little known group once remarked: 'My peopie were not Soli until 1937 when the Bwana D.C. told us we were. The com.:ept of the Zulu as a discrete ethnic group did not emerge until 1870.' These were the dangerous sands upon which the colonialists imposed a new political geography. However, once in motion, the process was enthusiastically rein­ forced by the Africans themselves. Tribes became the object of passionate African imagination. Some chroniclers have endowed their tribes with i:l retrospective primordial essence. Rather like Yeats did with the similarly disen­ franchised Irish. The British ruled through these local hierarchies, a process which unconsciously promoted the most mal­ leable, collaborative or corrupt local chiefs and where none existed, as we've seen, they simply created one, enabling ambitious individuals and groups to achieve positions of status, dominance and wealth that might otherwise have been unattainable. 10 counter llib II iUalbm some African leaders pro­ claimed the single party state to be the only means to control the excessive, ethnically based competition for the global goods of modernity - education. health and the eradication ot poverty, Competitive democracy they said would only lead to penury. Yet one-party rule unrestrained by the moral check of shared community had the same result. It proved to be a mask for oppression, ethnocracy and kleptocracy. Of the 107 African leaders overthrown between 1960 and 2003 two-thirds were murdered, jailed or slung Into exile. Up until 1979, 59 African leaders were toppled or assassinated. Only three retired peacefully and not one was voted out of office. No incumbent African leader ever lost an election until 1982. ... [ImpOSing] cultural beliefs on other people, whether by economic muscle or cruise missile, so that they can be more like us is a farce, particularly when the obvious external purpose is regional control of resources and political influence. Source: StPauls_Lecture_2004.pdf (extract), accessed 1March 2010.

Shepherd Shonhiwa, a Zimbabwean expatriate and fellow of the Institute of Directors in Southern Africa recently pleaded for Europe to re-assess its view of Africa's business. In a contribution to the Financial Times series 'Mastering Management', he noted that African culture had distinctive feelings of communalism rather than separatism. He went on to describe what he considered to be fundamental African personality traits: : , In the main, African culture is non-discriminatory and does not promote prejudice. This explains the readiness with which Africans embrace reconciliation in politics and business. • Africans have a mentality of inherent trust and belief in the fairness of human beings. 87

Chapter 4 Business cultures in Asia, Africa and Middle East

• They have high standards of basic morality, based on historical precedent. These are bolstered by the close kinship observed through totem or clan names and the extended family system.

hierarchical political ideology, but based on an inclusive system of consultation. Labour relations and people management practices will optimize this trait.

e A perpetual optimism is an integral part of the African, mainly due to strongly held religious beliefs.
Mutabazi (2001: 100) underlines these characteristics when stating that 'the cultural unity of African societies exceeds their diversity'. These societies share a collection of values and beliefs as a result of which every village or town, local administration or company dis­ plays the same social phenomena and behaviour. This shared cultural basis of values and rules will have been passed down through many generations within the tribes and passed on through networks of families and friends to communities living in other 'countries'. Cultural models imported from the West did not succeed in replacing this common African cultural base, one which, according to Mutabazi (2001) is characterized by its relationship to time and (organized) work, as well as its relationship with other people (family, hierarchy, colleagues, subordinates, outsiders), These relations are the same in regions that may be geographically very distant from each other, or very different to each other in terms of climate, religion or language. Mutabazi gives the Ivory Coast and Ruanda as examples of very dlfft:!rent countries where, at business level, there are similar attitudes as to how decisions should be made, how managers should give orders. There are also similarities in the way employees behave towards the company. This can be witnessed, for example, in their low rate of attendance, their frequent absenteeism and their lack of initiative. Furthermore, the great majority of local companies reject the idea of interpersonal competitiuIl among employees, as encountered in the North American model. They therefore, for example, do not allocate bonuses to individuals for extra performance or productivity, Certain bureaucratic procedures dating from the French colonial period, such as contracts and other written directives, are also rejected by the Africans. They place greater value on verbal commitments.

South Africa, the Rainbow Nation
The rainbow, South Africa's recently adopted symbol, reflects the country's huge cultural diversity. Apart from the indigenous black peoples there are the white Europeans, Indians, Chinese and other immigrantN rrQm various countries in Asia. Since the dismantling of the policy of apartheid, which not only allowed the white minority to maintain its domination of the country through control of its economic and social system but also institutionalized racial discrimination, South Africa has con­ fidently promoted its multicultural society and is attempting to draw diverse ethnic, cultural and religious groups into the social and economic development of the country. See Spotlight 4.7. The increasing migration from town to country, as mentioned earlier concerning Africa as a whole, has helped create a sharp urbanlrural contrast in South African society. In the rural areas traditional values still apply: the head of the family determines the manner in which business takes place and the way it is carried out. Tribal/family coimections can play

the policy has fostered cronyism and corruption. At the same time they may well encounter a professional.:OIlt. 16/07/2009 (Lapper. undermining overall economic performance. worse still. and frames of refer­ ence. business with companies in neighbouring countries. top-down managerial style one which is more task-focused. it is difficult to talk of a particular approach to management in this multi-ethnic country.1Lht'! lh. they argue that: •. on the other hand. BEE has been hugely controversial. eVel) when il WIIII::S tu <. Conservative critics allege that it has triggered emigration of skilled professionals from minority white. will be the workforce of tomorrow. Perhaps because of the scale of this shift. with the changes taking place in the new South Africa. they typify both approaches in terms of the GLOBE dimensions. managers should Ut' iJlleJll 011 t.will lose out in any dealings with the public sector. R.'hile pursuing their business goals. Source: <ldiJpted from Transfer of assets tarnished by elitism. reflects high collectivism and. As Booysen and van Wyk (2008) indicate.Concept 4. businesses unwilling to follow the new rules . Voluntary codes stipulating minimum levels of black ownership in finance. mining and other key !'lectors IldVI:! Ul:!l:!rI I einforced by legislation. They argue that. humane orientation.. board representation and procurement policies. a set of gov­ ernment policies and business agreements designed to give the country's disadvantaged majority greater influence over trade. by allowing an elite of politically well'connected and poorly qualified 'black tycoons' to make fortunes while bringing no appreciable benefit to the poor. with their sense of values and perceptions.luiu).1I1 confrontation. an important role ill this process. Although compliance Is not com' pulsory. as well as below­ average assertiveness. Using the original GLOBE findings on the White male manager in South Africa and subsequent research among white and African Black Management. The 'Afrocentric' approach.monitored by the department of trade and industry . lett­ wingers stili rail aqainst the way the 'new rich' flaunt accumulated wealth. Although Booysen and van Wyk (2008: 470) call for both approaches to be embraced. They refer to the dilemma facing managers in this country: choosing between the 'Eurocentric' approach and the 'Afrocentric' approach. They typify the 'Eurocentric' approach as one reflecting high performance orientation on the individual level as well as high assertiveness. \A. 89 . thus reflecting the need to maintain social harmony in this multicultural environment.1 Asian cultures III Black empowerment By Richard Lapper Few areas of life in contemporary South Africa excite quite so much controversy as black economic empowerment (BEE). Financial Times. including the large inflow of migrants from neighbouring countries. Those who have moved into urban areas are subjected to the many influences of the others living there. finance and industry.:i1iaLioll 1. Indian and coloured communities. and that the average South African Is 15 years old and black and they.). even corporate cultUre has started to realize that we are all in Africa. This brings us to the nature of management generally in South Africa. Despite efforts to broaden the focus of BEE beyond a simple transfer of ownership to include issues such as management.

2 February 2011 (adapted).Morocco. The family is run in a disciplined way by an authoritarian father. as well as their own. has for centuries been the crossroads where West and East have met. . .-. Tunisia. Five of these . These can over-ride the interests of close members in favour of nephews or cousins if the interests of the clan as a whole are better served. Libya and Mauritania ._ _ . _. Language and culture are unifying factors. -~-- . The head of the family clan is usually the oldest..Chapter 4 Business cultures in Asia. a kin group or clan involving several households and cousins on the father's side. buying and selling the goods from other countries. this means the broader notion of family... The present Arab states were formed following the break-up of the Ottoman Empire during the First World War (1914-18). Family ties bring security but also commitments.. We will focus specifically on the Arabs of the Middle East.. with the Islam religion providing an over­ arching body of belief and a strong sense of identity and community. Middle East and North Africa Source: Financial Times (FT.1 shows the countries of the Middle East along with countries in North Africa. which had once been a tribal language in the Arab peninsula.. Here. The welfare of the family is of primary concern. As already witnessed in Asia. the geo­ graphical term created in the West to describe the group of countries in this part of the world. Algeria. All the countries are often clustered together because of the many cultural features they share. competent member of the grouping and runs the clan in an equally 4:.. stretching from Iraq through the Arabian peninsula and along the north coast of Africa. Africa and Middle East The Middle East. the Arabs have successfully traded between the two. 90 ~~-. Islam spread in the seventh century and along with it the Arab language. The family remains at the basis of Arab social structure. Figure 4.are often referred to collectively by the Arab word Maghreb...

Admiration and respect are sought after as much as. are put in less important positions. This process. as shown in the following text. other time. This is of utmost importance. however talented. from being abused. sometimes it can mean 'I'll arrange if. However. on others 'no'. is being controlled not only by those implementing changes. and aspects of Western culture have made their way into many Arab countries. even when this involves dealing with relative strangers. it is members of the ruler's family who are most likely to hold all the main government posts. These comments on family and face highlight a paradox which Hickson and Pugh (2001: 221) refer to when discussing the Arab model of management: Arabs are disposed to handle authority centrally with high power distance. 91 . we can say that Arabic companies are facing a dilemma that brings the globaliza­ tion of the economy into conflict with affection for cultural values of the past. particularly if these people do not enhance their personal reputation. such as tolerance) indi­ vidualism and concern for the future.Concept 4. outsiders. It is often contended that when a family concern has to deal with the government it is more often than not a question of two family businesses coming to terms with each other. and the relationships between the individuals involved. Communication can therefore be a hazardous affair for not only outsiders but also for any translators involved. since damage to one member of the family damages the whole family. Its use also emphasizes the extreme sensitivity shown to the context of any discussion. The changes happening in the Gulf emirate of Qatar. The considerable awareness that Arabs have of their social and economic environment is a noticeable feature of their business culture. The door is now wide open in many parts of the Middle East. and to consultation in the manner of the sheikhs. Keeping face is often referred to with regard to Arab society and is related to this question of reputation. The face or image conveyed to others. They are highly sensitive towards traders and may turn down a lucrative business deal because they dislike the people they are dealing with. More and more Middle Easterners are also participating in management education programmes in the West and applying the knowledge and skills to their native business environment. And this prestige is not for the individual concerned. exemplify this process. especially in public. A large proportion of Arab businesses are family-owned and discipline is maintained by a leader having strong central control and a strict hierarchy. but these 'duties' may also be a prelude to seeking some kind of commitment or request. high or low. as enshrined in civil and religious law. The phrase 'Inshalah'. if not more than. the particular purpose of the discussion. particularly because they must also take account ofthe intonation and body language used.1 Asian cultures authoritarian way. On some occasions it can mean 'yes'. For. In short. however. in the government. but for the family to whom the individual belongs. The Arabs are renowned for their generosity and hospitality. often translated as 'God willing' or 'if Allah so wishes'. a middle dass is becoming apparent which is trying to reconcile the process of economic modernization with the development of new values. Its exact meaning depends on the subject in hand.s 'Don't discuss this further'. is therefore given considerable attention. financial success. is one often used in everyday conversation and reflects deep-rooted beliefs in pre-destination and fatalism. but also by the guardians of Arab society who wish to prevent its norms and values. yet at the same time they aspire to an 'open door' for all comers.

1 A different breed of foot soldier By William Wallis A strange kind of revolution is taking place in the tiny.000 labourers have been brought in from south-east Asia for one project alone. they say. It is liberalising the economy and wants a world class financial sector. But the larger the non-Qatari population pecomes.' says an expatriate government adviser who himself fits the category. It wants more tourists. or 'modern but Muslim' emerge from Power Point presentations rather than street pamphlets or radical preachers. Its approach in this respect is far more cautious than nearby Dubai's. Qatar remained a comparative backwater. Most paradoxical of all. As a non­ elected leader with almost limitless funds at his disposal he has the luxury of thinking big and planning iong term. Although there are a growing number of exceptions. Slogans such as 'modernisation without westernisatlon'. as well as its energy wealth. Copyright © The Financial Times Ltd. In the first 24 years of Independence from Britain. this appears to be a price the emir believes worth paying. rents have risen by 100 per cent in the past year and the composition and size of the population is changing by the day. the harder it may be to stem the flow of unwanted aspects of foreign influence. What elements In the mini-case support the statement that the modernIzation of Qatar is the result of previous colonization? 92 . together with a desire not to be seen to compromise the deeply held Islamic beliefs of Qatar's strict Wilhabbi culture. The emir says he wants to build a nation rich in human as well as natural resources. a will to invest at home money that might previously have gone abroad. What's good for the world Is also good for Qatar. most Qatari women do not work and 60 per cent of the population is under the age 01 21. In Doha. Source: from FT Report . To achieve this. Qatar is. 'His highness. Skyscrapers are sprouting from the desert and foreigners and investors are pouring In In search of business. the government wants to develop its non-energy economy without jeopardising the culture and proportion of the local population. hired from abroad to help promote and develop the emir's 'vision'. are going out of their way to empower women and instil entre­ preneurlalism In a population accustomed to being looked after In style by the state. when other oil rich Gulf societies were assembling the trappings of modernity. 'is way ahead of his society. Qatar is asserting itself with global ambitions. the transformations under way in Qatar have been engineered not so much by its population as by Sheikh Hamad bin Khalifa al-Thani. He is trying to position us to benefit from the changes in the world. the foot soldiers of change are a different breed from those crowding other Arab capitals.l. the economy and commerce minister.' explains one enthusiastic subject from Qatar's academic community. Shelkha Moza.Chapter 4 Business cultures in Asia. He and his influential wife. We are not some kind of freak nation: By the standards of the conservative autocracies of the Gulf. 'Qatar Is looking to do things that requIre global experience right from the guy operating the crane. he is not just changing the skyline In Doha. the absolute ruler. In the process. The financial Times. is a desire on the part of the emir to shake off the apathy that characterised times past.Qatar. some Qataris complain that the roads are clogging up with traffic. There Is also. But there is little scrutiny of business and data on public debt. . however. From the smallest financial sector In the immediate vicinity. foreign reserves or local population size are not disclosed. 1 (Wallis W. But the tiny size of the local population is. Women are flocking to universities. Africa and Middle East 1 T 1. Qatar wants to develop the region's preferred bank­ ing centre and has tailored regulations for the purpose. where you can now buy a beer with your fish and chips on the beach. With so many projects at stake. Expense is of little concern. more skyscrapers. Questions 1. What are the contradictions and resulting cultUral dilemmas which the Inhabitants of Oatar have to face? 2. strategically positioned for its service industries. They are more likely to be from public relations firms and management consultancies. to the engineer. say government officials. 18/05/2005. more international sporting and cultural events and more skills and know-how. to the financier trying to pull together Investors. At a time when the Arab street is seen to be stirring in pursuit of change. Behind these ambitions. says Mohamed al-Thani. The government wants a booming tourism Industry but without the trashier trappings. Until relatively recently a fiercely conservative peninsular state living in the long shadow of Saudi Arabia. p. About 10. becoming distinct in more ways than one even if It shares many of the same challenges. energy-rich Gulf emirate of Qatar. He Is also attempting to remould the mindset of Its inhabitants.

5 . and Van Wyk. References Booysen. M. Browaeys. Concept 4. It has highlighted the importance of relationships and networks in these clusters. one containing China. This is the aim of the next chapter. Chapter 4 has highlighted some key features of the (business) culture of countries within the Asian. in the form of guanxi in China and the chaebol in South Korea and has shown generally how Confucianism and Buddhism influence economic activity. HQI.>n:-nr. NY: Lawl'~lice El'lbaum Associates. and TrornpellBBI's. and House. New York. (eds) (2000) Cases Studies on Cultural Dilemmas.I"tnn. R. P. Explain why. Netllerlands: Nyenrode University Press.. It now seems appropriate to go deeper into the value systems inherent to every culture in a business context. This book documents critical sensitivities that the business person must exhibit in various part of the world. Brodbeck. F.r. Chapter 5. The differences between the two religions have caused GLOBE to create two clusters. 93 . To what extent do you believe thl:lt religion stili plays an important role in the business cultures of these countries? 2.> '3.Conclusion and Points for reflection This second concept has focused on further clusters drawn from the GLOBE project out­ lined in Chapter 2. F. and on the other hand tradition and local cultul-al values. for example. African and Middle East clusters. J. Ti"Xilf. Sub-Sahara Africa could be characterized as a region of contrasts: on the one hand there is modernity and Western influence.1 underlined the importance of Confucianism and Buddhism in Asian societies. M. (1987) Gramrnaire des Civilisations. It focuses on building dynamic change into cultural systems and creating synergistic relations in the midst of cultural differences. Culture and Leadership Across the World: The GLOB[ Book of In-Depth Studies of 25 Societies. Fundamental traits of the business cultures in Africa and the Middle East have been highlighted and examples given to illustrate similarities and differences. How do you account for these contrasts? Could the Middle East be characterized in the same way.A. F.R.T. and to bring forward some of the dilemmas these contradictory values can generate.W..-J. Further reading i-larris.C. expressed. (2008) 'Culture and leadership in South Africa'. for example. RJ. (eds).: Gulf. in Chhokar. 1. (1\il96) Managing eli/tIm'll niffr. 4th odn. Paris: Arthaud-Flarnrnarion. L. and Moran. Breukelell. the other containing India.E. Braudel.

·!I II Chapter 4 Business cultures in Asia. (2001) Management Worldwide. Srimuang.S. 2nd edn. D. with McGregor. Pedroletti. Paris. and House. D. (1998) The Origins of Cultural Differences and Their Impact on Management.. New York. 9 October 2002: 11. P. Paris.J.J.C. (2010) Le Monde. NY: Lawrence Erlbaum Associates. R.m. (2009) Le Monde. London: Nicholas Brealey. Edition internationale.P.ollectiv. Culture and Leadership Across the World: The GLOBE Book of In-Depth Studies of 25 Societies.S.J. Boulderl CO: Wcntview rre. S. Brodbeck. J. P. L. (eds). (2008) India: 'Diversity and Complexity in Action'.C. D. P. R. R.o. P. and Worm.J. Zhu. 12 (3): 63-84. In t call Bet Thi! My One beef advl Kon but T eupl hiOh sus~ it WE WerE top ( TI typic easil how from their rem" W did 5' had ( A that woul Tt 94 .S.S. Cross Cultural Management. Truc. Bhawuk.. France: Societe editrice du Monde (SA). Culture and Leadership Across the World: The GLOBE Book of In-Depth Studies of 25 Societies. and Nel. B. Brodbeck. Africa and Middle East Burns. Hickson. Y. V. and Gupta. and Bechtold. Nishii. I I' ti I i Fu.. J. F. and House. J. Lewis. Engardio. New York..P. London: Ouorum. Hanges. (1996) When Cultures Collide.W. in House. Javidan. Bhat. in Chhokar. J. Edition internationale.! Ill. (1995) Individualism and r. Chamlong: Interview in Bangkok Post. D. (2004) 'Individualism and Collectivism'. M•• Dorfman. (2006) 'Karma Capitalism' in Business Week. R. Culture. (eds). 30 October 2006: 84-87. 19 December: 5. Y. J. and House. and Yang. Mlchailova. (2003) 'Personal networking in Russia and China: blat and guanxi'. P. (2008) 'Chinese culture and leadership'. G. F.C.~. Mutabazi. 6 February: 4. R. M. O. London: Penguin. H. Australia: Addison Wesley Longman. J. Scarborough.. Mondialisation: les cultures en questions. (eds).J. and Pierre. Paris: APSE: 95-118. F. R. France: Societe editrice du Monde (SA). New York. Chhokar.. (eds). Brodbeck..C..J. (2005) 'Building business relationships: a preliminary study of business executives' views'. E. NY: Lawrence Erlbaum Associates. Chhokar. (1998) Doing Business in Asia: A Cultural Perspective. and Pugh. Leadership and Organizations: The GLOBE Study of 62 Societies: 437-512. NY: Lawrence Erlbaum Associates.J. in Dahan-Seltze. V.H.S. P. Gelfand. Sociologies Pratiques.D. Wu.. Triandis. 21 (4): 509-519. R.J. (2001) 'Multiculturalisme et gouvernement des societes africaines'.S. European Management Journal. (eds) (2008) Culture and Leadership Across the World: The GLOBE Book of In-Depth Studies of 25 Societies. in Chhokar. R.

95 . My negotiating dilemma One of my clients was a South Korean company established in the Netherlands. it was not really a surprise to hear from the Koreans that they intended to break their contract with the agency.In the case study below. but still they felt that the Dutch were taking advantage of the situation. During it the Koreans made it clear that they were not going to pay.pilt:! ut:!iny eager to continue with the contract. He shared the view held by some businesses that Koreans easily breach contracts. which appeared to maintain its success. One ingredient of the campaign was a simple but innovative slogan that quickly caught on. a perception that usually comes about because people are generally unaware of how Koreans interpret the word 'trust'. re-read both Chapters 3 and 4. de::. a comment which was frequently heard at the top of the company was: 'You have to be careful with those Dutch: The Korean company started to withhold payments. To help them reach these targets they hired an advertising agency. but also because they were suspicious about the actual hours that the agency was spending on producing the advertising. a Dutch business consultant gives his account of a problem that he was called in to resolve. The young manager representing the agency told the Koreans that they Would not be allowed to use the slogans any more if the contract was terminated. LOSing it would mean disaster for a company that had only started up a few months before getting the Korean contract. As I discovered later. Having tried to explain this to him. The director of the Dutch agency saw this as a typical tactic of the Koreans to get lower prices. and reminded them that all the slogans used to promote their products remained the (intellectual) property of the advertiSing agency. I told them it could damage their name in the market if they did so. The initial euphoria within the compiJny had. They knew it was difficult to check on the time needed to come up with brilliant ideas. The agency went to work and came up with a total media campaign which the South Korean company accepted and allowed to be set in motion. Before reading the text and answering the questions. They did so. the agency threatened to take the Korean company to court to recover the money it was owed. however. The problem Involved a South Korean company and a Dutch advertising agency. The Korean management called me in and asked me to help. which examines cultural dilemmas. The advertising agency continued the campaign. The sales targets they had been given by the headquarters in Seoul were very high. not only because the agency had been working with them for two years. 'rhis activity also prepares the ground for Chapter 5. A meeting took place between the two sides without my presence. evaporated. Well. Its lIIanagers thought the agency's bills were too high.

What exactly Is the dilemma referred to In the last paragraph? By L All h A 2. none of the production workers turned up for work. How would you describe the contrast between the South Koreans and the Dutch when they are doing business? 3. The general manager was pleased with the performance of the production workers. ten pri: Iml of of ha Where are the workers? The following Inddent took place In a r. What had gone wrong? hE Kc la o Questions 1.8 as well as relevant data in Table 2. Breaking it would mean putting an end to the whole advertisement campaign that they needed so much (since they were new in the market). Those employed in the production department were black.ompany based in South Africa and which had a Dutch management team. The Christmas holidays came and went and the New Year started. even though the factory was open. Eventually. Why was the factory empty for the first two weeks of January? c· P f 2. the Netherlands. However. The general manager was perplexed.Chapter 4 Business cultures in Asia. the Koreans would have no chance of winning the case. Africa and Middle East I had a dilemma. The Dutch had good arguments for the amounts they had charged and were really afraid of losing the contract. An Questions 1. If the advertising agency started legal proceedings. he awarded them a bonus at the end of the year equivalent to two weeks'·· wages. It was in my clients' interest to continue the contract.9. and as is usual In his own country. 96 . Analyse the attitude of the workers using the relevant 'culture construct definitions' given in Table 2. How do you think the dilemma could be resolved? of10 stoel cent T bacf ft dorr pes' Lee Read the following text and answer the questions. on 15 January they re-appeared. Source: Adapted from Browaeys and Trompenaars (2000): case 10.

of FOri'lllJ!:od Pld~lic~ rellllt'. to paraphrase Leo Tolstoy. he says. Dynasties proliferate across south-east Asia: the Malaysian Kuoks. nuw in a spot of bottll'l UVl'1 lIll:' dlltir.!'. Asia. who engaged in (] power slruggle when tlleir father died.a reflection of the fact that many arc rooted in cyc:lical indLlstries such as property (l~velopment. an associate professor at the National University of Singapore who has researched Asian family businesses. along with greater globalisation of operations. However.i 97 -------------. whose corporate landscape is partly in government hands. In Singapore. sees grounds for optimism. _ . never gave up on family businesses. Small wonder that several US companies. Korea's Samsung Electronics underperformed its benchmark in two of the past four years.. whose interests span hotels and media. especially in technology: he says. of course. And Chung Mong-koo 'retains full operational control and decision' making authority for long­ 'term strategic issues affecting Hyundai Motor: the carmaker says .in spite of being handed a three-year prison sentence for embezzlement.extracting more from the existing franchise: And What ot the unhappy tamilies'? fhe spat in India between Reliance's Ambani brothers. dlill lIll:' KUl. ib ulcJl:'~. Mainland entities aside. But there are plenty of stars in the family-controlled universe.have improved.. 'That's a gOod development . five decades or so aftN the model WllS nUdged aside in favour of public ownership. Does that mean Asian investors have more chance of outperforming benchmarks? Sadly.. The Lee family has tightened its grip on the Samsung group by elevating the son of chairman Lee Kun-hee.. more driven by emerging operations. According to analysts at the Swiss bank. Other Asian dymlsties move in locl{step with their peers .the subsequent division of the company unlocked value and pushed both brothers into expansion mode. Indonesia's Salims in noodles. family-owned companies dominate Hong Kong's Hang Scng Index. even after those pesky scandals.. of heir apparent Jeffrey Koo junior. South Korea's corporate dynasties arc flourishing. European stocks with a significant family influence have outperformed their respective sectors by an average 8 per cent a year over the past decade. including the retailer Gap.I . Credit Suisse has not developed an Asian version of its index. Even Singapore. briefly sent Reliance sllares tumbling.. A 'family index' produced by Credit Suisse shows that companies in which the founding family has a stake of 10 per cent or more are good for shareholders' wealth.once conspicuous by their absence . consistent out-performance does not apply to all the region's best-known family companies.l l.. state-controlled DBS outperformed its family-owned banking peers.---. Henry Yeung Wai-Cheung.I I Read the following case study about Asian family businesses and then answer the questions. But even unhappy ones are not bad for business.i"l:'b!:o lIYlld~ly. and the same country's Bakries in mining and telecoms. 'This new phenomenon is leading to a new kind of family firm. The US experience is similar. But it didsllareholders a favour in the long run .Ju~. has family empires. are going bacK to their fllmlly roots. Corporate governance and transparency . A new generation of family firm By Louise Lucas III All happy families are the same. Younger generations are moving family businesses into different areas. Taiwan has the Wangs..­ . while Hutchison lagged behind every year.

that if we are in position to do so. especially all of us in Asia. RictwcJ..bankrol[a:n ~cqulsitionof help '... in a speech last ..' .. .' . Th~ FlnllnCiaI Times. .. our traditional valuesentourageandeven demand that wealth and means pass through li~eage asan imperative duty....hereferstphischaritablefoundation. 12 (Lucas L).ultimately rejected by shareholders.Mr Llsaid: 'In Asia. hope to persl.' . I urge and.. Blit it set back the cause offamily .MrLi'sproposal.. .Li's pl'lns tCisell PCCW'stelecomassetsto private equity JirrnsWer~scuPperedbyBeijing.end this traditionaJbelief.· probably owed morejo repairing pollticalretation~than. 'September entitled '~ythird.ladeyou. iistedon N~sdaqand·Shareholders<sawgains?fuPt03~perce.ence'Sp'lsino)ointvehturewiththeSOhof Australianm~dla'magnateKerry .telecorns busines~.•..Perhapsthe most startling family rift was lastyear~s bid:by Li Ka-Sl1ing. sinceitwasMr Li who YirotetheePitaphforkeeping wealth in the f'lmily.the Hong Kong billionake.son' :'whichis h0w... How tan anunhappyfarnilybe goodforbusil'i!'lSs? ".g'lrnbnng~rt"lpire~r:llJt hiSdynast{confinuesteproduce 'fabulous returnsJ9rsh~reholders. . . .~.' .holdings In his .theMaca9c:aSltlo<kingplh(diSOwn~dtiissister. Source: from Anew generation of fami IV firm. Copyright © TheFin~ncial Times Ltd.. 10/03/2007. ... .Packer r~cei1tIY.. row about dividend payments and . How does an Indian farnlly buslhess differ from the other family types In Asia? Refer to Concept 4...." businesses. th'lt we transc.sparing hisson~s blushes. .1...nton day orie.. . . . '.son's. ..sspnbawr.. A pity. ·'Hi. 2.oyer. Questions 1.

These researchers developed cultural value orientations when investigating the phenomenon of culture and developed cross-cultural management models for a business context. Have explored some cultural dilemmas in business. has served as a primary source of reference for many researchers into culture and management. Concept 5. particularly those relating culture to management. It also highlights some of the differences between Trompenaars' and Hofstede's dimensions. Their book. The Slnullll'e l'i Social ActiOll (1937). Trompenaars also developed dimensions to measure cultural differences and gain further understanding about cultural diversity in business. Have learned how cultural differences can be reconciled. to examine the effect of the norms and values of a society on the individual. ~ The concepts of cultural theory have inspired researchers. 99 . Hofstede and Trompenaars. including Schein.2 in the introduction to Part One mentioned the names of two social scientists. that the action of the individual is totally integrated into a socia1 system. argued In his ground-breaking wOl'k. Adler. Hall.2 explains the method and the process for reconciling the dilemmas outlined in Concept 5. Some insight was given in Chapter 2 into the relationship between national cultural values and management. Have gained insight into Trompenaars' seven dimensions. What is particularly original about his work is that he presents opposing cultural values in the form of dilemmas. Kluckholn and Strodtbeck. Parsons. Learning outcomes After reading the chapter you should: ~ ® (!) Understand the concept of value orientations.Figure 1. Variations in Value Orientations (1961).1.1 gives an overview of Trompenaars' dimensions and the ensuing dilemmas which a manager may encounter in an intercultural environment. un American sociologist who attempted to intferate all the soda! sciences into a science of human action. Concept 5.

Kl uckholn and Strodtbeck (1961: 11. including some intra-cultural variations. These norms steer their actions and subordinate individuals to the social order. under­ stood and need not always be severely condemned' (page 12). considered good just because they are past. 3.. 3. Human nature orientation (goodness or badness ofhnmannature): 'Some in the United Stalt!!.. . The ways of the past are not . the affective and the directive. providing the change does not threaten the existing value order . many of which relate to the culture prevailing in the US. which have been integrated into the concept in Chapter 6 dealing with cultural values in management. thr.. being-in-becoming and doing): 'The doing orientation is so characteristir. and truly dominant .20) illustrate their definitions with examples. Man-nature orielttation (harmony-with-nature and mastery-over-nature): 'in the conceptualization of the man-natun: relationship is that of harmony. present and future): ~ericans place an emphasis upon the future. This view results in a high evaluation of change. To enable this classification to be made. "Getting things done" and "Let's do something about it" are stock American phrases' (page 17). nature and supra-nature . 2. Time orientation (past. The mastery-over-nature position is the first-order (that is. 4. These assumptions allow them to determine five problems common to all human groupings. 1. today inclll1e to the view that human nature is a mixture of Good and Evil. This final element is of particular interest since it orders and conducts human thoughts and actions 'as these relate to the solution of "common human" problems'. Kluckholn and Strodtbeck (1961: 10) formulate three assumptions: 1. the dominant orientation) of most Americans.the American way of life' (page IS). the motives and reactions of those involved much less certain. . reducing the uncertainty they experience when interacting. 2. There are many ways of solving problems. They put forward a classification of the universal components of value orientations. 100 ...Chapter 5 Cultural dimensions and dilemmas Individuals passively follow the rules of conduct of the specific society in which they are living. lapses can he.. This forms the essentially universal nature of value orientations.>rc is no real separation of mall. To enable a clearer understanding of these value orientations. Activity orientation (being. Americans aft! seldom coulent with the present.. interaction would be much less predictable. Natural forces of all kinds are to be overcome and put to the use of human beings' (page 13). Societies have different preferences when it comes to choosing solutions. On the basis of these problems they established the variations in five orientations. Kluckholn and Strodtbeck (1961: 4) define value orientations as being complex principles that are the result of interaction between three elements: the cognitive. The norms of the society are institutionalized and internalized by the individuals in it through a process of socialization.. 'There are a limited number of common human problems for which all peoples at all times must find some solution'.ally the dominanl one In American society ....a future which is anticipated to be bi~fl'r and better . Without this social mechanism. These would say thM although control and effort are certainly needed.

in particular. In the many squatter camps in South Africa ubuntu means that those in need are helped by others who have the means. but mean::. These subgroup variations contribute to the creation of what Kluckhohn and Strodtbeck (1961: 28) call a 'web of variation' in a society. attention should be given to 'what they mean to the people in each culture' (1993: 3). This first set of dimensions is based on the five relational orientations borrowed from Parsons which describe 'the ways in which human beings deal with each other' (Trompenaars. The standpoint of Fons Trompenaars is that each culture has its own specific solutions for universal problems.1. Trompenaars follows the same line of rea50ning as Kluckhohn and Strodtbcck by proposing dimensions based. Riding the Waves of Culture (1993). 101 Dr . Kluckhohn and Strodtbeck . he goes beyond the framework of anthropology and sociology to show how these dimensions also affect the process of managing across cultures.and these are relevant to business.1 Value orientations and dimensions 5. with time and with nature. serves as an ideal example to illustrate the degrees of variation in value orientations. He rejects the notion that there is one 'best way' of doing business and advocates a better understanding of the cultural dilemmas faced by international companies. Ubuntu This term. if there is a large number of products and services on world markets. 1993: 8). In his surveys he presented his respondents with a number of dilemmas and asked them to choose one of a number of solutions.!!:i!:ientlaliy 'I am because you are'. on the orientation of societies with regard to their relations with other people. Five of the seven dimensions of culture as presented by Trompenaars in Riding the Waves ofCulture ate outlined in Table 5. with its many ethnic groups. It can be translated in several ways. However. These variations result from the presence of subgroups in every society whose behaviour is more or less patterned according to the value orienta­ tions of the dominant group. time and enVlronment Some of the dimensions produced reflect those of the authors mentioned above . Trompenaars attempts to show the effects of culture on management by describing different cultural orientations based on academic and field research carried out in several countries. without any obligation to give In return. the Collateral and the Individualistic 'relational' alternatives are analytical concepts for the purpose of making fine distinctions both within and between systems rather than generalizing concepts for the specification of the gross differences between systems' (page 17). It reflects a way of life in which collective responsibility is considered more important than individual concerns.Parsons (1951). Trom enaars examines culture within seven dimensions divided into three main categories: eopie. comes from traditional African culture. Relational orientation (man's relation to other men): 'The Lineal. In the first edition of his book. t. which refers to the spirit of community in Africa. It Is the group which ensures the survival of the individual as long as the individual remains loyal to the collective cause.Concept 5. The US. Furthermore.

Universalism versus particularism: . Achievement versus ascription (doing/being): iii legitimating power and status Source: adapted from Trompenaars (1993: 8-11) and his other publications.. societal versus personal Ob. this team of worker~ had created all the necessary processes and analyses for the customer profitability model. Neutral versus affective relationships: . business people ale evaluated'bYhOW well they perform an allocated function. My intention was to have each member of the team individually sign up to these commitments. contact versus contract e rapport versus report Specific: company employees are hired in contractually to be part of a system which performs efficiently Diffuse: company employees are members of a group working together. My Swedish branch head believed that the idea to lIave all the team members agree to their commitments on paper was an excellent one because he believed that the project might otherwise fall apart after I had left Amsterdam. Let us have a look at an example. irrespective of circumstances and situations Particularism: circumstances and relationships are more impOi-t"ant considerations than absolutes . Pleased with the results of my team's customer profitability system. The system required a team of people from different parts of the company to aggregate and analyze information related to customer activities.1 2. - Individualism: personal welfare and fulfilment Collectivism: social concern and altruism ~Ie in business: goals of negotiating and decision-making 3. to older people..J~~>n Un~m: absolute rules apply. With this in mind. Statements of commitment One of my tasks as financial manager was to implement a customer profitability system at a Swedish company located in Amsterdam. which could be analysed with the dimensions: 'relations to other people'. 102 . Table 5... Their relations with each other and the organization determine how the company functions In achievement-oriented cultures. Individualism versus collectivism (communitarianism): Gl personal versus group goals . status is attributed. I wrote a formal document that stated the individual commitments of everyone on the team in terms of the profitability system over the next year. The new system had already succeeded in helping the company's account managers to derive more profits from their existing customers. those who are of good family or highly qualified 5. Should emotion be exhibited in business relations? 4.1 Relations to the other people 1. In ascript~e cultures. emotional orientation in relationships This dimension concerns the contexts and ways that cultures choose to express emotions. Under my direction. Specific versus diffuse relationships: .Chapter 5 Cultural dimensions and dilemmas ":t. the Swedish head of the branch asked me to ensure that the system remained in place even after I had returned to the US. for example.

This has served to help managers structure their real world experiences. The Trompenaars' database of 50. but related issues of corporate culture as well as dealing with a diverse work force. the differing attitudes that result. if I failed to gain some kind of formal commitment to the project. Table 5. Appointments are approximate and subject to 'giving time' to siqnificant othE'rs 7.l? Trompenaars added two dimensions of particular interest to management and business. Source: adapted from Browaeys and Trompenaars (2000): case 7.~onic) Segufntial: time is tangible and divisible. it is nevertheless necessary for management to define what these dimensions mean in concrete terms. Trompenaars and Wooliiams. I was surprised by his unease when signing the document.2). Questions 1. is that person an individualist or communitarian person? Does the status of that person derive from what (s)he does or who (s)he is? This approach: helps to Identify and model the source of not only national cultural differences.2 Relations to time and the environment 6.ny. A useful way of demon­ strating these differences is by examining the ways ill which dilemmas are approached. However. I felt sure that my Swedish manager would be dissatisfied. He said that having individuals sign a document in this manner was very 'un-Dutch'. Often flexible attitude. Although it is important to know the dimensions based on value differences in societies to compare cultures.concept 5. How can this sItuatIon be analysed using Trompenaars' dimensions as given In Table S. The dimensions he delineated are to do with time (monochronic/polychronic) and the environment (Table 5.000 managers worldwide continues to be a rich source of social constructs for iden­ tifying and E!xpleinlnq anu predicting culture clash. 2000: 22 103 .1 Value orientations and dimensions Upon presenting my commitment document to one Dutch manager with whom I had worked closely.1. willing to compromise Source: see Table 5. Only do one activity at a time Synchronic: time is flexible and Intangible. Inner versus outer directed e Internal or external control to the environment I~I control: one's personal conviction is the starting point for every action and this may result in conflict with others ilnd resistance to nature External control: Sensitive to the environment and seeks ha. Details of these dimensions and the related cultural dilemmas are presented below. A framework for the new millennium manager These seven dimensions were essentially the result of Trompenaars' research based on the question 'Where are you coming from?' Are the value-systems of a person predominantly universalistic or particularistic. What do you think the financial manager should do to get the team's formal commitment? 2. Sequential versus synchronic time (~onoChrpnic/~OIj.

' respec'ts and retQncile's th.Rights or. managers promulgate a rLlle only to the values of rule~making br exception-finding.3). augrn~nt all.. By using a factor analysis. dilemmas are typically between: o Legal contracts and loose interpretations. These competencies are defined on the basis of seven dimensions on which the values of diverse cultures vary. • Data and codification or conceptS and models.s-orlented. In practice. and' Extending rules or discoveringexCiaptlons~ I Thus. Dilemmas can arise from: The bottom line or general good will.s fPr. Low-cost strategies or premium strategy. but between these. .dconstrv~Hh~ experience.Chapter 5 Cultural dimensions and dilemmas Trompenaars and Woolliams (2000: 25-27) developed a framework for the 'millennium manager' by combining these seven dimensions with a range of dilemmas. ~z Ahigh-perfdrrilihgmanager .' Facts or relationships. and (. «> Egoisrnor altruism.r1PlnrV . A moralist would be against the sinfulness of it all. 104 . . respects and reconciles allegiance to rule~bound activity or unique circumstances.. A boss would feel defied. - . A scientist would believe he had falled~ . to Which corporation alid customers should b. ..3 A framework for the 'millennium manager' A high-performing manager recognizes. e Emphasis on globalism or localism... duties. !)' Being results-oriented or pro(.. how else can exceptional abilities be deveioi:Jed than by noting the highest defined standardS and exceeding them? To theirannbyance. \ Responsibility for self or tithers. enrichment· and fulflirnent or the ext~nt. 41 . How else can the rules be improved except by noting each exq~ption and revising the rules accordingly? In complementarity. A.ctlve m~nagement lies not . 9 II> <II Human rights or special relationships. Effective behaviours can be defined for each dimension. dilemmasare typically between: e Profit or market share strategy. These concepts are abstract but all exhibit bifurcation. . effe. they reduced the variety of behaviours to seven core competencies that categorjze a range of dilemmas.e:. and .of experience or to syrthe$i~e. 'milienniLlm manager'. The same framework can be used to consider many business dilemmas (Table 5. . .. Originating ideasar r~fining I products. would learn from it! reconciles the individual employee's development.e the beneficiaries of personal efforts~ In pr(lctice. I Table 5...

tlme . and that senior managers of the client usually tried to avoid discussing issues with her. Dilemmas can arise from: e Highly rational. respects and reconciles different meaning and priority given to time passing in sequence or coming around and around. she found It difficult to persuade the client to put her ideas into practice. she had enormous difficulties.. Which particular aspects of status relate to the consultant and to the company for whom she was working? 2. /!. respects and reconciles whether the locus of control is inside or outside the people involved. She was then given an assignment with an oil company based in Saudi Arabia. Moreover. She worked there for four years and reached the level of senior consultant by the age of thirty-three. Inner or outer directed A high-performing manager recognizes. For the latter. and Winning the race or shortening the course.Sequentia.. . p. Dauntless entrepreneur or public benefactor. A high-performing manager recognizes. ~--. Head-hunting or developing in-house. How do you think the consultant can try to improve her situation? ~ 105 . and . she could feel that her opinions were not being taken seriously. with this particular Client. standardized production or just-In-time production. However. however. Until then she had had no problems in commun­ icating with the client's team-members and had always produced successful results.. the better and more innovative her ideas were. Despite her efforts. In fact. She worked as hard as she could to figure out the structure of the company. Although she felt she could really help the company with her knowledge and experience.Concept 5. respects and reconciles why status is conferred on people. Source: adapted from Trompenaars and Woolliams (2000): 25-27.J Strategically oriented or fusion-oriented. she had difficulty in getting vital information from employees lower down in the hierarchy. and Learning at school or learning through life.1 or synchr<1I1k. Questions 1. In search of status An English friend of mine had finiShed her studies in the most famous 'Grande Ecole' of commerce in France.. Dilemmas can arise from being: o Driven by conscience or responsive to outside influence. the more difficult it was to get them over to the managers in Saudi Arabia. status following success or status preceding success. so she was unable to come up with the analyses she wanted.3 (continued) A high-performing manager recognizes. it is the environment to which people must adapt. Mini-case 5.1 Value orientations and dimensions Table 5.2 is a typical example of the cultural dilemma of achievement versus ascription. its problems and possible solutions. . Source: adapted from Browaeys and Trompenaars (2000): case 5. ~ Keeping to schedule or being easily distracted. Dilemmas can arise from: ® il> \1l Pay for performance or vindication for worth. She did both her undergradua\" dllU her MBA studies there and then she was hired by a well-known consulting firm in London.--'- 7..

Chapter 5 Cultural dimensions and dilemmas I Fons Trompenaars. cultures attempt to integrate and reconcile values to come up with a satisfactory response. Hofstede should consider more carefully. borrowed from (or disguised versions of) questions used in various psychological profile tests used during the 19505 and 1960s in the US. If anything. They insist that he does not have the right when assessing their results to view his 'independent variables' as sovereign and to claim that other cultural concepts are derived from them.but with a French mother . Hampden -'furner and Trompenaars say they have moved on. Hofstede questions Trompenaars' research method. more in commerce: 'He tunes his messages to what he thinks the customer likes to hear. a compatriot of Geert Hofstede's . Hampden-Turner and Trompenaars strongly defend the US research literature. are essentially 'heuristic devices' or speculative formulations that serve as a guide when investigations are being made into 'family resemblances' between cultures when they are faced with dilemmas. rejecting the idea that the many researchers whose work they drew on did no empirit:::al research. cultures are more like circles with 'preferred arcs joined together' rather than being Hofstede's linear forms where cultures are positioned high or low or in the middle. They then turn to the questions Hofstede himself uses in his questionnaires: these are. they say. even look as if they are 'more of the same'. Hampden-Turner and Trompenaars (1997) concede that Hofstede has taught them n lot and that they basically respect the results of his research. Their dimensions. Hampden-Turner and Trompenaars see theirs as a 'model-to-Iearn-with'. The seven dimensions he has developed may. they believe. a time when personality research was extremely popular. slowed his learning and hindered renewal. Hofstede had concluded his review by implying that Trompenaars was less interested in scholarship. as can 106 . As for the dimensions themselves. they argue. they maintain. at first glance. In that sense. which Hofstede is still seeking. as this concept has shown. As for the question of 'preconceived notions' and implied lack of rigour. Hampden-Turner and Trompenaars see cultures as 'dancing' from one preferred end of a dimension to another when encountering various dilemmas. it is con­ tinental Europe that is more concerned with 'an excess of rationalism and grand theories'. claiming among other things that the latter had started his research using preconceived notions taken from mid-twentieth century US literature and had not changed these concepts using the database Trompenaars compiled. Hofstede (1996) comes to the conclusion that the questionnaire used by Trompenaars is essentially measur­ ing Hofstede's own individualism dimension by using dimensions that are interrelated. Rather than being 'the perfect model'. However.' In their measured response to Hofstede's review. This is very clear from the response which Trompenaars and co-author Charles Hampden-Turner (1997) gave to the review made by Hofstede (1996) of Trompenaars' model of national culture differences. Faced with dilemmas. they consider Hofstede's pursuit of the least number of dimensions to account for observed differences to be 'one dimensional thinking' (1997: 158). They staunchly defend their approach by giving a detailed account of the statistical methods used and which.and vice-versa. Hofstede's search for perfection has. they argue. the nature of these dimensions is different and reflects irreconcilable differences in approach between these two Dutch stalwarts. Having carried out an empirical analysis of Trompenaars' own data. They can learn from their respondents .has on several occasions acknowledged his indebtedness to Hofstede.

Cultural awareness is understanding states of mind. Reconciliation is part of building transcultural competence. Especially important are the processes of reconciliation. However. But even their combined powers may not always suffice. they always say 'yes'. Might her father not say 'Wonderful. Respect is most effectively developed once people recognize that most cultural differ­ ences are in themselves. It is difficult to know what they feel or think. perhaps more interesting problem is that of mutual empathy (Bennett. If people lack sufficient awareness of the differences that may exist between cultures. awareness and respect are necessary foundations for reconcillng cultural differ­ ences. Hampden-Turner has explored and conceived a methodology which aims to reconcile what appear to be opposing values within each of the dimensions. She must go on again after the interval.2 Reconciling cultural dilemmas be seen in Trompenaars' recent publications. awareness can bring pain and frustration can emerge from respect. There are three essential components of tranSCUltural competence: awareness. even in cases where they might feel or think negatively about It. both awareness and respect are necessary steps toward developing tran­ scultural competence. Yet. respect and reconciling cultural differences. He proposes a model that can be used to reconcile what appear to be values that conflict with each other: A model of reconciliation When businesses cross cultures there are many potential situations in which the reconcilln­ tlon of differences may be both desirable and necessary. One could say that Westerners think the Japanese are mystics. require some kind of resolution. they may easily damage a relationship without intending to do so. Without the confidence that reconciliation is possible. The success of the business being conducted may depend on It. darling' to give her confidence. What happens when one person attempts to shift to another culture's perspective when at the same time the other person is trying to do the same thing? 107 . Reconciling dilemmas The dilemmas outlined in Trompenaars' seven-dimensional model of culture. at times even unreliable. People often ask questions such as: 'Why should only we respect and adapt to the other culture? Why don't they respect and adapt to ours?' Another. including 'Riding the Whirlwind (2007)' (see Further reading). This will be explained in the next concept of this chapter. 1979). Trompenaars (200{)~ 29-33) givils marc C011sid~lalion to the question of cultural dilemmas in the business context. but they have not recognized most of them. 'The practice of reconciliation'. your own and the person being encountered. The seven-dimensional model of culture provides with frames of reference for analyzing ways in which people attribute meaning to the world. consider the case where a child has given a nervous and halting performance in her first solo In a school concert. since the permutations of options are countless.Concept 5. although he did not actually believe her performance was good? To sum up. You can never be fully informed. In his article.

but were quiet when Invited to ask questions. selling. and once one can respect and understand that those of another culture are legitimately different. of course. which make up a dilemma. The second approach is called contextualizing. but at the same time see and understand how the other's perspectives can help their oWi'l. one manager put up his hand and said: 'Can you tell us about pay for performance?' What was happening here is very common. In fact. There are many ways of achieving synergy. This is why people need to reconcile differences.its name. and shows its membership of the InterContinental hotels group after . Companies need foreigners to be themselves If partnership Is to work. Text and context cha'nge. So if the dilemma is central versus decentrallt has to be turned Into centralizing versus decentralizing. not just for themselves. It was entitled: 'Relationships do not retire: The gist of the presentation was that Motorola had come to China to stay and help the economy to create wealth. Why do this? Because business people aim to create wealth and value. which only some of its members will abandon. reconciliation results In the integration of values through synergy. It is this very difference that makes the relationship valuable. 'See. the activity In which a dilemma is made into two processes. After consider­ able thought. Even as the Americans moved towards the Chinese perspective. of working in partnership. such encounters only harden prejudices. The temptation to 'sell out' one's own culture is overwhelmingly strong and. The first one Is processing. Here. the process of reconciliation leads to a dynamic equilibrium between seemingly opposed values. to be them­ selves. the former's salary may be ten times the latter's.Chapter 5 Cultural dimensions and dilemmas Motorola University recently prepared carefully for a presentation In China. one has to decide what is text and what is context. The Chinese audiences listened politely to the presentation. but also for those who live in different cultural worlds. of joint venturing. sub-contractors and employees would constitute a perma­ nent commitment to building Chinese economic infrastructure and earning hard currency through exports. People who abandon their culture often become weakened and corrupt. Once one is aware of one's own mental models and cultural predispositions. compare the names of two luxury hotels located In Amsterdam: Le Merldlen Apollo Hotel AMSTEL HOTEL InterContinental The Apollo Hotel Is a member of the Le Meridlen hotel group and uses the group's name as its main logo. like ships in the night. For example. The Amstel Hotel uses Its name In capital letters. It is easier to reconcile verbs than nouns. How does reconciliation work? In essence. Remember that the Chinese who turn out for a presentation by a Western company. the Chinese started to move towards theirs. then it becomes possible to reconcile differences. they all want to be like us: However. may already be pro-Western and see Western views as potentially liberating. 108 . Relation­ ships with Chinese suppliers. This dynamic is especially strong when a country is small and poor. Finally. foreign cultures have Integrity. People need to share the value of buying. When a drug salesman from a US company meets with a health minister from Costa Rica. and the two sides passed each other invisibly.

because in a compromise both parties may still not get what they expected. As Estienne (1997) indicates. Table 5.4. despite the tensions involved. Even compromise has its problems.4 Framework for the reconciliation of cross-cultural conflict Reaffirm our' commitment to the ongoing relationship and its benefit to both parties Think 'win-win' and concentrate on the benefits of collaboration to each culture Develop a global mindset Legitimise diversity Acquire knowledge of other cultures Display 'acceptance' when appropriate 2 Recognize where and how we differ I 3 Continue by searching for similarities Synthesize our solutions or create outcomes which utilize the most appropriate elements of the opposing cultural dimensions Review the learning process. yet recognize the needs of the other. There then follows a rigorous search for clear difference and similarities among the parties during which dialogue plays a key role. 2000: 29-33. Every pro­ cess of reconciliation is also a sequence. the process of synergizing is a way to reconcile. Finally. which eventually enables effective action to be undertaken by the parties involved. The skills mentioned ill Table 5.Concept 5. as well as the methods she proposes for moving from one stage to the next. but rather on developing awl maintaining a rapport. in which both parties may not benefit. going through these stages is itself a way of developing skills for global business. Those involved need to maintain a rapport despite all the cultural differences encountered.2 Reconciling cultural dilemmas A third option is sequencing. These are given in Table 5. The focus needs to be not on getting things done. Those involved discuss openly not only the conflict itself but also their relationship.4 will be elaborated upon in later chapters. Marion Estienne (1997) see five stages to the reconciliation process as developed by Trompenaars. You can first centralize and later decentralize. particularly in Part Three. but these go hand-in-hand with knowledge of the cultures involved. capture it. Source: adapted from Trompenaars. Reconciliation permits both parties to maintain what Is important to them. Synergizlng is best explained by adding the word 'through' between the two opposite orientations. 17 109 .. It is the answer to the question: 'How can we increase the quality of our central offerings through better learning from our decentralized operations?' Reconciliation is preferred over other methods for dealing with cultural differences such as conflict. The first mandatory stage involves the relevant parties showing their commitment to developing their relationship. ' Employ dialogue Practise creative thinking Demonstrate a willingness to learn Dialogue Practise experience-based learning Articulate what has been seen and known Act on learning at a later stage 4 I 5 Source: Estienne (1997). and make available for the future I I .

Dilemmas are universal. the interaction between the interlocutors. Rather than the dimensions themselves. These allow cultures to be classified according to certain values. but the way they are resolved is determined culturally. i. Why do you think this is the case? 2.Chapter 5 Cultural di. Chapter 6 offers an instrument to assist in this exploration. Trompenaars and Hampden-Turner consider their dimen­ sions to be essentially 'heuristic devices' or speculative formulations that serve as a guide for investigations into 'family resemblances' between cultures when faced with dilemmas.ilidliull. Getting to know the cultural framework of reference of one's interlocutors seems to be the best way of adapting to their culture(s) and their way of working. These dimensions serve not only to distinguish national cultures. These researchers appear to rely more on cultural theory than theories of management. especially since it takes into account the dynamics of cultures. with nature and with the environment. Many researchers in the area of cross-cultural management refer to authors whose disciplines are in the field of social sciences. Trompenaars proposes the reconciliation method as a way of dealing with oPPosing values. to what extent do you believe the reconciliation method can be used to resolve all dilemmas? 110 . Tile approach to diiemmas by means of reconciliation remains an interesting approach. In an intercultural business context. Chapter 5 gives examples to demonstrate this point as well as the msans to resolve them through the principle or reLUIl!. as expressed in the way they confront dilemmas. Their perception of dimensions contrasts with what they term the linear nature of Hofstede's dimensions.mensions and dilemmas Iii I The reconciliation approach opens the door to a third dimension. In what other ways do the two sets of dimensions differ? To what extent do they resemble each other? 3. This chapter has outlined the cultural dimensions devised by Trompenaars. but also to show how the values they reflect can affect relations in business and management. In their response to Hofstede. unblocks in some way the duality of the dilemma.thefreedictionary. These dimensions reflect the value-orientation concept proposed by Kluckholn and Strodtbeck since they take into account the relations with others. 1. If the definition of 'dilemma' is taken as 'a situation that requires a choice between options that are or seem equally unfavourable or mutually exclusive' (www. For cultural diiemmas in business. it is the model of reconciliation that distinguishes the work of Trompenaars and Hampden-Turner from that of Hofstede.e. The cross-cultural manager has to face recourse to reconciliation may well avoid a situation ending in an impasse..

M. in Browaeys. NY: McGraw HIli. and Strodtbeck. 2nd edn. and Trompenaars. (1961) Variations in Value Orientations. Estienne. M. (1993) Riding the Waves of Culture. Trompenaars describes in his book how connecting people (individuals and teams) and organizations in a culture of innovation. 29-33. (1996) 'Riding the waves of commerce: a test of Trompenaars'. (2003) Business Across Cultures. (ed. pp. (1993) Ridlnq the Waves of Culture. (1997) Riding thE? Waves of culture. 20 0): 14-18. (1937) The Structure of Social Action. M. JourniJl of European Industrial Training. Parsons. T. Case Studies on Cultural Dilemmas. S. (1997) 'Response to Geert Hofstede'. Chichester. r. New York.Further reading and References Further reading Trompenaars. Trompenaars. p. F. (2000) 'The practice of reconciliation'. www. C. The aim of this book is to provide executives with a cross-cultural perspective on how companies meet the diverse needs of customers. coaching and (un)learning services to help leaders and professionals manage and solve their business and culture dilemmas. Trurnpenaars. and Hampden-Tul'lll:!r. Quoted in Trompenaars. Additions to the second edition are significantly influenced by Charles Hampden-Turner's way of thinking. Browaeys. 21-28. London: Fconomist Books. Oreukelen. Parsons. training.thtconsulting.L.-J. F.-J. F. F. Trompenaars. 21 (1): 149-159. London: Nicholas Brealey. and Woolliams. International Journal of Intercultural Relations. countries. F. F. International Journal of Intercultural He/at/ons. P. Trompenaars. Breukelen. (2000) 'Competency framework for the millennium manager'. Trompenaars.). (1979) 'Overcoming the golden rule: sympathy and empathy'. G. (1951) The Social System. website of the firm run by Trompenaars and Hampden-Turner. Hampden-Turner. NY: Free Press. Netherlands: Nyenrode University Press.F. Case Studies on Cultural Dilemmas. Hofstede. References Bennett. Communication Yearbook 3. in Nimmo. 2nd edn. (2007) Riding the Whirlwind. Fons Trompenaars first published this book in 1993. (eds). TX: Interniltional Communication Association. M. F'.and Trompenaars. and Trompenaars F. The authors added three new chapters: one on methodology for reconciling cultural dilemmas and two where they discuss diversity within. pp. London: Economist Books. Culture for Business. Netherlands: Nyenrode University F. M. Connecticut: Greenwood. Austin. and Hampden-Turner. 20 (2): 189-198. London: Nicholas Brealey. New York. D. investors and employees. P. (1997) Riding the Waves of Culture. Trompenaars. F. (eds) (2000) Case Studies on Cultural Dilemmas. T. F. and Woolliams. Trompenaars. C. Breukelen. Oxford: The Infinite Ideas. (2007) Riding the Whirlwind. Oxford: Infinite Ideas Limited. (1997) 'The art of cross-cultural managelll!:!I1L: an alternative approach to training and devl:!lupment'. Website Trompenaars Hampden-Turner.-J. The firm provides consulting. Kluckholn. Inspired by the humour and John Cleese's vision of creativity. (eds). 111 -= . C. Netherlands: Nyenrode University Press. F. F. in Browaeys. and Trompenaars. England: Capstone. rather than between.

And it would improve consistency between the international operations. 3. After all. Mr Katilkl from Japan saw big difficulties In Implementing the individualized bonus system in the light of the predominantly team-oriented value system of the Japanese. Check your answer with your Instructor. multicultural teams were slowly bein€) formed. i " . I would discuss the idea further with the HR staff. The programme would be based on the success of the Australian employees who produced more effort since they had been recognized for their individual work. I would implement the individual incentive programme. The US HR manager and Jeff proposed an individual incentive system worldwide that would increase the staff's productivity. In the past. b) I would allow the company employees in Asia to choose a group-oriented incentive system in Asia and those working in the more Individualistic parts of the world to choose a system based on individual incentives. I would then implement a worldwide programme in which one of the major individual Incentives Is based on how people support the group. I Question What would you do If you were in Jeff's pOSition? Choose one of the options given below. In the evening. Japanese and Australian employees working together. Jeff was asked to make a decision that would be respected by all. Now.Individual and group bonus plans: a case for reconciliation The dilemma below explores the issue of reconciling a cultural dilemma In a business environment (adapted from Trompenaars. A subsidiary had been set up in Japan to develop operations there. 2000: 31-32). British. Sales were promising. asking them to tell me what aspects of the Incentive programme they thought would be worthwhile. I would Introduce a consistent plan worldwide that rewards the group. a) I would recognize that the Individual Incentive programme alone would not be effective. the Japanese had worked in Japan and the Americans had worked in the US. however. In the last couple of years. given the communltarian orientation of some Asian staff. Matehold had internationalized its operations. Jeff raised the question of the need for greater con­ sistency among his colleagues. 2. with US. During an international human resources meeting. Jeff Mate was the human resources director of an Australian company in household appliances. everyone responds to individualized monetary rewards. 1. This led to il heated discussion involving dll the HR directors present. especially in the Pacific Rim markets. but which makes the team responsible for looking after individuals either who do not optimally support the group's production goals or who support Individual Inventiveness. . 4. first. 112 . some activities had been transferred to the Mid-West of the USA and some research and development work was being done in the UK because of its excellent education system.

ended at 5pm. Zurich staff had to stay later because of the time difference (Zurich is seven hours ahead of New York). however. particularly as there was no formal training for thi~ !-lusting. an American whose parents had been born in India. Justify your choice. whose knowledge he needed to become proficient in his jOb~ uu Source: Browaeys and Trompenaars (2000): case 9. how can Marcus and·Heldl resolve the dilemma in order to enable them to work together efficiently and effectively? 113 . Four months into their new environment they were elated when Marcus found a challenging new position at Kraft Jacobs Suchard. for instance. particularly since he had had similar experience dealing with different time zones when working in the US. it was made clear that overtime would be required because of this time difference. After spending four years in San Diego. she made it plain that she considered giving any sort of training to Marcus to be beyond her job description. Naturally. Though this was now a US company (Jacobs Suchard having been acquired three years before) and quite a few expatriates of varying backgrounds worked in the Zurich regional head office where Marcus was posted. After reading the case.. Marcus did not feel this was unusual for someone in a salaried position. as Marcus was. 2. But was this fair? And how could Marcus achieve a more equitable work balance while at the same time build a working relationship with Heidi. Marcus. arrived in Zurich with his Swiss wife. Expatriate's first job in Switzerland . They were both excited about starting a new chapter in their life together. managing its international assignments programme. this was not to be the case in Zurich. prompt. Her work responsibilities. she felt. Although Heidi did lend some assistance to Marcus (by telling him. During Marcus' interviews for the position. did not feel the same way. they were keen for a change. However.Read the following case and answer the questions that follow. although Marcus had mixed feelings about job prospects forhimself in Switzerland.1. is what he had experienced in various jobs in the US. From this perspective. Questions . This left Marcus in a quandary. Using the model of reconciliation. refer to Concept 5. when she normally had lunch). How could he gain the knowledge he needed to be effective in this new job? Another pOint of contention was overtime. And she stuck to this position adamantly. One aroa of confusion and some conflict 11ad to with teamwork and lhe boundaries ot jOb descriptions. much to the confusion and chagrin of Marcus.1 and try to Identify in which of the seven dimensions you can categorize the dilemma in question. A newcomer to a function or a department. will have a rather steep learning curve for the first few months on the job. this left Marcus having to deal most evenings with the less uptight (relatively speaking of Course) New Yorkers. Ttlis Was a natural assumption given that thic. there were nevertheless some strong Swiss work attitudes that pervaded the work environment. Marcus presumed that his new Swiss colleague Heidi would help with the vast amount of learning that he faced. Since the Zurich regional head office was in frequent contact with the head office in New York. Heidi.

as well as to sketch the profiles of (future) business partners and colleagues from uther cultures. This has to do with how the goals and objectives of a company or department are established. The following management tasks and Table 6. The activities chosen below will be discussed in the light of cultural values.1 to 6. Organizing. $! Understand how a number of management practices are shaped according to the cultural preferences of the managers concerned. 114 . Learning outcomes After reading this chapter you should: o Gain a clearer appreciation of the effect cultural values have on the way managers work.d to be able to establish your own cultural profile.In this chapter cultural values are presented that have been extracted from the dimensions examined in earlier chapters. by the end of Part One you will be cxpe('tp. These values are each characterized in bipolar terms and their influence on everyday business activities discussed.8 are based on material in the participant workbook of Doing Business Internationally (1992): L Planning. There are many managerial activities performed across all societies on which cultural values have a considerable effect. as well as determining what actions are needed to achieve them. The use of the resources involved also requires careful organization to ensure effectiveness and efficiency. The cultural values are presented as a model of culture that the reader will be asked to apply in one of Part One's final activities. Therefore. This is a big responsibility of managers. They need to decide how the work involved is to be divided up and how it is to be co-ordinated. 2.

1 of Part One. 4. we have used the value concepts presented so far to compile our own list of cultural value orientations which we judge as having a considerable influence on the way managers perform their activities. Hall in particular. How do managers relate to the employees. Directing. The effectofcultutalvaluesonrnanagement A number of I:llltt1l'al Vah.. Monitoring the performance of a company or department is a task for which different cultures may use different systems and approaches. Controlling. The way the above tasks and responsibilities are performed will be examined in the light of cultural values. Time focus Monochronlcl Polychronlc Action Dolngl Being Time orientation Present! Past! I-uture n<. Staffing. is hiring suitable employees for particular responsibilities.3.Concept 6. Figure 6. Participant Workbook: 2. This list has been supplemented by other value orientations based on the works of other scholars.1 presents the value orientations and characterizes the related values in hipolilf lerms to clarify the differences. an activity aimed at developing cross-cultural effectiveness in an international context. how they do they communicate with them. Consideration must also be given to they show for enabling people to fulfil their potential within the company. Since the terminology used often varied. The differences reflect the relations between managers and employees as well as the way performance is perceived.1 Management tasks and cultural values 3. It is intended to be used as a framework of reference when readers are attempting to understand some of the differences they may encounter when doing business internationally and when managing across cultures. The eight cultural value orientations featured in the model will now be examined in turn. space and communication have proved to be especially relevant to management activities. 115 .i Power Hierarchy! Equality Communication High-context! Low-context Competition Competitivel Co-operative A model of culture Source: adapted from Doing Business Internationally.ll::8 have emerged in previuus chapters when cultural dimensions were being presented and discussed. whose ideas on time. The task of allocating employees to particular positions within a company is demanding.!ure (. This goes also for the ways used to prevent problems or to resolve them. how do they supervise them? 5. This framework will also be used in the Final activity AI. This has to do with leading the organization and its employees towards its goals.

These may be used more to determine action points and deadlines or more as an opportunity to reflect on the company generally and to sound each other out on the way things are going or should be going. Hall and Hall (1990) analyse differences in time systems among cultures. Initially. In cultures where polychronic time is preferred. People tend to do one activity at a time and dislike having to move away from a schedule. time is experienced and used in a linear way. 116 . if kept. history. Outside working hours. What is more important is involvement with other people . Actual decisions may come later through further (informal) consultation. Schedules. one which often overshadowed the many positive experiences from being exposed to other cultures. That explains why polychronic cultures may well have problems respecting timings wilhin the working environment. present and future. In cultures where a monochronic perception of time prevails. Angry words were spoken and the latecomers promised to be more 'business­ like' and to do everything to arrive on time. Different cultures have different perceptions of time according to their environment. and that was punctuality. are much more approximate and may be changed at any time.1 can be seen in the role given to formal meetings. traditions and general practices. Time. This margin of time now seemed to have been accepted by those who always arrived on time. however. These authors distinguish two prominent time systems of particular relevance to management: monochronic and polychronic. Ali. spoke euphorically about the Joys of getting to know other nationalities. The others attending arrived up to thirty minutes late. Their punctuality had improved. Arriving in time for the start of group meet­ ings was still a problem for her. The differences in time focus as characterized in Table 6.they take priority over schedules. Ali admitted: they often arrived late. an Indian student.Chapter 6 Culture and styles of management 1. even after several months into the programme. and their relations with others may suffer because they do not fit into the schedule of things to be done. They are more focused on information than people. Keeping time When asked about her experiences working in small multicultural groups at a European business school. Cultures can also be categorized according to another aspect of time. However. On the residential campus life was generally chaotic and social events Ali had attended often began well after the official starting-time. but their goodwill soon turned Into frustration. there was one Issue which she and her colleagues from the Indian subcontinent and South America found a real challenge. there­ fore. the punc­ tuality rule didn't seem to apply so rigidly. people tend to focus on several tasks and are less dependent on detailed information when performing these tasks. is one of the fundamentals on which all cultures rest and around which all activities revolve. Those who regu­ larly arrived promptly showed a certain under­ standing during the first few meetings as she and her fellow latecomers walked apologetically into the room. Time focus (monochronic and polychronic) Time is related to the rhythm of nature. but no later than five minutes after the offical start of the meeting. namely a culture's orientation towards the past. she and the other habitual latecomers had arrived just a few minutes after the start to discover they were the only ones present.

and that time is expensive. Your purpose Is to assist the organization in achiev­ ing its objectives. reacting according to (changed) circumstances. .i>. Changes and plans are made according to whether or not they are in line with the history of the company and the way it usually does things. :i .¥". 117 . with concern for building relationships over time The emphasis is on being flexible.1 Characteristics of two attitudes to time i~":/ I'.i. . regardless of whether your job function is that of data processing manager..'~I·~". Directing 5.. Those cultures concerned with the presf'nt are out for quick results and short-tf'rm gain.•. present and future) Cultures focused on the past value the upholding of tradition.~.jL.!lIcy to use more flexibll' control systems Involving people as wpll a.Concept 6. Planning 2. Having a plan is the fi rst step on the way to that achievement: Ma{1OlQf'? L. . Those with a view towards the future are more likely to give up short­ term gains when there is the prospect of more substantial long-term benefits. information 1. Organizing The focus of activity is more on the task itself and making schedules The approach used is structured. :. managing the inflow and distribution of detailed information 4..%«i·'·/rb~i:~C. giving priority to people over plans.. relying more on the sharing of implicit knowledge and information Tendl.··::·.•·•••. Controlling Tendency to use control system'> thal u~pend on detailed information and involve strict deadlines .·>···.~. positive investment. The focus of activity is more on relationships when planning The approach Is a less structured one. Staffing Concerns are focused on the shorter term. Yes.••..~.< 'I.~.:.·~·. You have to take control of the time at your disposal and decide how you want to spend it. Yes.but that is a sensible.. "''''Y''''. '. it is crucial to plan out how it's going to be spent to most effect. This means clarifying th@ mailllJUrp05e 01 your job.ei"i: I'r:'..':·::~.. meeting immediate needs and requirements The emphasis is on making and following plans.• .ondon:· M~lllu"n' Sourcl!: Vid~o Arts (1984) $0 You Think You Can t!u.:' ':"':'.. Being organized will help you to achieve those objectives.··". senior welfare officer...•. you may have to spend even more time to make time . Ask Yourself: what am I here for? Those Whose answers identify or match the purpose of the organization for which they work can award themselves several gold stars.. Time is a resource to be husbanded in the same way as you would treat raw materials or finished goods or stock in the business.1 Management tasks and cultural values Table 6. more holistic in nature and people-focused The focus is on the longer term... So if you have only a finite amount of time."·'" !•• '.'. Any changes or plans are therefore assessed in the light of expected future benefit. How to plan your time 'Without planning. linear and task-focused 3. Time also costs money. Time orientation (past. . you'll never have the time for anything.-- '·······:·\·. initially. i I.­ 2. sales director or typing pool supervisor.

Chapter 6 Culture and styles of management

Table 6.2 Time orientation and management skills

.... The emph.asisisoncontinuing ·traditiol)sand buildingir1 long-tenn time frames If the plan isfara ;·changeprocess . Work andresources arecfividedand Organi~aticinaldeclsionsare made Cb"ordinated to meet longer-range ". withinthe conteXt of the customs of ·the society; Past goals and precedents . goals and projections for the fufL,lrEi . guide the process of otgCl!1lzlng Managementareslbwer In .adapting · the. c:riteriabywhich they select and .. train employees . .. Tendency to devel()p vision and mission statements that emphasize the .cOntinuation ofthecompany's valUes and reputation Tendency to develop performance objectives in keeping with customary goals

Managemenf select and train
empl<;lyees to meetiong-term
business goals
. Tendency to develop vision and· statements whlchfocus on achieving long-term benefits Tendency to develop performance objectives in the context of long-term goals

Hall and Hall (1990) emphasize the importance of knowing which parts of the time frame are given prominence in which areas ot the world. They see that countries in the J:lar East, as well as India and Iran, have cultures orientec1 towards the pa.~t. On the American continent, however, they consider the culture of the urban us to be more oriented towards the present and short-term future, while the cultures of Latin America, are both past and present-oriented. These differences in values (Table 6.2) t:aIl bt: pt:rcdvt:u ill wallY at:liviLie~, varLicu­ larly when it comes to negotiations. TIll.lst: whl) arl; 'palit-l)rit!nLt:u' may ut: wlJn:: inLelil on compensating for previous losses or regaining past successes rather than aiming for a resolution that all those involved find acceptable. Plans for the future will tend to be based on past experiences rather than expectations whereby employees are entrusted with respunsibility for what happens in the future.

3. Power (hierarchy and equality)
The power value orientation is to do with the extent to which the less powerful members of a society expect find accept that power is distributed unequally. As Mead indicates (1994: 66) it is in this area that a culture shows the extent to which it 'tolerates and fosters pecking orders, and how actively members try to reduce them'. In some cultures, inequality is a givt:n and no attempt is made tu make any compensa­ tions on a socio-economic level for intellectual or physical inequalities. In other cultures, inequality is regarded as undesirable, necessitating some form of correction through legal, political and economic means. At work, the level of power and authority are strictly marked out by cultures oriented to hierarchy. There, the employees do their work according to the directives of their boss. In their eyes, the role of the manager is to allocate tasks and to take decisions. During'


Concept 6.1 Management tasks and cultural values Table 6.3 Effects of hierarchy

.... .; .......2,<.

, >': .

.• Hier~tc~Y'i'.", .'•••.. l····'·








1­ Planning

More autocratic or paternalistic planning is displayed, in which managers make decisions without consulting employees The organizational structure is tightly controlled. Authority and responsibility are centralized Subordinates expect bosses to take the initiative to train, develop and promote them Leaders are expected to behave in ways that reinforce their Importance. Employees like being closely supervised and feel comfortable with i3 directive supervisor Employees prefer the personal control of superiors over impersonal control systems

Employees may implement the plan in the way they believe is the most appropriate. More participative planning is displayed The organizational structure encourages individual autonomy. Authority is decentralized to the lowest poSsible level Work relationships should not be strictly prescribed in terms of appropriate/inappropriate behaviours and roles Managers exhibit participative or consultative styles. In bosssubordinate communications, employees are not afraid to disagree with their managers Subordinates tend to like working with their bosses to develop, implement, monitor and alter performance objectives

2. Organizing

3. Staffing

4. Directing

5. Controlling



negotiations, title, status and formal position have less influence in cultun::s oriented towards equality. There, the hierarchy I:!xists essentially to facilitate the relations between the people in an organization. Managers see their role as more participative than directive. They are more likely to consult employees before taking decisions (Table 6.3). In companies oriented towards equality there will be more informal structures based on expertise or focused on certain projects, Hqwever, hierarchy may still bt: Lhere below the surface. When risks have to be taken or when there is a budgetary crisis, those with formal authority may well re-assert their power. An organization with a formal hierarchy that adopts certain features of equality in the way it is run will always feel the tension between control and empowerment.

Culture and airline safety
The controversial Canadian journalist. Malcolm Gladwell, dedicates a chapter of his recent book 'Outliers' (2008) to an examination of the role of culture in air crashes. He focuses in particular on one crash involving Colombian pilots and another involving pilots from South Korea. He maintains that, apart from the weather conditions and fatigue, the pilots in question were struggling with a cultural legacy: the hierarch­ ical relationship between the crew members. In both cases, the subordinates had to be deferential towards the captain and felt unable to warn him that the plane was about to crash. Planes such as those built by Boeing and Airbus, Gladwell argues, must be flown by two equals because of their complex nature.


Chapter 6 Culture and styles of management

4. Competition (Competitive and co-operative)
Management may well encourage competition in an organization, particularly where the environment is that of a 'free market'. Tt enco~1rages employees to take responsibility for the organization's survival and can be crucial in stimulating innovation and developing markets. When competitiveness is valued, the culture is focused on acquiring wealth, per­ forming well and achieving a1lllJiLiuns. The Success of a project is determined only by the J,Jwfil il makes. In other cultures, however, job satisfaction has less to do withmaking money and more to do with working in a pleasant environment. Here, competition is not so highly valued and not considered to be the main purpose of business. Instead, co-operation is preferred, with the stress 011 tht: quality of life, relationships and consensus (1able 6.4).
Table 6.4 Co-operation and competition

The emphasis Is on speed andtask ' performam;e when Imph~inenting , plans Individual achievementisallowed ' and encouraged in organizing the Work. Managers have moreofa , leadership

Emphasis is on maintaining relationships In plan Implementation Group integration 'sperm/Hed, together with maintenance ofa positive working environment and convenien't schedules. Managers havemoreof a fatilitatingrole , Employees are sel,ectedforth~lr' abilityto work wellingroups ' The leader's Folels tofa,eilltate mutuallvbeneficial relationships


Empl9yees are selected th.elr " ClbllitYto ?let IndegendentlY<,


Thel~ader's mle Isto track and reward
achi~vement.The stre~slnVOlved in .
the "'t0rkis gen,erally higher ',SystemS th~tarept~q9mrna ntly, ,,' • per(orrni3nce-bas,~dar~pt~f~rl"~9i

Despite the fierce competition between car- ' which both ,considered to have considerable are many examples where rivals potential growth. decide to. work together to. promqte their The ,two companies shared design and individual illterests.Autolatrna SA is one suCh marketing facilities but still marketed their, example ... aIel/nt venture set upin the 19805 by cars separately, The co-operation .Iasted for Ford and$wagen in Brazil and Argentina. eight years untU 1994.when Brazil9pened up' , "ACI;;o~dingt() Yoshino and Rangan. (1995); , Jtscar market to fweign car importers. Differ- ' the creation ,of. Autolatina allowed the tw6ingvie~son how to deal with Autolatina's companie?toaddressthedIfficultl~s'()f'd()iruf' newtbmp~titors led tot~e joint venture being " bU$iness InasmaJI, fragmented rnarket,Qutone dissolved.


concept 6.1 Management tasks and cultural values

A company operating in a competitive, dynamic market, but which is keen to maintain or develop co-operation among its staff, will experience a tension between opposing values similar to that felt during other management activities mentioned earlier. Nevertheless, the company will wish to promote creativity among its employees through competition while, at the same time, encouraging co-operation between its employees to ensure effective running of the organization.

5. Action (activity: doing and being)
Kluckholn and Strodtbeck (1961) place 'activity' in their value orientalion system because they consider this to be one of the universal human problems. They see every method of human expression as resulting in some form of activity (not in the active or passive sense) which, in turn, shows a preference towards a 'being' or 'doing' orientation (Table 6.5). If the orientation is towards being, then this is 'a spontaneous expression of what i~ conceived to be "given" in the human personality', The 'doine' orientation, on the other hand, prefers 'a kind of activity which results in accomplishments that are measurable by standards conceived to be external to the acting individual'. The stress in 'doing' cultures is placed on action and achieving personal goals. Prime motivators are recognition of achievement and promotion. In 'being' cultures, the stress is placed on working for the moment and living the experience rather than achievement itself. The prime motivator is the promise of future rewards while maintaining social harmony.
Table 6.5 Two approaches to 'action'

1. Planning

Tends to be done by developing measurable, time-framed action steps Involves developing action-oriented documentation for project management in which task responsibilities are clearly spelled out Account is not necessarily taken of a person's worth beyond his or her ability to carry out organizational tasks Managers are considered to be effective if they have the necessary expertise and competence

Tends to be done with a strong focus on the vision or Idea! a company wishes to attain Based more on the assumption that implementation is not so much dependent on action steps as on common vision and persona! trust Career development is usually based not only on performance but also on other standards, such as personal or social criteria Managers are considered to be effective if their personal philosophy, values and style are seen as compatible The for.;us is less on efficiency and more on pffprtivpnp~~ ilnel adaptability. ManalJpmpnl (1f performance measurement tends to be less systematic

2. Organizing

I '


3. Staffing


4. Directing

S. Controlling

The focus is nol only on the t\ilsks to be done, but also ·on tl1e ways In which they are done. Management 01 performance is carried out systematically


Chapter 6 Culture and styles of management

The meeting
The contrast between these two types of culture can come clearly to the fore when decisions are being taken during meetings. In a 'being' culture, the status of the 'boss' is unquestioned: it is he who makes the decision. In a 'doing' culture, everybody attending the meeting has a role to play, and these roles can change according to the type of decision, the expertise and experience available. The 'boss' may take the final decision on the basis of the informa­ tion and analysis emerging during the meeting, or may even delegate the decision to those he considers more competent.


I ,


6. Space (private and public)
One aspect of space orientation relates to what is to be regarded as private and public space (Table 6.6). In some cultures, a house, car or refrigerator is not open to public view, in others some or all of these are. Another aspect relates to the invisible boundary around every person, a 'comfort zone'. If this zone is encroached upon, people feel uneasy or even under threat. In some cultures, this zone is much narrower than in others. The proximity of people in conversation, for example, may be much closer in one culture than in another. This concept of space can be seen in terms of personality, as Hoecklin (1995: 44) notes when reviewing Trompenaars' dimension of 'specific versus diffuse relationships':
Every individual has various levels to their personality, from a more public level to the inner, more private level. Howevor, thel'!:' can be cultural differences In the relative size of people's public and private 'spaces' and also in the degree to which they feel comfortable sharing those parts of their personality with other people.

Table 6.6 The Influence of personal space at work

I. ··.··.i

oj', ie,,, "'P~ivate'!.,.•' ." ...... ""

........... ;. ' .. "' 'c, ·······":,'~Z !','. P~lllic . •. '''' .•,.




1. Planning

2. Organizing 3. Staffing 4. Directing


Tendency to use more individualistic or systematic forms of planning The approaches used tend to centre on tasks The information about how staff are to be employed is more explicit Managers and employees do not share the same office

Public space cultures tend to use more gfouP·urlp.nted or authoritativ~ forms of planning The approaches used tend to be more centred on relationships The information about how staff are to be employed is more implicit


The location or size of lhe place where an employee works does not necessarily reflect that person's rank in the company Managers can use more informal checks on performance

5. ContrOlling

Since managers are separated spatially from their employees, they need to use more explicit measures of performance


Concept 6.1 Management tasks and cultural values

Private business
A European manager may find himself getting invited by his Chinese business partner to the latter's home, his private space. By doing so, the Chinese is hoping to get to know his
partner well with a view to establishing a close relationship. This can prove to be an important basis for (more) business deals.

In cultures that are more specific in nature, there are large public spaces or spheres where personal matters are openly discussed, where family worries and individual failings are revealed for all to comment on. Private spheres, however, are very small and not easily penetrated. In more diffuse cultures, public spaces are smaller and more formal, access to which is not easy for strangers. However, once a member of a diffuse culture accepts someone, then that person will be given access to a larger private sphere.

7. Communication (high-context and low-context)
When investigating communication between different cultures, Hall introduced the con­ cept of context and described the role it plays in the communication process (Table 6.7). Context relates to the framework, background and surrounding cirC'umstancc~ in which communication nr an event take~ place. He distinguishes between high-context and low-context messages:
Table 6.7 Communication and context

1. Planning

Low-context cultures develop plans that are explicit, detailed, quantifiable and Information-based Task-responsibility guidelines are explicit: they are detailed and understood through verbal or written instruction Detailed contracts of employment and explicit performance appraisals

High-context cultures develop plans that are more implicit and less detailed in terms of instructions Job descriptions and responsibilities are implicit and understood according to the context The criteria and methods for recruitment, selection, pay and firing are not explicit, nor is the appraisal process In high-context cultures, managers get work done through others by giving attention to relationships and group processes. Conflicts must be resolved before work can progress Control is more process-driven. Information regarding the various aspects of control is embedded in the cultural context

2. Organizing

3. Staffing

4. Directing

Managers get work done through others by outlining specific goals and ways to achieve them. Communication is explicit and conflict is depersonalized Conlrol Is more task-driven in accordance with monitoring and control procedures used to ensure performance objectives

5, Controlling


Chapter 6 Culture and styles of management A high context (HC) communication or message Is one In which most of the information Is already In the person, while very little Is in the coded, explicit, transmitted part of the message. A low context communication (LC) Is just the opposite; i.e., the mass of the Information Is vested in the explicit code. Hall and Hall, 1990: 6

When applying this concept to cultures, he sees the US as a low-context country, because the messages conveyed generally, and in business in particular, are usually clear and explicit. Japan, however, is a high context country, where the most important part of any information is 'hidden' in the text; the situation in which the communication takes place carries most of the information.

The office
To illustrate the contrast between the two ends of this context spectrum, Hall and Hall (1990) describe a typical routine in a US office and compare it with one in a French or Japanese office. When an American company director is In his office, he has to work through a stream of pre-arranged appointments, with visitors usually entering the office one at a time. The informatlon needed to do the job comes from a small group of people s!:'l?n through the day as w!:lll as from memos and reports he reads. The flow of information is controlled by supervisors and assistants. According to Hall and Hall (1990), the equivalent office day In a high-context country such as France or Japan is very different. People are constantly entering and leaving the office, both requesting and passing information on. The organization itself is dependent on the col­ lection and distribution of information so that everyone in the business knows about every aspect and who is the best informed about which subjects.

Although Hall does not rank countries in terms of their degree of LC or HC, Figure 6.2 reflects the qualilative insights of Hall himself as well as of other scholars in cross-cultural communication as to where certain countries lie on the context dimensiun. At One end

SOllrcc; Usunicf (1993): 103.


,- !9u' co! 62 Mp,5sages and context (adapted from Hall)


Concept 6.1 Management tasks and cultural values

of the dimension are a number of countries in Asia, at the other a number of Northern European countries, as well as the US. Part Three of this book will deal with this high/low context orientation in more detail.

8. Structure (ind',vidualisrn and collectivism)
The term 'structure' refers to a social structure or, in business terms, an organizational structure, which allows management to distinguish uncertain situations, ambiguity, stress and risk (Table 6.8). This particular value orientation concerns the relation between the individual and the group. According to Kluckholn and Strodtbeck (1961), individualism shows the extent to which cultures elevate the role of the individual over the role of the group. When individualism is valued, the 'I' predominates over the 'We', Individual goals, initiative and achievement are most important and people are encouraged to be independent and self-reliant. There is less need to conform to a group and less distinction made between in-groups and out-groups. Individuals frequently acquire and change their friends and do not hesitate to establish pre­ ferred relationships among family relatives. Collectivism shows the extent to which the interests of the group prevail over individual interests. Each person in a collectivist society is encouraged to conform, to do what is best for the group and to avoid expressing opinions or beliefs that go against it. Reluctance to co-operate within the group or eagerness to stand out is frowned upon. Clearer distinctions are made between in-groups and out-group". Relationship8 are IllOre constant both within and outside the family.

Table 6,8 Structure and business activities
Individualism ~--~------+-~---------------------+ It is expected that those involved in 1. Plenning planning will take the initiative to present their views 2. Organizing Organizational structures emphasize the individual in tasks assignments and resources allocation Organizations are not expected to look after their employees' career development Leaders expect employees to meet or exceed their responsibilities and defend their own interests. Management entails managing individuals Collectivism Plans are developed within the shared values used for measuring and justifying activities in the organization Organizational structures emphasize the group; the team is assigned tasks and resources Promotion is based primarily on seniority. Managers are evaluated according to how well they conform to organizational or group norms Leaders expect loyalty in exchange for protection. Group or top-down decisions are the norm, with the leader In quiet control

3. Staffing

4. Directing

Control tends to be exerted by Deviation from standards and individual standards of excellence. expectiltions is discouraged through rear of lo,ing self-respect discourages group-oriented pressure deviance from standards ' - - -_ _- - ' - -_ _ _ _ _ _ _ _ _ _----1._ _ _ _ _ _ _ _ _ _ 5. Controlling



and per­ formed very poorly when operating as a group and anonymously. In addition. gave 48 management trainees from southern China and a matched group of 48 management trainees from the US an 'in-tray task' consisting of 40 items requiring between two and five minutes each (Earley. so that some sort of accommodation can be made between the representatives of the cultures in question. On the other hand. The latter's dilemma approach. Source: Hoecklln (1995): 37. were asked to mark each item with their name. seems to reflect much more faithfully the nature of present-day international business and the increasing interdependence between countries and business sectors across the globe. This concept has led to a number of cultural value orientations and presented extreme differences between the values within each orientation. the other half turned them in anonymously. The previous concept outlined the cultural values and the way they are reflected in management. the other half were given a group goal of 200 items to be completed in one hour by 10 people. This idea of integrating values is much less clear-cut in nature than that of trying to find a trade-off of values during cultural collisions. The complex and unpredictable nature of this integration process. what helps them co-exist. a US management researcher. Sometimes. This interdependence between cultures has led some cross-cultural scholars to question the stability of cultures generally and cultural values in particular. the tliffer­ ences between (some) cultural values may not be as extremE" <1S the differences presented llt~re. This is a much more productive way of addressing the either/or nature of a cultural dilemma than trying to resolve it through making weak compromises. Values are what people essentially share in a particular culture. the contrasts may be such that co-operation is extremely difficult. ally and with their name marked on their work. however. As seen in Chapter 5. The individualist US participants performed best when operating Individually and with their work attributed to them personally.An in-tray task Christopher Earley. however. entail the development of a third dimension in which the values of the parties concerned are integrated through close synergy. participants performed best when operating with a group goal and anonymously. of course. half of the participants from either country. 1989). Hofstede (1991) emphasizes their durability. The Chinese. They performed worst when operating indlvldu­ . acknowledges that in dealing with foreign cultures it may be necessary to talk of reconciliation whereby the parties involved recognize each other's needs while maintaining their own values. this process may. both from the group and from the individual goal subsets. according to Trompenaars. collectivist. S0derberg and Holden 126 . The task involved such activities as writing memos evaluating plans and rating job candidates' application forms. Half of the participants from each country were given an individual goal of 20 items. as does Trompenaars.

They should. Managers who are involved in globalization may relate to this concepL much more readily than to the fixed dimensions of culture as described in Part One. etc. may take them on board. Increasing consideration is therefore being given to the notion of culture as a sharing of 'patterns of meaning and interpretation' (S0derberg and Holden. and the concepts and categories to which they are socialized. culture is the meaning which we attach to aspects of the world around us' (page 925). or by Identifiable segments of the population. 2002: 112) resulting from interaction with others. and thus that ultimately any communication and negotiation is intercultural. Earley says. 2002: 112 The consequence of this standpoint is that making a standard cultural profile is impos­ sible because it ultimately reflects only constructs based on 'the practitioners' and the researchers' own cultural thought patterns. 2006: 928). Rather than there being stable cultural communities.'. 'is not a value or set of values. is the development of theories and framework that 'link culture to action'.2 other views on values (2002). Values as culture remains what Earley calls the 'obsession' of cross-cultural research. for example. and/or negotiate a shared meaning and intc>rpretation. Value.1erberg and Holden. Earley (2006) is another scholar who sees the concept of culture as being related to the context. and transmitted from one generation to the next. be it in adapted form.Concept 6. 2002: 110).g that 'knowledge.Lruct iTSelf (page 924). their work is 'the management of multiple cultures' (S!I)(. actions.. Rather than developing even more value-basec'l dassifications on a grand scale. values and experience are trans­ ferred into multicultural domains of implementation' (page 113). At the heart of this lies the individual. He is adamant about wanting to avoid what he calls the 'cultural quagmire' of the cultural dimension construct whereby cultural values are an aggregate of individual perceptions and therefore contradict the cOll::. 1::>7 . They will see their role as more to do with ensuring that the interaction within multicultural teams is effective and reaping synergetic rewards. What is needed. cul­ tural and social experiences. 1Ut: only one den'l.' (Earley. to interaction with others. there are groups sharing such patterns who. 'Culture: Earley claims. not societies and their 'average tendencies' (the term used by Hofstede to describe the nature of cultural dimension scores). be more focllscd OIl meAning as CUllllrf.cnl allOWing meaning to be attached to the environment. percep­ tions. refer to a recent dynamic approach to the way culture is conceptualized in terms of relations between people rather than in terms of stable sets of values. The cultural identity of people is determined by the context: This relational approach to culture and to cultural complexity and the idea of cultural complexity suggest that every individual embodies a unique combination of personal. S0derberg and Holden. when interacting with others whose patterns they can identify wiLli. thereby ensuril1. he maintains. he fJwposes (more) research based on the concept of culture as a psychological construct whereby an individual is subject to a number of influences. organizations. which can be used to understand 'the linkage among cultures. structures. Rather than being a matter of dealing with cultures in isolation. Earley shows how this ties in with a definition of culture made by Rohner (1984: 119-120): The totality of equivalent and complementary learned meanings maintained by a human population.

The case given in Activity 6. including Earley himself. Which standpoint do you support? Explain why and give examples on the basis of your experience or analysis. but believes it offers a promising way to examine how individual actions are affected by culture. however. 128 .1 will demonstrate this influence. it is hoped. may well be too constrictive in nature. particularly when applied to management. however. such as keeping to deadlines.Chapter 6 Culture and styles of management After reviewing work done to establish the linkage described above. who that business culture rather than business convention has a greater influence on the way people work internationally or otherwise. The concept gives a range of eight cultural values that could affect five management skill areas. allow you to develop a clear definition of your own style of working. This chapter has shown the link between theory and practice. This reflection will. By giving the viewpoints of several writers who question the validity of such models. There are others. One final activity in Part One provides you with the opportunity to reflect on your own cultural values as well as those of others. this chapter has given its readers food for thought concerning the application of cultural values to management behaviour. follow certain professional codes of behaviour. The assumption underlying this study is that an individual's framework of cultural preferences influences the way In which their tasks are executed. Can you suggest other cultural value ranges that could be applied? Are there other management skill areas to which these values could apply? 2. There are those who think that when doing business internationally It is necessary to . Earley admits this approach needs considerable development. meeting delivery dates and obeying terms of contract. particularly since they do not take account of what may happen when (different) cultures interact. on the 'cultural intelligence' construct. The focus moves from the context of interaction (such as shared values and meanings) to the behaviour of the individual and the (meta-) cognitive processing involved. Definitions based on research in the field of culture and management have enabled a model of culture to be developed. A number of Earley's ideas are reflected in Chapter 18 where consideration is given to the notion of intercultural communicative competence. 1. This model has been applied to the world of international business and the daily tasks of a manager examined in terms of cultural values. Such cultural models. Earley (2006) points to the work done by several authors. This approach to studying cultural differences examines the extent to which individuals are able to adapt to cultural settings. Managers operating internationally therefore • need to take cultural differences into account.

in which ways do you consider these definitions to be compll:!mentary and/or opposi­ tional in nature? Further reading Earley. This article describes what the authors claim to be the three sources of cultural intelligence. (2004) 'Cultural intelligence'. he refers to Rohner's definition of culture: 'The totality of equivalent and complementary learned meanings maintained by a human population. or by identifiable segments of the population. Hall. F. Maine: Intercultural. 82 (October): 139-146.T. (1991) Cu/turf'~ and Organizations: Suftware o(the Mind. M.ontext7 4.L. 37: 922-931. (2008) Outliers: The Story of Success. You have seen how culture can affect management. either in their personal or professional lives. (1995) Managing Cultural Differences: Strategies for Comparative Advantage.Further reading and References 3. and Strodtbeck. and transmitted from one generation to the next: Compare this definition of culture with that made by Hofstede (Chapter 1): 'The collective programming of the mind which distinguishes the members of one human group from another'. (1961) Variations in Value Orientations. R. After giving six cultural intelligence profiles to enable readers to assess which one describes them. London: Penguin. Yarmouth. L. (1990) Understanding Cultural Differences. Oxford: Blackwell Business. E. (2006) 'Leading cultural research in the future: a matter of paradigms and taste'. E.R.C. Apart from being aware of this. It is therefore useful for many other people whose lives involve contact with foreign nationals. and Mosakowski. Journal of International Business Studies. 34: 565-581. Harvard Business Review. When doing so. The research findings help to clarify what can go on in international management. References Doing Business Internationally: The Cross-cultural Challenges (1992) Participant Workbook. and Hall. London: McGraw-HilI. The book explores the effect of culture on each business area and provides a frame­ work for considering cultural factors. ME: Intercultural Press. (1983) 'The cultural diversity of western conceptions of management'. Hall. Princeton. Administrative Science Quarterly. M. Mead. G. A. Hoecklin. Hofstede. Earley argues that culture has less to do with determining values and more to do with meanings. C. L. F. and Hall. International Studies of Management and Organization 13 (1-2): 75-96. Wokingham: Addison-Wesley. Gladwell. P. what else do you think is needed to perform success­ fully in a cross-cultural r. Earley. E. (1990) Understanding Cultural Differences. Hoecklin. the authors suggest ways in which cultural intelligence can be cultivated. Westport.T. Earley. Although this book was written primarily for business people. Kluckholn.P.C. it is oriented towards interpersonal relations with foreigners. 1?Q . G. P. NJ: Princeton Training Press. Laurent. (1994) International Management: Cross-cultural Dimensions.R. (1995) Managing Cultural Differences: Strategies for Comparative Advantage. (1989) 'Social loafing and collectivism: a comparison of the United States and the People's Republic of China'.CT: Greenwood. Wokingham: Addison-Wesley.

and Holden.S. Yoshino. MA: Harvard Business School Press. (2002) 'Rethinking cross cultural management in a globalizing business world'. S0derberg. (1984) 'Toward a conception of culture from cross-cultural psychology" Journal of Cross­ Cultural Psychology. R. M. (1993) Marketing Across Cultures. Cambridge. I 1 t tl tl rr 'p rr w n( p< to br Ij th 130 . and Rangan. 15 (2): 111-138.e. N.Y. Video Arts (1984) So You Think You Can Manage? London: Methuen. (1995) Strategic Alliances: An Entrepreneurial Approach to Globalization. 2 (1): 103-121. J. U. International Journal of Cross Cultural Management. Usunler.P.-M. Hernel Hempstead: Prentice-Hall: 103.Chapter 6 Culture and styles of management Rohner. A.

he added: 'I hope you enjoyed your lelicious lunch with my beloved sons. 'Please call me Hashem. would be unable to attend the neqotiatinns. 'Thank you for your warm reception. I said. welcome to Lebanon. An own goal The taxi arrived at the impressive mansion in Faqra and I made my way through the blistering sun towards the entrance. An elaborate clock chimed twelve. 'Mr.Read the case study below. A peek at my watch revealed it was 11. Before approaching me he first kissed both men and had a brief conversation with the woman. which I had refused out of politeness.30. but I ate on the plane. He called his two sons over while his wife quietly 'aded for the door. Charlotte: 'Mr. Shall Ie come to terms as quickly as possible so we can finalize this matter in the best interest of both parties?' 'Shouf Wilhelm: he retorted. In front of Haider's door I cleared my throat. By 12. as well as lr his home country. but agreed to talk. 'Ahlwn Wilhelm. It concerns a football agent's attempt to make a deal for his client. He had faxed me a contract. Haider: I replied. Haider. Alain and Elie. 131 . tightened my tie.15 my patience had started to desert me. and I was determined to get a better deal for my client. answer the questions that follow. I'd arrived just in time. Please make yourself at home while you're waiting: A servant led me to a large room where there were two men and. but there was still no sign of him. despite the flight delays at Frankfurt and the queues at Beirut airport.30. Mr. But why the rush? We have the time for business ntil the sun walks out on us! When will your client arrive?' I told him that my client. Haider if he had already broken his promise beforehand? Eventually. I am delighted to meet you'. I sat down in a chair and waited for Mr. By now the other three were thoroughly enjoying their lunch. 'Ahlan Wilhelm. Haider. I had prepared myself well for this moment. Denmark. As she passed by I respectfully looked her in the eye and wished her a pleasant day. Looking at the table. Haider's room. I gave him w firm handshake and seated myself. and of course with my habibi. Haider seemed disgruntled. When you have read it. the terms of which were ridiculously low. How could I trust Mr.' he said. : (I tlesltated: how )uld I GIll him by his first Ilallle and show my total respect?) 'It's usual for a player to leave such dealings his agent: Mr. rather too exuberantly. My client is extremely lleased about your interest and he is looking forward to playing for such an illustrious club as AI Ansar. based on the experiences of Larry Zeenny In the Lebanon. in the far corner. I was met by two servants and directed to Mr. a beautiful oriental woman. To keep my nerves steady I had only accepted a glass of arak. at 12.. Haider entered the room. He looked extremely relaxed in his traditional dress and I jumped up to greet him. gathered all my courage and entered the room. a goalkeeper who had played for German. 'The thing Is . 'I just have to say goodbye to my important visitors. I was going to be too late for my next meeting. welcome my friend: said Haider. Italian and British teams.

space. 132 . but I couldn't really understand why. quite disconcertingly. Over a period of two years. How can Wilhelm best prepare for any future negotiations in the Middle East on behalf of his football clients? I I The role of the manager Andre Laurent (1983) carried out investigations into the attitudes of managers in several countries towards their organization. Haider refused to provide me with a bank guarantee with respect to my client's salary and signing-on fee. Germany and Great Britain. one being a US-based chemical firm with subsidiaries in France. Mr.Chapter 6 Culture and styles of management The bargaining process began and. Questions 1. questions were put to experienced international managers attending executive programmes at an international business school. competitiveness. Halder. What do you think has caused the so-called stalemate? Refer to the cultural values outlined in this chapter that have had an impact on the way the agent handled his encounter with Mr. the results from the first multinational surveyed showed respondents' concepts to be even more entrenched. But for me they were the problem. How would you define the problem from your perspective? 3. the results showed a surprising stability. In fact. A series of studies he made concerning national differences in concepts of management produced interesting results. After an hour we had reached an impasse. communication. issues relating to: time focus.eted ~nlung liIuch younger and less experienced MBA students and. Moreover. and structure 4. How do you think Wilhelm can rescue the deal? 5. activity. since they would not be a problem as far as he was concerned. Was he hoping to get the upper hand through force of numbers? Could I trust his sons to honour the confidentiality aspect the negotiation? I was concerned details would leak out to the predators from the international press. Mr. and later in amended form to another multinational. The findings showed clear differences between countries with regard to the perception of organizations as political systems. he insisted. These could be discussed the next day. in two multi­ national companies. The study was rcplir. in particular. What is the significance of the title of this case? 2. Mention. Mr. And that was why we had reached a stalemate. The results from the replications were essentially the same as those from the first survey among executive programme participants. Haider persistently refused to go into financial matters. Haider's sons joined in. Although It might have been expected for those working in multinationals to have undergone some kind of homogenizing effect in terms of managerial concepts. role-formalization systems and hierarchical relationship systems. authority systems.

p.3 Should a manager have precise answers? Source: Based on figures given in Laurent ( echoed in the results of the GLOBE project's survey among company employees working in their own society. Questions 1. One of the questions which Laurent used in his surveys is given below. 46 Italy Indonesia 11-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _--1173 f:' ==============::::::J166 ! ! 53 ~M. Respondents were asked to react to the following statement: 'It is important for a manager to have at hand precise answers to most of the questions that his subordinates may raise about their work: Examine the results and answer the questions below Figure 6.Concept 6...that the management process in the ten countries surveyed is as much culture­ bound as their cooking . employees do not leave their national culture behind at the company entrance.3. How would you describe the research method Laurent used? 133 . Germans and Japanese towards the role of the mannger in an organization? 2.---1 10 20 30 40 50 60 70 Percentage agreeing with statement 90 Figure 6. I~ 4. Using the percentaqes given In the above figure.. As Laurent explains.... how would you characterize the attItudes of Swedes.1 Management tasks and cultural values Laurent's conclusion . Sweden Netherlands USA Denmark United Kingdom Switzerland Belgium Garmany France 10 17 18 23 27 38 __ ---144 . 86)..! I Japan o I ~~. The national culture remains dominant within the organization.. 80 .

1: A model of culture. Step two: Cross-cultural understanding: understanding the culture of others. Acquiring knowledge and understanding of the national culture and the business culture of the society or country in question is a requirement. The assignment involves: Making a cultural profile of yourself (step one as described above) and a profile of another culture (as described in step two).1). Figure 6. particularly cultural analysis skills which will enable them to operate effectively in a variety of cultural contexts. Adapt business skills to work across different cultures. as is insight into its preferences in terms of the cultural variables given in 'A model of culture' (Figure 6. 134 . Part One has also shown how close the relations are between culture and management. To facilitate this task. ( Step three: Adapting your professional skills to the culture and working style of the society or country in question. There are three steps in developing cross-cultural effectiveness (Doing Business Internationally. However. International managers also need to develop personal capabilities. Account needs to be taken of both the preferences within each cultural variable and the effect of these variables on working styles. Self-awareness: gaining in&iy/Il into VOur own f:ulture. strategies need to be established to enable a manager to succeed in the country in question. IL i::. It is not enough to learn the different styles of doing business Inherent to certain culture(s). Furthermore. you will be able to: Analyse the effect of cultural variables in business and management practices. necessary to analyse yourself. 1992: 2. : ii i 11 After completing this activity.32): ( Step on$. to discover your own style with respect to the eight cultural variables In Chapter 6. your instructor can download a Microsoft Excel file entitled 'Cultural Profile' from the website dedicated to this book.Developing cross-cultural effectiveness The concepts presented In Part One have allowed a framework of reflection and knowledge to be developed about national cultures and businesses cultures. Such insights are essential for working and succeeding In an environment different to one's own.

1). This model.1 Make your own profile Parameter Time focus Time orientation Space Power Structure Competition CommunIcation Action Value=l monochronic past private equality Individualism co-operatIve low-context being Value=5 polychronic future public hierarchy collectivism competitive high-context doing Your score (from 1 to 5) These values can be plotted on a 'step-one profile' diagram (Figure A1. This model was originally presented in Chapter 6 (Figure 6. step one: self-awareness The first step is to identify your own cultural values by making your own cultural profile: 1.1 against each parameter that reflects your own value on a range of 1 to 5.1. Table A1.1 A model of culture 2. You are required to enter a score in Table A1.1 (Chapter 6). Refer to 'A model of culture' given below (Figure Att1). L I ActIon Doingl Being Competition Competitive! Co-operative Figure At1.2 by giving d st:Ore for the eight cultural parameters. if necessary. ® f. Make your own cultural profile in Figure A1.1. Time focus Monochronic/ Polychronic Time orientation Present/ Past/ Future Power Hlerarchy/ Equality Communication High-context/ Low-context . Making an analysis of the main differences in cultural values and the way they change management roles.1 will be used to establish a cultural profile. Determining the management strategies needed to make a success of your job in the country chosen. together with the eight parameters shown in Concept 6. Re-read.Part One Final activity At1 ~ Making a comparison of the differences between your own culture and another culture. the definitions of the cultural parameters in Concept 6.2).1.1. 135 . 3.---------.

2.*-+-+-4--l. If necessary.3. . Table A'1.1. See below the examples of cultural profiles in Table A1.1.-} Public Collectivism Figure A1. monochronic past private equality Individualism co-operative low'context being " Value =5 " ' Your score other score pofychronic future public hierarchy collectivism competitive high-context doing 1 3 5 3 I 1 2 4 5 4 J I 1 5 1 4 1 I I 5 2 I I Action a e b s 136 .2).1.2 Example: Your cultural profile score and that of chosen country PlIrllmeter Time focus Time orientation Space Power Structure Competition Communication i . Choose another country where you know some of its inhabitants..2 Step one profile Step tWO: cross-cultural understanding The second step is to analyse the preferences of the culture in which you are going to do business. collect further relevant documentation on this country.Part One Final activity Al.. .1.1. How do you perceive the culture of this country? 1.2 and Figure A1.. and/or re-read Chapter 3 and Chapter 4.Va)ue=l :'.1 Polychronic High-context r--+--+-+-+6.. Make up the cultural profile of the country you have chosen in a similar way as your own by giving a score for the eight cultur1'l1 f1ilrilmeters in the same cultural profile document (rigure A1.

1 Polychronlc High-context ~~:. and accepted as a shared objective by all involved. staffing. directing and controlling (Table A1.1. 'fanning Differences in cultural values regarding management tasks ~p. 1. Compare your own cultural profile with the profile of the culture that you are going to work with: ~.1. read the example below.3). Look.!lt ttlP eight tables in tile concept 6.1 'Management tasks and cultural values' in Chapter 6.mese cUstomel relationships are based on trust and long-term perspectives. 137 . This text explains differences between the Netherlands md Japan in terms of cultural values regarding management tasks (1) and the strategies needed (2) for the aunching of a new product. Make an analysis of the impact of the main differences in the eight cultural values between you and the country chosen on five management tasks: planning.t:±7\'~:7t-t-t~-)Public I- Fi9ur~ Own Other I Collectivism Al. national and professional cultural differences in Table A1.3 Step two profile: own and chosen country 3.1. but not with too many detailed instrudlons. 2. What are the differences and the similarities in which parameters? What. think about how you can adapt to operate in the business environment of tl1e chosen country taking into account individual. On the other hand.1 affect the way you perceive and perform the professional and management skills required. The marketing plan needs to emphasize long-term relationship building. the goals and objectives : should be very detailed and quantifiable. in your view. are the critical issues when representatives of the two cultures profiled work together? t€ step three: adapt your professional skills Cultural preferences given in Figure AU. When the introduction of product in this market is being planned.3 given at the end of this activity. Then. 3. The planning should schedule-driven. organizing. 3efore doing Step three.Part One Final activity A1.. it is necessary to exercise patience: time is needed to build rela­ mships and this has to be taken into account when sales targets and market share objectives are being tablished.

Dc Pr I I 138 . Absence of this directive attitude or a sudden casual form of management can confuse employees. people should be hired who have the social skills required. but achievements should be rewarded with bonuses. one should have concrete ideas on what the plan has to be. Salaries can be lower than in the Netherlands (owing to differences in Japanese living standards). Directing (Leading) 1 Differences in cultural values regarding management tasks Japanese sales employees are used to strong directive control and detailed instructions on how to proceed. If an idea is put forward. people will react defensively. 2 Mar Strate I 2 Management strategies The assignment of specific customers to specific. Tasks will nevertheless need to be clearly assigned to a specific person or a team. 2 Management strategies To motivate employees. Marketing people familiar with the local market can avoid cultural mistakes in communication about the product. Top-down planning is expected. 11· Organizing Contro 1 Differ Conflic1 has be JapanE should I i 1 Differences in cultural values regarding management tasks Once staff have been hired. a manager should show that he takes care of their interests. Mana~ Group cc achIeved sales tar Agair accordir I . step-by-step approach to planning. Training is to be initiated by the manager although the score on competitiveness would suggest differently. Since informal and casual management communication is characteristic of the Dutch. If the Dutch approach was used. reliable salespeople could be of crucial importance. so that the best possible reiaLionsl1ips can be built. Each salesperson or sales-team needs to be the right 'fit' for the customers concerned. since the Japanese are not used to participative management. However. they should be instructed carefully as to the expectations of the Dutch management. local sales and marketing people who are reliable and trustworthy need to be recruited. uncertainty and lead to undesirable behaviour. where adherence to time schedules is very important. For a product launch in Japan to be successful. the wrong ideas can end up being taken on board. Plans should be challenging to motivate sales people. As a result. the expected flexibility in an organization will therefore be lacking. It may well be accepted because the Japanese are reluctant to show their disagreement and cause possible conflict. To ensure their co-operation. . the task does not need to be specified in such great detail. and employees were allowed the room to discuss and participate in the planning. Japanese people are used to a relatively strong hierarchical structure. Part One Final activity At1 :2 2 Management strategies As manager. they need to be organized: tasks need to be allocated. Staffing 1 Differences in cultural values re<. he needs to apply a system of seniority that employees will accept.lardln9 management tasks Bearing in mind the above-mentioned emphasis on building long-term relationships..---' . In contrast to the focused. The initiative clearly has to come from the manager. Procedures and protocols will need to be followed if goals are to be achieved in the long run. If there is any ambiguity. Relationships rather than detailed plans are more important for selling the product. cause. geographical areas assigned and a reporting structure put in place. the Japanese would set very conservative goals· to avoid risk.

Controlling 1 Differences in cultural values regarding management tasks Conflicts must be resolved before work can progress. the feedback given should be carefully communicated. Table A1. for example. Japanese people are used to security in their job through lifetime employment. 2.1 2 Management strategies Group coherence is very important in the Japanese culture and therefore the best results probably will be achieved if this value is applied. Controlling: Monitoring performance and giving feedback on aChievements Reference DOing BUSiness Internatlonallv: The cross·cultural challenges (1992) Participant WorkbooK. ManaQement $trategles 1.3 Cultural differences summary Management tasks 1. 2. Again. Planning: Defining goals and objectives ". preferably in an indirect way.1. 139 .Part One Final activity A1. 2 Management strategies Strategies should involve building good relationships with employees. by making the group responsible for meeting sales targets. 1. 2. 1. 1. Organizing: Defining tasks and relationship structures 2. That means that. This can be done. time based management is expected and therefore the Dutch manager should adapt his directives accordingly. Princeton: Princeton Tldilling Pross.~ . Differences In cultural management tasks val~les regarding . whenever a deviation to the plan has been observed. ' 2• I. . Any corrective measures should therefore be carefully considered. Staffing: Acquiring appropriate human resources Directing (leading): Leading the employees towards the goals of the organization 2.

Question 1.R. R~ad section 5 and compare Once you have done this. French and British . your conclusions with theirs.the German. would lead lo a framework that could be used when examining other companies operatlny internationally. Nyenrode University Press 1. Read first of all the sections 1-4 of the paper In which the researchers give their findings.the aim of the investigation was to gain insight into how three dominant members of the present-day European Union . Seifert Working paper. answer the general questions at the end of the case study.-J. sensitive questioning. Browaeys. It could be used as a framework for readers who Intend to study the relations between employees from different cultural backgrounds who are working in one company. INTRODUCTION In the light of continuing European integration . Finally. 'British' or 'German' and more 'European'? b) The conClusions drawn by the researchers are given in section 5. R.a case study An empirical study of cross-cultural relations between french. and had been doing so since the company came into being. become less 'French'. Understand how essentially qualitative data can be interpreted in a reflective manner by a team of inter­ viewers from different cultures who have themselves undergone considerable international exposure. J. Have they.economic and otherwise . YOUR ASSIGNMENT The research paper below investigates how representatives of three European cultures cope with each other's cultural differences when they are working together. outlined below. Learning outcomes After reading this case and answering the questions you will: Ii} Gain insight into how cultural sensitivity can be assessed through careful. The starting-point W<lS one comp<lny in which the three cultures mentioned were working together. Then: a) Draw any general conclusions you have about the Interviewees. 140 .This final activity is based on a case study that takes a practical and relevant approach to the investiga­ tion of cultural relations. It was hoped that the results of the invesLigdUons.cope with each other's cultural differences when working together. Galderma . $ } . for example. answer the questions which follows Section S. German and British managers in an international company By M.L Price and C.

These comments applied to situations where the code of communication was English or French.2. arranged in terms of the particular cultural aspects touched upon. GALDERMA INTERNATIONAL Galderma International is the first co-operative venture between L'Oreal and Nestle. with one exception. During this stage of the research. The comments ranged from 'their soft expression' through 'they don't always say what they mean' to 'you have to decode what they say'. They had all workp. in Germany. althouqh a number of basic Questions were r. to be less direct in communication with them than they would wish. it is an international company selling skin preparations and products to dermatologists on the world market. the interaction of the differing perceptions relating to the researchers' cultural backgrounds acted as a control on the subjectivity of the final analysis. as is the laboratory. they were asked to give their perceptions of the two other cultures involved in the research and to give their own perceptions of their own cultures In the eyes of the other cultures. The company's initial range of products consisted of those produced by Alcon. the Chief executive (president-directeur general) of the company was interviewed. the interviewee felt obliged to be very careful in finding a form that would not cause the British to feel too offended. INTERVIEW METHOD The interviews revolved around open"ended questions about how the managers in question intcn:lcted with managers from other nations within their specific working environment. Their background All the managers interviewed had undergone a university education in science and/or management studies. a) The French view of the British All the French managers interviewed in the company commented on how the British communicate. All had English as their native or second tongue. with corporate services in Paris. One particular comment reflects the tenor of others given: 'They tend to bring considerable nuance to their expression.1. In particular.dY that It was sometimes necessary to treat the British in a gingerly fashion. In Nice. In total. In Paris. 4. with minimum Influence from the interviewers as to the nature of the answers Qiven. The responses were then considered. The interviewees were not asked a standard list of questions. the director and product portfOlio manager. Nestle's us subsidiary. The interviews were carried out in the interviewee's native tongue ill £uch a way that the experiences ot the subjects were drawn upon to a maximum. 4. Galderma employs 2. all those people in managerial positions were interviewed. thirteen managers were interviewed.300 people in 33 fully owned subsidiaries worldwide. started in 1981. The majority of them had worked In two foreign countries. Among lts European subsidiaries are those in France. part or all of which had been taken abroad. and at the German subsidiary. one in Europe. Galderma's parent company is in Switzerland. and those developed by 1:0real. as well as all members of the board of management. at the R&D Centre at the technology park of Sophia Antipolis near Nice in southern France. As well as having research and development centres in France. 3. 141 . The interviews carried out by the researchers (who each represented one of the three cultures under investigation) took place at the Paris headquarters. Olll:! tJr which was the us.omposed beforehand to serve as a framework for each interview.Part One Final activity A1.. Some remarks focused specifically on the communicative behaviour of the British when operating in English. If criticism had to be given or disagreement expressed. The management of the holding company is staffed by several nationalities. reflected upon and analysed by the interviewers. each of whom represented one of the three cultures in question. the US and Japan. which frequently begs the question: "What are you trying Lo say exactly?'" Thi~ behnvlour led one of the F'reneli iliterviewees t'u . Germany and the UK. THE MANAGERS IN QUESTION 4. Their perception of other cultures During the interviews the various nationalities present In the managers' working environment came up for discussion.fl outside their home country before coming to work at Galderma. Galderma produces products at its plants in France and Canada.2 2. The comments that the interviewees made are given below. to use kid gloves.

to be regarded as important within the company. were not used to dealing with women who occupied a similar position to themselves in the hierarchy. Several interviewees described the behaviour of the British in the company as fanfaron.!i c.on the left-hand side of the road! bJ The DriUsh view o( ("he' FrP. This was something they tended to do in the company of other Anglo-Saxons when drinking in a local bar after finishing work. One interviewee talked of their wish to 'recreate the world'. A number of informants referred to their experiences with bureaucracy elsewhere in the world and conceded that the problems they had undergone or were undergoing in France caused no particular irritations.rIr. occasional miscommunication and misunderstanding. Another interviewee went further by saying that the British were known to have gone back on decisions they made or supported earlier. when it was more convenient for them to go into Eng­ lish if they wished to communicate effectively. Although both considered themselves proficient in the French language. h( a~ in Fr hi h. another of their individualistic nature. 01 b( er ri al rr U o' rr f( rf tt t( n G h ir n p g s f{ 142 . and have even greater problems with womE'n who are above them. they admitted. 'and this is something which the British are good at doing: The same two informants talked about dealing with the French at meetings. but essentially wished they would talk less and work more. Comments made by three interviewees on the British attitude to work shed further light on the question of the general effectiveness of the British in the company. and uses French nationals to carry them out. The headquarters of GaldE'rmi'l AS well as the laboratory are Situated in France. Deep in the collective unconsciousness of the French.2 Another interviewee concluded that there was a general lack of understanding between the two nations. One said bluntly: 'They don't work'. the tendency to fantasize about how the department/company/country/world would be like if they had total control. the next they were calm. One interviewee summed up his experiences with the British by saying that they were not international. The Brits. He attributed this to the fact that. i. who said he made a pOint of speaking In French at ail times. they admitted. one Informant talked of the 'bloody"mindedness' of the French. and both are subject to Frem:h law.e.the British being 'wishy-washy'. 'rapprochement' and other diplomatic manoeuvres. Another talked of a lack of courage in seeing matters through. unlike the British. either because they did not know what they really wanted. they lack effectiveness when carrying them out./) A common thread in all the comments 9iven by the British interlocutors was the bureaucratic administration of the French.ontact with the bureaucrats themselves. All three were positive about the essential friendliness of their British colleagues. and something the French colleagues could neither use nor appreCiate. This 'roller-coaster' of er ail 'T it s~ 01 st Fr to c) N. He talked of a lack of rigueur . This view was contested by another Informant who maintained that if the Brits made a 'gentleman's agreement'. For one informant. he devises strategies to outsmi'lrt his adversaries. I he crlticlsm$ relate to thE' hurp. A further informant. they maintained. but rather members of an exotic island race that just went Its own way . the French did not have sport as part of their school curriculum. he said. 'Sport encourages team-play.Part One Final activity A1. Another aspect concerning working with collea9ues is highlighted by two comments on the difficulty the British have in deallng with female colleagues. One person talked of how her English colleague preferred to delegate implementation of a policy if it was likely to meet resistance among members of the department. there were times. As for their general effectiveness in the company's operations.' he added. another: 'They stop work at 4pm' (the French tendency being to work until 6-7pm). The result was. This often put the French c':lt a considerable disadvantage: the subtlety of the English language was something only native speakers of English could use. The former explained that this had to do with excelling within a very rigid hierarchical system.i'llJcratic: nature of public employees in civil administration and the health sector in particular. although they may be effective in helping to determine policies. Most Interviewees commented on the need for the British to make their presence felt. the battle with French bureaucracy is the focus of his activities with the company. Several informants made the pOint that. there was an incomprehension of the British that has to do with the feeling that they still remain the traditional enemy of the French. although he is rarely In face-to-rc(. which implies that they display a certain boastfulness when talk­ ing of their role in the company. In relation to the above.' was one typical comment. despite 'ententes cordiales'. found that the French could display strong emotions at such meetings: one moment they were 'up in the air'. the latter explained that working together with others was not a particular strength of the French. they always stuck to It. the general impression drawn from the interviews was not positive. or because they were afraid to commit themselves to an action or decision that might later rebound on them. InstcLld. 'They enjoy a position of power and enjoy reminding others of the power they possess. another said they were not travail/eur.

he said. preferring Instead to talk In terms of personalities. one based on the stereotype Image of the Germans. Moving on. BS it was €:allprl. rnnlr cI.led strongly with what the same infornldllt ldlleu till:' French pre­ ference for 'bold strokes'. One particular feature of the Germans that received some attention in the interviews was their very careful approach to business.:. 'their monolithic presence'. careful both in the sense of being very precise and accurate. While they expressed their opinions/feelings In no uncertain terms. thus ImJ'llying that tile Germans were prepared for the worst by presenting such m0gest sales forecasts. The eXPectation on the French side is therefore that the channel of communication be carefully prepared. although a further round involving non­ French employees had caused hardly any reactions. d) The French view of the Germans Two contrasting views ilppeared to predominate In the wrnpany. One manager commented on the tone of voice used by the Germans as being sometimes unpleasant. She referred In particular to requests which a German manager makes in French on the phone. even if they are rather direct'. This is based on comments such as 'they may be somewhat rule-bound. adding that he felt the British thought he was being much too outspoken. 'their Imperious nature'. however. did make remarks concerning the French view of the British.I tend to stay up in the air for the rest of the meeting.they prefer the concrete to the 'airy-fairy'. He meant essentially French classic literature and referred specifically to Voltaire. c) How the British thin/( the French see them . expressed and implied. One manager added that they were protectionist about their. whr. Their reservations were clearly expressed in the low sales forecast for this product they sent to headquarters. He said the subsidiary had been told to sell this product. The stereotype image is reflected in comments such as 'their authoritarian character'. reluctant to take risks. particularly with the more direct modal forms being used. 'There are no French: he maintained.a recent round of staff cuts involving French employees had provoked considerable local publicity. One interviewee gave a concrete example of this behaviour in relation to the sales forecasts of the German subsidiary for one particular product. When this happens the French sometimes find it difficult to deal with me: Another Interviewee would not be drawn Into defining what was typically French in the behaviour of his colleagues. so the British see the French as being nationalistic. One manager.'they need to justify their culture'. 'My contacts with the Germans may not have been very warm. These tended to sound more like orders. although the Germans had doubts about its potential success as a result of their own marketing research. the other on tile presence of one German manager who was seen as the very opposite. Just as the French see the British as being imperious in nature. They considered French a much more suitable language for discussing more abstract matters than English. he said somewhilt scornfully. Several other managers talked admiringly about the German 'Grl. however. This sort of behaviour naturally put the Germans in a· 'lood lil)ht.'a certain envy' was how he put it. the imperative nature of the request Is all the stronger. was the fact that the German subsidiary ran out of stock after a while.2 emotions was something he found difficult to deal with: 'When r explode . The down­ side.n thl-' pslimated Ilnd ac[udl ~alcs were compared at l.eadquarlt=1 s. 'their rigidity'. and could not meet demand. 'their pride in themselves'. This e~sential prudence. 'When actual sales turned out to be ten times the number forecast: he added. He acknowledged. he talked of certain prejudices the British have towards the French . but at least they are easier to understand (than the British)'.Part One Final activity A1. that to become partially integrated into French society it was essential to have some knowledge of French culture. but at the same 143 . he tended to hold himself back. there was a general feeling. 'the Germans were delighted and proud to have achieved such wonderful sales figures!' The interviewee in question called such conservative forecasting 'sandbagging'. Another manager added that the French encourage the non-French to take an active interest in their culture and language . As for the French. Despite these remarks. that working with the Germans was not too unpleasant an experience.indlichkeit'.which isn't very often . Racine and La Fontaine. particularly of the lifestyle they lead. one informant talked of the British reaction in the UK to his critical comments about the role of Britain in the EU. If not. presence in this international company. A third manager thought his French colleagues found him rather phlegmatic. as well as in the sense of being conservative. The French. tend to think of the British as being rather pragmatic in their ideas . 'You can count on them. 'They were scandalized by my open criticism: he said. This point was pursued by another informant who said that the French found it difficult to talk in English with the British about 'concepts'. but at least they get things done: Several respondents raised the matter of lack of warmth In day-to-day contact. The same respondent said this would be bearable were it not for the lack of 'chit-chat' preceding the request. however.and vice versa Not all respondents were able to deal with this area.

to ur fe rl I . it's only a question of personality. 'are more concerned with ideas than with detail. on the basis of experiences with the British subsidiary. perhaps. In line with the French observdliuns made earlier. They were seen as great fun to be with . although the fact that life is family-oriented makes It difficult to integrate. inflexible] image is not a true one'. the other said that Y was pursuing with some success an 'affiliatory style of management'.the lack of punctuality was appealing to one.' Such comments are not necessarily a denial of the culture In question. but one that counters the comments of a number of those interviewed. This is an obvious conclusion. They were masters of communication in their own tongue. 6. when talking about his German colleague said: 'X is the exception to the rule' ­ and went on to give the stereotype image of the Germans as portrayed by John Cleese. it was not always possible to rely on them. he remarked. another (French) interviewee stated: 'There are no French'. As said earlier. One manager said that this view of the Germans predominated and that the Germans were aware of this. the need to 'argue till the cows come home before you can convince them'. One manager. X is still perceived as being Germanic In character. hE> doesn't know whilt to do'. Other descriptions of the typical German were: 'the regimented. two managers talked of the immense effort made by the Germans to Integrate. so It was occasionally necessary to read between the lines to get at what they were really thinking. even flourish. to see how they used their language to such great effect.n ! I i:1 I iJj I " II Part One Final activity A1.' q) The Germlii{/ view M the British One interviewee expressed exas!)eratlon with the British. have a certain disdain for detail .' Related to this was the following comment: 'The French are very good at defining goals. a wish to show that the Interviewee Is able to exist.2 time remarked upon the disadvantages this brings: 'stick-in-the-mud attitudes'. Hitleresque figures. One German commented on the influential role of the French Grandes Ecoles and the preponderance of their graduates in top management not so much on the basis of merit. 'the worker who goes by the book . their skill in English was frequently used to conceal their real thoughts. one German member of the management team was considered to be different. One gut reaction made to the questiun concerning Germans and their colleagues In general was: 'The French do not . 'The French: one interviewee remarked.1 11 5 AI th se an Th i observations are worth noting. but more. The cultures remain The responses to the questions and reflections upon them lead to a conclusion that. thus an anti-authoritarian figure.' Favourable comments were expressed by three interViewees about the French lifestyle. per tilt hal vie 5. Moreover. The managers there. the following ". authurltarlan. we believe. 144 . Inflexible type'. They are not particularly thorough. in this area were Ilmited and further Interviews need to be made. Promises were therefore not always kept. whatever Insights they have dis­ played concerning themselves and their international colleagues.1. He was regarded several French interviewees as 'soft'. a 'reluctance to take our [French] creativity seriously'. . In another culture and is not being dragged down by the ballast of his/her own culture. more of an irritation to another. the interviewees remain essentially French. the British comedy actor who has portrayed the GermAns as goose-stepping. a third remarked: 'There are no differences between cultures. e) The German view of the French The comments recorded.their social Hfestyle and sense of humour being very enjoyable.If it's not In there. A very difficult task. were extremely co-operative and 'promised you heaven'. f) The British view of the Germans The views expressed by the French on the contrasting German images were frequently reflected In the observations made by the British managers. As a result 'they work twice as hard to prove that this [authoritarian. Nevertheless. Qt fir a) b) c) 6. The less disciplined ways of the French were also commented on .and this can be somewhat vexing for someone who is concerned with getting things right. One said that despite all these efforts. German and British.1 As by 1(1 like the Germans. One proclaimed: 'I'm a European'. a 'Green' who was ecologically aware. On the other hand. more as a result of their simply being graduates of these schools. but the realization of these promises depended on others who lacked the same commitment. PERCEPTIONS OF THE MANAGERS: SOME CONCLUSIONS 5. but are not particularly concerned as to how the goal should be reached. and it was fascinating.

.. it was decided. of the paper.e. implicit In the way they describe the other culture with which they are working. Graphical representation of interview results As stated earlier. the responses given to the questions. ~ Interviewees' scores plotted 145 . to what extent Is the interviewee aware of the cultural background of the colleagues with whom (s)he is dealing? to what extent Is the interviewee aware of his/her own cultural background? Question 2.1). it was fell.2 of this paper.. This stage involved returning to the raw material of the Interviews. the "iiW material' of the interview" i. 3 4 5 High Other culture (score) ::: . each interviewer allotted a score ranging from 1 (low) to 5 (high) to the person~ interviewed. 'Germanness' and 'Britishness' remain... b) What is your opinion of cultural categorizations generally? Refer to the concepts in Chapter 2 and Chapter 5.Part One Final activity Al.1. it does not make clear to what extent the degree of cultural sensitivity varies from one respondent to another. c) Compare your response with that of the researchers as given In section 7. i. were living in other cultures and taking on board many of that culture's ways. Once the interviewers had deliberated with each other over the individual scores they had allotted. reflecting on it carefully as individual interviewers and as a group of interviewers and assessing as carefully as possible the cultural sensitivity of each person interviewed. Here the researchers have categorized their findings from the Interviews carried out. . High 5 4 A 31- G Own culture (score) B 2fQ N C H M P KL DE J Low 0 I 0 Low 2 ~. On the basis of their individual reflections.2. even though the Interviewees had been exposed to other cultures. 5. 6.. The questions which. German or British. Many informants may be unable to say explicitly what it is to be French..e. Cultural sensitivity Although the previous section presented the comments in such a way as to highlight some of the common threads woven through the individual comments on the cultures In question. of two numbers: the first represented the degr ee of perception which. the Interviewers should ask themselves were the following: " (l.1. were reflected upon by the three interviewers.2.. a median score was awarded to each inter­ viewee and plotted (Figure A1.---~~----=~~. the second number reflected the uegree of perception that the interviewee was judged to have reached vis a vis other cultures.2 Nevertheless the 'Frenchness'.. to describe features of their cultural Identity. each Interviewee had Acquired concerning his/her own culture. Now read sections 6 and 7. This was therefore another stage to the analysis. The score cOllslsted.. a) Give your opinion of the validity and usefulness of the categorization in this case. These features are..."-. A CATEGORIZATION OF THE INTERVIEWEES AT GALDERMA 6.-"""-~ . however.

The scores allotted to the majority of their managers at Galderma tend to be clustered around the centre of the figure. In quadrant 4. High 5 4 2 B 4 A 3 G Own culture (scOre) 2 Q N C H P Iv1 1 J Low KL 3 DE 0 o Low 2 3 4 5 Other culture (score) High Figure A1. Just like the interviewees in quadrant 3. They talk at length about other cultures and display a high degree of perception.2. hnwp. the degree of perception is generally lower.r. they are able to talk at length about other cultures. citing many examples.vp. in our judgement. but his remarks are bilsed more on int'uition rather than reflection. where a high degree of perception of one's own culture and a low degree of perception of other cultures Is marked. This subject is. clearly set apart from the others. They Qxplain how necessury it Is to udapt one'5 munner of communication to that of the host country. but do so in an implicit manner by Indicating ways In which another culture differs from their own. Initial observations on the graph The graph shows that the majority of the interviewees have. He is very descriptive and categorical in his judgement. however.3. They also attempt now and again to give explanations for the cultural attitudes that they have described. the two interviewees plotted . 146 . He does show a certain interest in his culture.2 Shared characteristics of interviewees The interviewees to be found in each quadrant can be said to share certain chartlcteristics with regard to their cultural awareness. but became aware of the inter­ cultural phenomenon only as the interview progressed.2 6. Those in quadrant 1. a rather high score when it comes to their perception of other cultures. frequently using detailed examples drawn from their own experiences to support their analysis. interviewees such as M are able to analyse their own culture. B. but does not muke any attempt to analyse It.2. such as interviewee J.2. Categorization of the scores The field on which the scores are plotted can be divided up into quadrants (Figure A1.2). When it comes to their own culture. He deals with his own culture in terms of opinions and observations.A and G . is scarcely occupied. The top left of the graph. however.a Part One Final activity A1.are both able to make a critical analysis of companies which are representative of their own culture. They gn furthpr. In quadrant 3. Quadrant 2 has not yet been referred to since only one interviewee has been plotted there. hy r:h1'lrnctpri7lng the cultures in terms of their professional activities and by explainIng why they prefer to work with one culture rather than another. 6. show great Interest 111 the question topics. He knows the other cultures which he presents in terms of cliches and idees re~ues.

THE FOUR CATEGORIES 7. Interaction with other cultures is perceived by their standpoint only. the culture in question. This can serve as a frame­ work for further study of managers working in international companies.. behaviour . Their comments are perceptive and non-judgemental. 1hls tl'lerelore imp lip. Category 4 These people adapt consciously to the other culture(s) while reflecting critically on the culture(s). Category 2 People who have some knowledge of their own culture. but who have little or no awareness of the other culture(s) in question. we would expect to come across many more repre­ sentatives of this category in other companies.2. This is not surprising bearing in mind that we were dealing with a collection of managers who had all had experience of living and working abroad. This category accounts for those who display a minimal degree of cross-cultural awareness. InsteaC'l. Although only one respondent is clearly placed in this category. the person is attempting to account for what (s}lle may consider to be i:lbnormal behaviour in terms of the other's cultural ba~kground. have not perceived how the other cultures perceive them.1. A person belonging to this category is usually able to make general comments about his/her own culture and can refer Lo what (s)he considers to be typical features of Lhe behaviour displayed. On the other hand (s)he is also attempting to consider why (s)he conSiders thi. German or British is all about. This implies relating such behaviour to what may be 'normal' for. They tend to be judgemental when there are cross-cultural differences. they have not gained inSight Into their own cultural background. behaviour that corresponds :0 hiS/her cultural norm. A person in this category has reflected on both his/her own culture and the culture(s) encountered. The people in question here have clearly gained insight into the cultural background of the people with whom they are working. 147 . Such people have never con­ sidered what It is to be a member of a culture. category I People who have given little or no reflection to their own culture and therefore have minimal knowledge or aware­ ness of It. expect to find many more representatives of this category in national companies with International ambitions. no account is taken of the other culture's perception of themselves and the reasons for this.1tmorm. it is possible to come to a concise definition of each of these four categories. Ci. Definitions and comments The four categories defined below correspond to the four quadrants on the graph in Figure A1. They can function effectively in the other culture(s) while reflecting critically on their own.1 dllYWClY. We encountered few representatives of this category during our interviews. are unable to describe what being French.lture(.<'Iling with someone from i:l different cultural background.). I.!tl?Qory 3 People who are trying to adapt fully to the other culture. The question of cultural differences has not occurred to them. The fact that their culture may be different from others is not something they have ever had to deal with. however. tho person in question is aware that (s)hp. is ramillar with some of the features of that baCkground. When it comes to working with representatives of the culture(s) in question. As for the other n. according to the quadrants in which they have been plotted.e.2. 7.2 After further reflection concerning the responses of these interviewees. that thp per~\'!n b II ylng to elicit what (~)Ile cOnsidf'rs to be 'normal' behaviour. the person tends to 11'ldk~ Judgemental remarks <'Ind oplnion<llted comments on the other culture(s) without showing understanding of them. A degree of awareness has been reached which enables questions to be asked such as: 'Why Is X reacting that way?' 'Why is X causing me to react in this way?' On the one hand. However. but do not reflect on their own culture while doing so. We WOUld. is dp. the person is not aware of the Influence that ills/her cultural background has on th"ir working together.Part One Final activity A1. They have adapted to their working environment.

one which involves posing questions about one's own culture as well as about the other(s).2. People are forever attempting to characteriZe facets of human behaviour. of course. as both Interviewee and Interviewer. trying them out. General questions Que&tlon 3. coming up with hypothetical answers to these questions. d) Discuss the results of the interview and the questioning strategy used. The authors refer to the fact that they did not a&k a standard list of questions.llly to the responses IjIlven and try to use as many follow'up questions as you can to clarify or broaden the responses given. the person can ask 'Why cannot I adapt?' This critical reflection and further experience with(in) the culture in question may lead to an enhanced understanding of the person's own culture and the other culture. In short. but the fact that they are asked shows that the person is busy reflecting on his/her situation.Part One Final activity A1. ! 7. if any. Moreover. The interviewers themselves recognize the complex nature of this process. Gaining awareness. Moreover. on the interaction with those around. b) Compare these with the onl:?S actually llsed by the researchers (provldl:?d on thp. the results of which are essentially qualitative in nature. Nevertheless. this categorization can be used as a somewhat primitive instrument with which to examine the degree of cross-cultural awareness of Individual managers as well as the composition of a management team when other companies active in international business are being investigated. referring constantly to the person's own culture and that of the other(s). a) What. during which differences are determined. instructor's website). and this could be seen as another vain attempt. This paper presents a small-scale research project. is an erratic to-and-fro between one's perception of one's own culture and the other culture. think worked well and how could the interview have been more effective? Question 4. If this is not possible. This very attitude puts that person In a position where (s)he is taking stock. coming to terms with the culture(s) in question and adapting where possible. reflected upon and In some way accounted for. one can talk of the person moving along a spiral of experiential learning.2 This does not imply that such questions can be answered. t. Some reservations The problem with such a categorization is. a) Compose a list of the framework questions you think were used. Listen I:ClI\:!fl. What do you. finding other answers if the original answers do not appear to be valid. then.omposed beforehclllU al> a framework for thl:! irllerviews. the categorization does give some Indicators of what the interviewers believe to be the degree of sensitivity attained by the subjects questioned. these categories of cultural awareness cannot adeqUately deal with the process each individual undergoes when dealing with other cultures. trying these out and so on. its seductive Simplicity. are the advantages and disadvantages of this approach in cross-cultural management research? b) What role. in your opinion. does it have to play alongside the quantitative-oriented research described In Part One? 148 . a c) Try using these questions as a basis tor a short Interview with a colleague. but used basic list of qUI:!l>tiom.

'~"'l L • J ..

were not delivering the anticipated· volume: The compa~y desperately. Mr Takahashi did his best to cenceal his anger and disappointment. preferably in the expanding Asian market. although increasing gradually. which was interested'in purchasing floor coverings.of 2S-year-old m<llt whisky and then Chanel perfume which. r !1 \1 I\ I I Why did Mr Takahashi react the way he did? . lj I ' Mr Takahashi and the perfume Lekan. witheut signing the contract.'xamiJ.of negotiators. A small case study for starters f I 1 An appropriate way of starting the f. particularly the Issue of cultural diversity.of business. 151 .veshow best to prepare for this kind of situation we need to look mUfe cl. this part aims to develop the cross­ cultural competenc~ you need for worklng'n International business. a large wholesrller specializing in interior furnishings. C:. but the present for his wife.. the (.ought aleng gifts fer Mr takahashi. Ligato.of gratitude. its export sales. Mr Roberts' present had been unintentionally insulting. He left the celebrations. the senier sales manager who had headed the Lekan team . his Japanese ceunterpart. the Influence of culture on companies operating in the global market-place. . he said. In Japan it is not done to buy perfume for a woman because it implies that she has an unpleasant odour.j!\f:>ly (ll. Mr Roberts. had br.Ll By examining the effect of culture on organizations. particu­ 'Iarly on the way they are led. Its domestic market was ~tagnant and.lation of m~nagf'rial competence within a context of cultural Jiversity is to consider the case ~fMr Takahashi and the perfume. ' . It was not the maltwhisky that upset Mr Takahashi. however. environment. needed te ~'ake a large deal. After Intensive efferts by its m~rketing department. . Mr Roberts handed ever a bottle . Had he known how the Japanese perceived such a gift. was intended for MrsTakahas~i. ~hen the deal could have been signed and sealed. This cross-cultural competence Involves being aware of: I!\' the impact of culture in the international business. Before we ask ourseJ. The two companies meton several eccasiens in Tekye and alarge:'deal was finally made. needed to boost its sales.vntcxt nf lLlltural di:'erslty and Lultural cOmpeten\=e. A dinner Was arranged te celebrate the successful cenclusion . " 11 . Lekan was eventually contacted by a Japanese company. . With heartfelt expressions .

. " will describe in detail.e chahnels of communication and human interaction IId!.global and international firm. People develop competence via a combination of knowledge and know-how."e: the tr'imsnational organization. To sum up. This means that they need to learnf about the methods and tools that will help them to optimiie their skills. . The transnational company. as longas they are able to handle it. consider Figure Ii.l based on the concept ' .tu III Soclo-:C!Jltural cOntext 1 Communication and human Interaction I I Ability to Integrate =competence Figure local l e v e l . Two The context in which a mai1ager ope''rates i' . As Concept 12. ' developed byte Boterf (1994). People from different cultures interact with each other more and more frequently.' i Acquiring transcultural competence To define a competence of this natur~ in detail.1 What Is competence? 152 .s lu [urm the desired level of competence. Bartlett and Ghoshal (1989) came up'with a model for the organiZation of the futul.the key. which combines the abilities of the multinatiol1al'. international level. This model shows Knowledge 011 une side and 'Know-how on the other. competence involves a full range of resources related to knowledge. not only on an. skllls and cognitive abilities. ' ' ' Bearhigthis continuing globalization in mind.1. It has been known for some time that the pr<?~ess of globalization is a reality for represents the territory of the' . which when 'combined through th. The ability to integrate these resources represents . In this way they can eventually adopt the most appropriate attitude in a specific cross-cultural conte?'t. This acquired complex of-skills is referred to as 'transcultural' competence.Introduction to Part. this model has both the managers at company headquarters but also those in charge of the subsidiaries' abroad being responsible for the co-ordination of units. within the whole organization. f modern m a n a g e r . The same is true of cultural diversity. ' Managers and profesSionals in such an organization perceive the cultural diversity present as an opportunity. but also nationally and' .

II I ! rj ~ J I J competence. especially since knowledge itself entails learning from experience. as well as the learning process itself. This implies that the competenc!! of a tran~national manager will involve possession not only of the knowledge or experience in the field of cross-cultural relations. but also the development of a 'memory of cases". put . Two . situation.Critical incidents are therefore particularly suitable for learning about cjlltures and. All situatiops heard. [1 ' II 153 . just as jnPart One. 1994: 24 . in'the first place.. read or studied. abilities of an individual such as "~tructuring knowledge. there is no need for a comprehensive case analysis. To return to Mr Roberts and the perfume.' the effect can then be imagined of different actions in line with one's own experience in comparable situations..aRe stu<." ' L II Introduction to Part. . For Le Boterf. we learn much more about culturally different people in the dynamiCs of their.ln all circumstances. in a context with its own partIcular dynamics whereby the interaction between the people concerned is unique.• the good manager Is not the one who' exhibits the same behaviour. is 'memory' because it provides individuals with the ability to store information. 'An effectiv~ way of learning from experience is by studying examples.A manager will draw on this memory to adopt the appropriate attitude in a given situation.ct and learn more about Japanese business Culture generally. will find a place \yithln a database. togetherin the form of . As Bosche (1993) remarked.~nce is at the heart of the complexity surrounding the ordinary and cannot only be defin~d as the capadtyto solve a problem. In the context of management. Bf'Aring this in mind. prfmary function of the case study method is to learn how to deal with complex and non-structured problems. The case study approach' is directed" at the development of cognitive. compet. it is this interaction that is the motor oflearning. will continue'to be present in the activities ot this part of the book. Le Boterf sees this competence in the following terms: ' . Integratingthls with his managerial know-how when he is interacting with his counterpart. This will eventually permit individuals to act at the right moment without thinking. Just as in medicine and in human sciences. but the one who. A special form of case study'is the 'critical incident'. After an analysis of the situation. Know-how is all about caIling 011 the right know­ ' ledge ~t the right moment to identify a problem. ) t.<nows how to modify management strate9Y accordIng to the situations encountered. This database will form the knowledge of an individual. the development of the capaCity to reason anduot the achievement of a precise solution. Mr Roberts will then modify his behaviour according to the. interaction than by learning about their cultural backgrounds. Instead. We will now outline the various components of Part Two. the. The niost important factor. hbwever. the objective of case studies is. the reader is confronted with a specific situation. " 'Le Boterf. reasoning and problem-solviJ1g. •. such as the one given at the start of this introduction. Here. ' rl 11 Learning about cultures .iies. he ~i1l make SUre that he is not confronted' with the same situation again. He will investigate why Mr Takahashi did not sign the con­ tra..

Various forms of classification are deScribed which take account business environment ~nd the national cultural setting.1ltnral variables thatmay be contin~ellt on leade~ship effectiveness. . " t 'i ! I J i1 I II tl J Concept 8. f alliances in theg)obal m a r k e t p l a f e .constituents.2 Leadership in the international context.[ -l ! i jI .1 Pifferent conceptions of leadership. This chapter examines the'role of culture in this p r o c e s s .r 1 II i ' {l o Concept 7. .' . . ' " J. ' . ' CI Conce~t 10. .2 Strategy alliances and business cultures. The focus of this concept is corporate culture and its '.' .1 Org~izational structures. especially strategic. . 154 ..flI Wes~ern ideas O? le.1 Cultural view of strategy. ' f I If . This concepl considers C1.y. 01 the iJ II rJ ' Chal?ter 8 Culture and leadership j rj I I This chapter looks at the evolution of thought with regard to leadership.2 Corporate cultures. co-operation on the cultural front.tioL ' concerned.t t~en considers the question r '1 as to whether there are attnbutes reflectmg 'good' leadership m the West that Ifre to be [ ' found in all c u l t u r e s .Concept 8.. This concept examines the ques-: J tion of culture in merger and acquisition strategies and the difficulties for all kinds ot] .. _.This concept showshow models of organizational structure evolve' in line with the (hanges in context and with the influence of Cultural differences. cultural ele~ents .< [1 Introduction to Part Two . l.I rJ rI «. The relation~hip between culture and strategy iS r explored. as ~s the way national culture influences a company's strategy. This chapter addresses the role culture plays in determining'strategy. .1 Organizational chan:ge as a cultural process. involved in defining the role ofleaders as well as attributes ofleadership within and between Ij cultures.. culture of the organiza. ' . ' C!Jl Concept 7. Once the process Of organizl tional change and the mechanisms involved have been presented. Having outlined the developIl\ents in partlcularly the lnfluence of Jap~n and Eastern phIlosophIes. .presen:-day thinking on the subject. Chapter 7 Culture and corporate structures This chapter examines the places that national culture and the business environmen~ occup.ldership this concept looks' at .' Cl I Concept 9.. in the notiori of corporate culture. r r Fundamental organizational change involves changing the.i· U [J . ' i 'i i Chapter 10 Cultural change in organizations . .' ~ Chapter 9 Culture and corporate strategy i 1 I • Concept 9. . the concept considers the cultural insights needed for change to sllcceed.

This concept investigates the influence of culture on ' operating in an international (!I1vironment. The skills necessary for dealing competently with cultural diversity when operating in Inte'rnatlonal business. The notion of transcultural competence is addressed. .2 Organizational change iil'a global environment. J Concept 12. ' • Concept 10.r­ ship. ~ . an essential component for managing cultural diversity effectively.cultures. Once the present-day approach to marketing has been addressed. The models used are adapted from the cultural model referred to in. Before dofng so.2 Marketing communication across.ent. Making cultural profiles of brands. their relation to national images.1 Managing djv~sity in a global envh'onment. of 2. one which involves the whole company. addressed. Part C?ne. its leade. Final activities Part Two contains two final activities: 1. The question of brands is J Chapter 12 Cultural diversity in organizations This chapter considers the general question of cultural diversity in organizations) the nature of the transnational organization and the management of cultural diversity. Chapter 11 Culture and international marketing management . .2 Diversity and transcultural competence in organizations.1 Marketing in a cross-cultural environm. This concept examines howexterl1al factors influence the culture of an organization and presents an assessment instrument for diagnosing discrepancies between its culture and its business environment. ~ Concept 1l. ' strategies to the international consumer. After working through Part Two you will gain more insight Into:' The influence of culture on all aspects of the organization: its structure. f!1 n1ilrketi~g activities of companies Concept 11. 155 . you will read a study in which the cultural profiles of a range of brands are developed. and how their meaning is managed a@ross .u t] ri Introduction to Part Two . especially in advertising. The concept examines ways in which managers can dealwith cultural diversity as well as turn ino their advantage. . A case study about a joint venture between two chemical manufacturers in South Africa ' presents strategic and cultural issues round a joint venture. the question ofintercultural marketing is discussed: This involves adapting produCts and marketing. The first of the final activities requires you to create cultural profiles of brands your choice. striitegy and marketing. • Concept 12. cultures.

in Bosche.). ' Bosche. S. (ed. MA: Hutchinson.competence. Boston.A. Le Botert.. I 156 . G. Le management interculturel. C. . M. . Paris: Editions Nathan: 31-48. and Ghoshal. (1994) De la. ' . (1993) 'La probh~matique interculturelle'. (1989) Managing across Borders: The Transnational Solution. M.u u Introduction to Part Two References Bartlett. Paris: Les Editions d'Organisation.

To gain a better understanding of this relation. Forms of organizational structure.1 focuses on the:forms of organizational structure and how these have evolved. It also indicates the kind of hierarchy within the organization. organizational culture.articular interest to this concept. The levels and values of corporate cultur~:>.[I Thischapter describes the relation to be f94nd between the structure and the culture of an organization. It allows relations within the organization to be formalized by describing the tasks. The business 157 . limits and responsibilities of the work units. Such classificiJtions are useful. r 1 r& ~ d. This relation is a very close one because structure is not independent of culture but an element of the organization's culture.the structure and the culture.2 refers to the classifications of corporate culture proposed by experts in the area of. organizational structure forms the frame of the organization's culture. This is because models change or adapt in line with new forms of organization that emerge over time according to the context and InHucncc of cultural organized to carry out its objectives and pursue its projects. jobs ~lDd positions of its personnel. In llhort. Concept 7.[I The term 'organizational structure' describes the wayan institution. (1 I . it can be flexible and engage the whole staff in a range of activities. Several variables influence the structure of an organization. Size is one: if a compan:' is srri'all. Learning outcomes After reading this chapter you will gain an understanding of: The relation between . ) . although different forms should be put forward to reflect the dHrerent facets of an organization's culture: It Is this range of ideas that gives p. Concept 7. . structure and culture have been separated into two concepts. . the levels of authority and power as well fL~the formal lines of com­ munication between the employees. of an organization. That is why the structure of an organization is used to analyse its cultttre . as well as the...

service or location. the type of activity being undertaken. one that has assumed increasing importance . -'is a senior manager who reports directly to the companyis chief executive: where a company has several product lines. 'Punctions. The way internal arid external forces are combined gives each entel'l?rise a different structure.. will need to be more 4ecentralizedif it sells its products in many markets. another form of str. In the former. i1 J <lI't! grouped accordine to region in the broad sense (or country/continent if they are multinationals). product. whether they be regional or inter~ationa1. the staff is divided up according to function. whi~h are in turn grouped according to product divisions.' Bearing iri mind these domains. host governments and product-market characteristics) that influe~ce an organ­ . research and development. In this stlul. operations of each company. According to Fatehi (1996: lO~). howeyer.---------. needs . f factors such as the physical distance between headquarters and the subsidiaries. finance. he~puts forward a detailed classification: of five organizational structures which he defines as follows: .' Ft. This structure allows a product to be launched simply through the creation of. such autonomous units can pose problems relating to control and i:. ' Generally speaking. etc.magers' do not always have the same objec­ tives. the particular strategy pursued) and the external environment (external forces such as economic conditions. a new division. All the functions relating to the product being sold and the market being served are. For several years now.national borders means that the need for co-ordination and integration will be greater than in domestic organizations. Another important variable is the influence internal and external factors can have on the organizational structure.. . The fact that multinationals operate across.'liol1nl structure. Fatehi (1996) makes a distinction between internal requirements (thechoice of technology. where executives' could spend more time resolving such conflicts than they do making strategic decisions. a large-scale organization. 158 . 2. ization's fate. . may be passed to headquarters.~ [J rl • Chapter 7 Culture and corporate structures LJ environment is another: the structure of. their mutual relations and the legislation of the countries where the subsidiaries oper'ate.truc-' ture takes the. in t~e latter. ' 3. employees .If th . Here. form of a project team or assumes a matrix structu~·e. . the 'functional m. Fatehi (1996). .. Product structure.. At the head of each division there is a senior-level executive who shares responsibility for the area with the' ' ~'human resources manager. for example. The organizations using this model organize their staff ".m.ucture has been making its appearance. respomibilities are arranged according to functional areas: at the head of each function ~ marketing.the network structure. controlled by the divisions. does not see any fundamental differences between multinational organizations and domestic ones. This form facilitates partnerships between ol:ganizations. products and geographic areas remain the three basic models of organizational structure.. one that allows it to realize its particular goals. Although the rest of the company may be less destabilized as a result.lurC. two main types oforganizational structures can be distinguished: a tradi~ tional hierarchical structure and a structure with several lines of reporting. Headquarters maintains control of ' strategic planning' as well as contrul (. A number of regional divisions may retain the possibility' of producing and selling according to local.Geogmphic strw:tl~rt).----~~-. .'I I'i l. These differertces of opinion. the s.0-ordination." .ccording to' product lines. apart from the fact that multinationals need to tal<eaccount o ..

' ".. e thefunctional skills.:. with the geographic divisions. or.I r . or . Was the country boss (in the case shops for top managers across the company of washing-machines the one in Italy) responsible to discuss issues that are of COncern to the for th. (buiit around products such as consumer goods.Concept 7. Moreov~r. (2006) points out that the company ment of new products and not enough to superimposed geographical 'silos' on the com­ the company's cus\omers. would 'units is being encourage. Ml. l I ) I '11 . This may. · strategy for each of these components ond Businesses were grouped together into units checks that the strategy is being carried out.' In Accountability: where does the buck stop? ( J 1 . the buck stops at HO. 5. They are looking for a form that allows different structures to be combined. nts of the overall were based at Philips' headquarters and local strategy and are responsible for monitoring the operations ('national offices') were to report to process but.functional and project . lands. of that product division in the Netherlands? " A classic bureaucracy usually has a number of .. the Dutch electronics mUltinational.the position of chief market­ functional units. ' . the .d and Incentives have report to the head of Philips in Italy as well as to be:en put in place to get employees td move the washing-machine supremo in the Nether' between geographical regions or product areas. . in turn. the director of the unit In question.The tU!.people in the organization. product heads eventually resulted in Philips Ing to head office. . This meant that: 'The boss of ing officer.[1 . b~ing given to technology and the develop' Hindle. lighting and medical products). was one of the to' criticism that too muCh .(. Lv wllJbi!H~: • area knowledge with product and functional skills.Mixed structure.collaboratlon between the washing-machine division in Italy.' The basic problem Philips encountered This need to cross organizational boundaries with this sort of organization was to do with has also been reflected in the running of work­ accountability.\ltina'tionaIs may'wIsh.attention was first companies to adopt a matrix structure.err~c. . nr wl'l~ It the he~d wh91e company. Moreover. or c the functional divisions with product divisions. butit also bas the disadvantage of relying on more managers (thus increasing costs) and'of possiblyincreasing internal competition. These units whereby the units fill in el. ess~ntially. .1 Organlzi!ltio~al structures 4. Changes include · pany structure that cut across the traditional the creation of . Hindle (2006) pOints out that this struc· with a vast range of products and a growing tiJf~ has been modified slightly as a response · number of markets worldwide.e prescribes thE' reqrganizing itself again In the late 1980s.. management of this type of organization acknowledges a lat~ral authority. relatively Independent business units report· . create conflict among. A certain decentralization may be allowed.!.rof-war between country bosses and . this system facilitates the co-ordination and integration of projects. share responsibility. general. Philips.)llnt. fOI exampl{. This structure is often preferred by organizations who wish to extend their international business acthrides.I 159 . The two ~lines' .. 'nrofiNln(H(')~" 1'l(. Head offic.( I I. A matrix organization does not follow the traditional hierarchy since it does not respect the principle that each employee has just one superior. say. Matrix structure.(.0 the geographic areas with product lines.

The business teams had to fUnction as autonomous internal think tanks demonstrating an open and accountable process of problem analysis" research. Network structur~s also have ~o do with managing the cross-cultural ~ransfer of kpow­ ledge. . S.ntial characteristic of a 'le.with a horizontal systeJl:l of communication..alliances (Deresky. that was originally hierarchically structured in pillars. ' I ' DeallnQ with a network of Individuals ~"he Asset Management division at Delfa Lloyd' 'chMged a policy that affected orgQnizll" tional structures in an attempt to improve Its performance and market position.. . It was <. 2003). " ' ". . oh il. and decision-making is dispersed to local subsidiaries and . so called 'business teams'. bUSiness line was chosen as the captainuf the.. 'Holden (2002) considers networking as'an activity of cross-cultural exchanges of negotiation involving interlocutors being chosen knowledge. The teams were supposed to cooperate." Network structure . mission of the 6rgan~ ization.o 4•. Therefore the teams wer4 composed of various business functions: portfolio managers and information specialists of the specific 'business line'. -. thanks mainly to developments in technology a~d a network's apparent ability t~ deal more effectively with global competitiqn. a marketer. Within the division. . to share visions and dilemmas with the 'established' organlzation and to hold each other accountable for results and performance. M-J: .' . combined with sales representatives of Fund sales and Institutional saliS.onsldered important that the business teams had a crossfunctional character. This activity has the shape a). This implies that responsibility .curr~hfthin~~ng:onoth(!r Jirgtt6i:zatf~nal' $truc~ures .. at the same time. ~xisting 6 business lines. ' . . 160 I I I" . the phenomenon of globalization has brought ab'outthe appearance of new organizational forms or adapta­ . .' The organizational structures described above are still common. a network has company units. This form of organizational structure has gained considerable favour.arning organizatiqn' (see Concept 8. . This network is indispensable for companies needing to learn about the rapidly changing business environment in which they are involved.1d. a Chapter 7 Culture and corporate structures . However. ' . . Setting up business teams At this division of Delta Lloyd. team. a 'shadow' organizational ' structure rose that would centre around 6. These teams were extracted from-the . -. ' The practice of networking facilitates orgahizational'learning and is the esse. deCision-making. --. f~om Fisser. Networking' uses 'socio-interactive communication' to support the strategy and the. . and Browaeys. Rather than being a pyramid hierarchical structure.' ! ! f 11 . Implementation and evaluation. . R 'hRc:k-nffic~ co-worker and a Technical Product Manager•• The portfolio manager as representative of the. . . Source: extract (2010}: 61-62.1 for a definition). tions of existing forms to keep pace with economic reality.\ i: :' II. allowing access to theresources of organizations that are culturally or geographically different. r i . .

multinational and global strategies to become what the authors ca. ------~-. Coneept 7.sitY~rid '()rgan'z'a~iOQ~lstruc:Jure.dhfer. organizations and the stagesthat organizations need togo through before they can call ..r-..--.. . Knowledge is developed jointly and shared world'\Yide.. Such a compan~has the following characteristics: 4.ual Jiv~rsily in these' organizations. They argue that international enterprises must adopt a multi­ faceted strategy to respond to' the compiex environment within which they operate. In other words. gt:ographic and functional u~its. or by 'virtual cQrporations' thanks to the evolution of technology..:in present-day business. that given below represents the most common evolution of North American firms: is [ 161 l --~-- I . Cultural. how does cultural diversity affect afirm's strategy?' To address these questions.---.·1 . but also in the sum of processes occ~rring within the organization. I I i t In this sphere of internationalization. This question addressed predictions that the end of large worldwide companies was in sight. they give the result of their investigation on the. the integration process and the renewal process. l~ r} Ij 1 J rl i.. ~ ~ I j 'I I 1 Fifteen years after the emergence ofthe traqsnationaj organization.~ I i I. to be replaced by either more flexible small companies.iI ' . National units make differentiated contributions to integrated worldwide operations. -. . This implies that the managers have to \idapl their ' attitudes and skills to their new roles. . Howdoes the . In such a company' 'innovations are regarded as an outcome of a larger process of organizational/earning that' encompasses.2002).lla 'transnational company'. 'firms frequently skip iihases in order to m.. The 'order of the phases can va'ry from country to country. relations between people from various cultural backgrounds are increasing and companies have to manage these differences. themselves global.ore rapidly position themselves to maximize . One of the key observations they made was that. respond to the needs of the future? (Bartlett et aI. interdepen~ent and specialized. . impol'tanct of culL\. This description reflects ~~ore accurately a style of business management that involves the entrepreneurial process.for international. The influence of culture is to be found: Jot only in the choice of structure.. They describe four kinds of organizations not only as an independent structure. they must opt at the same time . but in terms of processes. but also as a part of the phases of development in going globaL In addition. They investigated the impact of national culture and cultural diversity on .their global competitive advantage' (Adler ~ith Gundersen.1 Orqanizational structures Transnational structure Bartlett and Ghoshal (1989: 59) were among the first to propose a new structure that 'corresponded more effectively to the strategy of internationalization among. we can refer to the work done by Adler with Gundersen (2008. the authors sl1BBPstprl that 'large companies' should no longer be described in terms of a formal structure divided into business. 2008: 9). 2004: 756). While maintaining the concept of the 'transnational company'.~ .' organizational structure affect these differences? To what eXtent cultural diversity reflected in organizations! Furthermore. ' . every member of the company'. ....companies: the transnational structure.. the authors asked themselves about the future of this model: How must the transnational model evolve to . It is dispersed..

Sensitivity towards cultural differences is therefore importanl when the implementation of corporate strategy is bdng considered. 'Cultural diversity strongly affects relationships t::xlernal to the organ­ ization. Unlike those with a domestic structure. I J. . . is indispensable.Heterog~neity. . ' 2. tural diversity traditionally has nQt affected domestic firms' internal organizational cultUre' (Adler with Gundersen. Domestic structure. 1. give~ that it has both clients and employees in other cOli.~lopmr. In this structure the global strategies of human resources become essential and. and so continue operatil1g . Multinational structure. as desc. Iii I t .. it is because foreign custo~ers want to buy their products.I I L I IJ I. Multidomestic structure. I . status. Although many present .ribed by BartlE!tt and Choshal (1989) . each of these firms must take into account the particularities of the local market in which it is operating. The organization is presented as' a set' of subunits in. apparent: 'Worldwide cul.c..nterprise. This structure differs from the others through the fact that it generates its own evolution without having to rely on forces outside the (. " I I I I­ 1. diversity is inherent to the organization concerned. ' el1lt:rprises their 'global. most firms with this. i . interaction: Internal and external .:urding to its norms. The transnational (or global) s t r u c t u r e . ' ' SO.i(.are moving. Chapter 7 Culture and corporate structures \J I' i II' I Domestic Firms MiJltidomestlc Firms Multinational Firms Global Firms Figure 7. SuCh firms can therefore be said to have an ethnocentrk perspective where no sensitivity towa~ds cultural differences is. 2008: 12. the diversity present allows mutually beneficial relations to be created.8).several countries whiCh operate autonomously. r 162 .nt. . That is why' these companies attach great importance to managing multinational diversity within the ' firm rather than to managing cultural differences external to the firm. 2008: 128. structure have offered their products or services almost exclusively to the domestk market: If they sell their products abroad. a company with a multinational structu{e has an internal organization whose culture is affected by the cultural diversity present. and all the problems it may bring.ntries' (2008: 128). Up to'now.1 Organizational location of global cross-cultural.tic firm. This fin~l type of structure­ the transnational companies may consider the multinational phase to be the final phase of de:v. there is a fourth phase into whiCh competitive companies . Unlike a multidome.. Owing to the geographical spread of this structure.urce: Adler with Gundersen.

Concept 7. of corporate. . requi~es that choice's be made and values are an' . The management places great importance on communicating the values that shape the . ' ' I\Y The tough-guy.:Dedsions must be ~ade quickly. contrast to the 'tough-guy' culture. This type of culture puts great emphasis on youth and speed. the 'the work h~rd/play hard' culture rests on 'find a need and fill it: 165 . A police force o~ a hospital can be seen as representatives of this type of culture. and how much time is needed before a' company and its employees know how succ~ssful their decisions or. II 11 Identifying corporate cultures . however. a study they inade of various firms . As stated in the introduc.risk is involved in the firm's 1. . whicb is 'i1nd a mOtlntnili and climb it'.Corporate . . The ' 1. r ! '. . consumers and their needs.and their business environment.. According to the same author-s. 3. companies from each other: orga~ization as well as c9mmitment.. .'eventing risks. A strong culture . or even management consulting and the whole entertainment industry. macho culture. There n . The main belief is .allows the behaviour of people to be guided and to 'feel better about what they do. . that a compClny isnot only'a place where things are produced. Using concrete examples taken from companies that.which they see 'as a system of informal rules that spells out how people are to behave most of the time' ...Ictivities. These categories pro. In. This culture attaches particuhlr importance to. according to them. This is a 'run' and action culture with a tendency to pursue low-risk activities that give quick feedback. so they are more likely to work harder'.they distinguish four categories of culture.tory. . strictcont 1'0J system p. 'particularly since they have to deal with a fot of internal competition. Their book is intended primarily to serve as a' primer on cultural management for business leaders.:tion to this concept. The construction or cosmetics industries. I r j De'al and Kennedy (2000: 15-16) are among the first to examine in detail the phenomenon .vide a useful framework •for classifying organizational cultures. This culture is to be found in the sales • department of a company or in a fa(. are Giller examples. And it is these people who manage themselves by using 'the subtle cues ofa culture'. they examine the role of the leader ' as a 'mediatoi' of behaviour' and the positive effects of building culture.cultures concern undermines both the leadership of the indisp~nsable guide for making such choices.k is gained rapidly and everyone Knows whether or not the work has been carried out aCC(. [1 . The organizations have'an explicit philosophy as to vJhythey are conductirig business. These values are shared at all levels ofthe organization. Usil)g two factors ­ . know how to m~ll1age theit culture. company in terms of the econoJtlic choices and the business environment of the company. This culture takes a lot of risks and quickly find.strategies have been . ev~ryday business env~ronment. they may not be the right ones. even if there is a risk that.ll'ding to th" rules.2. • 'company operale~ ha~ a considerable influence on the ~ulture of the company. Thut is why Deal and Kennedy (2000) present a classification of the types of cultures on the basis of . the business environment in which a. three characteristics emphasize values and distinguish .> out whether its actions have been successful. but also an institution whose prh1cipal resources are people.!lit [ Work hard/play hard much .f] 2. . culture. The feedba(. from the shop floor to the board room.

Trompenoars and Woolliams (2003: 106-11 n put forward a model based on 'organizational relationships' . an organization is composed of individuals with different personal­ ities who form and share' a culture. they come up with four culture types: Incubator Family Eiffsl Tower Figure 7. whereby organizational culture is div. Other criteria. 166 '­ . however. This is typical of banks. This type of organization may invest millions in a project that will take years before it is completed -or not. By using a model that combines two dimensions .maybe monthS and years . has been taken up by other writers. Thete is little feedback Within this sort of culture. such that discussi6nsaie encouraged to make Sllre that the right decision is taken. This form favours high· risk. A lot of time passes .ided irtto four groups.those between employees. Ttompenaars and Woolliams (2003: 101) dedicate a whole chapter of their book Business Across Cultures to corporate culture.2. and the activities are low-risk. " ' .- I I Chapter 7 Culture and corporate structures e Bet-your-company culture. The risk of the company going bankrupt is considerable. hierar~hical or egalitarian (high versus low centralization). between employees and their superiors and the relations within the group as a whole. " The process culture. reconciling dilemmas that originate from issues of corporate culture: Justas in a society. As in the ' work/play culture."Management of culture" is now about creating a corporate culture in which people will work together to achieve the organization's goals. unlike that culture. That is why relations within the company are. but in' an· environment where feedback is slow. the'empl9yees receive no feedback: This lack of feedback forces employees not to worry about what they are doing but how they are doing it. the financial interestsar~ low but.task or person (high versus low formalization). have been used for the classification.before the employees see the benefit of the decisions t.>keri by the company. Source: Trompenaars and Woolliams (2003): 106. as well as in highly regulated industries such as pharmaceutical companies. They describe it as the 'driver' of the organization: '. Four culture types. insurance companies and financial departments." The classification model just described.

Delavallee's standpoint (2002) appea.f has presei{ted two ways of categorizing companies according to their structure or culture.~ The Incubator is like a team without a leader.. . Therefore. /'~ . being the result of the co~pany's history. with a stress On personal relationships (affinityltrust) and an entrep~en~c1urracter. That culture exists in its own right and. e The Bifid Tower has a high degree of formalization together with a high degree of central­ ization. It is power· oriented. ' I i i f I To conclude this concept. but also by its specific corporate culture. of trade.ortance given to job descriptions andev. . .41 .i~.'.. 167 .ted with a management by objectives approach and a focus on the power of~owledge/expertise) commitment to . differences between companies.. This chaptp. [j I According to this chapter. it is necessary to taKe Into account its structure.has unique characteristics that differentiate it from others. . / (.' correct. While cultural diversity has little impact on' national organizations. by the people who compose 'it. rules and procedures. cul~ure remains the most effe. a corpurate culture cannot he cQpied. it can affect strur. It would be worthwhile investigating a possible correlation between the two to see if certain types of organization are more suited than others to developing specific corporate values inherent to a particular type of culture.aluatlons. and also by its attitude towards the business environment. influenced by its history.. as well as its cultural diversity. globalization of business.:lure at all levels in intp. There are many organizational structures. It is task. Therefore. ranging from geographical and matrix structures through to network and transnational structures. -. The formality is reflected in th. if the com· pany has adapted to the demanps of its environment. It is role·or~nted. The Guided Missile has a low degree of centralization and a high degree of formalization. Its main characteristics ar~ that it is person· oriented and focused on self~realization! commitment to oneself and profes­ sionalrecognition. What n:mains different is the culture of each company.\. The choice of. the' corporate culture of a company . The last two seem to be the most suitable for the.4 f1 The Family culture is characterized by a high degree of centralization and a low degree of formalization.. .even if it is classified somehow . That culture' is a way a company can differentiate itself from its global competitors. in that global­ izatiol'l:.D u / 6 Conclusion rJ' L i . to analyse the culture of an organization.rtive way of maintaining a lasting competitive advanlage. an organization is nul only characterized by its structure. . with power attached to the position or role. " order and predictability.. structure depends on the strategy and the mission of the organization. belongs to it alone. Unlike a production method.. Deal a~d Kennedy (2000) show that the culture of a company is strongly. " •. identical management and production techniques have narrowed the .orieE.tasks and pay for pet:formanc~".rnational organizations. ' .

(1989) Managing Across Borders. I j II j Dp. Netherlands: NYE!nrode University Press. Breukelen. . South-Western Cengage Learning. with the company's problems. In their nelN introduction. remains re. right or wrong). and a'third containing its assumptions. and Kennedy. Despite the changes of business in the past two decades. C. (2000\ Corporate Cultures: The Rites and Rituals of Corporate Life. N:J. as they say. ' 2. S. Its culture.often involves a change to the organization's structure. Ghoshal. A. the authors argue that the basics . and Kennedy. As indicated in Part One. T. any consequent change . . The authors dis' Cu~~ lrc!nsnatiOMI management and focuS on cross-border companies and management. Because the systems of norms (what Ie. An organization's structure and culture are often seen as one and the same: Its structure is often given more serious consideration than its culture.A. and Trompenaars. and Blrklnshaw. 4th edn. 4th edn.are as strong as they were in organizations twenty years ago.u [J Chapter 7 Culture and corporate structures . this book.~E. A. Delavallee. Their work remains. What do the structure and the culture have iri common? . or if the business. • 5th edn. C. Cambridge MA: Perseus. Ghoshal. and Gh. . • . (eds) (2000) Cases Studies on Cultural Dilemmas.levant.internal pr external . NY: McGraw-Hili. is often ignored or seems to be the last resort for dealing . This edition reviews the overall content of the 1989 edition.A. !3rowaeys. NY: Ni'tfJraw-Hill. and Birkinshaw. culture using the same criteria as those used for the concept of culture. 2nd edn.environment evolves.! 168 .. what do you consider to be the pOssible purpose of organizational culture? j' J Further reading 8artlett. S. Thp Transnational Solution. Ii' .-J. F. New York. 'still deeply committed to the embryonic ideas.E.A~ (2000) Corporate Cultures: 'T1"Ie rites and rituals of corporate life. I I Bartlett. If the size of the company increases or decreases. describe the basis of'Corporate .1. ' 1 Discuss the. with Gundersen. each culture can be seEm as having three layet:"s: the 'behavioural' or 'explicit' level. New York.T. (2004) Transnational Manaqement. M. (2002) La culture d'entreprise pour manager J. a second layer cpntaining the 'norms"beliefs and v'alues'.A.. Paris: Editions d'Organisation. Bosto~. . Deal. Cambridge.A. (2004) Transnational Management. values (what is good or bad) and assumptions appear to vary from company to company. J. the scholars who introduced the concept of corporate culture" such as Deal and Kennedy.. It provides' a fulfilling and realistic approach to the management of today's multinationals. lUI. . Even if their classification systems differ.. MA: Perseus.osh?'. •-. S. launched a while ago and still viable today'. (2008. 8artlett!C. MA: H u t c h i n s o n . Ii -. '---~"---I ~¥'.the artefacts of organizational me and the shared values . t 1 I " I References Adler. on the other hand.E. and Schein. above statement and answer the question. A. written in 1982•. 2002) International Dimensions of Organizational Behaviour. ' I . Mason.

(1999. F. '.er. . K. Deresky.a l.H.17 (1): 58-68~ Hindle. Paris: PUF Que sais-je?. Harlow: Pearson Education . (2006) 'The matrix master'. S. H. I j f I J ( " I I I I 169 .M. ChJchester: NJ: Prentice Hall. P. (1999) La culture d'rmtreprise. I I :t . Fatehi. M. 21 January: 3-5. 2009) The Corporate Cultut~ SurJival GUide. . . (2003) International Management Managing Across Borders and Cultu. and Wootliams. (2010) 'Team learning on the edge of chaos'. . Economist. San Francisco. Jossey·Bass. and Browaeys. ' J ~J 0' I I . (2002) Cross-Cultural Management. E. (2003) Business Across Cultures. ' . CA: . N. Saddle River. Holden. (1996) International Management: A Crossccultural Approach. Upper . Trompenaars. TMvenet. F"iss. T. newant:l (evd edn. .-J. r)' References . Upper Saddle River. The Learning Organization. 4th edn. NJ: Prentice Hall.Schein.

If I " Chapter 7 Culture and corp' iJ! '.. ' 0. Venture was in the process or n'i'. including lawyers from Germany. capital and funding reqI. prepared themselves for the negotiations. we should try instead to' team up with them~ Mr.a mother cOn1panyinlndia. They informed us that they were not .. Two weeks later.\ iiiI "/' wead the case study below about ajolntvehtl1re between a Saudi Arabian and a' German company.'gotiating the contract. they think they are lords. but Mr.' for being crooked. with as branch head. Would you like me to fly down thel eearly tomorrow morning so that we can resume discussions usillY a clMIi slate?' I I I " .. We have tried to work with Westerners before and they always try to be difficult. . The next day. The Saudi AraQian company was in'a very comfortahle posi!j0n. then answer the questions. Kirchdorfer are people we do not trust! We get the feeling that they are trying to fleece us. The only solution I can see is that we contract with you: you run the project. but our only condition is that they do not become partner in ourbusinessl' Mr. '. Habib to calm 'Mr. . DXB-Ai Fayed was a partner in the business because it hadmanaged to negotiate and win a favourable contract with the government for the purchase of the plastic tubes.esolve tlie matter. ' On the first evening after negotiations had started. but Allah is there watching us all. [I [I j r I . we heard by phone from the German side that things were looking good. group. 170 . the knowledge. " A large delegation of nine people. The proposed project was to build a plant if! a small town near Riyadh to. Mr. I am sure we can r. We only had to walt for another three weeks since the German negotiating party was going to negotiate and conclude the contract after having received the necessary approval from us.. 1 . Habib commented on the phone: 'I am sure that we. There is no place . At this point. .' he said. .Jired was to be provided by our company. 'I apologize on behalf of my business partners in case there ~as been any misunde standing. East. ! I Bad blood Our. Soota ~ received an offer to invest $2 million in a joint venture between Brigitte Zankyl GmbH in Munich and DXB'AI Fayed . ". TheY are trying to pretend they are doing us a big favour.tJ II f. Habib. We don't care if you outsource the technology and expertise from Briglttt!Zankyl. the Venture Group . Soota was becoming concerned and..make blood transfusion tubes to sell in the Middle. Corporation in Saudi Arabia. to try and diffuse the situation. asked Mr. l [I 'I: . we received a call from the Saudi party. Zankyl and Mr. the company was more convinced than ever' that this was going to be a wonderful project. it had no financial stake in the project and was a 35 per cent partner In the business by virtue of its good contacts with the SaLidl government and its in-depth knOWledge of the loeill market. however. after' our managers had returned. can work with you. if possible. willing to sign any contract with the German party and. I I: I' I' l . The German company had the technical expertise. A few senior managers from our company were asked to Cjo to Riyadh to explore the viability of the investment.

[buest ions' .se they do not understand the principle of : lOSing face.I d) Having a ~specific' .al integration but had unfortunately ignored the inter-personal and culturpl integration aspect of organizational synthesis. Yet Arabs are used to dealing with foreigners and readily forgive them for not behaving like Arabs as long as they do not feel personally challenged and insulted. In his analysis.II family concern needs to gear up ana ad more professionally to manage Llhe new projectl But we know how to run our business -we don't need the: Germans for that!' 11 Source:-adapted from Brow611Ys and Trompenaars (2000): case 4. but the GermanJawyers told us that they would only like to see contracts in black al')d white and said that our word was not enough.e honest and admit that we do not 1 Jeven trust them since business should b.1 iJ" .Isult their OPPOSite 'diffuse' Arab partners. when the German experts il)finance. which is what happens when something is done that people perceive as being private. This is becau..-rl. Furthermore. the matters would not hav!:! got out of hand. the authorof the case proposes four reasons forexPlalnl~g what happened. adding: 'I wish the German side could understand us as much as we understand each other. but please do . Habib appreciated Mr. but also the mutual understandings be~ween the leaders . - i • government order. Whatdo you think Is the most likely reason? ' a) The two contracting parties had perhaps agreed on the first level of organizatlon. They do not care about what we think! All that matters to them is dollars. Sheikh Habib. dollars and more dollars. p(!rhapl.ilronlc scale. b) The Germans and the Arabs are at opposite extremes on tile monorhronic"polyc. . Habib did not want to do business with Brigitte Zankyl GmbH? lJ.the exigencies of the MUSlim reliqion often complicate the Interchange of ideas even more.Chdorfer said that our sma.' Why do you think Mr. am a liar? If they don't trust us. ) \ I . Habib would. Activity 7.! have to b. Sherrif gave us his word and promised us that. the Germans' approach was perhaps to try and clarify facts and determine who held the decision power. \ and themselves.manded proof of his claims about the . Insha'Allah.e for 'mutual benefit and not dictated.culture. Soota's remarks. the dgovernment would signthepurchase cO:-ltractnext month. ' . rlMr. Our esteemed minister Mr. therefore communic9tion did not tBke plaCQ In n normal manner. c) In the negotiations. r 1 I ' \ r- i i 171 .. which very much provides the n€'cessary foundation for the success of any strategic allinnce. Do they want to imply rlthat. the German managers perhap~ found it particularly easy to '. the Arabs appeared to be evasive and secretive. I.not expect me to respect somebody who thinks that we are dishonest and unprofessional in our approach. .. I am sorry. To the Germans. have perhaps felt very insulted in front of his colleagues if the German contracting party had de.Jnarketing and law met their ArabiccQunterpar. ' I It can bEl' inferred from the scenario that Mr.ts. Had both parties made a conscious and deliberate effort to understand one another tiS individuals with an appreciation for o~ another'5 cultural bearing. Mr.Kir. then. not revealing anything_ For the Arabs it was not just the 'facts"that the r) Germans seemed to be prying into.

soota's POSition? Explain Why• . His 700 fellow passeng! .rivalled by only a handful of other large banks ~ to ride out tl10 stan tllat have battered the financial services industry during the past two years. the Germans saw the contract as definite. Particularists get suspicious when hurried. to someone they like. As close working relations develop among the alliance particlp~nts. are RBC tellers. just like the Germans did in Riyadh. For the Arabs . When talking busim:!ss with Arabs. b.a point of escaping Canada's frigid winter each Jar. Nixon joins the cruises to put into practice the teamwork and mutual respect he has tried to fos! among RBC's 73. Nixon says. 'Those are the sort of things that brought down a lot of organizations.000 employees in eight years at the helm of Canada's biggest bank. Arabs speak volubly and earnestly .als. 172 [ . One s~rious pitfall for 'universalist' cultures (Germans) in doing business with the more 'particularist' ones (Saudi Arabians) is that the importance of the relationship is often ignored. based on trust and shared go. Many find this difficult. But t excursion is more work than pleasure for Royal Bank of Canada's chief executive. c. tile Arabs will think that their own physical presence Is considered distasteful. whereas the Arabs perhaps regarded it as only a ' rough guide or approximation. If people keep their distance. psychological contracts. so the contracting party should have also attempted todo the same. a. Mr.time. 'We don't tolerate fiefdoms so forth. junior employees and middle managers who are being rewarded 1 superior performance. but also integrate the organizations so that the appropriate points of contact and communication are managed. The o'nlY solution for good communication for the 'linear-active' 'Germans should have been to make some concessions towards extroversion. They (lotcinly allocate adequate resources and management attention to these relationships.. It is important to create a sound rational and trustworthy basis that equates the quality of the product with the quality of the personal relationship. relationships have a flexibility and durability that contracts often . What would you du next if you were In Mr.' Mr. U "') . The capital gained from culture By Bernard Simon in Toronto Gordon Nixon makes. ' Read the following article which examin~s the corporate culture at the Royal Bank of Callada. .lack.wary for a Caribbepn cruise. even painful. replace the formal alliance agreement. I.0 [J U Ll Chapter7 Culture and corporate:structures 3. or that these people are cold individuals.. Firms that are adept at managing strateglCalliahces use a flexible approach. ' I ' . ' 4.' a . administrative staff. that cultl has played 11 crucial role in RBe's ability . but the rewards for doing so can be considerable. Answer the questions that follow. one must always do so against an intensely personal background. letting their alliances evolve as conditions change over. As he sees it. What would have been the most appropriate attitude for the Germans to adopt? Explain your choice.

the others arc Toronto-Doillinlon.1." '1 to make sure it's very sensible and very strategic. Nixon is noncommittl'll. Nixon. i 173 I . 10 (Simon. build our customer bas. All five have maintained their dividends. what we've been doing for the past five years . The bank wanted to make surethat 'where we were extending our balance sheet. 'In mdJ1Y WRyS that's a i 1 dangerousquestion becau~~ it was at the root of some of tI-'e problems that some banks had In the early I I l. 52. But. . most of his career in investment banking. Mr.i i 1 ! ' Source: adapted from The capital gained from culture. p. traces RBC's good fO. we were being paid for it' and that in each case . the time Canada's biggest brokerage firm . Mr. 'We can have the hottest-shot trMer in the world. Teamwork and 'doing the right thing for the organization' are non-n!!gotiable el~ments of RBe's culture. Nixon says: 'We're not going to make an acquisition.' " ' None of Canada's bilJ five brinks .Royal Bank of Canada chief executive. He has spent .' he says. there was a 'pretty significant shift'.rtune to its conservative culture. The Financial 'Times. Bank'ot Nova Scotia. They ili. to make changes even when you've got good people. Bank of Montreal and Canadian Imperial Bank of Commerce . has a reputation as a level-headed manager. withoulany Infusion of governrmmt money. RBC is gearing up to take advantage of its strong pOSition. 'We weren't going to lend our balance sheet to a customer in Europe who I Royal Bank had no relationship with simply because there was an opportunity to lend money and to earn : a return: Mr. he adds: 'You can't be afraid .Activity 7. Even so. 'There's no hurry. Copyright © The Financial Times Ltd. B.which is to hire people.' ..e: .e got the right person running your businesses. 1. l1 A great believer in having the rlght'person running eCich business' 'l I 1Gordon Nixon. Mr.. Define: the corporate cUlture of RBC using the models presented in Chapter 7. are emerging from the crisis in better shape than most of their rivals elsewhen~ in the world. He joined Dominion Sflcurities .30 years ago and stayed o. She has beeii replaced by a 13-strong operating 1committee. To what extent does the behaviour of the RBC 'management reflect the Canadian b(Jslnes~ culture as outlined In Chapter 3. the client decision was sensible. the Canadian banks .lva ~Ilrvlv/Z>d. In the\ate 1990s and early this decade. Nixon says he is 'a great believer in ensuring that you:". On the capital markets side. he says. Nixon says. we don't want that pl::'f'son being part of the [bank]. to grow it by continuing to do.). but if he doesn't comply with the culture and values of the organization.2 . Asked what RBC will look like five years from now.. extend our balance sheet. you want r. and have relied far less on liquidity support than US and European lenders. however. hire teams. 'I think we've got a period here that's going to last at least two to five years [lj where banks around the world are going to be shrinking their balance sheets when we have the ability to invest in all of our businesses. where this is compared to that of the US. Questions' '.t I i. So if you do something.because there are going to be lots of opportunities and lots of restructuring in the financial services induktry over the next five years.has escaped the turmoil unscathed. including a three-yei'lr stint In Tokyo.n after RBC acquired it in 1987. We're going .' he says. I and giving them the rope to make mistakes but also to do the right thing'. part of this decade.' ' The forn)erchief operating officer is nowhead of strategy. 17/08/2009. . 2.

. but most assuine that leadership has to do with an individual intention­ ally exerting influence on others to structure the relationships in an about leadership have been devised over the years. . effectively how a company works and how it can improve its performance. This Involves looking briefly at (W'€stern) theories of leadership and the recent influence of Eastern ideas on them.lving ideas with regard to leadership. A number of the. person will have .I i i I i I The first' leader The prototype leader in a business coil text is the entrepreneur who founds a company.that there are attributes of leadership shared across all cultures. That . Learning outcomes Aftet reading this chapter.i 174 . even r1 r L J Before exainining the role of leader. ~. it is necessary to look at the concept ~lleader. . Where drfinitions differ is with regard to how the influence· is exerted and the outco'lne of the attempt to influence. . particularly those Western ideas influenced by Asian concepts of leadership.u I U fJ (J The previous chapter examined types of company structure and the range of corporate cultures. most of which emanate from the US 'and Europe. you will gain an understanding of: !W Evq. It is this role of management in the cultural context that Chapter 8 will examine In detail. He/she will determine the mission of the company andthe environmental context in which it operates. They contain many definitions of the term in the business context. though these are perceived differently in different cultures. Schein (2004) describes i . By gaining Insight into a company's found within them.a strong influence from the start. managers Can see more. before considering the notion that assumptions about leadership are shared across all cultures. The notion .

\ I ([] The criteria used for recruitment. including the increasing specialization and 'division onabour emerging from thl' industrial revolution. . Research o~ organizations and the decision-makers focused originally O'n the ol'ganization of work systems.1 Different conceptions of leadership the founding process and the mechanisms that the leader may use to implant and maintain the corporate culture: e.hy of authodty. study of organizations. The priorities a leader sets when allocatingr~sources. The totally rational approach of this model is emphasized by the :tiniform appJicationof standard ruJes and procedures. \I'h~re responsibilities are clearly defined. . In recent histO'ry.. it is the industrial revolution that spawned the founder/leader as well as the. only the leader.ed. the company culture takes on a life of its own. difficult to break if there is felt to be need for change in response to a dynamic environment. Then it is up to the leader to re-assert his position and to instigate changes to revitalize the company. preferring to keep things going as they have always done . " and blaming the environment for the change in its fortunes.Y The examples set by a Ie. be. may instead ding to power. This shows others within the company how they should react in similar situations.ader. Concept $. What the leader considers important and pays attention to. what must be measured and controlled.think.· The way a leader reacts to difficultsituat~ons and crises. Chapter 6 touched on these issues when examining cultural elements rdating to the tasks of the manager. organizing. Such routines/habits may. The produ(.production processes. particularly as a response to much larger companies. once they stand. The increasing size of a successful company and the consequent decentralization of its operations may water down the power and influence exerted by those who have replaced the leader. This management team may not recognize the need for change when the company undcrgot!s some sort of decline :md . Or hand over the reins to a successor or new leader from the management te. as many entrepreneurs have ctaCi. Bureaucratlcorqanlzatlons were the eventual product of this approach to managing . promotion and dismissal. back from the com­ pany they started.tiol!-' prol:ess. selection. The leader's pioneering work mil}rhave resulted in the establishment of routines in all aspects of the company's .r/manager. In stKh bureau­ .the worker was not . Functions within the organization become speciaji7. was the focus of attention. @j @ I. .What was the best way for a leader to get the job done in the most efficient way pOSSible? cThis led to the development of prlriclples of scientific leadershlp"whereby the questions ofplanning. information­ " and cCintroJ~centralized. All employees playa role in this \ I \ 175 .desired behaviours. \\ 6\ \\ \. leading and contro\ling a group of ~mployees were approached in a scientific way. The criteria a leader u'ses to allocate rewards and status as well as to reinforce . This has considerable influence on people in the working environment. Standard methods for doing a job were developed .iY ! I " The theories evolving around t~eleader .esthe leader heads a carefully design~d hierar<. ' . The next section will give a brief account of the development ({organization theory with emphasis on the role of the leade. These teach and reinforce desired values arid behaviours. O'perations. However..:required to. hov"ever.

s~-focused theories emerged ideas about the ideal leader.<."a!1PI'Oarh and a""jme.. While a leader needs to remainta~)i:-oricnted to ensure effective performance of the organization.. . .which will make them seek out and reach positions of leadership and be effective ' in them. 110t listen to s\lggestiop~ f0:~.overall knowledge..ponsibmty~uf is the a I I . ."'f' I. The theory was developed .... They generally lack ambition... . they need to find~ comprpmise between rational....n~ relations within organizations only began to achieve prominence as a result of research carried out in the late 1920s and early 1930s. . ". has little interest inhuqlan issues. doe:. it was maintained.t . Stogdill (1974)._.~). hi' the wor.".:\ . The theory X manager is results-driven.l'<..:>. like Du. height: tallness implies auth. 0 . and treating workers with respect.that some people have traits .lJt.. which took many' ideas from historians. . avoid responsibility and seek security.blt...ensure greater satisfaction among subordinates. reviCVl[ed studIes ofleader attributes and made a list of characteristics of a successful leader frOItl different countr'ies.o!>.f~r fflilurt!~.llnprov~p1¢nr.. he has to be a relationship~orie~ted leader to.::. .)~ .:sr~onsjbH. . ~!~'q. whatever the situation. . and Skills .. considerable initiative involving energy.. for example.. ' iy.::.ger. . Alongside these proce.' .<vHHng to accept.'.~ . lack imagination. .I @ considerable verbal fluency.••• ..11. whoever the 'followers~ Great leaders throughout history were examined and the features they had in common. managed to balance both task and relationship concerns: Maintaining this balance was necessary to ensure the effectiveness of the group. bureaucratic world that is totally separate from the one they play in their private lives. "1"'1' '(<:\'I". the police and . but also large companies.. delegate authority.\ble self~~t0. creativity and initiative..ity~ 11ft­ . particl-l­ larly as to how leaders interacted with groups under various conditions. making jobs more' challenging. psychologists and sociologists.~'"\:d.''''''''''' ! . ambition and persistence. The first clearly definable trend was the trait approach. goal~oriented beh~~iour'~nd ~ori:~a~ional behaviour am~ng an organization's employees.Ority! "C!) & r j' 't e ques IOn. n':'. demands rather chan asks. (. The successful leader. _ _ . If theyare"tQ 0F~rate successfully. ' .. holds L. providing rewards for superior performance..and snO:'Ns little cr.rterst 1.:~. Iv •• ~ . cl:itidsrn as•.H1CemfOl>the l!lGraie{'lfthe wQrkforce~ThcX mQna. These included: .<ers. .~~i.~ th-it l)"oP.human-oriented view.Attempts were also made to marry the scientific and human approaches by focusing on the role of the decision­ maJ.."F'''~ '. '":' . () l~ ! ' . military...' Chapter B Culture and leadership . . of' bureaucracies include not only gpvernment departments. ' Theory X is based on a pessimistic assumption that people have an inherent dislike of work and will do lot to avoid 'it. Examples. 'I - With the shift to the human factor dtbe'a'shift in emphasis with regard to the recipe for leadership success: The style ofleadership behaviour became the base for analysis.'I't ··u II '11 .nigh intellige~ce.kplace. The X and Y theory of McGregor (1960) gave a startling contrast between the taSk-oriented view and .et. The message accompanying this lheorywas that managers should take a more positive approach toward employees...

Fiedler (1967) established a new perspective on the study of leadership. This way of functioning had indeed appeared to be working well: the growth and profitability of the US economy had soared during the 1950s.fl' L Concept 8. Th~ Y manager wants employees to participate in decision-making and problem-solving . 6 A highly unfavourable situation in which the leader has a battle of wills with the workforce and the task is not clearly structured. . Therefore. want to learn to accept and to seek responsibility. ' '11 l. however. The context within which the contingency theory was developed was that of (North AmerIcan) com­ panies ru~ning bureaucratic systems whereby the core functions of planning. : ' " " . well-made and well-priced products from Japan. The leader needs to be strong to counterbalance the power of the workforce and to shov'. Fiedler's The contingency theQry considers how performance of the workers in an organization is the result of the interaction of two factors: leadership style and situational favourableness~ Leadership effectiveness is. " $ ® I '1 I [i I Fiedler (1967) presents two extreme situations. the '[ocus.~ tr J creative and imaginative. Task-structure: the extent to which it is necessary to spell out the goals. organizing and controlling workforces could be exercised efficiently to ensure maximum economies of scale and increased output. The Y manager believes people. the result of interaction between the style of the leader and the characteristics of the environment in which the leader works.pp. The car 3l=ld electronicsl. in the search of leadership effectiveness.and further the ()rganizati()n'~ success. The implication of this approach is that there is no universal answer as to what makes an effective leader. the task performed ! I is clear a~d the leader enjoys considerable power. and many studies ' ' since have adopted a similar approach. In this situation. j . Theories were developed to try to establish the factors determining all appropriate match between leadership style arid demands of the situation.ectors in particular were being hit hard by innovatjve. By that time. 'trust and respect. describingall the contingent factors: e> A highly favourable situation in which eyeryone gets along' well. .1 Different conceptions of leadership. Position power: the extent to which the leader or the group holds the power.2). it is 'it depends . 177 . procedure and guidelines to the wo~kers. direction in an a~biguous environment. The leader's 'power may be boosted by the expertise shown and the authority to reward or punish.of the research being done in North America shiflt!d from the person to the context in which leadership takes place.. the increasintl prescnc/' ofJapuncse products in the USdorncstic market WHS beginning to take its toll. 1960s and most of the 1970ii. This environment is characterized by three factors: @ Leader-member relationship: the degree of confidence.ople's creativity can hr used to solve problems. all that'is needed is someone to take charge and show direc~ion. The attention of researchers in management inevitably turned increasingly to the Japanese wa}' of doillg business and their approach to'mlHlilgement. under the right conditions. If there is one answer that can be given. ' OOt1 drawback to this ~pproach was that itgave littlt! consideration to the influence of different situations in which a leader may operate tll?-d how these affect the effectiveness of the leader. II ! I I ! Fiedler's theory is implicitly related to leadership in North America: no mention is made ofcultural impediments to improving the leader's situation (see Concept 8.

[J Chapter 8 Culture and leadership / '. Nevertheless. allocating responsibilities and controlling. where the principles of scientific management still tended to predominate. Ouchi's theory assumes' that employees are disciplined. He describes the basic elements of the Japanese management approach and explains what us business people can learn from their Japanese counterparts. pany through training and job rotation. I I I..I The Ztheory f I . . the employees develop a range of skills that c.on management and motivation from the manager's viewpoint. the workers are expected to develop a loyalty to the company and to devote themselves to it for their working life. The . Leadership theories nowadays place less emphasis On planning. even though they had been softf!ned to some extent by a greater emphasis on human relations. Its many advocates point out that 'type Z' companies are among the most successful and fast-growing types of businesses' in the US. the Z theory has had an enormous effect on rnanager. Management's jqb is to ensure t~at employees increase their knowledge of the com. they will be very knowledgeable about the company and the way it operates and will in turn be in a position to use the manage­ ment Z approach with new employees.!d to develop their skills and decision-making competence. individuals are encouraged to develop their potential be' applied in many parts of the company's operation~. Theory Z' can be seen as im extension of M. . Through gaining considerable famili<]. creating change and empowering others.rity with these operations while being traint.-­ 178 . '. have a strong moral obHgationto work hard and'want to establish close. to function in different positions. and one which managers there have as their starting-point.. .Gregor's X and Y theory in that it combines elements of theory Y with features of modern Japanese management.nenUn the US. This entails the organization giving consideration to the workers' families and traditions since these are as important as work itself. reflected in the consiqerable degree of collaborative behaviour and consensus­ building within an organization. and more on the attitudes and responsibilities of' subordinates. It reflects the fundamental concept found in Japan. Rather than being tied to one position. To that end.t:VLiun of leadership has changed in line with the development of ideas concerning organizations and management described above. If they are eventually promot~d to a high managerial position. they are expected. This theory moves on from theories X and Y in that it focuses less. with train­ ing. Rather than becoming specialists. and give more emphasis to motivating and inspiring subordi~ates. developed and introduced by Ouchi (1981). . co-operative working relations with their colleagues as well as those for whom they are working. This is the notion of harmony. Reference has been made in Chapter 4 to the Japanese concept of wa. . tnat all employees share a collective responsibility for the fate of their company. The new leadership A transformational rather than a transactional IGadG!r The peII.the company. " This approach was very different to that taken in North America. They can be trusted to work hard as long as management can be • trusted to give them maximum support and to show 'concern for their well-being. This is in turn reflected in the Z theory.

the best managing of all may well. That way people can say. Bush's to be a leader. it does demonstrate how the very nature of leadership has undergone considerable cultural influence from leadership in .1. I \ One crucla! element is their ability to inspire those around them to create a dedicated. the need for power. is being invested in the concepfof leadership. Tomorrow is appreciated because yesterday. of leadership.1 considers the notion of . Spotlight 8.d frequently when describing transformational leaders. the most effective leaders are bQth . was asked why he focused on the short-term (.' Because we did. less dramatic leadership at all levels of an organization.a Greek word meaning 'a gift from the gods' . dedication and Judgement apply.liet.ding performance. More indusive models of leadership have come to the fore. Republican politician George Bush (senior). The certainties of the recent past as to the role of the leader have given way to an intensive and extensive examination of the elusive nature. Bal!s \lnd Avolio (2002) make it clear that there is need in business for both· types of leadership. which motivates them objectives and not on the longer term.oliiI<IS1n:errcommitment to the orgamzatlon a~d inspires trust. To quote Mintzberg (1999: 30): Ql.charisma' in leaders. con_~_ence and loYaIty. loyal workforce by articulating a clear. tl=ansactionalleaders appeal· . whom he calls a transactional leader someone who ~s more of a 'business-like' relation with subordinates. meaning that it Is an integral part of the organization and so has the respect of everyone there. a German sociolpgist. used the term 'charisma' when describing the qualltie~ some leaders have that enable them to motivate others to achieve outstan. RObert House (1977) tried to define the charismatic leader bX referring to: '" their strong feeling of self-efficacy: they feel they are essentially capable.J. a lot of energy. look after m~e (and thecompany'~)'. personality. including o'ne called 'quiet management' which advocates a quieter. ~. between leader and sUDofciinates: 'I'Jllook after your interests !f. 1. Leadership works because it is legitimate. 'We did it ourselves. is honoured. trust. This term .1 Different conceptions of leadership new leader creates. particularly in the US. aSdescribed . l \ A gift from the gods? Max Weber. reaction was: '01'. Although such an idea may have been crafted Is about thoughtfulness rooted In experience. TliisIsthe~rie~~aey-'--:-~ Barnard Bass ( 1985) makes a distinction between the transform~er. communicates and embodies a vision that can intIuence changes in the . th~ir followers. That makes today a pleasure. In their view. Indeed. the vision thing: At present. to the self-interest of all parties. transformational and transactio~al in their leadership style.Is use. and ~ their conviction jnthe moral rightness of their beliefs. above. In other words. .Concept 8. and the traditional leader. WordsHke wisdom. which has a profound effect on when campaigning for the US presidency. at'tiW'des and assumptions of suborrunates. compelling vision. . Canada. he starting-point tOrWatteI'Js essentialltthat of exchange. be silent.

where collective aspiration Is set free. his aim fulfilled.u [J ChapterS Culture and leadership Eastern cultures.developed came frOnl North America and Westerra Europe. The Flfth Discipline. particularly: those of China and Japan. Such leaders have tci counter the 'mental models' that hold back members Gfan organization from participating fully in its operation· by bringing about a fundamental shift of mind among the members of the organization. People need tools and guiding id~as to cope with and give real meaning to the situations they in a 'h:arninq orqanization'. or rather the rate of learning. worse when they despise him. Senge (]990: 3) defines learning' organiz~tions as: r) IJ . in his opinion.ffer organizations an to try to understand the laws of nature through cafeful observation. But of a good leader who talks little when his work is done. where ~ew and expansive patterns of thinking are nurtured. key to truth and freedom and told his followers . It has.. not so good when people obey and acclaim hil!l. leaders of learning organizations have a more important.l<s have copsiderable reson~nce in today's'uncertain world and some of his quotations parailel the ideas of many contemporary thinkers with regard to leadership. which itself was a response to the increasing uncertainty and complexity of global business. ·(http://uoleadership. to see themselves not as powerless figures in the corporate landscape but as participants who shape that very landscape. they will say: we did it ourselves.quote' frorri Lao Tzu below contains similar ideas to those put forward by: Mintzberg with regard to the idea of collective leadership: A leader is best when pE!ople barely kMW hE! exists. I I Organizations are not. They are essentially responsible for learning in the organization: they: design the learning processes. The . is constantly: influenced by: outside forces. to create the fi. could o.l~ to play. . In this way: they: cOcld develop their intuition and increase their personal power. and where people are continually Jearning. sustainable advantage in a world where competition is becoming increasingly stronger. ~nd help people to understand what brings about change.tture. and to use that power to lead life . II r J / /i I r I J . but also how recent idea~ have all 180 . The type Z theory heralded the concept of the learning organization. Rather than being traditional heroes who charismatically rescue their organization from a crisis.uoregon. Senge (1990) advocates the mastery of disciplines that enable people to gain a broader view of the organization's see the whole together. In his seminal work. if less flamboyant. · .wor. like everything in the universe. structured to allow people to reflect on what they are doing or to become engaged in their work. This concept· has offered a framework of reference on leadership py outlining the deve~opment in ~hought with regard to leadership. saw that learning. Rather than just coping with the present they are . beli~ea . and without force. accessE!d 1 September 2010) The role. Peter Senge. the sixth-century Chinese philosopher who was an older contemporary of Confucius and proponent of Taoism. His. ro. foster and manage a shared vision. with love. He believed that "simpliCity offered the. This entails 'discover[ing] how to tap people's commitment and capacity to learn at leve1sin an organization' (1990: 4 ) . one of the architects of the concept..of.shown how many of the theories . Lao Tzu.a:lso helping . create. organizations where people continually expand their capacity to create th'e results they truly desire. the lead.that human life.

'You can hire managers. $ can emanate a Vision. . .weforum. Great leaders all know their real selves and have sometimes taken extraordinary steps to discover this. . Bennis said that some leaders had an enormous desire to lead. She outlined a list of characteristics of r." ' Concept 8. at the annual meeting of the World Economic Forum startecl with the experiences of two people with 'outstanding stories'.' I been heavily influenced by the approach taken by Japanese management. they lost their powers of empathy: 'They think they are listening.Define your leader The session 'Define your leader'. The next COIl­ cept will take some ofthesr ideas on leadership further and consider some of the cultural . This is a combination 'of self-awareness and character. so carry credibility with the team. gained from her expe'rience as a head teacher In failing schools..leader was 'a social architect whose role it is to create the ecology of learning'. and inspire a team to carry it out. " are able to balance home and work . president of the Center for Leadership Renewal In the . & tell the truth and work hard.. O'Neil quoted a definition of leaders. On the question of whether some people are natural leaders and others followers..1 giv.last year needs to be scrutinized the next'. e! Asked about the role of charisma ina leader. the Ideas person Is the le'!lder. Meanwhile.'~ ft~rlhtr thoughl~ on the nature of leagership. like Gandhi who spent a year listening to 1n. Bennis said that the. the leader has to 'galvanize' activity. but It is hard to hire a dreamer: O'Neil stated that most leaders evolve with time and are suffiCiently self-critical to 'know that what was great .n~f/Conten1:/33330?open. and are prepared to quit before people notice. ~ can identify people who can replace you. r\ Warren Bennis. director of the School Leadership Academy in the US.enated and then very bored. which elements do YOLi think support the thesis that 'Leaders are born not made'? .. others learned the skill over time. Many great leaders. often fed by subordinates. A comment from the floor suggested that leaders need to lead from the front to handle crises. Questions . implicatiolls and go in search of attributes ofleadership thOlt can be apvli~d across cultures. focused on what he called 'finding your voice'. successful leaders: " (> can' Identify and articulate a dream. Other leaders become ali. though this takes guts. were accidental leaders. In her view. O'Neil said that a common problem was when good leaders 'lose their creative connection' and didn't realize it. but could be just as effectIve as 'servant leaders'.Jreat leaders that she had largely . Acknowledging that . professor of business administration and founding chairman of the Leadership Institute at Marshall School of Business of the University of Southern California. accessed 1June 2008. Which other elements from the text do you believe support the I~ea that people can be trained to become leaders? 181 \ l . and realize when this is no ionger'the case. at first.In Monroe's view. . " can fire people.1 Different conieptlons of I~adership '. but in fact they no longer are: Some leaders fail because they suffer from hubris. all of you show up on time. and yet others decided to drop leadership. In the words of moderator John R. From your reading of the text. In her view. King had a symbiotic relationship with his followers . leading from behind at other times.particularly difficult for women. Challenged by a participant to distinguish between a leader and a manager.1. 2. !l have done the job themselves. Source: www. Mini-case 8. Lorraine Monroe..ego. including Martin Luther King. O'Neil. Monroe said that managers 'don't give Joy'. admitted she 'loved the power of leading'. the ability to differentiate 'what you want to be from what you want to do'. Monroe said a .hip used in the Basque country: co show up on time. work hard but don't let the outcome be attached to your.~lIan villagers to un~erstand his destiny. f>. whom he had known.was he who followed them to jail. Bennis said that leaders tended to have a stronger moral voice 'which touches the human heart'. true leader is sensitive about knowing when to drop is difficult to explain At the same time.29 January 2001. are creatively crazy.

regulations and instru~tions.'llfeel uncomfortable with these changes and may indeed attribute some sinister motive to the actions. Fiedler (1967) has had a considerable influence on leadership companv are simiL1rly risk-<Jwr~e? an III" I I J ! I (1 [I fi 182 . The second factor is to do with the way cultures handle uncertainty. therefore. they may be forced to alter their own leadership behaviour to conform to the cultural realities they face. I This concept.t Fiedler describes because of cultural constraints. Managers international environment may nee:d to take a large power distance. of? If he is himself risk~averse by nature. In the workplace they prefer to work by the book. leaders may not be able to exercise· all the variables tha. if culture is taken explicitly into account. to rely on rules. Is his own cultural profile not a contingency factor that has to be taken account. the differ­ ence between the more powerful members am] the least powcrful members is smAll. the difference between the 1110St pbwel'ful and least powerful is large.~reas where cultural attitudes and values can obviously have a big effect on styles of lcadership have already been tnllched upon in Part One: the wielding of power and the . In such an environment. What Fiedler does not address in his contingency theory is the natur~ of the leader who is makil1gde~~.tes ' . /' '! II 1 'I Cultural contingency factors. 1 I j' I. position to influence the wO.). This ties in with the question of task structure as a contingency factor raised by Fiedler (1967). A benevolent auto~rat or paternalist is not expected to ingratiate himself gratuitously with his subjects.. employees in th.l'kfol'ce and the dominant culture. In Fiedler's terms. subordinate~' expecta­ tions have a considerable influence on whether certain leadership behaviours are feasible. can he be expected to lead a.~ particularly if the . As mentioned earlier. large differences in power are legitimate and accept­ able. They avoid ambiguities in their tasks and prefer to be told how to carry out their tasks. an ideal leader may well be expected to dis­ play great authority. In those sudt:ties where power is more evel'lly distributFo amOl1g the ntemhers. the lcadcrmay well need.Y wl.expeiience and accumulated wisdom will account for more than the actual ability to do the job. handling of uncertainty.sions ~s to how best to lead. Age. Instead of being in a . Shuuld an attempt be madc to reduce the distancF between the lcader und the workforce by incrt!a~illg accessibility bctween the t""o and attempting to engender a friendly iJlteraction.[J. Tn those societies where there is a wide variation in power distribution.·but to do so to the benefitof those being led.' i. Cultures with strong uncertainty avoidance are unwilling to take risks and to assume heavy responsibilities.ltures.compuny to success in a competitive environmel1t. In cultures where there . will first consider the extent to which aspects of culture can influence 'Western' ideas of leadership before examining the question of whether there are attribu. However.ccount of cultural differences working in and adapt their style of leadership accordingly. The idea that leadership effectiveness is the result of interaction between the style of the leader and the char~cteristics ·of the environment is seductive. Two. Hei'e. of leadership that can be found in all c1. to show direction and make sure that tasks are unambiguous andwell structured. the suborclinate11 concerm:d HUl.

I .central tendencies'.~ . of at all levels. increased sensitivity to cultural differences may discourage attempts to get people to adapt to practices Of not values) used in other cultures. Born in Brazil. cultural factors do not stand alone when a company's fortunes are being considered. Thes~ dimensions are given in Table 8. I I II .d was the only feasible solution.·vith il] the Global Leadershipand Organizational Rfh. Ghosn was parachu~e. Evans et al. its companies and its representatives and more on particular examples.2 below. be as great as th~ va. cultural context. the company and its other stakeholders is. discussion turns to an individual leader in a particular company in a particu~ lar. case studies and books have tried procedures and direction. (2002) rightly warn their readers of applying a cultural perspective that only takes account of '.variables The question of the universality of leader behaviours is one of a numher of issues dealt . Consider Spotlight 8. determining how best to lead a company.including economic ones .Js'building within transform business practices. Concept 8. and. became aware of how distressed Lebanese parents.2.. . but from Nguyen-Huy's Is the basis of a person's authority within a. the ·focus is les~ on the -general tendencies displayed by . not only to accept radical changes to the way in persuading the company's employees that the company operated. I Universal attributes and cultural . they recognize that culture may be used as an excuse for not trying to make changes to ensure a company's success. Ghosn managed pany had been undermined.1 billion had become ~. The research carrieJ out sofa!: has determined sixg]oba!leadership dimemiuns which SLlmmal'ize the cha'racteristics perceived culturally to furtber or to impede effeCtive leadership. The variance within a . rl I I l. they maintain. Good intentions.1 Different conceptions of leadership fJ LJ' Inevitably. Ghosn's concern with implementation helped Nlssan's net loss of $6.need to be considered when .iation o(~eans across cultures. Within one year of his arrival. It is clear that' company.' ass. The need to restore to persuade the Japanese side of the alliance Nissan's 'face' was clearly an Important factor. Ghosn helped create an'(j all employees 'were about Nissan's poor per­ led a strategic alliance between a French andformance.:wioul' Effectiveness( GLOBE) rest:aidl programme..7 billion~ This transformatiorf This happened In a country where every­ in the company's fortune was brought about thing is done to avoid uncertainty and where by an outsider who managed to cut costs and careful.culture can.a certain culture. drawn~out consensl. need to be put into practice. in by Renault to Join a company with debt however. Others factors . norm" What wus the secret ofGlwsn's success'rally a prerequisite of any change in business Many articles.ure the plan's success. Indeed. Moreover. lucid account (2004) i'\lone. By doing so. net profit of $2. and of $20 billion. Although the authors acknowledge that the cultural perspective offers considerable insights into attitudes towards power and uncertainty. J Turnaround The experiences of Carlos Ghosn are worth Ghosn listened carefuJly to the company's woes dwelling on in this context. and when'! seniority to reveal the answer.1J . 1P. of how their pride in the coma Japanese car manufacturer. but also to imple­ what became known as the 'Nissan revival plan' ment these efficiently.

the authors are able to dt:rive a number of .that aligns with societal cultur. partly In Singapore)' d) as a traditional principle of humanity repOSing faith and confidence in followers.2. (2008: 1042) detect four different types •. . show that this dimension has an impact on effective leadership varying from very positive to neutral. Fran'ce) b) as a legal principle to organize interactions at work between labour 'and capital (or management) manifest In societal and organizational cultural practices and values .t. . ' .Concept 8.' o'f Autocratic and Self-centred Leadership.nomous Leadership. egalitarianism and not flaunting one's status asa leader (evident in several AnglO countries) b) as friendly. in times of cdsis direct and clear (in New Zealand). being Informal and not preoccupied with oneself (e. although the range of scores is less extreme. (e. the culture-specific findings show the greatest'variation of the six dimensions. compassionate (in the United States) or aggressive (in Austr~lia) . for this country very much reflect those of Anglo countries concerning Humane Oriented Leadership: 'leaderS sho. Argentina. r 1 J I a) as an opposition to non-partici. United s. possible standards. autocratic or directive leadership (e.r Their findings concernm~ Humane Oriented Leadership. for example. . the fourth leadership dimension. as contributing slightly to organizational effectiveness in Germanic Europe. both between individual societies and between culture clusters.sonal characteristics in modern North American leader.species' on the basis of the country-specific findings of the GWBE project (Brodbeck. Brodbeck et aI. lo not flaunt their 'authority andshollid behave in un egalitarian way' (2008: 1046).. Brodbeck et ences ~on these dimellsions which appear to be based on differing cultural practices and conceptions of leadership' The other leadership dimensions in Table 8. i I As for AutO. As with Participative.g.ship conduct that surface. Self-protective Leadership. Leadership. .1. In treating others as equals.g.' resentment aQainst formill rulE''!! <"nd <I preference for open exchange (e. for example. (2008) detail key differ­ Using GLOBE's country-specific investigations. open.ates) d) as a set of communication behaviours Il~e listening and inviting suggestions from others .with regard to their perceived effectiveness. and taking personal care of their well-being (India).. r .. also show considerable variation. This dimension is perceived. (2008 j indicate. Greece). In the Netherlands.Q. but perceived as ineffeGtivf' in Anglo countries. c) as a Confucian principle of moderation and maintaining harmonious social relationships (China. As DwdLclk tel .g. 1 .1 Diffe. (or 'species') of this particular f f l c e t : ' " at . The findings concerning the final leadership dimension in Table 8. The findings relating to Germany reflect the value given to autonomous leaders with considerable technical. Although Participative Leadership is found to contribute. 2008: 1043): a) as a set of values and behaviours that espouse equanimity. finland. to effective· leadership in all the cultures and clusters studied. generous Interpersonal Gonduct. however. eXpertise: they negotiate their involvement 'in activities to ensure the highest. Austria and other Germanic COUntries) c) as a set of per.2 are far from being universal since there are considerable variations between societies . giving them freedom.pative. . autonomous ieadership is considered to be a facet .. the findings .

j.. Masculine leadership styles are generalized as being less interpersonal-oriented and more focused on the task. The concept of charisma. perceive and exhibit behaviour that reflects integri~y7 . Gender can be regarded as just one of many social differences that play an important' role in the development of leadership styles. qualities that enable them to survive arid even thrive in a competitive environment. i . ' . Task-oriented behaviour (as evident in transactional leadership) may be mOre appropriatt: at: timt:s.of leadership may be hampered by gender stereotypes clouding the perception subordinates have of what makes a successful leader.. Those societies scoring high on the cultudtl dimensions of Power Distance and Uncertainty.. of which women take the major share. female leaders may see themselves compelled at times to perform in a task-oriented way while still practising-their 'natural' intuitive. . but this does not exclude the possibility that the way trans­ fbrmational attributes are expressed may differ between cultures. Elsewhere. .. may . independence and objectivity. but what each culture perceiv~s as charismatic behaviour may differ. How do people in different cultures conceptualize. . are to do with rearing children and maintaining family cohesion. One theory frequently.well be shared among all cultures.I ..characteristics appropriate to the position. 'natural' perfoClnlUore tasks outsirll': the home and require. _. aggression.. . .. Thde thoughts echo those of Bass (1997) who proposed that transformational! charismatic leadership may be universal.•.> the term 'integrity'. decisive behaviour. If feminine leadership styles are different to male-oriented ones. These features are related to the stereotype view of women as being warm. Feminine leadership styles are generalized as being conc~rned for the welfare ofothers.. sensitive. whether male or female. The stereotypical traits related include decisiveness. In the same way that male leaders may need to pay more attention to interpersonal . . iii I I 1 186 --------------_. A further issue with regard to universal attributes of leadership is that 9f gender: are . One question that remains when examining leadership dimensions across cultures has essentially do with the meaning of th~ terms used to describe aspects of leadership. House et . So many factors within an organization need to be considered when determining whiCh style of leadership is appropriate. it does to an American. Avoidance tend to have scores that s~ow' that Self-protective Leadership has either no impact on effective leadership Or contributes slightly to it. does it mean the same thing to a Chin~se as. an attribute that is considered desirable in all the cultures studied: 1 to' .o ~. Men. the matter of their effec­ tiveness brings up the question of contingency. considerate and' expressive. put forward in the literature to account for these differences is based on the division of labour ip tlle home: qualities required for domestic activities.~ . (2004: 727) address this issue succinctly by referring t<. Developing an appropriate. for example. democratic and charismatic. while focusing on the. some universalattributesmore prevalent among male or female leaders? One starting-point is to try to determine whether there actually are gender differences examines the influence gender has on aspects of leadership. effectiye style. the theory maintains. empathic s k i l l s . Chapter 8 Culture and leadership· !( ! I Ii: I ii \. Overcoming these stereotypes._---. and relation-oriented behaviour (as evident in transformational leadership) more appropriate at others.. Self~protective Leadership is considered to inhibit effective leadership.. remains key for any candidate ror leadership.' skills alongside their. than those for Autonomous Leadership..

one survey carried out across a number of countries . Female respondents. among other!oped countries. housework and child-care n. ranked in the middle.been as much difficulty: she pointed out this week. In Judy Rosener's (1990) survey. The Economist magazine considered the words of Harriet Harman. both heavily implicated in the cri?is. I·". Most equal were Sweden and Norway.ld been run. 11 1. 'Of bankers and bankeresses·. cultures? Although international research in this arca is thin on the ground.between sex equality and suscept· ibility to the financial crisis. together with matched male cot'interparts. They saw th~ power they used as coming from their formal. 8 A\lQus! 2009: 392•. their interpersonal skills and their ability to work hard. Source: Thl! Economist. both of which look set lo wp. banks. r\ . on the other hand. '. 'Men cannot be left to run things on their own: she told a newsp'aper.1I ~. Rosener summarizes the differences between male and female leaders in terms of the transactional and transformational behaviour referlied to earlier. their leadership performance as well as the ways they used to influence those with whom they worked. to move beyond self-interest and consider the interest'of the group as a whole.) Ms Harman also thinks her party should change its rules so that either its leader or its deputy leader must be a woman. 'Somebody said that if it had been Lehman Sisters. ! : II . r1 I \ Egalitarian Index On August 3rd (2009) Oxford Univorslty publbi1ed en 'eYCllItarian Index' of 12 rJp. and punishments given for inadequate performance.'. their power to come less from their position in the organization and more from their own character .l I i I ~. one of the few countrje~ with. (That 'somebody' is Neelie Kroes.lny critical events during the turbulent period had been the bank-' ruptcy of Lehman Brothers.' thl! European Union's competition commis­ sloner. ning the show. there might not h~ve. based on research into attitudes to the sexes. instead of Lehman Brothers.I \ 1. d' II.' straits.their charisma. . hierarchical position within the company. SOlvent. The Economist.both in the East and West . I "IT Concept 8. One of the mi.lOrdinates to see the bigger picture. in desperute . a numberof commentators considered whether the crisis would have been less severe if women h<. Malfrespondents generally saw their job performance as a series of transactions with subordinates whereby rewards were given for satisfactory performance. Anything you can do. who at the time was the deputy leader of the governing British Labour Party.still has a certain resonance. members of the Intcrnatiunal Women's Forum.'j I. Female leaders considered.sponsibilities. a global financial services firm. Irelanrl. I can do better In the aftermath of the international financial crisis which began In 2008. were asked to describe. 8 August 2009: 392 (extract).ather the: recessiun comparatively well. saw their leadership role as getting su1.1 Different conceptions of leadership . came aoy direction .~ I \ . 'Of bankers and bankeresses·. n I \ I j Do . Next came Britain and America. It showed no empiric~1 link . Australia.these· considerations concerning gender and leadership apply across'. who likes to put this about in speeches.

1. certain facets of charisma are valued differently in different countries. it has taken on a much more human orientation. be a consenSUS across cultures as'to what makes an effective leader (including integrity. Rosenh's survey. Ouchi put forward the Z theory to explain how Japanese management works. for example. decisiveness and being team-oriented). and . this concept has indicated that some modern concepts of leadership generated in the West appear to have theiranteced~nts in the East.. The consideration '. to show the Americans what they could learn from their Japanese counterparts.r.een in other countries. ' This concept has briefly described cultural variables that apply to conceptions Qf leadership. However. charisma.vomen show others. display differing behavioural tendencies whatever their country of origin. However. ' .I' I 188 . It has also shown that there are consistent elements of leadership recognized across cultures but whose form may vary between cultures.1lJ n a [/ Chapter 8 Culture and leadership . How do you a~count for their success. it appears.t ti1ese differences is based more on culture tha. as well as other limited research carried out in the area where leadership. Pinpoint which aspects of the leadership dimension outlined in Table 8. say. Male attd female leaders. especially In domestic companies. Many advocates of the theory indicate that type Z companies are among the most successful types of us cOlJ1panies.your country.r gender. One element of transformational leadership referred to in this chapter is charisma. the way in which these attributes are expressed in actual behaviour can vary considerably from culture to culture.' t . differences in the leadership style employed are based more on culture than on gender.t. leadership stili predbminate In that country? 2. even if the contexts within which leadership is affected are very different. it seemSi can generate similar perceptions of leadership. gender and culture interact. could generally be regarded as potentially effective managers in. The same applies in a way to the question of gender and leadership: the differences in leadership style between males and females ob~erved in one country are also s. The concept of leadership in the West has evolved. Asia because of their person-oriented leadership skills. Although leadership style may be based on gender. Female managers working for Western companies.2 prevail In . ' . suggests that differences between genders in one culture are also found in other cultures.ur tends to rpflp. as well . but the ways in which behavio. Different cultures.. Moreover. bearing in mind that the principles of scientific . Research shows that it is a universal attribute of good leadership. reflecting the influence of the way leaders behave In AsicL T118i'e now appears to. Companies are becoming increasingly aware of the need for relation-oriented skills in their global endeavours. Based originally on scientific principles.

Chhokar. (1990) 'Ways women lead'. F. for example. F. McGregor. New York. E.\. Carbondale. IL: SouU1ern·lllmols University PrE'lss: 189-207. M. (1997) 'Does the transactional-transformational paradigm transcend organizatiollal and national boundaries?'.Business Review.p. 68 (2): 119-125.-L. New York. j'loljse. and Barsoux. . New Yorl.. NY: McGraw-Hili. New York. R. and Gupta.ncy Doubleday. Thousand Oaks. accessed 1 June 2008 (http://knowledge.. Hanges. Leadel­ ship: The Cutting Edge. Brodbeck.B. NY: Free Press. NY: Cum'. R.k.. J.J. S.2. Ouelli. Hunt and LL LArson (eds).. CA: Sage.W.M. Morden. 2 (4): 15-23. (1995) 'Six country comparisons'. P. V.)avidiln. Rosener. 3id cdn. ~tQQdill. S. J...M.J. Leader to Leader. 12 (Spring): 24-30.19\.5. Javldan. and Avlolo.J. Dorfman. P. P. and Future Directions. Conclusions.Further reading and References· as their ability to empathize. and House. F. R. (1999) 'Managil'\g quietly'. Pucik.H. the book glve$ dn Interesting review of leadershlr theories. and Gupta. Hanges.. (2004) 'Building emotional· capital for strategic renewal: Nissan (1999-2002)'. J. Studies of 25 Societies.C. h I. . New York.Journal.J.. Evans.B.J.W. NY: McGraw-HIli/Irwin. Sass. <. American Psychologist. Culture and OrQdlllzatlons: The GLOBE Study of 62 Societies.. T. NY: Free Press. 52 (2): 130-139. B. H. B. CA: Sage. . (2002) The Global Challenge. Thousand Oaks. Nguyen-Huy.R. (eds) (2002) Developing Potential Across a Full Range of Leadership: Cases on Transactional and Transformational Leadership. (t:!us) (2U04) Leadership.(196n Thp.E.! Yorl~.. P. (1967) A Theory of Leadership Effectiveness. (1985) Leadl:!rsl1lp and Performance Beyond Expectations. D.. V. (1960) The Human Side of Enterprise. O. NJ: Lawrence ErlbaumAssociates. are features that ar!.J.. One of the alms of this book. as described in Concept 8. I l Further reading House.10) The Fifth Discipline: The Art and Practice of the Learning Orqanizatio!l.multinatlonals neverthelesstendnot to give serious consideration to female candidates. Culture and Leadership Across the World: The OLOBE Book of In-Depth.J. (2008) Culture and Leadership in 2S Societies: Integration. (1974) Handbook of Ll:!adership:A survey of theory and researcl). Senge.C. (eds)..M. M. J. (..lnsead. the MidC\le East? . NY: Lawrence Erlbaum Associales. Brodbec. Sass. I~. The GLOBE project is a long-term research programme based on an integrated theory of the reiationship between culture ane! societal. organizational and leadership effectiveness. (eds) (2004) Leadership. Culture and Organizations: TheGLOB£ study of 62 societies. !\IY: for managerial positions In. (2004) OrQElnizationai Culture and Leader~h.. New York. Harvard. NY: McGraw-HilI.S. New York. o t. (1977) 'A 1976 theory of charism~fic leadership'.ory Z: How Am"'l iCM BusinF!ss Can Meet tile Japanese Challenge. R. W.M.M. in J. 'I \: I I 0 \I References eas~. Mahwah. . Fiedler. Schein. House. Dorfman. l. Insead . New York.J.G. is to fhid out how leadership is understood differently across cultures. and House. NY: Avon.! said to be held inhigh esteem in that part of the worl(j. case study. I \ \ Mintzberg.G. in Chhok<Jr.:ross Cultural Management: An International . R. Apart from proposing a range of cultural dimensions (dealt with briefly in Part One). Why do you think that"some. r. P.

Just over 30 per cent of French chief exeCutives and directors rate thiS as one of the three things about being a leader. the survey finds.1 190 .' . Public recognltionls more important In France. the best thing about the job Is developing talent in the . der Chef and thebos's " By Alison Maitland Have you heard the one about the three captains of industry? The Brit insists he is happy to have his decisions challenged. The research. . Although few of the 200 captains of industry choose 'being in a position of power' as one of the three best things about the job. Germans as 'dernocrats'and British as 'meritocrats'.The ability to hand-pick their team is another perk of the job for the French.. German and French managers. Answer the questions which follow the article. these are the reveali'ng findings of a new survey of 20bchief executives. in Germany and B r i t a i n . to regard this as important. The French prize the autonomy they gain from the Job. compared with 16.rate this $lmong the top three benefits of leadership. It is often assumed that rules about leadership apply regardless of culture or nationality. it finds that fewer than three in 10 French bosses are. Germany.'ed with half of Germans Clnd more than nirie out of 10 busi­ ness leaders in'the UK. It highlights bIg diff~r'ences ' in national attitudes to accept the responsibility of authority but you don't talk about it. or if you own a company. describes the results of a survey among British. Seventy per cent of arltish bosses and nearly 50 per cent of Germans ­ but only 14 per cent French ones . UK. ' Lepatron. status and decision-making that global companies would do w<!1! to understand. But the survey suggests this is an over-simplificatiOn. labels French captains or industry as 'alltocrats'. managing director of DOl Europe. co-ordinated by MORI for DOl.I J t ! 'Read the following article which. Germany and France. and eight times more than the Germans. reflecting the kudos attached to a senior position in he says. 1. per cent in Germany and just two per cent in the. Nearly two-thirds count itne freedom to make decisions with minimum interference' as one of the three best things about being a leader. importance of humility. ' ' For business leaders in the UK and. chairmen and directol's in the UK. ' hi support ot these catchy generalitfltions. whereas typically In France. And the Frenchman enjoys wielding 'power without having to consult first.' says steve Newhall. the French are three times more likely than the British. but one that Is less highly rated. 'I enjoy the decision~making without having to confer with others: says one Gallic captain of Industry: Only 46 per cent of bosses in Germany and 39 per cent in the UK regard this as being Important: . The German stresses the. compi:l. ' Far from being a joke. company.happy to be challenged about the deciSions they make. it's a badge of success thilt you wear In every aspect of your life. 'In Germany. an international human resources consultancy.if you belong to the upper echelons of management.

>.ACTIVITY 8. with nearly 1 60 per cent of business leaders saying their decisions are likely to go unchallengfid. In the UK. The importance of the team is widely appreciated. in private one-to-one Intervi8ws.. which contrasts with the Anglo-. and that nothing can fully prepare I!OU for the challenge of running a company.that tieferenc\:: Is strongest In Germany.Despite the man. Newhall believes this reflects the lingering stigma of failure in Germany. \their own: says Mr. but he says the anonymity of the interviews makes it likely these are genuine differences. and working efficiently within a team is the best way: . 'Sometimes the amour1t of Influence I have frightens me: says one German boss. 'Again and again.' Another comment: 'You have to remain humble: personal vanity and over-estimating your ability wlillead'to the downfall of the enterprisl>: Given such modest responses. while not abandoning their individualism. the chances are that you will trip up: German leaders stand out in the survey for their social conscience and their concern about the respons' .1 \ Is it possible that these differences simply reflect greater honesty from the French about enjoying the exercise of power. . As a German respondent puts it: 'It is a . 10 (Maitland.strategies we have yvorked out togother: A i-rench respondent concurs: 'We are working in an evermore complex environment. 'The intention was to get as honest an answer as possible and to probe behind the is better than another. it is perhaps paradoxical .' I I . This emphasis on collaboration is epitomized hy a Gar 0 says: 'I see myself as a service r provider in -a company run as a re everyone pulls together to aChieve the. '\ Copyright © The Financial Time. 'I have to be very cautious and thoroughly weigh up the pros and cons of any decision.)ng /:lard climb to the top of the mountain. \ Leaders in the UKappear the most upbeat. But executives of iiiterna­ tional companies need to be like chameleons. . What keeps the. able to adapt to the corporate and nationdl culture in which they are working. style.y differences. ibifity that goes with power. compared with just over two in 10 In Britain. There is a nice view. the research finds. such .merican preference to see failure as an opportunity to learn and move on. warring \::gos in the management team are a big concern. the Financial Times. admits It is hard to be sure... While this may simply \ . For French leaders. whether face-to-face or 'on. p. . 191 . and on th~ir team's success rather than .comraredwitl1 only 28 per cent of loaders in the UK and 20 per cent in France. Newhall. the 001 report suggests that Fren. If you take an auto­ cratic style into a culture that expects a more democratic or meritocrati. 'The danger for any leader is ollly being able to operate within one of these styles. ~ewhall .m awake at night are external pressures. "the establishment" is used more as a derogatory than a positive term: He says he is not suggesting that one leadership . We know about the grqndes ecoles system where the elite are prized.I I Source: from Le Patron. Four in 10 German bossPS clte fear of tailure as a top conc~rn. captains of " \ industry stated their focus to be on responsibility rather than power. der Chef alld tile boss.). '\ . A final common theme is that the risks increase the higher you get.' he says. :. but it Is quite wind)'. Mr. perhaps because of the more 'stable economic environment. Nearly half say that one of their top three concel ns IS having to make tough decisions that affect people's futures .)ce issues. the phone. 'The French are more likely to respond in that way because it's something that's acceptable within their cultural norms. Enjoy it while it lasts. Ltd. Lack of personal time Is a common concern. while the British and Germa~s consider this would be politically incorrect? Mr. reflect Gallic style. 09/01/2006.executives' fondness for independent decision­ making may !tiad to friction. some worries and beiiefs are shared across all three new legislation and corporate governa!. chlef!.

Questions 1.j In u Chapter 8 Culture and leadership . Enter key examples In the table:below of behaviour or attitudes that reflect the label given tCfeach type of leader at the beginning of the article. Look again at the text and try. to determine what questions were used in the survey. 4e patron: theaufocrat .. die Chefln'and the female boss'.I 2.would you have expected to see in the survey? 'I i 192 . How reliable in your opinion. If the title of the article hacibeen 'La patronne. ' 5. The bess: the meritocrat 3.of the respondents. . i:lre tl"lli results of the survey? Refer in partlcull!lr to the comments . which of the above labels would you use to descrfbe them? Give examples of behaviours that reflect your labelling.if any' . 4. . how valid do you think the results of the survey would have been? Whatbehaviourai or attitudinal differences . .'.' Derchef: the democrat . made In 'the text about the 'honesty' . If you were asked to classify the bUSiness leaders in your country.

work together to achieve the r jOecision-making withIn a Dutch company is 'slow. the manager is seen as facilitat­ : !ng and COcordinating action agreed upon through consensus. Below Is 1. where reference is made specifically to the X. deCision-making still tends to be centralized and done so on a short-term basis since economic . Y and Z theories mentioned in Concept a.ons: procedures must be followed scrupulously and comprehensive information gathered.meetings where the decisions arc taken· . Rather than being someone who prescribes action. This reflects'the emphasis on Theory Y and Z. oetting the task done.1 summary of thesedlonsdevoted to each country's management style. Here. The approach is a rational. . Nlth improved education and a developing economy. The actUal formal . reflecting their uwncmanagerial t'''ills as well as their con tern . . German manag. . Tony Morden (1995) compared six countries in terms of their national and bu. . i I I ! c· I ! 193 .ers see tl1eircompany as a 'community (I·f individual people working together'. \ The need to build consen!>lls is uppermost.jermany . : : Although consensus is regarded as important. They are fpected to be decisive while drawing upon th~ expertise and experience of the team they are leadinQ. This view is iiflectedin a participative style of management that reflects the notions in Theory Z. whereby all those involved.' MBWA Is used to check '-lhat underlings are doing what they are told to do and at the same time to give fatherly reassurance . formal and deliberate'. •. then answer the questions that follow. including managers who are senior in rank.: needed to make decisi. When managers delegate authority.l r) J.example'.·. ' . referred to by Morden as 'management by walkino around' (MBWA).for th@ dev~lopment of theil' subordinat~s as contributors to the organizaI in's development. . . This means that tIme i. . . as does lhe decentralized and autonomous approach. r to l. Theory Y is being applied which entails increased responsibility.ACTIVITY 8.'as well as their working practices and management style. Theory X is reflected in the way that managers exercise authority and direct!>ubordinates.slness cultures. analytical most effective outcome.2 In his article entitled 'Slx country comparisons' In Cross Cultural Manaqement:An International Journal (2(4): 15-23). managers are expected to 'lead by . jonditions (especially inflation rates and high dependence on global commodIty markets) discourage longer term planning. typkal organization has a strong hierarchy with control enforced from the top.tRead the summary.~ ~ral:1I . I jare usually preceded by informal consultation. they do so in a clearly defined manner.Llone.:· However. Management styles in six countries· Th~ Netherlands .

Even though hierarchy is important (and essentially based . Approval from the top is usually required and once gained will allow a carefully organized implementation.. 1'1 :1 3 . deeply involved in< the company as well as in civic affairs. r I J Questions 1.11 Maintaining harmony within the company at all levels Is reflected In the way that all those who will be involved in implementing a decision are involved In the making of it. Japan II 1.heory Z? 3. deference to it is subservient to maintaining harmony and meeting production and quality targets. The final version is then passed up to senior management who decide . A proposal is circulated which is added to and/or amended by those involved. Meetings tend to be used more as a tool of management control rather than of cor munication and consultation. despite the personalized and humanistic facets displayed.' mands great respect and wields Considerable power.whether or not to implement the proposal. The boss will. Management style is 'beyohcLTheory Z'. however. South Korea and Spain Is being described.·0 . discipline and order. If there is delegation. not even wl1en they have to implemef)t wh. the benevolent autocrat. Which factors do the management styies of these three countries share that reflect . What does this entail exactl\ 194 . Employees work together and each work-group isresponslble for mainta'ining their performariceand ~or meeting the standards required~ South Korea . on age and seniority). Everyone working in the company shares a communal responsibility for ensuring that the best decisions are made and goals attained. Managers need to be competitive and risk-oriented and ready to take bold decisions. make informal use of personal contacts within the compi:my. people who can trusted and who can deliver useful input Theory X therefore ten.. 'I' Iii. Middle managers are not involved in decision-making. Employees are regarded as a valuable asset In an environment where the chaebol are competing with each other. Spain Strategic decisions and business plans generally tend to be formulated at the top. bold in his actions while showing concern for the interest and security ( his famijy of employees. Chapter a Culture and leadership . . What do you consider to be the main differences between the Netherlands and Germany in term of Theory Y and T. has been decided. Such leaders are often charismatic. Theory X predominates through the need for authority. but only after carefully analysing all the relevant issues and a.ds to predominate.rj 'Ir i J The chief executive heads a hierarchical and disciplined organization and is usually a strong figure who com. The boss is regarde' more a. Theory X? Which factors Indicate any differentiation between the styles? 2.lternatives. Training is regarded as an integral part of business activity and required of all large companies. Management style in Japan is considered to be 'beyond Theory Z'. Theory X Is referred to when the management style of Brazil. then this done for a short time-frame and with cle instructions.

whether organizational or national . the relationship between company culture and strategy is doser than would appear. can be made between strategy and culture? strategy and corporate culture Is culture used to formulate strategy.1 addresses this issue.ffect of strategy on internatronal mergers and strategic applications such as mergers and acquisitions. The p. This chapter takes the concept of strategy as it is used generally in business and addresses the relationship . from marketing through human resources to communication. The role of national culture in the formation of company strategy. if any. It is the company's imagination that determines how this world could or should be. The question is: what link. 195 . When this world presents new problems or changes. This know­ ledge also includes the way it interprets the world and its position in it. then culture devises a company's strategic response to them.if one exists . it is found in all areas of man­ agement. Strategy can be seen as less to do with making decisions and more to do with knowledge. or is it just a component of strategy? According to Schoenberger (1997).e. while Concept 9. ~ If' Sine!:: the 1960s. This means strategy undergoes the influence of culture since it is through its culture that a company creates an understanding of itself as well as an interpretation of the world.between strategy and culture.Strategy is not only an element of managing organizations.2 attempts to explain the influence of culture . Learning outcomes After reading this chapter you will gain an understanding of: G The I elatlol"lship between strategy and culture. companies have been looking for strategies to use in their competitive environment and so help realize their objectives. i. what the organization knows or what it thinks it knows. Concept 9.

They argue that their definition of culture . when it comes to strategic management. The application by management of the strategies chosen have created beliefs and values. Schneider and Barsoux (2003) also underline the relationship between culture and strategy. models and jargon used are simply cultural artefacts. C'ultural models of strategy Deresky (2003) argues that most companies use strategic planning to evaluate their future prospects and so decide on strategies to be taken to accomplish their objectives in the long term.a solution to the problems of external adaptation and internal integration . Although the strategic planning process is an ideal way for doing so. The information obtained is qualitative and subjective in nature because it comes sources. '. friends and colleagues. this does not prevent decisions being influenced by the personal judgement. culture is also a product of strategy. This implies that a change in management can radically change the eventual strategy of the company. I 1 Assumptions regarding internal integration are relevant to questions <. But do these assumptions have the same meaning in different cultures? . Schneider and llarsoux (2003) divide management from different countries into two types according to their behaviours. control. and these are fairly quantitative and objective in nature. but also deciding what is to be done with it. Fatehi (1996) adds that formulating strategy .. is not so much how to adapt the corporate culture to a new strategy as to understand how culture produces strategy'. Furthermore.I ' If it is examined from this standpoint. human activity and time): ~ Controlling model: the departments responsible establish slrategic plans and present them to top management or to the board for their consideration. relations and ideas. .could also be used as the definition of strategy. says Schoenberger (1997: 14). I Cultural factors of strategy Following the same line as the previous authors. since the strategic orientation of the company has in the past moulded specific practices. however. Adapting model: responsibility for strategic decisions lies with all levels of the organiza­ tion. the tools. and behind these managerial practices are assumptions. strategy is a product of culture. Culture and strategy are therefore inextricably connected.--Chapter 9 Culture and corporate strategy . is not just a question of collecting information. At the same time. The actual departments where strategic plans are made. experience and motivation of the managers who make them. What companies need to resolve. . power. Such decisions are in no way 'free of human biases' and in fact the whole process of 196 i . The company's reports are the main source of information about its environment.j. values and assumptions (wl1cernillS uIIu'l'tainty.uch as who is Involved and who takes the decision. i. The process is the same: strategic decisions are made to adapt to the environment and these are implanted and integrated within the company by means of human resources. This is what Schneider and Barsoux (2003: 122) emphasize when they say: II.



Concept 9.1 Cultural view of strategy

collecting and examining information is a perceptual one based on culture. If this is so, in what way is the formulation of strategy affected by cultural differences? Fatehi (1996) suggests that two areas in particular are influenced by culture.

with the environment

To illustrate cultural differences in this area, Fatehi (1996) uses what he refers to as the 'mental framework' of two types of person. The first is 'engineering-oriented' and goes looking for information to support a strategy (change) whereby the environment can be altered to the benefit of the company. This orientation rests on the belief that humans can control their surroundings. The second is 'symbiotic-oriented', believes in close ties with nature and therefore looks for another, non-destructive strategy for dealing with the environment. Fatehi (1996) refers to the fatalist beliefs of Buddhists and the conviction amongst Muslims that events are predetermined. Both recognize the limits humans have when trying to control their environment.

Relationships among people
Fatehi also distinguishes differences in the question of interpersonal relationships within a company. Formulating strategy is just one of the functions of management involving a predictable pattern of relationships. Within a certain hierarchy the reaction of a sub­ ordinate to the order of a superior will be in line with expected modes of behaviour. To show differences in attitude among employees towards a company's strategy, Fatehi contrasts US and Japanese companies. The former cUllsitlt:r possibilities of success as 'environmentll) opportunities'. They formulate their strategies in such a way that they do not have tu demand individual sacrifice of their employees. Japanese companies, on the other hand, may demand a number of strategic choices, of which one or more could involve personal sacrifice from their personneL The individual employee, however, does not see this demand as a self sacrifice since it is made for the benefit of the company. Trice and Beyer (1993) also take up the question of the role played by cultural factors in corporate strategy. They too dwell on the differences between US and Japanese companies. Although there is intense competition between the two, the way they compete is shaped by cultural differences. Competition is inherent to US culture: companies in the US compete fiercf'ly for market domination. Neither the laws in place nor the managers and their way of thinking make it easy for companies from different sectors tu co-operate with each other, not even outside the US. The Japanese culture, however, is more to do with co-operation and harmonious relations - as was described in Part One. Nevertheless, they can be as competitive as their US counterparts. The difference is that Japanese (.;ompanies practise competition to achieve collective goals against 'outsiders', This type of competition preserves internal harmony and benefits the country as a whole.

The effect of national culture on strategy
In 'what ',val' can national culture affect strategy? Not only on the choice of stn1tegy but "Iso on the way it is realizt'd. So. this i5 about leadership and the decision-making process. Tayeb (2003) describes how, for example, Swedish managers spend more time making decisions

Chapter 9 Culture and corporate strategy


than their British counterparts. The British, on the other hand, require more interaction and consultation with experts. Schneider and Barsoux (2003) also refer to the cultural elements of decision-making: who makes the decisions, who is involved, where the decisions are taken (in a formal meeting, or elsewhere). Nor should the matter of time be forgotten: how quickly the decisions are made. The whole process reflects different cultural assumptions. Tayeb (2003) mentions another area where national culture impinges on strategy: the pro­ duct and services sectors. Consumer demand fot certain products will differ from country to country, from region to region, and this will influence the different markets. The needs and preferences of the consumers need to be taken into account when analysing the resources and capacities of the organization, particularly when business overseas is concerned. Finally, the question of national culture comes to the fore when a multinational has to make strategic decisions about the maintenance - or otherwise - of the national culture in its local subsidiaries. As Bartlett et a1. (2003: 672) indicate, if a corporate strategy is used, managers at headquarters will not necessarily have a clear insight into the business environ­ ment and the cultural differences at play in the foreign markets where the multinational operates. They underline the importance of the role of the country manager in the imple­ mentation of company strategy. This manager is at the centre of the strategic tension between defending the company's market positions against global competitors on the one hand, and satisfying the demands of the local subsidiary on the other. These demands usually include meeting the requirements set by the host government, responding to the specific needs of local consumers and reinforcing the company's competitive position with local (potential) resources. The country manager assumes the role of 'cultural interpreter' who is expected to be able to give information about the national situation to 'those whose perceptions may be obscured by ethnocentric biases'. In short, it is necessary to understand the national culture of the host country, to respect the local cultural norms and, at the same time, to understand the corporate goals, strategies and values and communicate them effectively Lo lht: lUi.:al employees.


Implications for international managers
Why is it that one company succeeds in the global market and not another? Some analysts claim that success is due to strategy, olht:l~ ~ay il b as a rt:sulL uf slrul:lurc ur technological innovation. Black et a!. (1999) argue that the key to success is the people involved. It is they who formulate the strategy and implement it, it is they who create and shape the organiza­ tional structures and it is they who invent and use the technology. In this regard, global assignments can be very important strategically for the company. The managers sent from headquarters to the subsidiary abroad can not only concentrate on the specific needs of the local market but can also analyse the tendencies in the global market for the benefit of the whole company. By going on an international assignment, the managers involved can also develop their individual knowledge and competencies, particu­ larly sim:e Lhey need to understand and work with people from another culture. As Black et al. (1999: 3-4) write:
Managers who fail to develop these skills, and organizations that fall to develop these managers, risk being Irrelevant in the twenty-first century.

But how is a manager to develop these skills? How is a manager to gain insight into the attitudes uf those involved in a cross-cultural siLualiun and mudify the management strategy

Concept 9.1 Cultural view of strategy

China suspends India power projects
By James Lamont In New Delhi
Last year, India introduced new limits on the use of foreign labour. Only 1 per cent of a project's workforce can be foreign. On power projects the limit is 40 skilled workers. Parvesh Minocha, the managing director of the transport division of Feedback Ventures, an Infrastructure consultancy, said India would be forced to turn to expatriates, particularly experts in project management, to help it meet goals in an environment in which cost and time overruns are the norm. China, India's largest trading partner, is a big supplier of power equipment and other infrastructure. It also has a reputation for building power stations faster than its neigh­ bour. McKinsey, the management consultancy, estimates that it takes double the time to build a power station in India as it does in China. Some Chinese companies, such as Huawei, are making efforts to localise their operations to be seen more as an Indian company. Its ex­ ecutives say they need a strategy to overcome prejudice against China's low-cost contractors and equipment in spite of their wide application across India's fast-growing telecommunications industry. Source: from China suspends India power projects. The financliill Times. 23/03/2010 (Lamont. J.), Copvrlght © The Financial Times Ltd.

accordingly? This does not mean that the manager has to have a fixed 'new' strategy for whatever circumstances. She/he will realize that the strategy is not to have the same strategy, but to modify it according to the situations encountered - especially since knowledge itself entails learning from experience. This learning is therefore to do with applying skills and knowledge learned in one context to another context. Once a manager has acquil'eJ this competence, then she/he is able to make judgements and adapt to different situations. This cultural understanding is particularly important in mergers and acquisitions, as the following concept shows.

To develop strategies for the global market, companies are turning to alliances. Strategic alliances can create considerable advantages. First, they can help realize increased eco­ nomies of scale and reduced marketing costs. Furthermore, they can result in access to new markets, know-how and technology. Moreover, if the alliance is a close one, a takeover or merger, risks can be shared and products developed jointly. Through carefully managed co-operation, the results of rapprochement between companies (an be seen relatively quickly. Not that everything is necessarily plain sailing: extra problems may well arise - c.:spedally those relating to culture. , This is an area of concern to managers only when things are not running smoothly. The focus is often first on the business advantages, including the merging of products and/or services, strategic fit in the market, and the financial savings. The matter of cultural fit is given relatively little attention at the start. Only when problems arise, particularly

Chapter 9 Culture and corporate strategy

when they interfere with the business goals established through an alliance, are they given real attention.

Carmakers' alliance faces cultural chasm
By Daniel Schafer in Frankfurt and John Reed in London
When the chief executives of Renault"Nissan and Daimler kicked off a strategic tie"up at a picture-perfect signing ceremony in Brussels on Wednesday, both quoted philosophers from their partner's respective countries. It was meant to demonstrate the Franco"German corporate bridge their partnership was building, but the quotations instead suggested big differences in how Carlos Ghosn and Dieter Zetsche viewed it - and pointed to potential future friction between their companies. Renault-Nissan's Mr Ghosn spoke about creating a 'technological powerhouse: and quoted Hegel: 'Nothing great has ever been accomplished without passion: he,declared. Daimler's Mr Zetsche; who chose to emphasise the tie-up's practical side and the hard work it had taken to conclude, cited Voltaire with 'Work is the father of pleasure'. Mr Ghosn has long been an advocate of cross"shareholdings in an industry facing growing pressure to be present in every market and vehicle segment. He had long spoken of adding a third partner to the ll-year-old Renault-Nissan alliance. But Daimler was burnt badly in past misalliances with three other mass-market carmakers: America's Chrysler; Japan's Mitsubishi and South Korea's Hyundai. Max Warburton, analyst with Sanford Bernstein, said: 'Daimler is clearly still scared by the Chrysler disaster, so it will see attractions in a much looser co-operation:. As Mr Ghosn acknowledged, the 'strategic partnership' announced on Wednesday falls short of the cross­ shareholding aliiance between Renault and Nissan. However,it goes well beyond the smaller, time-limited collaborations on cars, engines or plants favoured by competing carmakers. The ti'llks began in 2009 when Daimler approached Renault about working together on its Smart small-car brand and smaller four-cylinder engines. Daimler had said It Wd':, lalking to other poti>ntial partners on small cars, but Renault seems to have DPAn Its /,t€'st oplion.


The two companies will build three Smart and Renault lwingo mudels ill France ilnd SloVl;!nla tOQethcr, and co-operate on small engines, in addition to joining forces on vans. But analysts said that the partnership - while help­ ing to solve Daimler's problem in small cars - would yield more obvious benefits for Renault and Nissan, including by giving the Japanese carmaker's Inflnit! brand access to Mercedes' expertise in engines. To make the company share knowledge with Renault and NisSan, Mr Zetsche will have to push through a big cul­ tural shift in the lower ranks of the engineering-driven, technology-lOVing Stuttgart company. Paul Newton, analyst at I H S Global Insight, said: 'The opportunities for Daimler are many and obvious, but Daimler's e-nQlnccrs and cornorate culture may have to undergo a radical change for this to truly succeed'. Speaking in his German philosophical vein on Wednesday, Mr Ghu~n sOllght to dismi"~ scepticism about the partnership by quoting Nlet:;che's remark thnt what does not kill you makes you strongp.r. When Renault and Nlssan started their alliance In 1999, he said, some thought tne allidnce 'would probably kill both companll!'~: 'Here we are: he sdid. 'We ere not dead, and WE' are much stronger than WI!' were 11 years aQO.'
!:iource: adapted from Carmakers' alliance faces cultural Lhasm, The FinanciRI Tlme~, 07/04/2010 (Schafer, D. and rI~ed, J.), Copyright <Sl The Financial Times Ltd.

1. Referring to the text, explain what the author means by the phrase 'cultural chasm' Iii us.ed In the title.
Z. How can you explain the fact that the Renault and Nissen alliance is stili alive? What factors have helped to mCike the ililianci stronger?



Concept 9.1 Cultural view of strategy

Merging cultures
As DelavalIee (2002) points out, an alliance between companies - whether through a merger or a takeover - is one area where the most serious cultural problems arise. Only a major organizational change within a company causes a similar amount of anguish and conflict. The success or failure of an alliance is down to the human factor, not the bottom line. And the human factor is all to do with how people come to terms with each other, how the employees of two companies work together to help realize the goals of the alliance: the cultural dimension, therefore. However, as Delavallee (2002) stresses, this is often ignored or forgotten about. The systems that make up the organization of the two companies that are coming together must harmonize, if not become one. The merger process involves making a coherent whole out of the subsystems of the organization of each partner-to-be. These subsystems comprise goals, structures, techniques and culture. The merger process, therefore, has three levels: strategic, organizational and human. On the strategic level, Delavallee (2002) uses the work of Cartwright and Cooper (1993) to explain the strategies used during company mergers. According to them, there is not just one merger strategy but four: assimilation, deculturalization, separation and integration. The type of merger strategy used depends on:

how strong the influence is of the buyer on the culture of the company being absorbed; and the degree to


the company to be absorbed is bound to its own culture.

Compatibility between cultures is rarely taken into account while the merger process is under way. When the two sides are highly incompatible - a discovery often made munths later when people actually start working together - the shock can be overwhelming. If a merger between two national .companies can lead to a culture shock when the two teams have to work together, what l:an be expected when there is a merger between companies from different countries or cultures? Furthermure, what will happen when a manager is sent on an international assignment?

Culture shock
The notion of~r:-fers generally to the unpleasant experience that can be had when coming~ct with other cultures. Marx (1999)11as develoiiecramooeno describe this notion, one '~dapted from that~fthe anthropologist Oberg (1960). According to Marx, international managers experience culture shock psychologically at three levels. She uses what she calls the 'culture shock triangle' to describe these levels (Figure·~ Marx (1999) insists on thetact tl:iaft~""TIlJJUfe shock phase is an integral part of the adaptation phase and, as such, should have no negative connotations. This is a normal reaction of people who confront the strange, the unknown, the foreign, buTWhonave-no indication of future success. ._-. - - - _._-'- - .._ ..-. .-..-. - .- .. - . .. ..­

Howe~~r, the s~'C~s --or otherwise - of a merger between companies at international level depends not only on managers who art:! well prepared for this culture shock and who have the interpersonal skills necessary. Success depends' also on the motives ancl str<tlt'gjc~ of the companies wishing to co-oper<ltc \v ill! or take over another firm.



Chapter 9 Culture and corporate strategy



Emotions From euphoria to depression to contentment
So~lal skills and Identity From national to transnational social skills and an international identity

1 JI


From stereotyping to
culturally effective
Figme 9.1 Culture shock pyramid

Source: Marx (1999): 12.

Company strategy
The current company is no longer what it was nor is it what it will be. This applies just as much to national as to international companies. Every day, the media report mergers and acquisitions in every country and every business sector. In 1998, Paul Koster (1998: 37) was predicting that mergers and acquisitions would go on for decades: 'It is not a wave. There are only more or less intense episodes.' Today, the intensity is evident, particularly in Europe, where consolidation in many business sectors is rife. The hostile nature of some takeover battles has received considerable publicity, as has the increasing number of acquisi­ tions made by 'foreign' private investment companies. 'Companies have cash to spare and the prey is cheap. It i~ 8 l]llf'stion of swallow or be swallowed' (Hendriks, 2004: 27). As the examples below show, the forming of these kinds of co-operation, ranging from mergers and takeovers to joint ventures, alliances and partnerships, does not occur without difficulty:
In the acquisition of KLM by Air France there are also American partnerships to be Integrated. However, the American competition authority does not accept that they want to make International agreements in Europe. It Is not yet clear to what extent this dispute can further delay the takeover. Neither Air France nor KLM want to comment. 'We do not commrmt on matters happening on the other side of the Atlantic Oe&an,' was the official reaction from Air France in Paris. NRC Handelsblad, 22 March ~u04 The Swiss pharmaceutical company NQvartls mentions In public a potential merger with Aventis. Novartls is only prepared to discuss a merger or takeover with the French­ German company Aventis after an official invitation from the board of directors of Aventls. Furthermore, Novartis demands that the French government keeps out of the negotiations, or, at least, remains neutral. Earlier this month, thp Frpnr.h govl:'rnml:'nt announced its opposition to a takiover of Aventis by Novartis. Het Financieele Dagblad, 24 March 2004

I ,



concept 9.1 Cultural view of strategy

The post-merger period often shows companies taking the opposite direction to that planned. The case of the British-Dutch steel company Corus illustrates this:
Two years ago, two years after the merger between British Steel and Hoogovens, Corus decided that the British part would continue to produce for the British market, even though production in the Netherlands was cheaper. According to CEO Philippe Varin It is too expensive to close the existing plants and to expand in IJmuiden. Instead there will be capital investment in modernization in England. Het Financie/e Dagblad, 29 March 2004

As we see above, not only is the study of management after cross-border acquisitions of interest, but also during the acquisition phase, when the alliance forged on paper is being given shape. What are then the implications of this globalization for cross-border relations? What impact can this culture phenomenon have on the internationalization of business, on marketing or on human resources? The merger of two companies presupposes a change of 'culture' in the new organization. If, in addition, the companies are established in two different countries, the complexity of the exchanges, of the interactions between cultures increases and gives rise to other problems than those in a merger between two national companies. What can be observed is an organizational situation being transformed, along with all the accompanying elements of cultural change. A merger is by no means a simple process but a complex evolutionary process due to the inevitable change of culture(s) involved.

in this area of mergers and acquisitions, the company becomes integrated into the 1'1.1anage­ ment's process of globalization and internationalization. Therefore, as Pierre (2001: 141), elllpha:;;izes, this requires 'a permanent adaptation of the manaeer' because 'lhe environ­ ment is in perpetual chanee and the international executives appear continuously "under constru(;tion" through a never-ending prufessional maturation'. What are the reasons compelling companies to seek an alliance? According to the pro­ tagonists the reason is purely economic, particularly financial, whatever the sector. 'Ahold looks for takeovers after 2006. Company directs focus on Europe: is a headline from a financial newspaper (Ret Financiele Dagblad, 1 June 2004). The article explains: 'the objective of the current takeovers is to reduce the imbalance in income'. Others have acted similarly: 'Scottish Bank makes large takeuver in US. Royal Bank of Scotland (RBOS) buys the American bank Carter One for $10.5 billion in cash. This makes RBOS the seventh­ largest American bank' (Ret Financiele Daghlad, 6 Apri12004). What role does the cultural element play in these forms of cross-border alliance? As mentioned before, this element is usually completely ignored wnen plansure being drawn up for a merger, as well as at the start of lhe alliance. vVhen KLM and Air France had just completed their merger (to create for themselves a stronger position in the market), cultural issues were far from their minds. This was suggested in their reactions to a question con­ cerning Easy.iet's latest results:
Without saying it aloud, the disappOinting results of Easyjet are for both parties the proof that they well:! rlCjht about their plans to merge. Problems for Easyjet? 'We have our own problems to solve', they both said, laughing. Het Financieele Dagb/dd, 6 April 2004





Chapter 9 Culture and corporate strategy

I,I·' I,1 : '1'·


Sorting out financial questions resulting from the merger was clearly the priority for both parties.

1 1
The case of KLM and Northwest Airlines
By Ard-Pieter de Man, Nadine Roijakkers, Henk de Graauw While alliance formation is typically associated with high-tech firms and R&D-intensive indus­ tries, the airline industry is an example of a service-oriented sector where various kinds of alliances have also prOliferated. One of the first and most successful ongoing alliances formed in this industry Is the agreement between the Dutch airline KLM (now part of the Air France­ KLM Holding Company) and the US-based Northwest Airlines (NWA; at the time of writing involved in a merger with Delta Airlines), the start of which dates back to 1989. For many airlines the formation of alliances has constituted an important tactic to generate additional revenue and realize some cost saVings. Allian(;I!lS serve to accomplish these goals in the fOllOwing Wi:Jy~; Through alliances aIrlines gain access to a larger network of flight routes and final destinations as they connect their own network to that of their partners. Specifically, on the basis of a hub-and-spoke system partnering airlines transport their passengers between major airports (or hubs) where they board con­ necting flights to final destinations (spokes). Partnering airlines can increase their income substantially by increasing the number of final destinations on offer through connecting their flight networks. By delivering passengers to each other's networks and by combining flights (that is by jointly operating flights, a phenomenon called code-sharing) the occupancy rate of the planes increases. Fewer empty seats mean a better use of capacity and revenue growth.
Source: de Man et al. (201U), extracl.

II .



It is often [he cast! thal cultural factors come to thf' fore only when mergers and acquisi­
tions do not meet strategic expectations, or necessitate a change of strategy. Even then,
cultural factors may not be explicitly referred to:
The board of directors of the British-Dutch steel company Corus has to offer, at short notice, positions to Dutch directors. This was stated by the Russian steel baron Allsher Usmavov (a shareholder In Corus, who has a 12% interest In the company). Het Financieele Dagblad, 29 March 2004

Nevertheless, as Thevenet (1999: 10) remarks, the cultural element in companies is to be found everywhere: 'In all our investigations, not one company has ever showed itself to be interested in culture per se, but everybody works on culture to resolve concrete problems: problems of strategy, mergers, mobilization of the staff, reorganization, even communication.' This explicit attention to culture is all the greater when a company is operating across borders. This does not necessarily mean, however, that the cultural problems occurring in mergers are related solely to national cultures. This is confirmed by Trompenaars (2004) when describing the Sony/Philips alliance: the problems that had arisen were less to do with differences in national culture and more to do with the strong market orientation Sony coming up against the technical orientation of Philips.


Having to face an environment often perceived as hostile and unstable. These fears are often justified. It is a question of choosing strategies appropriate for enabling them to achieve long-term objectives. but more often than not fail to take into arcount the cultur Cli problems inherent in the emergence of a new culture in the new organization. they tend to ignore the cultural confrontations that take place and which. because not only does the organizational culture change. it remains obvious that those advocating a merger of some kind often underestimate the differences in the local cultures that have been brought together under one roof. but also their cultures. What is important in the process of creating a global culture is dealing with diversity. Are these attitudes towards strategy common to all companies? What role can culture play in defining strategy? 2. so they must choose a strategy that enables them to remain competitive in the global market. This relation is particularly obvious in mergers and cross-borders acquisitions since both involve not only the companies themselves. This chapter has dealt with the close relationship between the organizational culture and the corporate strategy of a company.locel cultures ot two organizations with their different forms of logic and principles be united while ensuring that their duality is maintained? I: 205 . a company needs to redefinE" its strategy. Moreover. Furthermore. The question therefore arises: how can the. The organizational culture is actually a part of the strategy in the sense that it influences not only the formulation of a strategy. This resistance is often the manifestation of collective fears intrinsic to the merger or takeover. 1. That is why any change needs to be managed carefully in such a way that the fears can be identified and monitored. in many cases. to give it a new orientation. provoke resistance to any changes on both sides. Companies may well believe that such actions offer a strategic way of dealing with globalization. Strategy is also linked to the future. as Schneider and Barsoux point out. in the process of strategy development lie the same levels as in culture: artefacts. The phenomenon of change in relation to culture will be developed in the next chapter. but also the way it is implemented in the company. opposite poles and the complementarity of ideas. Strategy is often linked to change.Conclusion and Points for reflection Nevertheless. but also the company's strategy. This means that the creation of a global culture in cross-border organizations has to do with the opposition between ideas. values and assumptions. Globalization compels companies to Internationalize.

Pierre. NJ: Prentice Hall. J. (2003) Transnational Management. E. (2003) International Management..B.(2004) 'HRM moet verzoenen in plaats van uitslulten'.oberg. NJ: Prentice Hall. (2002) La culture c/'entreprise (Jour m<Jnagor I:lulrement. 7: 177-82. (1999) Breaking Through Culture Shock. J. H. 28: 171-181.5. in Verbakel.E. 4th edn. H. Black. Man de.. Netherlands: Nyenrode University Press. 2nd edn. Cartwright. K. quoted by Marx. (1996) International Management. .. (2004) rEM Business Magazine. Upper Saddle River. F. K. H.Chapter 9 Culture and corporate strategy Further reading Deresky. Gregersen. Upper Saddle River. Schoenberger.· A Cross-cultural Approach. A.M. New York. Thevenet. P. St In mE Re an WE au wi ex dir (tt du !II Marx.K. 7(2). Academy of Management Executive. (1996) International Management: A Cross-cultural Approach.. Haarlem.-L. S. E. and Stroh. (1998) rEM Business Magazine.C. S. Browaeys. 19 June: 37.-P. Fatehi. and Graauw de. (1960) 'Culture shock: adjustment to new cultural environments'. F. Mendenhall. H. P. Breukelen. Harlow: Addison-Wesley. (ed. 4th edn. p. C. London: Nicholas Brealey. 6 March: 27.S. (2003) Managing Across Cultures. Upper Saddle River. E. Schneider.) (1996) The Challenges of Cross-Cultural Management. E.J. (1997) The Cultural Crisis of the Firm. Paris: Cditionr. Roijakker. J. H. N. (2002) La culture d'entreprise pour manager autrement. Practical Anthropology. Harlow: FT Prentice Hall. E. Delavallee. Deresky.M. Trompenaars. (1993) The Culture of Work Organizations. NJ: Prentice Hall. Paris: Editions d'Organisation. (2003) International Management: Managing Across Borders and Cultures. (ed. Koster. J. K. P.. (2010) 'Managing dynamics through robust alliance governance structures: the case of KLM and Northwest Airlines'. References Bartlett. European Management Journal. M. (1999) Breaking Through Culture Shock. (1993) 'The role of culture compatibility in successful organizational marriage'. NJ: Prentice Hall. Takes a global perspective in foreign environments while taking into account the variables of culture. Fatehl.. The Netherland~: Reed [Jusiness. Amsterdam. (2001) 'Elements pour une rE>flexion critique sur Ie management interculturel'.). M.-J. and Birkinshaw. Gids voor Personeelsmanagement. S. Oxford: Blackwell. WE M nl Or Pc dil th th wi Tt 206 . (2003) International Management: Managing Across Borders and Cultures. quoted by Delavalh~e. 83 (4): 20-22. (1999) Globalizing People Through International Assignments. NJ: Prentice Hall. Tayeb. Upper Saddle River. and Barsoux. L.A. M. NY: McGraw-Hili Education. 4th edn. Ghoshal. Hendriks. and Cooper. CoL. Paris: PUF Que sais-je? Trice. Cross-cultural management is evaluated in the context of global changes. and Beyer. This work uses the concepts of managing from an international perspective while emphasizing the cultural differences and the difficulties of working with people from diverse cultural backgrounds. London: Nicholas Brealey. (1999) La culture d'entreprlse. M. Harlow: ['rentice Hall. Sociologies Pratiques 5: 119-143. Upper Saddle River. The Netherlands: NVU Media. d'Organisation: 5S-70..

more efficient and accountable form of (jllvernancc. Source: Hoyal Dutch Shell 2005 annual report. These describe the developments in the organization of Shell. Then answer the questions that follow. Hague. the London room will fall into It also means we have been able to share and adopt best practice more quickly and so improve operational performance. to decide on the business of Royal Dutch/Shell Group. Instead.Shell's reorganization tn 2005. The chief exec. www. Royal Dutch Shell now hd~ a slnqle headqllarters in The Hague (tlw Netherlands). But if shareholders today approve the most radical restructuring in its history. simpler. For decades. two companies. Marriage after a century of cohabitation: Shell prepares for the next merger round On the top floor of London's towering Shell Centre. board members will assemble each time in the more intimate surroundings of a gabled building topped by a clock tower in The. The structural changes are also helping to reinforce our work to simplify and standardize many of our business processes. In particular. British and Dutch directors from two separate companies have held eight 'conferences' a year.utive now reports to a single board comprising 10 non-executive directors and five executive directors and a key advantage of this single. We have seen particular benefits at sites which contain both refineries and chemicals manu­ facturing plants. . the integration of the oil products and chemicals businesses into one down­ stream organization has so far been very succes!>ful in creating a more dynamic. responsive and effective organization. Royal Dutch Petroleum Company and Shell Transport and Trading Company merged to form one company: Royal Dutch Shell pic. a cavernous boardroom looms over the Houses of Parliament. smaller board is that it provides a very clear and direct line of accountability to alternating between there and the Netherlands. Read the two articles below. Our strategy in action: Creating the culture and organization to deliver We have made significant progress in changing our culture and organization to ensure that we can deliver our strategy. By sharing services and integrating their activities we can operate much more efficiently. filled with high-backed chairs and rows of angled microphones. The centraliz. . The unification of the parent companies under Royal Dutch Sheil pic in 2005 has provided us with a clearer.::ttion nf a flumbt![ of activities In the headquarters is helping to reduce duplication and helping us to operate in a more streamlined and efficient way.

'If you study· and I do that fairly regularly • U)e last 100 years of thf! oil Industry..a so-r. to some extent they were in denial: says one senior adviser to the company. they maintained. But investors were' unhappy about the ::. You must have the tools in your toolkit. led to a boardroom purge and brought $150m in fines imposed by US and British regulators.tructure. Now there is certainly more direction from the top. But Shell's dual structure also meant it would have been hard .' to improve the way in which it booked reserves and addressed other compliance issues. will be scrapped in favour of a modern. 'Anglo-Saxon-style' system designed to bring it into line with Exxon and BP. j 208 . But things had now changed and saw their opportunity.presented a tidying-up of the existing arrangement and had the adVantage of being to do. 'We changed a lot of the culture of this company. Shell had missed out on the wave of mega-mergers in the late 1990s that saw Exxon merge with Mobil and BP buy Amoco. company was doing well and there was little support for change. it is one long story of consolidation: he says. But the big-bang approaLil of a full mP. the group resisted the calls. as its rivals were dOing..rvened on behalf of large institutional investors to try to press their views about the need for a thorough uverhaul of the company's c.alled 'dual-header' company such as Rio Tinto or BHP Billiton. Investors question whether the merger will do enough to alter the ponderous way in which the group operates. the cost of any deals is much higher.Chapter 9 Culture and corporate strategy 1 ii/ I After nearly a century of quirky cohabitation. But critics ask why it took them so long to accept the need for change and why Shell had to be forced into it by shareholders following a scandal last year in which the group was forced to slash what it .. hamstrung the company with a cumbersome deciSion-making process and obstructed accountability. The union will put the relationship on a new footing and fundamentally alter the way the company is governed. Mr. Shareholder~ wanted un end to thp. I try to give very high clarity on where to go: He makes it clear that the direction the group is headed will include takeovers. Advisers intr.. Van der Veer says the company must be ready for the next wave of consolidation in the industry. The first was to create a single unified board while separate Dutch and Brilish companies . 'So you [had] better •.nIJ dual-board system which.:.stili eager to show that he and the other executives have taken a firm grip following one of the worst crises in its history· adds: 'We were very much a "bottom-up" company. Shell seemed paralyzed. This choice rp.' insists Jeroen Van der Veer. 'They thought the structure was doing well and when the reserves' debacle hit. 'They quickly went away from that into a phase where I quite frankly realized they didn't know what to do: Shell had periodically considered altering its structure. That reduced the level of reserves by one-third. Van der Veer and his new team took over in last year. Two broad options were on the table. Shell's eccentric corporate governance structure· long a source of befuddlement to outsiders . At that time.peed at which it was moving after Mr. for the group to use its stock as currency to finance takeovers. Executives say the shift represents a dramatic transformation of the company's conservCitive and consensus-driven culture· changes they say are badly needed if it is to compete in a rapidly changing oil industry.rger had thE' vlrtu~ of simplicity and would do away with complex corporate structure that so bothered investors.' TI1e necessary tools were absent when the reserves crisis hit. apPointed as Shell's first-ever chief executive following the reserves scandal and the decision to streamline the group. A soft-spoken Dutchman with a kindly manner. The failure to partlclpale was prompted largely by a prediction that oil prices would remain low· at about $10 a barrel instead of the $60 seen tOday. shareholders of Royal Dutch Petroleum and Shell Transport and Trading will today be asked to approve the formal marriage of the two. had recorded as proved reserves of oil and gas no fewer than five times. With today's high 011 price. most recently during the 1990s. But Mr.. which together make up the world's biggest publicly traded oil company after Exxon-Mobil and BP. [be] prepared. rt''Ilmn. Van der Veer . At first. its more successful rivals. It I'oak some measures .

p. There was a tax advantage to having the headquarters in The Hague.' Shell executives insist the changes are not cosmetic. then why changp. 21. i Ii 11 Questions 1. To the extent that you needed to pacify political interests in the Netherlands. The 60/40 split will also be maintained.' The reorganization of the comrany would not helve I)appened without the reserves criSiS. If there is no connection between the reserves crisis and the structure. Equally. Routs. That has left investors baffled. if much of what is proposed is 'common sense'. What changes in the culture of Shell are the 'marriage' of the two companies expected to bring? 3. at all? Conversely. having a UK listing played to the UK gallery. 'If I compare differences in the team in terms of operating. Whi'lt do you eon5h. 28/06/2005. The discussions centred on investor demand for a structure that would foster accountability and transparency in decision-making. 'For some people in the Netherlands. the merged company will be incorporated in Britain and listed on the London Stock Exchange. Few are entirely satisfied. The then troubled Shell side was forced to join up with Royal Dutch on somewhat humiliating terms . What evidence can you find in the text to suggest the possible emergence of a 'third culture' within new company? .ler to have been the key managerial and cultural factors involved in the merger process? 6. Under the new plan. investors hope the combined structure will help prevent any future scandal. though. many believe. supportive.I Activity 9. ref$r to Concept 8. th~n why was it not done sooner? Some believe that the dirClctors of Royal Dutch/Shell agreed to the restructuring not because they really believed in it but as a sop to disgruntled investors. 5.2. In cultural terms. There is not a lot of consensus-seeking in the old way of expressing it. As a senior adviser to the company says: 'The reserves debacle had seriously dented shareholder confidence and I suppose [the big-bang approach] was ultimately also a way of demonstrating to shareholders that we can deliver: At the height of the scandal last summer over the level of oil reserves it had booked. Mr. the nature of Shell when It was a 'cohabitation' of Royal Dutch Petroleum and Shell Transport and Trading? 2. What were the reasons for the strategiC decision to merge the two companies? 4. Investors say it took severill meetings for Shell executives to accept that the status quo was not an option. 'We are now a more transparent. We come to conclusions faster. Royal Dutch was in the ascendant when they joined forces in 1907. The Hague and the City of London. Jeroen Van der Veer. the company will be headquartered in The Hague and will be a tax resident of the Netherlands. head of downstream operations. How would you characterize. says he is already seeing tangible benefits. it is night and day: he says. To offset the perception that it is becoming too British.1 i i i I Any changes also had the potential to upset the delicate balance of power within the group that had existed for 98 years. seeing by far the largest company in the Netherlands become a pic with its primary listing in London is quite a difficult issue: says one director. The Financial Times. A senior adviser to the company says: 'The idea was to try to preserve the Anglo-Dutch heritage in as many ways as possible. as MI. and remain watchful lest Shell slip back into its secretive previous ways. which made no sense to give up. A year on. Source: from Marrrage after a century of cohabitation: Shell prepares for the next merger round. Copyright © The Financial Times Ltd. But Shell still does not accept that the reserves crisis was a result of its management structure. that clearly served the purpose. however. We come to deals faster. held a number of meetings with shareholders In the US. action-orientated executive team that makes things happen. How did the reserves crisis precipitate the changes? If necessary. the group's lead executive. Routs now says.a 60/40 split in the Dutch company's favour.

·11 .


Chapter 9 Culture and corporate strategy

The text below is an adaptation of an article written by a lawyer (a specialist In company reorganization, mergers and acquisitions) when he was working for an international group of tax consultants. Once you have read the text, answer the questions that follow.

Cultural differences during international takeovers and mergers
Cultural differences have played an important role in many of the cases I have been involved in. Sometimes they have helped to speed up a transaction, sometimes they have delayed a transaction - and even pre­ vented a deal being made. Some of the differences I have experienced are, in my opinion, to do with language. By language I do not mean the use of different mother tongues but also the use of the professional language prevalent among consultants. In our profession, it is easy to forget that not all our clients and oth.ers involved in our cases will understand the language terms we use. This goes not only for our international clients, but also for one group of specialists communicating with a different group of specialists in the same company. Other differences have to do with customs, different ways of doing things. I have been involved in several cases where such [cultural] differences have played a crucial role. A number of these are outlined below.

A British baker's takeover
A British concern wanted to take over a Dutch family baker. Although the former used internationally recognized norms when determining the value of the Dutch firm (these differed considerably from the norms used by the Dutch side), the deal was more or less finalized. All that had to be done was to work out how best to keep on managers of the Dutch bakers for a while once the takeover had taken place. The British, aware of the family's considerable knQwledge of and experience in the market, were keen to keep its members in position for a few months. The takeover was completed, but it soon became clear that the Dutch managers could not come to terms with the regime of the new owners. The strict accounting procedures coupled with the new book-keeping approach gave them a number of headaches, as did the new company's answerability to Its sharetloltlel~.11I the end this all proved loo much for the Dutch family and their stay-on was reduced from one year to six months.

A F'ilmlsh-Norwegian merger
I represented a Norwegian oil company in Its discussions with a Finnish 011 company over the Integration of· their respective plastic diVisions. The Finns used the services of an American lawyer; the Norwegians used my firm since, apparently, it was considered large enough and with enough international experience to do a good job. The idea of using a British firm had been considered but eventually rejected: British lawyers were considered to be too expensive, complicated and drawn out in their dealings. The intended merger itself was on a very large scale: one hundred companies were involved in several countries. Many external parties were also involved, including a British investment bank, which was in charge . of the whole project. It relentlessly pushed the project forward knowing that if the merger did not come off . it would receive no fee for its efforts. Once a letter of intent had been agreed upon and 'due diligence' reports completed, the real negotiations began, with co-operation on an equal footing being the main goal. The Norwegian party had noticed during its 'due diligence' investigations that several of the Finnish companies involved had caused environmental pollution, This would involve a costly cleaning-up operation and, along with other issues, would make it difficult for a

Activity 9.2

:I II'
it! It

50-50 deal to be reached. Nevertheless, after a number of long, drawn-out negotiations in several European cities (to underline the European character of the merger), the contracts were signed in England. During the process, clear differences in working practice between the American and Dutch lawyers emerged. The Finn's American lawyer made a note in detail and required every point to be covered - preferably twice - in the agreement. This slowed down the whole process, particularly when the American lawyers acted as if they were the spokespersons of the company and even appeared to be making decisions on the company's behalf. The Dutch lawyers behaved as they uSljally do: they are there to advise the client along with other advisors (accountants, tax consultants etc.). They consider it natural that in the end it is the company's directors who determine policy and take the decisions. Further differences emerged in behaviour during the negotiations. The lawyers representing the Finnish partners showed a rather aggressive attitude throughout and this contrasted strongly with the quieter, more modest approach of the Norwegians' lawyers. The Norwegians were somewhat intimidated by the American lawyers and had to be reassured that the less contentious approach in no way undermined the justness of their cause.



A French takeover of a Dutch concern
Language turned out to be a ban:ier when a French group of companies decided to take over a Dutch company. During the research phase prior to the negotiations, the French sent several employees from the Alsace region of France to carry out interviews in the Netherlands. They assumed that the dialect spoken by these colleagues would enable them to communicate with their Dutch counterparts. When this did not turn out to be the case, everyone involved started using English. English was used during the negotiating phase, but its role in the actual written agreement. was hotly disputed. The French preferred to have the takeover contracts written in French, the Dutch in Dutch. In such a situation, a contract written in a neutral language is the best solution, especially since legal terms written in one language can have a very different meaning in another. If both sides can agree on a neutral language, then agreements can be reached on what the legal terms used actually mean. In this particular takeover, neither side would back down and, for a while, the language question threatened to scupper the whIJle doal. Eventually, however, after a further round of protracted negotiations, an agree­ ment was reached and the deal went through. The takeover c:ontract was drawn up in French for the French group of companies and in Dutch for the Uutch concern. An English version was made for reference during face-to-face encounters.
Source: adapted from Browaeys (1996): 41-50.

1. The author of the article above mentioned some cultural differences he has encountered in dealing with companies abroad: language (different mother tongues and professional language) and customs (different way of doing things). Note the kinds of cultural differences - language, customs or others (say what they are) dealt with In the three cases:
a. A British baker's takeover; b. A Finnish-Norwegian merger; c. A trench takeover of a Dutch concern. 2. Describe the differences in attitudes and working practices of the lawyers and the people involved in the process of the three mergers/takeovers. 3. Write a conclusion to this article: make a synthesis of the three cases and answer the question: what have I learnt from this account about the cultural aspects In international mergers and acquisitions?

So far, this book has examined organizational culture in terms of the various models put
forward by researchers, the concepts of leadership and the cultural contingencies and
variables involved. Furthermore, it has looked at the question of company strategy and
corporate culture. All these elements come together when it is a question of a company
needing to adapt its culture to ensure its success or even survival.
Concept 10.1 examines the process of adaptation. the starting point for any real cultural
change in an organization. Concept 10.2 tackles the issue of changing the underlying culture
of global organizations.

Learning outcomes

After reading this chapter, you will gain an understanding of:

E!' Certain mechallisms for changing an organi7ntion's culture as well as an instrument for

didynosing the changes required.

The tensions between national cultur~ and urganizatlonal culture in the chanqe process, particularly the emergence of a so-cailed international corporate culture.

Whether an organization thrives, survives - or otherwise - depends on numerous factors, both within the company and outside it. There are, of course, external factors tu which a company needs to respond, or circumstances to anticipate in the way it orgaIll~es its operations. Rapid technological chang!::, changes in industries and markets, new deregula­ tion policies, increased COl'l'lpctition and the dFvc\opment of the global economy can all be seen as potential threats to a company's survival, or potential opportunities. But sucC!::S$ has also to do with internal factors. How can an organization adapt? Is it able to change its behavioural practices and structures, to deal with external pressures? Admittedly, the culture of a company is dynamic. However, does it need to change its core values to survive or will changing cultural artefacts suffice? It is generally acknowledged that successful change has to do with maintaining both continuity and change, retaining the . cultural foundation 011 which the company rests while changing its strategies and practices. In short, can essential elements of culture be brought in line with responses to the external forces pushing on the company?


Concept 10.1 Organizational change as a cultural process

The process of change
Andre Laurent (1989) addresses the difficulties involved in the process of change. The way workers view organizational change, and the management thereof, is inhibited by their own assumptions and conceptions. For a start, they may have fixed ideas as to how an organization should be structured. They may not, for example, consider any alternatives to the hierarchical pyramid, where movements up and down are clearly defined. The idea of unity of command may also be taken for granted. Such concepts, the products of classical (Western) management thought, may not be appropriate when the organization has to take on fresh tasks or technologies, or deal with new people or environments. Moreover, the whole idea of change may be naive, if well-intentioned. People focus too much on the benefits from change without giving consideration to the idea that change is not an organizational shift from A to B, but a transformation from A into B. These two differing concepts of change, shift versus transformation, reflect the 'doing' orientation of Anglo-Saxon cultures and 'being' of many Eastern cultures mentioned in Part One. In 'doing' cultures, people and groups are mostly defined in terms of what they do, what they achieve. In 'being' cultures, people and groups are defined more in terms of affiliation, the relationships they have with others in the organization. In 'doing' cul­ tures organizational change is perceived more in linear fashion, a question of putting the past state of affairs behind and pushill!!o un with the new. Tn 'he.inp,· nllnlres) however) the past stale of affairs umlergues gradual transformatIOn so that it eventually becomes a new state of affairs. Laurent (1989) advocates a dual approach to organizational change: both the instrumental and social nature of the organization must be considered. Managing change in the sense of ensuring the continuing rUllniug uf the organization, re-assigning tasks and maintain­ ing overall stability, may well be necessary in the process, but it is not enough. What is also needed is inspirational guidance, a leader who engages people's minds through vision. According to Laurent, our minds are the receptacles of culture, and as such give meaning and guidance to our experiences. Minds cannot be managed, but they can be transformed through inspiring leaders who spread visions that advocate new meanings and new lines of thinking. Such concerns are shared by Deal and Kennedy (2000: 158). Many company managers, they maintain, are concerned about change, but do not pay attention to the cultural issues involved. They may go about dealing with tangible factors, such as changing job descriptions, replacing managers, changing the company structure even, but essentially, 'the business of change is cultural transformation'.
These actions .•• are not the kind of tong-term, all-encompassing behavioural and cultural changes we are talking about. When we speak of organizational or cultural change we mean real changes in the behaviour of people throughout the organization.

In their view, the decision to become, for example, more marketing-oriented or to become cost-effective cannot be taken without subjecting the company to a fundamental cultural change that involves everyone. The change is not just a matter of changing routines but of identifying with role-models who embody a new purpose or goal. Such fundamental change docs not occur overnighl; it is often a gradual and sometimes painful transformation. 213


Chapter 10 Cultural change in organizations

The mechanisms of change
Chapter 8 summarized the ways proposed by Schein (2004) which enable a leader to implant and maintain the corporate culture. Such means can be used to change the culture of an organization. Schein (2004) also lists what he calls 'secondary' means. These are mechanisms for shaping"'and reinforcing the culture that are only effective if consistent with the primary means:

The design and structure of the organization.
The systems and procedures used.
The 'rites and rituals' used in an organization.
The design and layout of the organization's physical space.
Formal statements of the organization's philosophy.


o Stories of important events and people.

When a manager is intent on getting employees to perceive things differently, all the primary mechanisms must be used. Moreover, according to Schein, they must all be con­ sistent with each other. Schein's model refers to the group-learning process when responding to problems extern­ ally and internally. External problems are concerned with responding to the environment. Internal problems arise from managing the internal develupment of the organization. For Schein, culture plays an important role in determining not only how environmental develop­ ments are perceived by members of organizations, but also how members of the organization react to the strategies designed to respond to those environmental developments. In his article 'Organizational culture: w~at it is and how to change it', Schein (1989) presents what hI: believes to be the culture issues predominating at each phase ofa company's growth. In addition, he discusses the change mechanisms that could be operating during each phase of growth. These phases only apply to private organizations and the kind of change possible depends on the extent to which the organization is ready for change as a result of either an external crisis or an internal push for change. Table 10.1 summarizes Schein's insights and Table 10.2 outlines how he believes the <..Ultural chnnge mechanisms work.

Table 10.2 triggers an important question: is it possible to bring about fundamental trans­ formations? An analysis by Deal and Kennedy (2000) reflects the belief that the culture of an organization is deep-rooted, particularly if, in Schein's terms, it is in a mid-life or maturity stage. A culture that has developed along with the organization and been passed on from generation to generation will be difficult to change and involves all kinds of rela­ tions between individuals and subgroups. If the external factors referred to in Chapter 7 are believed to have a strong influence on the organizational culture, the values, beliefs and behaviours that employees bring to the organization, then there is little conviction that an organization can be changed unless the external environment changes in line with the desired changes. If organizational culture

Concept 10.1 Organizational change as a cultural process

Table 10.1 Growth states, functions of culture and mechanisms of change
Growth stage I. Birth and early growth Founder domination, possible family domination Function of culture/Issue (; Culture is a distinctive competence and source of Identity

Culture Is the 'glue' that holds organization together

" Organization strives towards more integration and clarity " Heavy emphasis on socialization as evidence of commitment Succession phase
~ Culture

becomes battleground between conservatives and

liberals '" Potential successors are judged on whether they will preserve or change cultural elements Change mechanisms

1. Natural evolution
2. Self-guided evolution through organizational therapy 3. Managed evolution through hybrIds 4. Managed 'revolution' through outsiders II. Organizational mld-Ilfe (; Expansion of products/markets

o Cultural Integration declines as subcultures are spawned

Loss of goals, values and assumptions creates crisis Identity

Vertical integration

.' Geographical expansion (.) Acquisitions, mergers Change mechanisms

(; Opportunity to manage direction of cultural change is provided


5. Planned change and organization development 6. Technological seduction 7. Change through scandal, explosion of myths 8. Incrementalism III. Organizational maturity '" Maturity or decline of markets
~ Increasing internal stability and/or stagnation

Culture becomes a constraint on innovation Culture preserves the glories of the past, hence is valued as a source of self-esteem, defence

c Lack of motivation to change

Transformation option

., Culture change is necessary and inevitable, but not all elements of culture can or must change (; Essential elements of culture must be identified, preserved

Culture change can be managed or simply allowed to evolve

DestructIon option

o Culture changes at fundamental levels

Bankruptcy and reorganization TAKeover and reorgan12:atlon

Culture changes through massive replacement of people


.. Merger and assimilation Change mechanisms 10. Turnaround


9. Coercive persuasion 11. Reorganization, destruction, rebirth
Source: Schein (1989): 66.


Chapter 10 Cultural change in organizations '). Table 10.2 Mechanisms of cultural change Natural evolution The culture will evolve a culture of what works best if the organization is not undergoing too much stress from the environment. This may also Involve what Schein calls a 'general evolution' to the next stage of the organization's development through diversification and growing complexity. It may also involve 'specific evolution' where subcultures may emerge around the Increasing number of subunits in the organization The organization gains insight into own strengths and weaknesses, e.g. by using an
outside consultant to 'unfreeze' the organizational culture and so allowing dramatic
changes to occur This approach is useful where the culture needs to change, but the organization may lose its identity as a result. People from inside the company are used in key positions, people who realize there is a need for change but may meet less resistance than outsiders Differentiation through growth and increasing complexity may lead to increasing subcultures coming into conflict. A consultant-initiates a change programme to reduce
conflict, one that involves some sort of culture change Technological changes may bring about cultural change because they change behaviour patterns and compel the organization to examine the way it carries out business Change may occur through discrepancies between the values that are espoused by
the organization and the practices that it actually performs. 'Whistleblowers' may reveal, for example, how ethical standards are being bypassed in certain operations, safety procedures ignored, promotion policies undermined. Such exposures often lead to assumptions being reconsidered and cultural changes being made Cultural change is implemented gradually over several years and is hardly noticed. Recruitment and selection policies, for example, may result in all key positions in a company being filled by people who act according to assumptions that are different to those of the old culture A culture turnaround, usually in a mature culture, where change agents - possibly senior managers - challenge .old assumptions, put forward new ones and give key managers psychological safety by rewarding them for embracing the new assumptions A turnaround individual or team has a clear idea of where the organization must go and how it is to get there. Some or all of the above mechanisms may be used while the present culture is unfrozen and psychological safety offered to reduce resistance An unusual occurrence, whereby the group that bears the old culture is removed and


Self-guided evolution through organizational
Managed evolution through hybrids

Planned change and organizational development
Technological seduction

Change through scandal, explosion and myth



Coercive persuasion


, Turnaround

Reorganization and rebirth

I replaced by a new group and a fresh culture

.is ~l~el1 as dependent on internal factors, then there is a belief that culture can be directed and changeu. Ideas as to how these changes are brought about vary: some concentrate OIl the role of the leader as instigator of changes ur as facilitator, others focus more on how to iniliate change at the thl'ee levels of curporate culture as defined by Schein (norms, values and beliefs; then behaviours and norms; then symbols and artefacts). The notion that cultural change is easier to implement in an organization with a 'weak' culture rather than a 'strong' culture is contested by Laurent (1989). In a way, both are doomed to extinction. The organization with a weak culture may eventually crash, even if there is an initial uursl of creativity from its disparate body of workers. With employees


concept 10.1 Organizational change as a cultural process

who each give the organization a different meaning and who each have a different view of what needs to be done, an organization with a weak culture is poorly co-ordinated, lacking direction and consistency. An organization with a strong culture, however, may be throttled by rigid norms and behaviour and the resulting dearth of innovation. Rather than the strong-weak paradigm, Laurent advocates a more conceptual differ­ entiation, which takes account of the extent to which an organization knows itself and the environment in which it operates. The higher the degree of awareness, both internally and externally, the better an organization~;n interpret its enVironmenran-aaearw1thi!.= Schein (2004) takes this awareness-raising issue further. -He suggests that one way of trying to 'grasp' the corporate culture is for members of the organization to examine their culture together and assess some of the main assumptions. One or more of these may need to be abandoned or re-defined so that those involved can help decide the way the organization needs to evolve. The leader can playa key role here in getting the 'self-guided' evolution under way and by managing the process.

Steadfastness in turbulent times
By Rob Goffee and Gareth Jones
In turbulent times steadfastness Is a leadership virtue. Not in the sense of having a fixed view of what will happen next. but by being true to a set of core values. A naIve reading of this point would suggest that all the leader has to do is be their authentic self. But that is not enough. Change will require that leaders play different roles in different contexts. In our previous book, Why Should Anyone Be Led By You?, we noted that effective leadership involves a complex balancing act between using your authentic differences and adapting your behaviours to context. Being authentic is not about being the same all the time. The most effective leaders are authentic chameleons. The chameleon always adapts to context but r",rnalns a chameleon.
Source: 'The challenges fadngleadershlp', Financial Times (, 12 february 2009 (extract).

A degree of culture change will almost always be necessary, Schein maintains, because what has been learned has become routine. Bringing unconscious values and norms to the surface, then questioning and redefining them, may lead to a considerable anxiety: the subjects involved may feel that their sense of identity or integrity is threatened. Everything must be done to reassure those involved, to show them that changes are possible and that they will not be humiliated in the process. This brings us back to the role of transformational leaders, discussed in Chapter 8. Their role is to provide that reassurance through communicating a vision of how things should be, of convincing those who feel under threat that there is a brighter, happier future for the organization. An inquiry into secret accounts held by the European Commission is an example of the sort of crisis that can trigger organizational change. Consider Mini-case 10.1. Change in an organizational culture does seem possible, but the effort involved may be considerable and time-consuming. Apart from needing to be motivated to undergo change, those involved need to go through a process whereby they can gain dear insight into import~l1t cultural assumptiom and thcn work out which of these hdp or hindcr the organization's future. A 'transformatiOllal' I""der c,m b~ rriti.;ul t,,) 5w.:h j proces~.




16/07/2003.. III I . Copyright © The Financial Times Ltd. in parallel to the work relating to the deepening of the antifraud reform of May 1999. Source: from Brussels launches probe into secret accounts. The Financial Times. As a result of the political agreement reached on 19 May 2003 in the Council and the opinion of the European Parliament of 19 June 2003. (http://eur-lex. accessed 1September 2010. EU administration commissiof')er. The secret bank accounts at Eurostat were set up by Commission officials to hold money paid through Inflated contracts to sub-contractors. has since revealed the 'relatively extensive practice' at Eurostat until 1999 of setting up secret and illegal accounts. they were not taken seriously until newspaper reports surfaced in May 2003.. Source: Report from the Commission Protection of the European Communities' financial Interests and the fight against fraud. How would you describe the effect that the whistleblower's actions had on the European Commission? 2. in 2001. a group of Commissioners including the President ensured that all the relevant information and/or allegations of fraud.Chapter 10 Cultural change in organizations I :1 Irregular practices at the European Commission Brussels launches probe into secret accounts . • I • J :1 Questions 1. IDOC I!Ind the Internal Audit Service are the sllbject of a rigorous follow-up. In response to the irregular practices detected at Eurostat. Annual report the Commission's statistical arm. I II/ . There is fear that the 'vast enterprise of looting' that fraud investigators found at Eurostat.. suspending all directors and ordering an investigation into the work of some thirty heads of unit. into which millions of euros are thought to have disappeared. Neil Kinnock. Although problems were identified at Eurostat by trade unions in 1997. Progress in the implementation of the Reform within the Commission Extract from the 2003 annual report dealing with protection of the European Community's financial interests and the fight against fraud: The modernization of the European public service continued to progress during 2003. In particular. and the decision of July 2003 on the Specialised Financial Irregularities Panel. As from its entry into force on 1May 2004. The commission has responded by initiating three disciplinary proceedings. by internal Commission audits in 1999 and 2000 and by Paul van Buitenen. To this end. this Staff reform will have a major impact on the managing practices of departments and will contribute in particular to the prevention of irregularities. In what way do you think the 'culture' Clf Eurostat might have been changed as a result of the actions? . the Commission adopted an amended Proposal for the Staff Regulation. may exist elsewhere in the European Union's executive. ilTegularity and other reprehensihlp.III II .• iii A widespread inquiry into secret bank accounts and fiCtitious contracts across the European Commission has been acts cominq in particular from OLAF. The group of commissioners Is asslsled by I!I high'levei interdepartmental group. the financial and administrative reform conceived in the White Paper of March 2000 on the internal reform of the Commission is being completed with the entry into force of the new Financial Regulation on 1 January 2003 which changes in particular the internal control system. a whistleblower.europa. the Commission adopted complementary horizontal reinforcement measures: the September 1999 Code of conduct on the relations between the Commissioners and their services was revised in order to improve the Information transmitted to Commissioners and to enable them to assume their political responsibility.

In other words. The means used to reach the desired change will also depend on how the national organization determines what the starting­ point should be.2 Organizational change in a global environment So. but also internal factors that may vary consider­ ably from one part of the company to another? Equally important is how the multinational can handle the external factors that are said to have such an influence on the culture of the organization (Laurent. the transformation of an organiza­ tion from A to B may involve following a different path in one part of the multinational than in another. Laurent's investigations showed that 'nationally bounded' collective perceptions of organizations did not appear to be diminished in any way through interna­ tional business. quality control. So. the outset of the transformation to B will depend on how the national organization interprets its own present situation (A). organizational change in companies operating across a number of cultures is not just instrumental (becoming more cost-effective or market-oriented) but also transformational (giving new ways of thinking). therefore.Concept 10. does a multinational deal with change if it not only has to deal with policy changes.1. 1989). The tension between organizational and national cultures The first issue to be addressed is the one briefly described in Part One: the tension between organizational culture and national culture.. it is argued that the companies for which these people work are themselves developing commonalities in terms of efficient production processes. these appeal La be reinforced through Lhe international exposure. To use the terms adopted in Concept 10. Moreover. She refers to the seminal research carried out by Laurent in the 19805. bel' of globally active companies. The conclusions of this research were that cultural differences among managers working for a multinational company were significantly greater than those cultural differences among managers working for companies in their own (native) country. How. similar work experience and who are developing their own global business culture. the opinion is often expressed that there is a growing class of transnational business people who shart! a similar education. Although rer. even if the end-result (B) is the same. The conclusion is that the natiomll companies of multinationals are likely to prefer different ways of bringing about the organizational changes that headquarters wish to implement. Adler (2002) wondered whether organiza­ tional values in some way pushed aside or diluted the national culture of the organization's environment. workers' rights and environment issues.trictcd to Wer. Does an international corporate culture exist? Despite the all-important influence of national cultures. both the increasing homogeneity among international managers and the increasing convergence of business practices is leading to the establishment of a common management culture among more and more 219 In . the argument runs. 011 the contrary) as Adler indicat~~. More and more international norms concerning business are being established through various agencies and these are being followt!d by an increasing num.tern managers.

they claim. Mapping corporate culture change At this stage it is worthwhile looking at the framework of reference used in the survey carried out by Despharde et al. but to suggest that these companies have adopted an organizational culture at the expense of national cultures is considered by many in the field to be wishful thinking. there is always the risk that multinational constituents become estranged from their national roots and that local relationships of all kinds are put under strain.. It requires an evolution In ways of thinking . two dimensions are used to differentiate effectiveness criteria: one emphasizes either flexibility and discretion or stability and control. France and Germany. As can be seen in Table 10.1). a true multinational does not subordinate national cultures. They investigated whether there were any commonalties when comparing the organizational performance of multinationals based in Japan. this increased learning and synergy: . the most successful businesses surveyed used a similar organizational strategy.. particularly when it comes to organizational change. although the companies operated very differently. Hence the name of the model. entrepreneurial values. The characteristics of these quadrants. (1997). however. In short. another emphasizes either internal orientation (integration and unity) or external orientation (differentiation and rivalry).3. based on many scholarly analyses of corporate culture and has. but regards them as a source of learning and increased synergy within the company. the idea that a shared organizational culture of many multinationals is pushing aside national cultures not only downplays the deep-seated nature of national cultures. These arguments appear to be supported by investigations done by Despharde et al. 220 . a common culture which has no roots in any particular national culture. England. Cameron and Quinn (1999) categorize organizational effectiveness per­ spectives and associated types of organization (Figure 10. In particular.from a parochial and ethnocentric conception of ml!lnsgement and organization to a world view. They emphasize that this categorization should 110t be seen in any way as comprehensive. proved its value in many subsequent investigations into corporate culture change. Whatever the country of origin. (1997) to allow the issue of corporate culture change to be taken further. as described by Cameron and Quinn (1999). Their findings may indeed highlight values that account for the success of the companies investigated. each successful multinational was most likely to foster competitive. but also discourages the transfer of know-how between the culturally different subsidiaries of the company.3. are summarized in Table 10. cannot be the result of a rational management decision. It is. There may indeed be a growing consensus among multinationals as to what best practice is for international business. The quadrants are contradictory or competing on the diagonal. which each represents a set of values that are at the base of judgements about organizations. the US.! 1 international companies and their national constituents. they found that those companies where innovation was most valued were the most successful.11 II ! I ij Chapter 10 Cultural change in organizations 1/ . However. These two dimensions produce four quadrants. To return to the analysis made by Laurent (1989: 93) and summarized at the start of this concept. Moreover. the competing values (CV) framework. They found that.

as well as the language used. The elements in the competing values framework. As such.(!) m ::d2 -'- g'lil Market Adhocracy l\f3 el. However. continuity.hievement ~ Market culture Clan culture - Focuses on internal issues and flexibility and discretion rather than seeking stability and control. a 'market' culture may be so focused on making profit that individuals . productivity.E Sl a­ -·15 ::lSI) ::l 0. An 'adhocracy'. consensus and mutual support Focuses on external issues and values flexibility. one type of culture tends to predominate. Its values are adaptability and innovation I- Adhocracy culture This categorization is not clear-cut: all organizations have aspects of all four cultures. can be used to discuss organizational culture and change. the framework helps in the diagnosis and management of the interrelationships. High performance entails. 221 I . congruencies and contradictiol1s in the organization.c m~ E. Equally important. therefore. It focuses more on internal than external (market) issues.may become secondary to the whole operation. which can work effectively if the goal is efficiency and the organizational environment is stable and simple Also values stability and control but Is more focused on e~ternal rather than internal issues. This is the traditional 'command and control' model of organizations. Altogether. wrnpetilive advantagp. a 'clan' culture may allow for so much uncontrolled individualism that the company's tasks become secondary.~ _. It values team-spirit. balancing conflicting and competing demands.and their health . over time. for example.2 Organizational change in a global environment Flexibility and discretion '0 ffi fJlC Hierarchy Clan o. This culture values profit. participation.5 Stability and control Figure 10. the framework serves as a basis for diagnosing the predominant culture of an organization and for assessing whether it is responding appropriately to the challenges and changes in the environment.Concept 10. which is intent on crccativity and flexibility. still needs to contain some 'hierarchy' values if it is not to run out of control. Table 10. and ar. and values stability and control over flexibility and discretion.3 The characteristics of the CV framework quadrants Hierarchy culture Values tradition. o'(/) . the framework helps leaders to improve in a comprehensive way the organization's performance and value creation. (i!!E.1 The competing values framework Source: Cameron and Quinn (1999): 32. rationalization and regulation.

to a face-to-face feedback session about the company and its vehicles. GM's vice'chairman and Ford Motor's chief financial officer were among other speakers present. in an attempt to persuade car buyers. General Motors and Chrysler. then answered again in terms of what the respondents think should be developed in the culture to respond to future challenges. especially Americans. has hosted numerous webchats and media conferences lately. outlined plans for a new Cadillac model and trumpeted the fuel efficiency of its new Chevy Volt plug-in hybrid. Copyright © The Financial Times Ltd. 14/08/2009 (Simon.1. Fritz Henderson. representative of style than substance. cUtting-edge enterprise. describe how GM Is attempting to bring about changes to the GM culture. It is too early to judge which of the two companies is on the right track.II I. including some of GM's fiercest critics. 2. The Financial Times. Which of Schein's 'mechanisms of change' do you think are being applied at GM? The 'organizational culture assessment instrument' used to carry out the diagnosis is described in detail by Cameron a11d Quinn (1999). Source: from GM and Chrysler steer different paths to recovery. Meanwhile. By contrast. Chapter 10 Cultural change in organizations GM and Chrysler steer different paths to recovery By Bernard Simon in Toronto III 'I . i Detroit's two embattled carmakers. has discontinued its monthly sales data briefings. styles and values are dominant)? @ What discrepancies are there between the present and future profiles (what needs to be done to close the gap)? '" What. Some outsiders question whether the flurry of activity at GM Is more. Once the present and future profiles of the organization have been drawn up. He and his colleagues on Monday Invited about 100 consumers. This week. The 'new' GM has galloped out of the gate with a slew of announcements on management shuffles.). Chrysler. that the dinosaur of old is managing to turn itself into a nimble. The questions are answered first in terms of the organization's current culture. . have been a study in contrasts since their emergence from court-supervised restructurings in recent months. to be launched at the end of next year. last week was a public affairs manager. is the degree of congruence between the individual responses to the questions (to what degree are the values and assumptions shared)? 222 . lL lakt:s lht: furm uf a questionnaire in which respondents complete qll~stions covering six items. B. Its sale representative at a motor industry conference in Traverse City. 'We're changing the culture of GM: Mr Henderson said at the Volt briefing on Tuesday. Michigan. new vehicles and other initiatives. now under the day-to-day control of Italy's Fiat. they can be examined from several angles: ~i What type of culture is most heavily emphasized (what basic assumptions. Toyota's president. Questions 1. Using figure 10. Chrysler has been relatively silent apart from run-of-the-mill sales promotions. GM cemented a joint venture with Ebay to sell vehicles online. GM's chief executive.

or is the mismatch itself a source of competitive advantage? Decision-making and competing values Here is a short extract from an article written by John Kay. is imperfect. J. for example. not just because they have different objectives. even with hindsight it will often not be possible to say who was right and who was wrong. The achievement of the great statesman is not to reach the best decision fastest. but because they observe different options. select diff\!rent information. the options. founding Director of till: Said Bus. Australasia and Asia. The achievement of the successful business leader Is not to articulate visions of the far future. and assess that inform a­ tion differently. . Cameron and Quinn (1999) provide a range of these.). French companies embraced many values associated with 'hierarchy' cultures. but to match continuously the capabilities of the firm to the chanqlnQ mArket envirolllllent. As a final point with regard to the competing values framework. We do not solve problems in the way the concept of deCision science implies because we can't.Concept 10. but also embraced the virtues of entrepreneurship and innovation associated with the 'adhocracy' culture. mostly from the US but also in Europe. ness School at Oxford University. (1997). English companies.Our approaches are iterative and adaptive. but to mediate effectively among competing views ami values. Comparing the two profiles allows insights to be developed concerning the cultural changes needed: is the organization out of line with the requirements of the sector's environment. that the Japanese companies under investigation fostered 'hierarchy' and 'dan' values while at the same time stressing competition and performance. CopyrlQht © Ihe financial Times ltd. Different people make different judgments in the same situation. Our knowledge of the relevant infor­ theory and the reality. mation and of what information is relevant.2 Organizational change in a global environment An organization's profile can also be measured against an average industry profile. although fostering values associated with 'adhocracy'. :I . Source: from DeCiSion-making. but also clearly imply that congruity between an organization's cultural values and national cultural values are a measure of a company's success. in which he We make our choices from a limited range of examines the question of deCision-making. they also noted differences of emphasis when it came to categorizing these companies according to the CV framework. also displayed 'clan' values of loyalty and cohesiveness. These findings confirm the 'competing' nature of the framework. Although the authors came to the conclusion that successful international companies were likely to foster very similar competitive. entre­ preneurial values. They found. 20/03/2010 (Kay. Africa. it is worth returning to the survey by Despharde et al. South America. John Kays' way. the test of financial acumen is to navigate successfully through irresolvable uncertainties. The Flnanc:ial Times.

devised by Cameron and Quinn is one way of employees are responding appropriately to the outlined in the chapter.and which he says is almost completely ignored in most leadership books . even if the culture of a multinational organization needs to be changed.Chapter 10 Cultural change in organizations Chapter 10 has described the role of culture in organizational change. Laurent advot:dtes a duol approach to address this situation. any transformation carried out will need to reflect the national culture while at the same time ensuring that the subsidiaries involved remain integral parts of the whole multinational. extent to which a company is aware of Using the competing values framework assessing whether a company and its environment. specifically the role of the leader in this process. are prevalent at the various stages in a company's development. What are the similarities betWeen this and the cultures defined in the competing values framework presented in Figure 10. San Francisco.and how do you account for these? Further reading the question of organiZational growth and the different role that culture plays during each stage of growth. made by Deal and Kennedy (2000) on the basis of a study they made nf various firms and their business environment. As the texl indicates. 3rd edn.2 summarized a classification of the types of cultures. (2004) Organizational Culture and Leadership. Concept 7. He also addresses the Question of cultural change within an organization.1? What differences do your perceIVe between the two . It has outlined the cultural issues which. cultures as well as the ways in which leaders apply the principles of culture to achieve organizational goals. Schein examines occupational . E. and it has summarized the actions he proposes as mechanisms of change. One crucial factor in any change process is the Its culture and of the operational environment. according to Schein. What type of leader Is required in this approach and what does that leader need to do? Where does this approach belong In Table 10. Using the findings of contemporary research.nd not to give explicit attention to cultural issues when planning dnd implementing orljMlZdUonal changE!. 224 . companies tp. This is the third edition of the book published originally in 1985. 1. Schein offers his readers considerable Insight into the dynamics of organizations and change. One aspect that Schein considers indispensable .2 (Schein's 'mechanisms of cultural change')? Z. CA: Jossey-Sass. as well as referring to many of the organizations with whom he has worked. this framework has been Chapter 10 has also shown that.

(1989) 'A cultural view of organizational change'. Cincinnati. Laurent.. A..: what it is and how to change it'.H. Human Resource Management in International Firms. E. San Francisco. and Laurent. References Adler. in Evans. and Quinn.S. London: Macmillan: 56-82. Schein. Chinese Europe International Businoss School on its website (www. Deal..ceibs. N. It then describes a step-by-step process for producing an organizational culture profile.A. in Evans.U. and Webster Jr. London: Macmillan: 83-94. Oi. Farley.J. E. (2000) Corporate Cultures: The Rites and Rituals of Corporate Life. (eds). CA: Jossey-Bass. Y. 98-027. R..References Cameron. (2002) International Dimension of Organizational Behaviour. (1999) Diagnosing and Changing Organizational Culture. The 1997.E. A. and Ouinn. and Laurent. (2005) 'Learn to agree to differ'. Upper Saddle River. This book provides an instrument for diagnosing organizational culture and a framework for understanding organizational culture. Schein. identifying the ways in which the culture of the organization should change. NJ: Prentice Hall. Y. (19f19) 'OrlJani~atiollal CUltul\. R.E. 225 . OH: South-Western. F. and Kennedy. K. R. A. No.shtml). River. J. 3rd edn. (2004) Organizational Culture and Leader~hip. MA: Perseus. A. NJ: Prentice-Hall. Cameron. K. (1997) 'Factors affecting organizational performance: a five-country comparison: Harvard Business School Working Paper. Doz. Human Resource Management in International Firms. P. Autumn 2005. Despharde. Cambridge. (1999) Diagnosing and Changing Organizational Culture. and formulating a strategy for accomplishing that change. (eds). Upper Saddle . L.E.S. T. Doz. The book contains an assessment instrument that readers can use to determine their own cultural profile as leaders/managers/employees in an organization. P.

skills and ambitions. Michelin in China implementing a human resources strategy In 2001. These values were immediately recognizable and not difficult for the Chinese employees to accept. The company badly needed managers who could work in a joint venture environment. But were they aware of what the implementation of these values through the management approach entailed? The personnel department in Shanghai. which were founded on respect for: customers. source of social cohesion and motivation. China.. the department was set apart from the business units. . 226 . open and shared company culture.> n ". the world's leading tyre manufacturer and based in France. This team was kept in place to facilitate the integration process. position in the hierarchy but worked closely with partners. Michelin. in which Michelin had a 70 per cent stake. The concept of appraisal and the role of career rn..jsp?codeRubrique=74&lang=EN. In her analysis of the personnel situation in the Shanghai plant. the human resources director of M China described the difficulties that the integration of this approach into the joint venture would cause 2005). set up a joint venture in Shanghai.celbs. Answer the questions that follow the summary. shareholders. themselves professionally according to their performance. so Michelin was happy to invest $200 million in the company...The summary of events given below concerning Michelin's joint venture in China Is based on the detailed account given in the autumn 2005 issue of The Link. employees' progress within the company there was continual evaluation and face-to-face dialogue i the employee. the unit manager and the career manager from the personnel department. Michelin wished to implement its well-established personal management philosophy in the new company. The department encouraged individual employees to advance . the learning Interface of China European Business School. people. The expatriates were used tolay the foundation for future operations and to support the management team that had originally run the Chinese company. this could not be done overnight. one that was a . The management approach Michelin wished to have adopted was based on Michelin's five core value!'.. the environment and facts. as well as its counterparts in other Michelin production plants.. with Shanghai Tyre and Rubber Company.mlchelin. Other elements of the HR approach lhllt would be rlifficult for the Chinese to accept I I. Just as on other Michelin sites. During tM. See the company's corporate website: http://www.'·' relationships. was mostly made up of employees from the . Chinese partner plus a small team of expatriate managers and managers recruited from other international ventures in China. This was the way to develop the personal and professional effectiveness of the workforce as well as help individuals develop their career in the company. accessed 1 June 2008 (www.. was responslbll:! for creating and maintaining a strong. The Chinese tyre market was expected to almost treble within three years. so this active approach to human resource development compensated for the dearth of suitable managers available in China. . the managers of the business units. The new company. The personnel managers had no formal ."' did not fit into the concept that the Chinese have of management and the importance given to h ior "rrI1il'tl.

'The engineers "nmediately start tidying up and stacking all the magazines in date order. Questions 1. all the while taking polaroids of themselves. in the Samsung idea incubator. lie on the floor and throw round Ideas without regard for rank. In addition. where grass sprouts from the ceilings. play with Elmo toys and inflatable jolphins. and the r!psigners just stand lhere and don't say anything. In this way initial fears and suspicions could be removed and the process of building mutual trust set in motion. It was about establishing the Michelin China way. Although some employees were unable to adapt to the changing environment and left. the expatriates had gained a deeper insight into how the Chinese culture works. But here. fhe R&D people unly want to talk lith Americans. career managers and line managers was under way. the HR director saw some progress. 2. the doors are covered with funfair mirrors and the walls covered with chalk drawings of ideas. Which of the values. and when they arrive they say "I can't york in this environment": says Chung Sue-young. as described In the competing values framework. Respect by both sides of both sides.Activity 10. do you recognize in the case with regard to Michelin and Its Chinese partner? How do you account for any similarities or differences? The article below describes the changes which an Asian company Is attempting to bring to Its R&D department In order to improve the company's pOSition In the global market. Summarize what you believe to be the 'Michelin China way'. Such an environment might be commonplace in the nformation technology companies of California but it is revolutionary in Korea. considerable resources were dedicated to training courses and study abroad for (potential) managers. one of the 'VIP' centre coordinators. 227 . Read the article and answer the questions follow. The starting point of any integration needed to be for both sides to understand each other's ways of thinking. where workers adhere to strict Confucian traditions and would never dream of questioning a superior or making wacky Suggestions. the majority appeared to be willing to accept Michelin's approach to human resources.' she says. The process was therefore not about establishing the Michelin way. one core value of the Michelin culture . Samsung SOWS for the future with its garden of delights III By Anna F'lfield Samsung Electronics executives often feel uneasy when they enter the company's 'value innovation programme' (VIP) centre south of Seoul. they are encouraged to put on Viking arid bumblebee hats. 'Some people come here because their manager tells them to. At the same time. The employees who had been recruited from other joint ventures and who had become familiar with Western practices acted as a bridge between the expatriates (who were mostly involved in the technical process) and the line managers (who were Chinese). Four years after the creation of the joint venture. but that integration was by no means complete.respect for people .2 the notion that support functions such as human resources were as important as functional departments and the expectation that employees should speak openly about themselves and the working environment. or the Chinese way. South Korean offices typically feature grey computers on grey desks inside grey walls.lies at the core of the integration process. As the writer indicates. The career management system was 'taking shape' and the process of dialogue between employees.

They go to department stores to watch people shopping. Samsung is trying to develop a more creative culture across its R&D centre. encouraging them to think outside the box. Using the Competing Values framework outlined in Concept 10. With its focus on design . Copyright © The Financial Times Ltd. So Samsung is increasingly sending employees to the VIP centre for weeks at a time. The author of the article refers to Samsung as having once been a 'copy· cat' manufacturer. A. as Sony did with the Walkman and Apple with the iPod. spendlnQ VI:'I y long hours in the office. 'In our Samsung culture. 'People often complain that the TV takes up lots of space and that it doesn't go with the other furniture.' she says. 04/01/2008 (Fifield. chatting about tllings such as their hobbies or current events .are becoming commodities. 'In all areas from design. which is now home to more than 39. at the lowest cost . we're going to make the kind of pretty TV that customers want.which essentially boils down to providing the things that a customer wants. 'This is common sense but when you work with technology and are very product oriented. it looks like the people here are slacking off.' Ms Chung explains. 3. 'We have good LCilent but we are miJybc 2 per cent short .« Chapter 10 Cultural change in organizations But this kind of change is crucial as Samsung. 'Traditionally we have been workal1nlics. Chairman Lee Kun-hee recognizes the need for creativity if Samsung is going to make the next leap forward. something a little bit crazy. now finds itself in something of a rut. a designer and a market­ ing specialist came up with the 'Bordeaux' flat screen television. marketing and R&D. we have to be prepared for the future by implementing creative management schemes: The value innovation programme . What the Bordeaux team did was simply to sit down and say. It was here that three engineers.such as semiconductors and flat-screens .' Mr. 'Before. or to museums to think about space and light.000 employees. Questions 1.topics that would be water-cooler talk in other countries but which could be deemed frivnlt'lus here. While the VIP centre is a kind of hotbed for creative thinking. but now the emphasis is moving to efficiency and the number of people coming In al weekends hiJS drastically clecrl!ased: SayS Eugene Pak. sometimes you are too specialist to see these kinds of things.' Ms Chung explains in one of the VIP centre rooms.1. Pak's department. How does the environment of the 'idea Incubator' encourage those working there to change their behaviour? 2.).the Bordeaux became Samsung's first LCD television to sell more than 1m units. 'An unexpected but tremendously rapid change will occur by 2010. which is incongruously housed in a run-down old dormitory at its main research and develop­ ment centre. In Mr. Samsung Is also changing its recruiting priorities.' he says.the speakers are hidden and the lines are supposed to be reminiscent of a wine glass . vice-president of the technology planning team. 'But there are more and more people who recognize the value of creative slacking. we looked for loyalty but these days WI:' are increasingly also looking for creativity and a knack for doing something unique.' she adds. describe the changes that Samsung is attempting to bring to the R&D department. and outside the office. executives are gathering for morning '10-minute talks'.' he said last year at the Samsung Electronics research centre. which has made a remarkable transformation from copy-cat manufacturer to become Asia's most valuable technology company. and it has yet to produce a killer product. To what extent to you consider the creation of the VIP centre to be an example of 'copy-cat' behaviour? 228 . Pak says. 'We need that extra insight that I think we can get from bringing people from abroad to help· change the corporate culture: Source: adapted from Samsung sows for the future with Its garden of delights.Wfi just need the extra push to make it to the top. Many of its products . We now look for people that have that extra central to that drive. The Financial Times.

U:~aITl1nq outCOI1'1€'S After readino this chapter. especially in marketing research. ~ . Concept 11. 'M~rketer~ithlri' '. . International marketing is more complex. Since the new approach to marketing is seen as the most appropriate and effective way of dealing with consumers within the expanding and increasingly integrated market. linking it to its environment. ... ( The role of communication in international marketing.: . but also an understanding of cultural differences among countries.Cross-Border Market ..:..- Marketing is no longer an isolated function of the organization. It needs not only the knowledge of foreign markets.::~. especially advert­ ising.. with all the adaptations this requires. e The nature of cross-cultural research in marketing and its components. Concept 11.2 focuses on communication in an intercultural environment.1 Marketing in a cross-cultural environment .!:~ ~~. The question of adapting products and marketing strategies to suit the needs and wishes of the consumer lies at the heart of the intercultural marketing approach.1 goes beyond the boundaries of the domestic firm to examine relationship marketing management in an international environment. This means that its activ­ ities such as creating markets and satisfying consumers can no longer be realized without the contribution of the whole organization. there are a number of problems which marketers must face with cross-border markets. The focus of this approach is principally on the consumer. -:-.j<. Marketing is the integrating part of the organization.~ 229 Figure 11. . you should have an understanding of: G The cultural differences in marketing management practices in the world. as well as on management of meanings related to brand names for international markets and to country of origin images.

market opportunities can be evaluated in relation to the resources of the enterprise with a view to attaining its goals. Market analysis with at least three elements: environment analysis. This prescriplion is. one that entails not only the notion of anticipating and responding to customer needs. Once a market has been scanned using the above tools. lOu. Management is intent on running the whole process effectively so that the customers' needs and wishes are met. It tries to balance customer needs with the aims and resources of the organization. apart from the product itself. plan­ ning and management. The following strategies are often used: market segmentation: taking a group of (potential) customers who share certain char­ acteristics (such as age or income range or occupational profile) marketing mix: comprising. However. but also the creation of networks that the authors define as 'sets of relationships and interactions performed within . :) market research: this is the way information concerning the company's customers and environment is collected. 2. Wall and Rees (2004) separate out market­ ing activities as follows: 1. They argue that market-driven management should be more than a succession of 'ordered functions'. Her!::. These relationships comprise not just personal and organizational ones. the function should be seen as a collective one whereby departments link up to perform various tasks and processes. accurding tu M!::rcado el al. lhe focus is less on the marketing mix and more on the development of relationships that firmly link the company to the market. oul also that of defining and delivering <:uslOlller value through a market­ oriented business strategy. price. buyer behaviour: the company needs to establish the profile of its (potential) customers and to know how and why they buy. the company has to develop a strategy to give a meaning and direction to its marketing activities. strategy. There should no longer be a separate unit for marketing. The various marketing activities are integrated into the organization through plan­ ning and management itself. Marketing strategy. Through planning. as well as the strategy of the marketing mix. this classification of marketing activities in terms of market. has its critics. Some experts see these approaches as being traditional ones that no longer meet present-day needs. Traditional view and new ideas and concepts As Mercado et al. (2001) note. This means that the whole marketing function of a company should be integrated into all parts of a company. promotional activities and place. (2001). which involves making an inventory of the risks and opportun­ ities in the company's environment.Chapter 11 Culture and international marketing management Marketing is an integral part of a company's activities. experts are increasingly questioning the effectiveness of the marketing mix approach. They see a modern concept of marketing with a stronger customer focus. closely linked to the develop­ m!::ul uf reiaLionship markt:liug.

Friends Reunited (UK). playahead (Sweden. if possible. The switch from the 'mass media' to 'relational media' encourages companies to listen to consumers and to enter into dialogue with them. The popularity of social websites The table below. Norway). Flickr. V Kontakte (Russia) Facebook (most Arab countries) 8ebo (including New Zealand) i Europe Middle East Pacific Islands Source: Kim et al. I .Concept 11. Table 2 Popular social websites by continent/region/country. Netlog (Canada) Orkut (Brazil). Continent/region Africa America (North) America (Central and South) Asia Dominant social websites HiS (Angola.also be added Twitter. Mlgente. companies are turning more and mllCe to 'social media' for marketing purposes. YouTube. Orkut (india. Sonico. IWiW (Hungary). social network applications now ff:ceive priority over digital advertising and f:-mail marketing.dulcenegosyante. Facebook (Panama) Friendster (Southeast Asia). Netlog. Skyrock (France. Tagged. Nettby (Norway). according to marketers worldwide. Nexopia (Canada). HIS (Portugal. Xing (China). Relationship marketing management is essentially about connecting with customers through continual transactions and exchanges whereby the expectations of customers are not only met but also. HiS. In fact. an international real-time information network. Mixi (Japan). Central Africa). Odnoklassniki. exceeded. Studivz (Germany). Cyworld (S.1 Marketing in (I cross-cultufl!ll environment specific relationships'. French speaking region). When looking for ways of establishing sustainable relations with and hf'tween con­ sumers. YouTube (Japan). taken from <http://www. Enterprises arc now setting up marketing strategies that bring not only change to corporate communication and marketing but also a real cultural revolution to the whole (Russia. Romania).pl (Poland). Facebook (UK). Europe). Xianonel (China).com/social-marketing-goldmine-top-100­ social-networking-sites> contains a partial list of websites which clearly indicates how popular social websites have become globally. Bebo (UK. Nasza-klasa. Xing. Cyprus. To the sites given below should . Hyves (the Netherlands). IRC-Galleria (Finland). Korea). Denmark. Pakistan). Facebook. HiS (Mongolia) Badoo (UK. (2010). LunarStorm (Sweden). Ireland). former Soviet republics). Facebook (Egypt) MySpace. HiS (Thailand).

Europeans show differences in th~ information they choose commUnIcate. 232 i!iiiiL¥if'ijU_ _ II • . whether in Europe or Asia. Language poses a real problem when it comes to identifying be viours common to different nationalities.K. ~ Cl Sensitivi 0 uestioning.~~~:r~w~. problems for marketers and market research Mercado et a!. If this is not done. increa~ ingly reluctant to participate in such surveys. a translation play such an important role in self-fulfilment. meaning of the translated words. are reluctant to talk openly about such matte and prefer instead to be asked questions on more practical issues. (2001: 394-395) define them as follows: ~ Language barriers. 2003: ·135). Demographic information. therefore. may not be worried about revealing informati on their income. Sor customers. it is important to take into account the cultural conte when responses to questionnaires are being analysed. for example. When surveys are being carried out across cultures about the IN.where work aoes not of work life and job satisfaction iiithin refers. Job satisfaction Will probably have a survey instruments In English. as the author points out. " What is behind the question? in his . Most of marketing research techniques emanate from the l They focus on the ability of individuals to express their sentiments and feelings. however.iIiii Chapter 11 Culture and International marketing management ~ ~ip.~W:l'th\~ctoss~botder·'ITl~t. people 've. Europe be a prime example. Gales (2003) nuam. translated Into French may not adequately reflect He refers toresearch into job satisfaction the concern that the French give to the quality across cultures. nvc and lhink. EJ Research techniques. A question theU$ with regard to the centrality of work in such as 'How satisfied are you with your salary?' one's life. There remain.~1:'~~~~at2h'·'·· This fresh approach to marketing is seen as the most appropriate and effective way of d ing with consumers within the expanding and increasingly integrated markets. such as that in France. e S~on. the reseure findings may be misinterpreted and the real meanings undiscovered. People in certain countries are becoming increasingly suspicious about wh. as well as the relative amounts spent on promotion and advertising. They the differences between France arid a given culture' (Gales. happens to information gathered through marketing surveys. translating them different meaning to thOse living in a culhlre ­ into the languages of the cultures In question. Cross-country comparisons of statistics are difficult to per form since e data is established locally and is based on practices that differ betweel countries. • Statistic:~pfj!isons. Translating from one language to anothe one problem.article on linguistic sensitivity in cross' of this kind will not necessarily 'capture the cultural organizational research. but also assessing the differences between countries when it comes to . e reeks. whereas the British are. e CuI ral di erences. of Hfe. educational qualifications and social grouping may be different. ReSearchers have used welHrled ..

as Daniels et al. when it comes to selling new products. Multinational companies selling throughout the world that consider their country of origin or host country in the same way as the other market environments in which they are involved. that these activities occur at three levels in line with the focus of a company's operations: li. cultural or even economic reasons.fUSS national borders'. Marketers just cannot determine in advance what the consumer is going to buy .2.usually multinationals . Many multinational concerns have decentralized structures whereby operatJ'ifg companies enjoy considerable autonomy. 'where there is also a great deal of spillover' between countries when it comes to product information. -vayof d( lrope be j 'esearcht ting be} . and pursuing a single. EY latteI ? wa) 1tex: arch hat € as- r­ n The application of international marketing depends not only on the target market but also on the marketing orientation of Lhe company. particularly when there is little or no need to adapt them for local consumption (telecommunications and pharmaceuticals are examples). Consumer products as well as industrial products are all potential candidates for the global market.. (2011: 640) point out. these companies have to take into account the effect oftheir products on all stakeholders .sudl as consumer associations . not only knuwing why a product is that they have regard for the concept of social responsibility. 233 .that want to adopt a glohal marketing strategy by identifying products or services with certain similarities in certain markets. or at least products that are unknown to the consumers there. Companies with a sales orientation try to sell the same product domestically and in a large number of countries where consumer characteristics are similar and.tnother les to tI hoosel rmatio he VI . Furthermore.--~-. a change in colour preferences or choice of materials is difficult to predict. Companies whose sales for the most part are made in the domestic market and consider exports to be less important. if not more so. Such a change may compel the enterprise to modify its products to meet the needs of local consumers. This entails not only knowing how a product is bought. however. however. exporting companies are having to adopt a soelal marketing orientation. Research done by a local company across different countries and markets may lack a consistent method. There are five common marketing orientations: production. The real reason for a change in orientation is often a cultural one.not even when they are surveying their home country.1 Marketing in a cross-cultural environment I € Fragmentation. A switch from one product to another. An illustration of the problems defined above is given in Spotlight 11. global marketing strategy for them (Cot:a-Cola being an obvious example). The last two are described below.~~~~-~~---~~ iiiiiiiiiiiiiiiiiiiii~~~-- Concept 11. sales and social marketing. but also lluw it is disposed of. A change in orientation may be necessary because of legal. 'international marketing can be simply defilled as marketing activities that I. for their international marketing to succeed. They do add. but also how it could be modified in some way to make it more socially desirable.S0111 International marketing According to Wall andRees (2004: 306). customer. Those companies . Increasingly. Making such pre­ dictions in foreign markets is as difficult. strategic marketing. be fragmented and inconclusive.

based on the desire for assimilation in a certain civilization. Intercultural marketing is made easier if the conditions for identification with the pro­ ducts are present in the target market.ntity (the need to reproduce the national culture such as it is. class and ethnidty. using criteria to do with consumer attitudes. II The elements involved in the process of cultural identification are.• Chapter 11 Culture and international marketing management The intercultural marketing approach The question of adapting products and marketing strategies to suit the needs and wishes of the consumer lies at the heart of the intercultural marketing approach. Cross-cultural consumer behaviour A certain understanding of cultural differences is indispensable for effective communica­ tion with consumers from different backgrounds. intercultural marketing is as much to do with localizing as with globalizing. Usunier and Lee (2005: 232) also maintain that consumers: buy the meaning that they find in products for the purpose of cultural identification. twofold: (l. particularly the web and satellite television. the importance of geographic frontiers and politics will gradually diminish because of changes in the economic enviroriment and the evolution of consumer behaviour. behaviour and interests. There are. in their analysis. According to Usunier and Lee (2005). Europe and the US: They have a tendency to share common values. 'geographical cultural affinity zones' which. That is why it is preferable to make clusters of countries or consumers who share 'meaningful cultural characteristics'. at the same time. However. If consumers are to buy a certain product they need to identify with it in some way. and tend to present common traits as a consumer segment. to a large extent. Such cultural affinity classes can be an ideal target for standardized products because they have a sense of belonging to a common age. Europe offers an example of such changes. as do the young generations of consumers in more and 234 II . Usunier and Lee (2005: 232) give an example of such a class composed of people between the ages of 15 and 20 from Japan. q. as well as to occupation. resemble national cultural groups. the desire to feel at home) the notion of exoticism (the desire to escape from one's culture and to experience other values. These notions are closely interlinked in a rather ambiguous way in the identification pro­ cess. and 'cultural affinity classes: which are formed using different kinds of segmentation. other ways of living). the notion of idp. their lifestyles converge worldwide Irrespective of national borders. preferences and lifestyles related to age. They may also share a common channel of communication. so a straightforward description of the approach is difficult to make. The intercultural marketing approach takes account of criteria related to geo­ graphy and nationality while. according to the authors. gender or income group across different countries. according to Kaynak and ]allat (2004).

but this is not sufficient in itself bet:ause the intentions of the consumers need to be established. there is increasing uniformity in consumer taste and consumer behaviour. account must be taken of the characteristics of the consumers' culture and their underlying models. How can we define what a brand is? Well. which were once assumed to be applicable ulliversally. therefore. Even in China there is evidence of the influence of the Confucian system of values retreating among the young to make way for a more individualist attitude in their buying habits. particularly when it comes to language.. Although differences in the cultural and economic environment remain. In a legal sense. (2011: 654). A name originally chosen for one particular market with a particuhlr language may have a different association in other language areas.2. Usuuier and Lee (2005) maintain that there are limitations to the way behavioural intentions nre determined. . The seductive power of the name seems therefore to count as much as the way the product is made. for a start. the brand (eventually) becomes instantly recognizable and can to a certain extent market itself. Using one uniform brand internationally makes economic sense. !Ii BrCl. Such problems may be all the greater if the brand is promoted using a different alphabet. is it possible to talk of transposing theories to do with consumer behaviour? There are certainly similarities between cultures. Marketing is also a process in which communication plays an important role. As Daniels et al. To what extent. They must decide 'whether to adopt a worldwide brand or to use different brands for a variety of country markets'. According to Daniels et al. Among many products on the market. This already appears to be having an effect on the markl:!ling strategies of <:ompanies operntillg at <ill iUlernationllllr. The name chosen may also be difficult to pronounce because the pronunciation of the name may create a meaning different to the original. Consumers buy not only the product but the meaning that goes with it. show different weightings between attitudes and norms. Concept 11.nding Some say that the brand often sells better than the product. but to really understand con­ sumer behaviour.2 Marketing communication across cultures more countries. the buyer recognizes 'his' or 'her' brand before actually buying the product. but problems can arise as a result.~ . problems with promoting brands internationally are exacerbated by the lack of some sounds of a brand name in other languages. They increasingly behave in the same way. This idea will be developed in Concept 11. As such. this form of identification becomes a trademark. (2011) rightly point out. j .ovel. provided it is registered. so reducing promotional costs. every producer and marketer working in an international environment must be very careful when making decisions about brands. NeverllJdess. Models of behavioural intention. Significant differences in consumer behaviour may be determined and the need to ndapt a prouuct established. it is the brand that identifies a product/service or range of products/services.

. Usunier and Lee (2005: 289) note the role of stereotypes in associating a product with the national image of a country. Brands and national Images As we have seen. the Image of Korean products as being cheap. consumers from aIlt: country do not IIlways have the same image of a . in the UK in 1905.Clf. IiI .. There are. and ease of use as well. It was introduced in other markets. For the British and Dutch markets it was renamed Jlf because. Moreover.•• the image of the robustness of German products. the story goes. The name Jif is stili used in Australia. as price. ~ Such elements are not necessarily related to one country (e. however. In terms of a consumer's purchase criteria. it is called Vim. Unllever decided to use Just one brand name for the product across Europe . image is an important facet of the product. wine). When It proved to be successful.g. along with quality. The national image of the manufacturing company. product from their own country as do consumers from another country. Although It seems logical to have the same name for the same product for marketing pur­ poses. The word 'jif' Is found In English phrases such as 'See you in a jif' or 'This won't take a jif' . but important number of consistent stereotypical images: . of course.. innovation. In 2001.g. the slang word for the sexually transmitted disease syphilis. New Zealand and Norway. but also in terms of other elements that contribute to the consumer's perception of product nationality. 236 . how do consumers perceive products from countries other than their own? What is the relationship between the nationality of a product and the image it evokes? A number of authors. pasta to Italy). The image diffused by the brand name. the change may also reflect the fact that syphilis is no longer a common subject of discussion in the UK.. not only in terms of the 'made in' label. In Canada. a small. the manufacturers were concerned that the name 'elf' might be associated with 'syph'. which was the name given to a similar product first manufactured by Lever Brothers . or even to a geographical area (yoghurt to the Balkans). but to several countries (e. they maintain. These include: to ~ ~ I i I The image of national products as compared with imported or international products. the brand name can provoke associations of ideas and emotions in such a way that consumers are not just buying a product but also the image it conveys. National images of generic products.Ii • Chapter 11 Culture and international marketing management Jif and Cif Unilever developed a liquid cleaning product that was first sold in France under the name Cif.implying that something will happen quickly.. the Image of France as associated with luxury goods. including Usunier and Lee (2005) see this relationship as a very important one. there are many perceptions of products which are not shared by consumers from different national cultures. design. In terms of international marketing.

research and product development. Skoda (Fabia or Octavia) well as from Asia? Some multinationals underplay the cO~_0. The cars it made before the 1<.)89 'Velvet Revolution' were available in western as well as east Europe. Daimler-Benz talks in its corporate advertising of the company 'being hl~iT'i'mort' than 200 countries' (Usllnier and Lee. marketers found it particularly difficult to shake off the old Skoda image. 2005: 292).php). through clever marketing campaigns in Europe (and parts of Asia and Latin America). The attendant says: 'I'm afrAid some little vandlll has stuck a Skoda badge on the front of your car'. the accolades the company received were not immediately reflected in sales figures in the West. Source: 'Skoda goes from trash to treasure: American Marketing Association. how 'French' is a Peugeot that has been assembled in the UK or Spain. This is particularly the case for products from Japan and the newly industrialized countries of Asia. Skoda was origin­ ally the name of a Czechoslovakian car manufacturer nationalised by the llew communist regime after World War II.along with those made by the Russian equivalent Lada . had a very positive effect on consumer awareness. Honest!' Market researchers found that this and other similar commercials. company in 1991 (eventually taking total control of the company in 2001). Although behind the Iron Curtain they were considered to be superior to cars from other communist countries. containing parts from different European countries ­ including France . they were seen in the West as cheap but poorly made and unrf! The cars were soon earning high praise from the motoring press. However. and seem to do so rapidly. commercial ends with the picture of the handsome. Jokes about the cal .2 Marketing communication across cultures Skoda transformed The perception of brand name Skoda has undergone a massive change since the early 1990s.Eigin and focus on the 'cou~try-c:[. =---. however. accessed 1 June 2008 (www. This applies also to countries that have cultural and language similarities through their colonial past.and those buying the product outside the ED? .were heard frequently: 'Huw dO you double the value of a Skoda? Answer: Fill it with petrol: 'Why does a Skoda have a heated rear windscreen? Answer: To keep your hands warm when you push it: Once the German car maker Volkswagen had taken a 30 per cent stake in the. but which have very differing perceptions of the meaning of products. Moreover. for example. as Usunier and Lee (2005) conclude from their investigations.--------~~---~ -. Through intensive training and extensive investment in the plant. differ considerably from one economic zone to another. things changed. in which the 'new' image played with the 'old' Image. As Usunier and Lee (2005) indicate. In the UK. Such shared perceptions. the percentage of British consumers who said they would not consider buying a Skoda fell by more than a third after one year into the campaign. So. 18 February 2002. What sort of associations are this label expected to evoke among consumers within the EU .~ and multiplying 'word-of-mouth' recommendations from satisfied buyers. the qual­ Ity of Skoda products improved considerably.marketingpower. Nevertheless. These products may. In on!? of these.-.~----~-~ --~---. sait:!s started rising rapidly.::------:~~------------ --~-- Concept 11.It's a Skoda. multinationals sell the same products under the same brand worldwide. Related to this change of focus is the increasing appearance of products that are 'made in the European Union'. however. beneath it. however. containing components from the company's country of origin as well as from the areas where they are sold. For example. Another factor that can change shared perceptions is the matter of 'country of origin'. consistently positive reviews from the motoring pre:. d Skoda driver returns to his car where a parking attendant is waiting. They helped boost sales during the la-month promotion period. the slogan '. that faced up to this image in an honest but humorous way. do change. Commercials were made.:~rand'.

celebrate er to.hOce\<lte. eat checelate alengside traditienal sweets. mark an event. Annual revenue is abeut E200m. less pelltlcally stable. Company websites allow not only information to be given about the products or services sold. with prefit continuing to. 'As a cempany. p. Cad bury's lighthearted ads in India show a middle-aged man who is celebrating after finally passing his final grade at scheel. in India than in ether ccuntrles because ef a 30 per cent impert duty en the cemmedity. cho. derisk cocoa: said Mr Kripalu. 150.000 tenncs to. small cempared with the UK but growing rapidly. which are also. change cultural habits In a ceuntry thi'lt hi'lF.whether the focus is on the organization in question or on its products .:~ Chapter l' Culture and internatienal marketing management '. Cecea seedlings grew aleng side cccenut palms in seuthern India and. seurce alief its bean:.celates by asseciating with traditienal sweets & eccasiens' is hew Cad bury describes the message ef the ads. tri'lciltlonally not p. CadbLJry believes that. Asia and managing directer ef Cadbury India. been ferced spite ef the gleba I recessien. however. knewn as mlthai. uses advertising as its principal channel. Being on the Web. 238 . sustain the grewth we have had in the last three years: said Anand Kripalu. 'Cadbury sheuld be in a pesition to. Changing cultural habits in India: Cadbury to raise India's role By Joe Leahy In Mumbai Cadbury is leeking to. 19 (Leahy. which are made o. build en its deminant pesitien in India'sc:hecolate market by making the country a regienal centre fer cecea preductien. also creates a number of strategic challenges for global com­ panies. include coceil trees in their plantations. if it rim persuade 20 per cent ef Indian cecenut farmer!i to. 01/06/2009. Internet technology offers a number of opportunities for international marketing. sugar and flavouring. grew at abeut 20 per cent a year and sales at 30 per cent . president. which has been In India fer 60 years. The challenge fer Cadbury. dumestically by 2015 rather than from the traditional uverseas markets. er 3 per \~p. The Financial Times. Why does Cadbury want to persuade. It ceuld increase natio.000 tennesa year.). 'Bringing a cultural context to. including 'Celebrate with Cadbury Dairy Milk' in 2004. by 2070.2m steres while Neslle cUlllrols aiJuul25 (JE:H cent. This grewth has ceme partly threugh extensive advertiSing campaigns. beceme mere self-sufficient in cecea beans.f milk.nal cutput ef the beans frem 10. II Questions 1. mestly grown in Ghana and Ivery Ceast The cempany hepes to.i'lti'n r. Indians to eat chocolate? 2. The UK-based preducer cf brands such as Cadbury's Dairy Milk and Beurnville said India was preving ene ef its mest resilient markets. They are eaten by Indians to. but also online advertising and sales promotion worldwide. has been to. Cadbury centrels mere than 70 per cent ef the checelate market in India with a presence in l. How did Cadbury proceed in order to reach Its goal? Communication: advertising To communicate with the customer and the outside world . we believe we want to. J. Cadbury has also. This was aimed at cenvlncing Indians to. therefore. Copyright © The Financlai Times Ltd. Source: from Cadbury to raise India's role. de net require fresh Clearing ef ferests fer plantatiens.nt of world production.

And whell a product has become known. friendship. not on its qualities.?::':'''7'>·''".t~.":·'7'::7. of course.. j.. but also to create a need.2 Marketing communication across cultures despite these advantages. Even 'lifestyle' research and other inves!igations to determine market segmentation pay increasing attention to the way culture affects C01l6ullll:rs' perception of products and services. advertising maintains the recognition and reputation it has acquired while maintaining the consumer's wish to buy the product. rules.. Taking a cultmal approach in marketing and ~dvertislI1g gives added value in the sense that it pro­ vides indispensable information to the marketers.7'. Same message: the Dutch tube gives the following message in Dutch: 'Daily use of Sensodyne protects The difference: on the Dutch tube: 'Brushing twice a day brings a lasting result: On the French tube: 'After three weeks' use you will be able to notice the improvement in your dental sensitivity and regain the pleasure of savour­ ing everything you like. enjoyment. the more control they have over creating an ad that will be Inter­ preted in the way In which they want.. focuses its message on the benefit the product brings the consumer.'~~:r.7-:7·~.~~-. consider the information to be found on a tube of 5ensodyne bought in Holland and on a tube bought in France: sensitive teeth and prevents the pain from returning. humour.' 239 ~ . brands.7:17"::7"~. Some consider advertising as a universal phenomenon. public life versus private life and so on. it prevents the sensitivity from returning: Same product: both tubes show identical ingredients (in English) and the same product description ('5ensodyne for sensitive teeth') in their respective languages. Those busy with international market­ ing must go beyond questions of language and behavioural differences to try and Crlld out the meanings that consumers in different cultures give to products... the power not only to persuade people to buy.-":". Advertising and other promotional campaigns adapted to the local market allow the image of the product in question to be directly associated with the product concept in the mind of the consumer.. Concept 11. but presented in a symbolic way to create adhesion.-... advertising in its simplest form is information intended to create a link between the producer and consumer. .t' Sensodyne toothpaste To Illustrate this 'glocal' strategy. Advertising is often defined as the channel of communication used not only to inform the public. _r--­ -~---~-. messages and behaviours.'':'!7:. it is all about 1111: consumer. The product or service is therefore no longer presented to the public as it is.:j.::-::y.".' The French tube gives the following message in French: 'If used daily. others focus on its power._~. In any case. an indispensable part of everyday life.... but also to persuade the consumer to buy a product or service. From Hoecklin's viewpoint (1995: 106): ••• the more the marketers understand about the way a particular culture tends to view status... The advertising presents the product in such a way as to.. namely to sell! Its essential purpose is to publicize a product and so create a demand fur it. Using cultural values to examine a product concept is what Hoecklin proposes. attract the consumer and when doing so. In the end. dealing in the same way with all the markets and consumers in different countries still remains a difficult task. expressions of emotion."'.'7!'""~t. But there is clearly a purpose behind this. ----~-.

hut also intFrpn"tine it by applying shapes or patterns..l.2 Effective communication 240 . for effective communication to take place. they indicate thaL a product must always involve the receiver to a sufficient degree. even if the information is considered shocking. As Hoecklin (1995) observes.2).fi. According to Hoecklin (1995: 111). necessary if a product is to be successfully launched in a new market. I. 'consumers' perceived meaning of a product or service must coincide with the advertiser's intended meaning' (Figure 11. In psychological terms. or will reduce its importance when interpreting it. consumers will avoid everything that contradicts their system of thought. If cognitive theories of perception are applied to advertising. If this does not happen.-. ============ ~ - Chapter 11 Culture and international marketing management Managing the meaning of brands across cultures Incorporating understanding of a consumer's culture takes into account the emotional element. companies operating internationally are managing the meaning of brands across cultures while building the strength of their brand and extending the number of markets in which they are selling and promoting their brand.'· I· Intended meaning of the brand Perceived meaning of the message Figure 11. Their attempts to adapt to the cultural differences in communication and product use have reached a sophisticated level: companies are increasingly intent on making sure that the intended meaning of the brand coincides with the perceived meaning of the message. One can deduce from this that differences in cultural systems also determine what is seen and how it is perceived. perception is a complex act whereby the individual is not just observing but also reconstructing his environment. . This approach underlines the importance of the notion of perception. Generally speaking. He is not just discovering.. the information given will not retain the consumer's attention.

. 241 .. Hence the tendency to go for the 'glocal' approach in Q2. but which contain different ingredients corresponding to the particular preferences of a adapted to the local culture.2 Marketing communication across cultures From a cultural viewpoint.3 illustrates this approach.3 The managing meaning matrix SOllr(0: HOiil. as indicated by the upward arrow from Ql. this means that 'the intended meaning of products brands' must coincide with 'the perceived meanings' of consumers who come from different cultures. Quadrant 2 contains products and services where the brand concept is globalized (as in quadrant 1) but the message . quadrant 1 contains truly global products and services. The approach in quadrant 4 applies to products for which the global message is the same.Concept 11. but at the same time allow for local adaptation of the message. The most cost-effective way of ensuring that this happens is to standardize the product or service concept globally. Figure 11. but which contains a different amount of sugar in a certain country where local taste differs slightly from the 'mainstream' taste.. Spotlight 11. This approach allows considerable economies of scale and cost savings in the marketing of the product. 1995: 101.klin. Different In Figure 1 U. Sales are increased globally by matching the perceived meaning and intended meaning'in each particular country/culture.6 illustrates the unfortunate consequences when it is assumed that a product with the same name and function is assumed to be the same in one country as in another. The success of the approach in Q 1 is limited: few products and services can be marketed this way. Local adaptation 'Glocal' advertising Quadrant 2 (Q2) Global concepts and messages Quadrant 1 (Q1) Message Standardization ~~r 'i~ ~ Local concepts and messages Quadrant 3 (Q3) ~ Quadrant 4 (Q4) Same Product concept Figure 11.the promotion . The product concept is the same everywhere and the advertising is standardized. An example is a soft drink that is promoted using global marketing. The arrow from Q3 to Q1 shows the move by producers of local product concepts to create a larger market through standardizing the product concept but using differently coded messages to ensure its success in different countries/cultures.

to make a choice between global marketing and Inter­ cultural marketing? 242 . the US product differed significantly. Managing the meaning of brands across cultures is not so much to do with presenting the products themselves. He was eventually disqualified and had to return his bronze medal.Chapter 11 Culture and international marketing management Vicks inhaler r Ii :! British skier Alan Baxter finished in third place at the Winter Olympics in Salt Lake City in 2002. Another element of international marketing which deserves special attention is com­ munication. It contained a substance that is on the proscribed list of the International Olympic Committee: levmetamphetamine. Despite his appeal that he had no idea that the US stick contained the substance . the marketing function of an enterprise involves not only the complete organization but also its environment. competition is becoming more global than national. Scotland on Sunday. Unfortunately for Alan. The cultural differences in the behaviour of the consumer appear to be diminishing. To succeed. because it is the consumer who first presents the most import­ ant cultural differences. Is it necessary. Two days sport. The focus is more on the consumer than on marketing methods.the IOC stuck to its decision: the substance was detected and an offence had been committed.cfm?id"268802002). accessed 1June 2. Even if there is a certain standardization in consumer behaviour.008 (http://scot!andonsunday. manufacturers still continue to adapt their products to suit the consumer markets where they are sold. This chapter presented ideas about international marketing management and pointed out problems involved in cross-border marketing research. he was told by the Olympic authorities that he had tested positive for drugs. when he was still celebrating his victory. The pack­ aging and the product looked exactly like the one he used regularly in the UK.and that the substance itself would not have improved his performance anyway . While preparing for the big event. When he went for the doping control it did not cross his mind to declare his use of the product. All this because he used an American inhaler rather than a British one. 10 March 2002. Source: 'The Highlander laid low' by Steven Downes. the message and the perception that people in a certain country may have about this product. but the value they communicate. 1. as marketer. communication through the various channels of advertising needs to create a balance in the relation between the product itself. Alan bought a Vicks inhaler stick to help him breathe more easily and so improve his sleep.scotsman. and multinationals are selling their products under the same brand. The basic values attached to the products are supplemented by values specific to each cultural group.

(2003) 'Unguistic sensitivity in cross-cultural organizational research: pOSitiVist/post­ positivist and grounded theory approaches'. (2001) European Business. Harlow: Pearson Education. Harlow: Pearson Education. How do you account for this change? Use the concepts to support your arguments. Usunier. 2nd edn. and Rees. K. 4th edn. written by the French professor Jean-Claud~ Usunier with the title Commerce entre cultures was published in 1992 and translated into several languag('s. acting as a form of buying guide. Binghamton. J. Although advertising has been around for a long time. F. The influence of culture on relevant aspects of marketing in an international environment is given a comprehensive analysis in the book. Wokinqham: Addison-Wesley. J. the press and posters. Language and Intercultural Communication. This is because it reflects the expectations of the consumer: more and more advertising is less to do with pushing the consumer into buying a product or service at any cost and more to do with keeping the consumer up-to-date on new products and services.seem to appreciate advertising more than they used to. Information Systems. The messages given are also clearer.M. Nowadays consumers . E. 13th edn. (eds). thanks to the contributions of its Australian co-author Jil Ann Lee. O. E. (2010) 'On social Web sites'. L. Kaynak. Harlow: Pearson Education. and Prescott.mces: SiriJteCjies for Competitive Advantage. The first edition of this book. S."J. Gales. L. Kim.D.Further reading and References 2. in Kaynak. D. (2005) Marketing Across Cultures.W. RadebaUgh. F. Marketing Issues in Western Europe: Changes and Developments. techniques have certainly evolved and the channels used have multiplied. (2005) Marketing Across Cultures. providing more information and. S. Wall. and Lee. Hoecklin. NY: International Business Press: 1-14.. The author's cultural approach offers a major contribution to international marketing. W. with websites now playing an important role alongside television and radio. 3 (2): 131-140. -c. Jeong. S. References Browaeys. 35 (2): 215-236. and Sullivan. J. and Trompenaars. more relevant and believable. How is advertising perceived in your country? Do you see the same evolution as that described above? Further readinq Usunier. Daniels. (2004) 'Marketing in Western Europe: a monolith or a multidimensional market'. M. J. (2011) International Business: Environments and Operations. and Jaliat. B.A. Breukelen. J. 243 . Welford.-R. 4th Western Europe at least . and Lee. and Lee. and Jallat.A. L. NJ: Prentice Hall. F. The fourth edition updates the subjects and cross-cultural cases. Netherlands: Nyenrode University Press. R. most importantly. (eds) (2000) Cases Studies on Cultural Dilemmas.-C..H.P. Upper Saddle River. Mercado. Harlow: Pearson Education. 4th edn.. but more importantly the book deals more thoroughly with the phenomenon of globalization. (1995) Managinq eultuml Diffen. (2004) International Business.

.spE. Payload capacity ' I ReliabilitY of . These clearly limit a haulier's management decisions regarding investment in one area of variability to extract greater economies from another. employ either a trained and experienced truck driver (who knows the ins and outs of the truck and hoW to use it profitably). for example. however. or to hire an inexperienced driver (who has only worked as a co-driver and knowS little about profitable truck use). when it comes to road conditions and speed limits. and buying the best lorry for the job is just half the battl@. (costahd p.costs) . Either driver could be put to use in Europe and India. Equally importantly.- -1 a:­ Read the case and answer the questions that follow. In terms of infrastructure. so they offer no competitive advantage at all. In India.~rUcture I Fuel efficlency (costs for fuel per km) Financial condition (loans and downpayments) Logistical situation (regular versus fluctuating transport) ! Driver (cost and performance) Road Infrastructure (condition ofl and speeds on the roads) Transportallon rates Reliability of vehicle (maintenance and breakdown costs) India Financial condition (loans and downpayments) Logistical situation (regular versus fluctuating transport) Government regulations and police Transportation rates Fuel efficiency (costs for fuel per km) . Both have to contend with t:l number of varit:lbles if they t:lre to generate a healthy profit. many variables are fixed: some are set by government regulations and others offer almost no choice. In European countries. Coping with variables: a comparison of Indian and European hauliers Hauliers in India and Europe both face a competitive environment. every competitor can take full advant­ age of these facilities.4 indicates the differen(e!> ill IIICHlagement tools for tile hauliers uelween uuth LUlllil1ellb. although the European· 244 . for example.I rm~-. A haulier could decide to .leds on the roads) InfrFl. while single lane pot­ holed dirt roads are the only option for trucks in rural areas. many variables attached to the truck driver in India. 'Road "Driver. the road network shows many differences: some four-lane highways are available in the urban areas. And the variables for the Indian haulier are very different from those faced by his European counterpart.. The main difference between these haulage sectors is the room to manoeuvre which these variables afford.erformahce) (cd!idition 011 aOQ. Figure 11. (West) Europe Government regulations and police Payload capacity Figure 11. The 'crossed' variables are fixed in the market.': vehicle" ' (lT1aii'ltemince andbrea!<:down '. there are very few variables to be found.~ __ ~-~ .4 Differences in hauliers' management tools There are.

so what could go wrong? The products were launched together with a TV commercial where the only change was to give the voice-over a Uruguayan accent. The distributor was not sending any new orders but calling instead to ask what should be done next. The company was not prepared for this feedback and started wondering whether its main competitor was aware of this. in the Indian truck market. What it discovered was surprising. Analyse the case using Trompenaars' framework (see Chapter 5). but this is certainly no longer the case fot all dealerships. for those occasions when the housewives had no time to prepare cakes in the normal way. Manufacturers and importers are mainly responsible for mass communication.5 Marketing in Europe and India Europe The flow of marketing communication starts with and is directed by the manufacturers. the focus is more on new prospects and first-time users. women aged twenty to forty-five. Product launch in Uruguay A few months after an Argentinian food manufacturing company had launched a number of product categories in Uruguay. Indian sales brochures focus on functionalities. middle class mothers who were the purchase decision-makers for this type of product. These women even prepared gelatine at home out of chicken bones (a very time-consuming and disgusting process). There was a market for pre-packaged ingredients.T a Chapter 11 Culture and international marketing management Table 11. while dealers account for most relational marketing activities. They set the marketing boundaries with which an importer has to comply. and less on existing customers than in Europe. there are obstacles. Read the case and answer the questions that follow. the products were still on the shelves. the importer in turn controls a large part of the marketing flow of a dealer. It was entering a market where there was only one competitor. The company decided to run focus groups to find out what was happening. Source: adapted from Browaeys and Trompenaars (2000): case 6. The sale of these products would help to build the brand rapidly and would contribute high volumes to the company's operations.~ I I JI When it comes to launching a product In another cultural environment. but only a small one. 2. while European brochures focus more on visual aspects . About three months later. They visit their 'accounts' (as they are called) and organize test drives and demonstrations. I It \ 1 ! I: Questions 1. explained that it was a disgrace to buy a pre-packaged cake or dessert. Con­ sumers. it decided that the next launch would be cake and dessert mixes. Dealers might be less pro-active than in Europe. and it had a 90 per cent market share. with manufacturers controlling the process. The company thought the launch would (literally) be a 'piece of cake': the country's culture was similar to its own. Making cakes from packets was out of the question: only the housewives couid give them the right flavour and ingredients . It was time to start a campaign to educate the customer. The marketing strategy of European truck brands focuses on existing customer relations rather than on new prospects India The communication flow is comparable to Europe. The true identity of a mother or a wife was only proven when she could cook something delicious for her loved ones.and cakes were easy to make anyway. What should the company have done to make the launch of its cake mixes a success? 246 . even when the country in question seems to have a business culture similar to that where the product is already being sold. The main difference is that.

-. Diversity integration: the organization addresses diversity in a pragmatic way.-~~- . 6 247 . The skills managers need to manage cultural differences in a global environment. ­ 7 . 2. An organization can be a domestic one. t I. but is probably unable to cope with any problems which diversity may cause. The concepts in this chapter will focus specifically on the management of cultural diversity in multinational operations. with many of its employees who have their roots abroad . It helps its employees to develop skills in diversity management and creates the preconditions needed for effective communication between the different groups in the workforce. 7F . as well as their position or salary. Concept 12.. diversity can refer to the collection of groups who form the organization: groups differentiated in terms of gend!?r.. At the same time.-. These elements will be developed further throughout Part Three. you will gain inSight into: E The features of management culture required in multinational companies.2 takes an initial look at the notion of transcultural competence.~:::. mother tongue.-. The word 'diversity' is ambiguous. Learning Qutcomes After reading this chapter. the term used to describe the attitudes and behaviour needed to manage cultural diversity effectively..reflecting the social diversity of the country in question.1f77Y'7747 ~ -~--.1 examines how managers can deal with cultural diversity and how they can turn this diversity to their advantage. 3. Diversity naIvete: the organization views diversity positively and encourages diversity awareness.. Concept 12. Diversity hostility: the organization attempts to 'homogenize' its employees and actively suppresses expressions of diversity. It can also be an inter­ national organization whose cultural diversity is reflected in its foreign subsidiaries. education. 4. Moore (1999: 212) analysed the attitudes of organizations towards diversity generally and identified four different perspectives: 1. especially when associated with the term 'organization'. Diversity blindness: no provision is made within the organization for addressing the problems and/or opportunities relating to diversity.

founders using dearly defined specific values. financial and service sectors. The elobali1. for example. Compared with political. 248' I . leaving considerable room for national cultures in all their diversity. howp. Management culture and multinationals As many writers on the subject indicate. which in turn is connected to the internationalization of organizations. A dominant transnational management culture created by the mother-comp~y's I I ® A minimum management culture.g. a culture present in all the multinational's operating companies. particularly those in the industrial. that of time (with long-term strategies). Steinmann and Scherer (2000) raise some fundamental issut:s with regard to the effects of the globalization process on managerial functions.ation of companies s<. What sort of management culture is to be found in multinationals? Thery (2002) dis­ tinguishes three types: (1 A dominant management culture that is a copy of the multinational's home country (e. and finally that of information and communicalion. businesses appear to be the most suitable candidates for globalization. one fundamental problem which the globaliza­ tion of the economy (ames organizations is the management of cultural differences. which concerns all in5titution~ of human society. American management in a U5 multinational). it also has to ensure that it respects the different national groups of clients and employees by making the necessary adaptations. that of complexity. Furthermore. based on the application of reasoning (a 'strategy of learning')? This last option seems to them the best way of settling the intercultural conflicts in multinational companies. According to de Woot (2000).p. researchers of other disciplines are also being urged to reflect on this process. International business research is directly affected by a globalization process that does not seem to end.ver. If. should it advocate Western values (what Steinmann and Scherer call a 'strategy of proclamation'). It not only has to ensure that the companies forming the group remain integrated and thus able to continue as a multinational. /' In all three cases.I I i . a multinational embraces operating companies in Asia. the multinational must perform two roles at once: an integrating role and an adapting role.Chapter 12 Cultural diversity in organizations III Globalization is one of the most discussed topics in to be linked to the cultural rliver~ity of organizations. or should it embark on the new process of intercultural learning. companies in these sectors have cleared most obstacles in the globalization process: that of size (with multinationals). sodal and educational inslitutions. «. These include the way the executives of a company conceive the interaction between the different cultures present.

' the response from Charles M.Temasek is one of the most innovative institutions I have tives from multinationals operating in Asia to pinpoint come across in terms of flexible work practices and creat­ the key workforce-related issues that affect Asia-focused ing opportunities for employee development. Mr Ormiston then outlines fundamental shifts which he 'I think it would be difficult to exaggerate the enorm.are from other backgrounds .' Source: Business Times SIngapore. believes most 'Asia-focused' corporations will need to ous people-development challenges facing Asia.!lctive wur kplace tor people who pxpatriates" who Itdve spent years of their life work. The 'transnational' is a management mentality combining the abilities of the multinational. Here is attempts to diversify their talent base. They were also asked to describe are local firms who have visibly failed with virtually all some of their key 'people-strategies' for As/a. traditional employees to be credible.1). When I talk to employees of the blll!>l em' player!> in ASia. The same holds true for the increase in cultural diversity in domestic and international companies where people from different cultural backgrounds are working together more and more. Schlumberger and Unilever are examples of great companies that attract and develop talent in the local ml1rkets l!ley work In.\ ~ \ --­ 249 I . The gap undertake in their thinking. global or international firm: flexibility. Employers need to actively coach their employees on their careers. Director Bain & Company. efficiency and the transfer of expertise. Tromprnaars alld Hampdell­ Turner ( ]997: ]88) state 'the transnational corporation is polycentric f<lilwr than w-ordinalt'd from the centre'.1 Managing diversity in a global environment Talent retention is vital The Business Times Singapore asked a number of execu. These include thp following: between organisations who "(let it" and th05e who dun't 'Create uiversity in your senior ranks. With the firms that "don't get it" in Asia. Transnational organization That globalization has become a reality and that it is still progressing at high speed is not in doubt.the rotating expatriates in MNCs simply don't take the time to bond with the local employee base in a productive way and the poorly run local firms have a tremendous wall between the "top team" and the up-and-coming generation. And yet there organisations today. who seem to begin thinking about how to return to New York or Chicago within weeks of arriving in Singapore. and then deploy the best talent globally. Hewlett-Packard. Standard Chartered. You have to take visible risks with non­ with working in either the "East" or thl':' "Wast". Asian senior management is of Asian origin. Bartlett and Ghoshal (1989) propose a model for the organization of the future: the transnational company (see Concept 7. There are MNCs where tile bulk of their are primarily people from one nationality or ethnic group. Cilibank. And yet there are still MNCs dominated by foreign expatriates on three-year rotations from head matter what platitudes ing in different markets and who are fully comfortable you convey. 5 October 2009. . this type of system is often non-existent . many "Asian you will never bp an attr. In view of these changes. a global management consulting firm. The managers at the headquarters and in the subsidiaries abroad are responsible for co-ordinating these capacities throughout the different units ofthe organization. Ormiston.SlngTel is doing an impressive job with diverse assets In Australia.Concept 12. India and the Philippines as well as in their home market.. If your senior ranks is tremendous. There are "local firms" who have also mastered the art of working with talent from a range of sources . they focus on the fairness and objectivity of their performance appraisal systems and the "good advice" they receive from key mentors over the years.

quvey (Adler and Ghadar. 111'1 I l' ill. 1990) to show that it can be a source of both problems and advantages..' " I. In everyday business life. managers may well sef! thf!ir f'mployf'f's as individuals. to open itself up to fresh perspectives. 1.. 250 "'t .\'~. Other managers find such organizations to be more aware of consumer needs. the greater the ambiguity. in fact. tools and working methods need to be acquired to help develop the attitude and behaviour desirable in a specific cross-cultural context.1. This means that know­ ledge. Problems with diversity also arise when certain practices and procedures are adopted by the organization across the board.! I 11HII 1"1:: '!I:·L: : 'i Chapter 12 Cultural diversity in organizations Ij :l 'I: !. On the other hand there are characteristics an individual can act on during his life.1 'l'. Adler (2002) notes that some managers describe multicultural organizations as being more flexible and open to new ideas. a shared set of values to reflect managers' goals.. As for the possible advantages of cultural diversity. age or gender. This means that the top managers are not just content to create an operational framework in which the responsibilities of the functional and geographic groups are clearly defined. (2001) see in the notion of diversity a human charac­ teristic that allows a differentiation to be made between people. While recognizing that diversity and internal tensions can be the source of new ideas. such as work background. Diversity is also considered an advantage when the concern needs toreposition itself. Problems caused by cultural diversity are to do with communication and integration. Export managers may use the same marketing campaign across countries without taking account of the different cultures involved. What is diversity? G6mez-Mejla et a!.I ii 'I • " '. geographical situation and education.if"l'l I ' '1 . at all management levels. it seems that the role of top manage­ ment is rather to create a common vision for the future. They also have a federating role by integrating the different influences of these groups in the management process. Managing diversity in this kind of organization and its environment demands. .i. :1 I I d. partners. • 1 "1. collaborators and co-workers will be brought into intercultural situations that need to be turned to their advantage to prevent failure of the strategy of internationalization.i J . to develop projects. How do the managers in a transnational Qrganization perceive cultural flivt'l'sity? Adler (2002: 157) refers to a . Good management is therefore crucial to prevent this happening. a competence that is often referred to as 'transcultural'.I. over which the individual has no or little control. On the one hand there are individual characteristics. diversity among employees may well not only cause misunderstandings but also obstruct team work and productivity. to generate ideas. Within organizations operating in an international environment.' . they should also be aware of the diversily and the characteristics inherent in each specific group. (2003) go further. such as race. They believe that top management must bring added value to the transnational company in the same way as the executives operating at all levels of the organization. particularly when the organization requires its employees to think and act in the same way. However. ~: ' II ! Bartlett et al. 1 1 i 11 ! jl d:I. The more an organization demands transparency and convergent opinions. complexity and confusion.

ornpanies such as Unilever China. case by case.3 billion consumers. ror {. companies must opt for inter­ cultural management. 1february 2009: 21 (extract) Retrieved from Activa. acrording to one But in this kind of top-down management culture you aren't expected to tell your bosses anything they don't want to hear . According to Thery (2002) imparting recipes or dos and don'ts is not the answer: such quick fixes are too anecdotal and offer no insight into the situation at hand.a thick Internal report updated monthly with facts and figurps showing how ear. vice-president of finance for Unilever's China Group. some cultures (managers) are quick to abandon their own orientation and to start from the opposing viewpoint before returning to their initial orientation to ensure it is accommodated in the reconciliation process (see Concept 5. which is based in Shanghai. but by the 'bulletin' . in other words management that adapts its way of communicating. The previous tenant was a Chinese tlrm and the layout Is a warren of small database. like most multinationals. In particular.' A bulldozer-style of management is valuable if you are trying to force a way through China's undergrowth of bureaucracy. the managers involved must become aware of their own cultural preferences and. Transcultural competence To develop the capacity to act effectively at international level. Independent consultant.1 J.~~~~------- concept 12.' sl1e says. this is a serious problem. 'You need a big. What is needed is the application of a global approach across the board.:h product line."r Zhao ACMA. 'Shell. from shampoos to a new range of deodorants. James Bruce. explains how the firm clearly sets out what it expects of its recruits: 'We tell them that there is a professional way of behaving. 'Typic. robust personality to get anything done: he says. Jel)nif. Trompenaars and Woolliams (2000) argue that cross-cultural comparisons are helpful to demonstrate the different ways in which dilemmas are approached.2 Diversity and transcultural competence in organizations t Year of the accountant? Below is an extract from an article by Victor Smart which examines the changing corporate environment in China. look for ways of working that are adapted to those of another culture.which can severely compromise the integrity of manage­ ment information. Nor is providing instruments for 'cracking' cultural codes the answer on its own. is f.. or a country-by-country approach. has a much more managerial approach where everybody gives their views. recently moved Into Uhp com­ pany's] new offices in the Chao Yang district of Beijing. they have observed that some cultures begin from their own orientation and accommodate the opposing dimension in a process of reconciliation.. negotiating and leading to the cultural context of the country in question. You don't supply wrong information simply to pledse your boss: Source: Financial Management.---_~-+w . a finance manager at Shell Bitumen. Moreover.mple meet In small offices and sometimes only the boss t(llks.. In contrast. It runs Its business not only by the book. with particular reference to the adoption of international accoounting standards. 251 .r­ Ing with the PRC's 1.dlly In China p.

Certain companies regard the management of cultural diversity as a way of develop­ ing new competencies that give them certain advantages. 1. however.the ability to communicate and collaborate successfully and effectively with those from other cultures by recognizing and respecting differences as well as other points of view. to diversify their markets and to promote creativity and innovation. values of the country in which each subsidiary is operating while ensuring that the subsidiary remains an integral part of the multinational? Bartlett and Ghoshal's concept of the transnational organization. rather than reducing it. Managers need to acquire tools and working methods to allow them to develop sufficient competence in the cross-cultural context to turn diversity into a competitive advantage.1 (') Intercultural competence . Intercultural competence is everyone's business. training and communication poliCies to the cultural diversity of their personnel? 253 I . Contrary to what would have been expected. but also for managers who work in multicultural teams. it is just a question of managing differences between genders and ethnic minorities. The chapter finally put forward the notion of transcultural competence as exemplified in the process of reconciliation (referred to earlier in Chapter 5). are the reasons for companies adapting their recruiting. for example. USing the reconciliation approach can turn cultural diversity into a competitive advantage. They are. This means having managers who are able to adapt and who can use the intercultural situations present both within and outside the company to the company's aJvamage. is partially addressed in the introduc­ tion to Part Two. The particular skills relating to the all-important communicative compo­ nent of intercultural competence are examint!d in Chapter 18. \ Activity 12. Following on from transcultural competence is intracultural competence which Trompenaars and Woolliams (2009: 443) define as 'the capability to leverage cultural and/or ethnic diversity within teams'. What.\'~. The question as to how this competence can be acquired. or at least deVeloped. efficiency and transfer of expertise. One problem was addressed: how can managers embrace the. \. was put forward as a way of resolving'the local/global is'sues because it allows the integration into the management process of the influences of the diverse culture groups within the organization.. This chapter has examined how managers In multinationals can best deal with cultural diversity and do so to the company's advantage. internationalization has reinforced the importance of cultural diversity. "Iii~ . It is therefore a question of a company having a management that can actually manage this diversity in some way. in your opinion. able to recruit and hold on to good employees. For most of the time. It is not just a requirement for expatri­ ates. with its flexibility.

(1990) 'International strategy from the perspective of people and culture: the North American context: in Rugman. (2003) Transnational Management.J. at the same time. (1989) Managing Across Borders. 4th edn. C. 2nd edn. G6mez-Mejla. Cincinnati. C. M.A. and Ghoshal. MA: Harvard Business School Press. Urban. as TMry points out in Concept 12. {ed. Trompenaars. 3rd edn. This book. . Cincinnati. Ghoshal.J. Paris: tditions d'Organisation. Transcultural competence is considered to be an essential element when managing diversity of whatever kind. D. and Hampden-Turner. S. NY: McGraw-Hili Education . country-by-country approach in such encounters. A. Greenwich. (1997) Ridings the Waves of Culture. Boston. H. Breukelen. Netherlands: Nyenrode University Press: 21-28. N. C. (2001) Managing Human Resources. J. Trompenaars. Research In Global Strategic Management: International Business Research for the Twenty-first Century. To what extentdo you believe this competence can be developed. and Nanopoulos. Managers in international companies increasingly find themselves in situations where they encounter representatives of many different cultures with which they are totally unfamiliar or of which they have only superficial acquaintance. OH: South-Western Thomson Learning. 4th edn. N. Bartlett. This work is particularly inter­ esting because it deals with studies of human behaviour carried out in essentially North American organizations while.J.-J. 1. Paris: PUF: 99-130.2. What do you consider to be one key element in this global approach? 3.A. N. (2002) International Dimensions of Organizational Behaviour.nplf>'s bp. A.M. Thery..}. and Scherer. in Browaeys. devoted to cross-cultural management examines what Nancy Adler calls 'the International dimensions of pp. Steinmann. K. CT: JAI Press: 179-205. (2000) 'Considerations philosophiques sur Ie pluralisme culturel et Ie management'. (2002) International Dimensions of Organlzaliolldl Behaviour. and Woolliams. OH: South-Western Thomson Learning. 254 . London: Nicholas Brealey. (1999) 'Understanding and managing diversity among groups at work: key issues for organ­ izational training and development'. and Trompenaars. Journal of European Industrial Training. one which a number of observers claim is essentially innate? III FurthG'f n~adlnq Adler. Canada's New Research Agenda. M..R. and Ghadar.Chapter 12 Cultural diversity in organizations 2. {eds}. P.B. and Cardy. 23/4/5: 208-217. B. F. S.G. Heferences Adler.. .R. {2002} Manager dans la dlversite culturelle. New York. L. Bartlett.haviour in organizations' and which she defines as 'a new field relative to the traditional study of management'. NJ: Prentice Hall. Case Studies on Cultural Dilemmas. F. Upper Saddle River. Balkin. in Ricciardelli. S. they are compelled by circumstances to adopt a global stance. 4th edn. (eds). Vol. Adler. Mondia/isation des socif~tes multiculturelles. Rather than using a . F. adopting an approach to take account of the diversity and complexity involved in the globalization of present-day organizations. and Birkinshaw. F. Moore. (2000) 'A new unified competency framework for the millennium manager'.L. S.: .

and Nanopoulos. in Deardorff. S.. (2009) 'Towards a general framework of competence for today's global village'. D. P. CA: Sage: 438-455. The Sage Handbook of Intercultural Competence. Ph. Paris: PUF: 155-170. Urban. 255 I . and Woolliams. (ed. K. Thousand Oaks.- References Trompenaars.). (eds). de (2000) 'Ambigu'ites de la globalisation'. Mondialisation des societes multiculturelles. in Ricciardelli. M.K. Woot. F.

Argentina Bolivia Brazil Chile Colombia Ecuador 7. 4. It is specifically related to the networks division of this company. The operations of the company in question consist of providing equipment and services for the local operators so they can build. Ihn"RODUCi'IOI\l This case study is related to the field of cultural management and focuses on a large international tele­ communications company. which has operations in Latin America.lI:!ell important growth in terms of revenues. The telecommunications industry has seen huge growth during the last couple of years in this part of the world. 2. IJ~I sunnel and offices. One important factor is that the GSM technology has been adapted as the standard in most Latin American countries and the local operators have adapted their mobile networks to this technology. Mexico 9. During the last few years then~ I1d~ I. operate and maintain a GSM mobile neLwork. Venezuela Figure 12. 6. 1.1 Company's presence in Latin America (2005) ·Case study adapted from a case written by Roberto Danker (2006).Diversity versus localization within a telecommunications company in Latin America* Read the case study below and answer the questions that follow it.1). 256 . Guatemala 8. Nyenrode Business University. Peru 11. 5. PanamCl 10. The company is present in most Latin American countries (Figure 12. 3.

In fact. The company also aims to improve its understanding of customers. Furthermore. innovative and creative start-up. They are applied worldwide and form the core element of the company culture as well as the basis for operations. such as gender. ------------------ VALUES AND DIVERSITY Tl1e corporate cultUre of the company is embedded in its culture and values. it has continued to stress a corporate culture more typical of an Independent. Another advantage of localization can be that it increases cultural awareness within the company of the country within which it is operatinq. This first entails the leaders disseminating the company's four values. education. management status. the company wants to encourage innovation which. The company believes the best way to achieve this goal is through leadership rather than traditional management. These values are: customer satisfaction. This can be best achieved through it mirroring a diverse marketplace to meet customer needs and so anticipate future opportunities. This element of diversity plays an important role in the company. employees are being hired from the country itself ('locals'). the company wants to maximize the pool of talent available. such as seniority. ethnicity. qualitative research was conducted among forty middle managers of the company in Latin America.-----~-. The advantages of diversity might be thut it increases creativity. the network division of this company is facing a cultural dilemma: should it maintain a diversified organization in the specific country or should it 'localize' the organization? Diversity can be defined as a mixture of people with different groups of identities. QUALITATIVE RESEARCH To identify the corporate culture embedded in the company's values. With regard to this second approach. can best be achieved by well-managed teams whose members come from diverse cultures. On the other hand. it believes.--.expatriates'. no matter how large the company might become. It means all the ways we are different from each other. often abbreviated to 'expats'). the company is using two approaches. bring down costs and so make the company more competitive in the market. Despite the company's rapid growth. The following subgroups were made (Figure 12.--~. LoeRls naturally undel :. The objective has always been to maintain this culture. a concept it defines as: 'Any demo­ graphic and individual attribute that defines each person as a unique individual. age.' First of that enables the company to achieve extraordinary results. for instance. to everyone in the organization. behaviours anli language better thCln outsiders do.--- • Activity 12. The total group was further split into three subgroups to identify any differences in views between certain types of employees.taM their customs. respect. it sees itself a~ a multicultural company in whieh diversity is an important as:. and o Females and Males. the company has defined goals with respect to diversity. Second. achievement and renewal. Diversity can also be related to work. These teams are usually more creative and find better solutions than homogeneous teams. First. existing employees of the company are moved to Latin America and offered positions for a fixed period (. 'localization' of personnel is also an important driver as it can. 257 . Finally. f/I Locals and Expats. income or functional level of an employee. This entails attracting and retaining the best people within a competitive environment. including that of the network division. language or marital status.2): • Latin and Europeans. Topics were analysed such as 'the (dis)advantages of diversity' versus 'the (dis)advantages of localization' in Latin America and the extent to which the company should 'localize' different functions. An investigation was also carried out to identify the company's corporate diversity policy and the attitude of the employees in this particular region towards it. generates different opinions and opens the mindset. defined in the 1990s.1 To manage the growth of the personnel in this region efficiently and effectively.

3 = disagree to some extent...."'-'--""-""-'. Commitment to oneself Power of poslliull or role of the Individual ~======::::::::::===:J Job description/evaluation .. . 1 Professional recognition Power of the person '-. '..~.. 6 = strongly agree Figure 12. ··. '.:r~:~~~~:~~:~ ==== .~..•..'"-'-"".=---....2 Subgroups of respondents to the questionnaire in the Latin American region RESULTS OF THE RESEARCH Cultural dimensions of the company in Latin America From the research comes the identification of the characteristics of the corporate culture and the cultural dimensions of the company in Latin America.••:....' "."..3 shows the characteristics of the corporate culture (using Trompenaars' model.-. 4 = agree to some extent.-..' I ~I a. ...3 Corporate culture of one of the company's divisions In Latin America 258 t l' . 5 = agree..: ...'. Rules and procedures ~"'-"-____""""--'--'-""."""~-'="'-'.•• . 0 0 : ! ! Guided missile Family [J Eiffe) tower B]lncubator I I 1 2 3 4 5 6 1 '" strongly disagree.... disagree.' .= Entrepreneurial ~=========~ Pay for performance '--_ _ _ _ _ _ _ _ _--' Power of each individual level Self-realization Power-oriented Role-oriented Order ~ e'" '. The three most Commitment to task I----------~__-'---' PersonalTask-oriented relationships ~ t:==============~ ~============~ Management by objectives ~============:J Trust Power of knowledge or competence Affinity .. each shade represents a different type of corporate culture).. 2 ... ....II Chapter 12 Cultural diversity in orQanizations 35 30 25 ~20 If 15 10 ~ 5 0' Latins Europeans 28 11 Locals Expats 20 19 ~ Females Males 6 33 Figure 12...". .' ..' .."..--. Figure 12.

2 =disagree. 6.Activity 12.4 I 0.1 6 2 S 4 5 1 2 strongly disagree. It is interesting to look at each subgroup and analyse how people in it identify themselves with. agree some extent. for instance.. agree some extent.. is a characteristic with which the respondents of the company are not identified.6 I 0. which basiC­ ally means that a company exists only to serve its employees.1 dominant characteristics of the company culture in Latin America are 'commitment to tasks'. 2 . disagree.. strongly agree Sequential External control Internal control Universalism Diffuse I I I I 1 Females and Males I 0. The results might have looked different for Europenns when bas!:!d In their own country in Europe.8 I 1.. latins versus Europeans Synchronic Locals versus Expals External contro I ~~~0'5 1-----105 I I 0.5 Particularism I I 10.uropeans and Expats than by Latins and Locnls. agree. 2 s disagree.. Another example Is that the f!:!rnales do not see the company as 'diffuse'.. disagree some extent.. 5 ~ agree. cultural dimensions. which means that the females do not tend to share many personal issues among their colleagues. see 'diffuse' as a dominant cultural dimension of the company In Latin America.6 Diffuse I 0. a characteristic such as 'person-oriented' colleugue!. 5. S . for example.. is a cultural dimension valued much more highly by i:. I I 0.7 I 2 S I . strongly disagree.4 shows the trends among the three subgroups in Latin America in terms of cultural dimensions. Figure 12. Males tend to share their personal life and issues much more easily among colleagues. agree. S = disagree some extent. 6 = strongly agree F'iOlli" j <" Largest differences among the three subgroups regarding cultural dimensions 259 I . The 'diffuse' dimension. An explanation for this reSUlt might be that all the Europeans are also Expats in Latin America aM therefore are much more open to having close personal contact amonQ thp. 'personal relationships' and 'task-oriented'. 5 . which is the degree of involvement in personal relationship among colleagues.4 --" control Particularism Achievement Diffuse D Europeans D Latins I I : 0. on the other hand. S .7 1 ~ strongly disagree. 6 = strongly agree 4 5 6 I 6 5 2 S 4 1 .. 4 . The results were based on the entire group: no distinction was made between different subgroups. 4 . Their male colleagues. disagree some extent. On the other hand. 4 a agree some extent.0 I ! D Males D Females I 111. This might s!:!em to be atypical since Latins naturally vallie thi~ dlmen~ion more highly than Europeans.

Higher costs Iil o Adaptation of foreigners to local culture might be a risk o Locals are not as well respected as they should be It is also interesting to see the differences in opinion within each subgroup regarding the (dis)advantages of localization and diversity. mindsets. better insight. Also. \IH \ \ \\ ~ Table 12. especially in the field and customer support functions. which are most often the most efficient: Expat: 260 \ \ . networking and cultural aspects bring potentially better positions for dealing with the local culture of the customers and suppliers. Limited experienr. contacts. understanding of the local reality.. lower exchange uf experience {.­ . behaviour. The same can be said about a local compared to an Expatriate (who may be either a latin or a European). Customer intimacy and needs <l> customer Less control Local people tend to create their own rulf's mindset I Language Everybody understands each other's position whf'n discrepancies eri:. points of view <\) Disadvantages ~ Stimulates more creativity Cultural barriers and distance might lead to misunderstandings Language (difficult to understand and communicate) More difficult to manage t.f'. Local culture cannot be appropriate for company culture (). local way of thinking under~tanding Ii> " Lower awareness of company culture or company way of working. Lack of global connections and global guidance G . AdVantages o Different opinions. A latin might have a different perception or preference from a European.1 summarizes the responses.. Some typical 'quotes' show the different perspectives within each subgroup: Advantages of localization: Local: 'Knowledge of the local situation can be very important in particular places like latin America: 'The cost of these resources is significantly lower: 'The deep knowledge.. Also the roles that do not add value to the overall business are better contracted locally to reduce the cost of the operation: 'Apart from minimizing the disadvantages of diversity. The company will addi­ tionally have access to the local ways of doing things. BI ings in more experience C' " Puts flavour in work environment (.1 Localization versus diversity: advantages and disadvantages Localization Advantages G Disadvantages . localization in general matches the cost levels our customers can accept.Chapter 12 Cultural diversity in organizations Advantages and disadvantages of localization versus diversity The research also consisted of open questions by which those interviewed were asked to identify advantagE and disadvantages of localization and diversity. Table 12.1:1 More realistic approach to solving problems (: Certain locelhdblts may not be supportive to business €> " Local~ are able to solve things taster E. {) Creation of small political groups '" It creates too narrow .'e" Cost reduction and cost efficiency Knowing the local culture. certain jobs. would prefer local personnel for language and cultural reasons..­ Diversity il Co .

this is needed to reduce costs to stay competitive in the market. using the Information given In Figure 12. education and language working together is itself a challenge that creates an environment of co-operation and flexibil­ ity to work under potentially difficult circumstances. flat organizations. This means that people of diffenmt ndtionalities. This is because the organization in Latin America has been growing fast during the last two years with a lot of new local employees.. etc. Discuss the conclusions given by the author at the end of the case study. A diverse organization also impressos our customprs: they have the feeliny lhat they are getting the best of the company's global reach: is Expat: CONCLUSIOh!S On the basis of the research findings. 261 . Do the same analysis for the two dimensions 'External control' and 'Particularism'. the company should have local knowledge in Latin America to gain a deep understanding of the market and to be close to the customer. there is a high risk of basic principles being lost: works: European: 'Less possibility of ensuring that the local organization stays in line with the way the company Advantages of diversity: lay Local: 'People with different experiences in other projects in which our company participated enriched others with a broader knowledge of the mobile business around the globe. 2.' 'Having foreigners keeps the company's way of working alive. 4. 3. With regard to its customers.4 and Trompenaar's definitions of these dimensions.1 Disadvantages of localization: :ages Latin: 'The company culture is still based on its European background (transparency. respect. so experienced employees (mostly foreigners) must be kept inside the organization for it to remain successful and competitive. a) Having cultural differences and multicultural teams in the organization in Latin America can lead to more creativity and better solutions.. Furthermore.4).~--~. Read the quotes from the different sub-groups and then decide which (dls)advantages of Localization and Diversity are most referred to. Look at Chapter 5 for a description of Trompenaar's seven dimensions. and ensures that our company does not become too "localized" in terms of behaviour.). If key positions are localized without there being a good understanding of the person's background. the company feels that it needs strong international back-up support in Latin America to ensure that its customers get the best possible attention. As for localizing resources in the region.---~~--~-~--------~ iiiijjiiiiiiiliiiiiiiiiiiioiiiiiiiiijiiijiiiiiOiiii=~ Activity 12. c) Diversity keeps the company way of working alive. etc. b) Diversity is necessary for remaining in business. Questions 1. conclusions can be made with respect to the cultural dilemma: why should the company have a diversified organization and what are the main reasons for having localization? The main incentives for having a diversified organization in Latin America can be summarized as follows. and then examine how the author in his case study describes the results for the 'Diffuse' dimension with regard to the three sub-groups (Figure 12. Localization also helps to remove possible language barriers and to gain a closer cultural match with local circumstances (customers. Diversity Itself motivates tolerance.). suppliers. customs.

including HR professionals. what other alternative(s). and that the localization should therefore be less. the survey findings show that for positions such as assistants and engineers the localization Is around 90 per cent.he Europeans believe that the company headquarters needs to keep control of local SUbsidiaries such as the one in Latin America. Below Is the author's answer with respect to the cultural dilemma: 'Which positions should be localized.lJ. Yet companies that can satisfy their global talent needs and overcome cultural and other silo-based barriers tend to outperform those that don't. replied that the localization 'policy' was not clear. b) Using the information given in the case and/or your knowledge of the area in question. If we look at the issue of localization in terms of different job grades. whatever subgroup they belonged to. The responses confirmed impressions from the Interviews that companies now struggle on a talent-management fronts. Furthermore. the Latins believe there should be higher localization for high management positions (around 75-80 per cent). damage their career prospects.lI~ willI CI more difficult talent agenda than domestic counterparts . the less localized it should be. mobll1ty. We've long observed that glob!1 corporations 9rdJ. in which case a local person is more suitable. The Europeans would like to see a lower localization percentage (50-75 per cent). sectors and all the main geographies. the survey shows a tendency whereby the higher the position inside the company. and establishing consistent H~ processes in different geographical units. partly because of the especially demanding nature of global leadership~ To find out more.- Chapter 12 Cultural diversity in organizations 5. overcoming barriers to International. senior managers. T.European subgroup'. 262 . could you put forward? Read the article below and answer the questions that follow. I ' \11 a) Discuss the author's analysis with your peers. Komm Managing talent in a global organization is more complex and demanding than it is in a national business ­ and few major worldwide corporations have risen to the challenge. More than 450 people. ranging from CEOs and other directors fo . Why multinationals struggle to manage talent By Matthew Guthridge and Asmus B. Our findings suggest that the movement of employees between countries is still surprisingly limited and that many people tempted to relocate fear that doing so wHI .partly because they need to share resources and knowledge across a number of business units and countries. if any. Considering the 'Latin . The reason for this might be that Latins believe that higher management also has to deal with political issues in the country. A McKinsey survey of managers at some of the world's best-known multinationals covered a range of . For higher management positions the localization is at least 75 per cent or more. However. and which not?' Author's analysis The cultural dilemma comes down basically to the following question: which positions should be localized in Latin America and which not? The results of the survey show that the organization does not have a clear answer to this question. we undertook in-depth interviews with executives at 11 major global corporations and separately invited senior managers at 22 global companies to participate in an online survey investigating how effectively they manage their talent. All respondents. took part in the survey. such as achieving greater cultural diversity. and the percentages involved.

we found that the respondents had also moved.[1] and ten dimensions of global talent management. Not only will this rotation support the development of company talent. Companies scoring in the bottom third of the survey in these three areas had a significantly lower probability of being top performers. the management of cultural diversity. 10-13. What our research suggests is that many of them need to match these aChievements with truly global talent-management attitudes and practices. 'it's more important to have an open-minded leader than to have someone with the right language skills. HR managers stressed the need for expatriates to learn more about the culture of the countries they transfer to than just the local language. company support and training is vital to the promotion of diversity. and their non-domestic workforce. McKinsey Quarterl)t.3 times between different functions . Global consistency in a company's talent evaluation processes is important. pp. the creation of globally consistent talent evaluation processes. It will also promote greater cultural awareness and diversity.another sign that movement from silo to silo is still limited. Instilling a common set of talent evaluation processes throughout the world . \ 263 I . 'Much valu­ able experience dissipates' because companies have a habit of 'ignoring input from returnees. particularly if the company had inconsistent global talent processes.especially standardized individual performance evaluations . 2007 Number 1. 'If you have to choose: explained one HR director. Source: Guthridge. their overseas customer base. The correlations were particularly striking In three areas. 56-65. I> Komm. Companies achieving scores in the top third in any of these three areas had a 70 per cent chance of achieving top-third financial performance. Companies scoring in the top third of the survey (when all ten dimensions were combined) earned significantly higher profit per employee than those in the bottom third. Interestingly.5 cross-border moves during their careers. as against an average of 2 for managers at the top-performing companies.will underpin this effort and build the confidence of line managers. on average. Bryan.' In our view the key implication of the research is that companies should focus hard on rotating talent globally across divisions and geographies. 'The new metrics of corporate performance: Profit per employee'. (2008). More and more companies are stepping up their International revenues. McKinsey Quarterly. but one of the most significant was the expectation that employees would be demoted after repatriation to their home location.2 I I I \. Despite the value companies claim to' place on international management experience.~- • Activity 12. M. Participants cited several personal disincentives to global mobility. only 1. 'Why multinationals struggle to manage talent'. A. on average. 1. 1 See Lowell L. assistance with housing and the logistical aspects of a move) also plays a decisive role in determining how positive or challenging an overseas assignment is for expatriates. because for mobility to succeed. as measured by profit per employee. Moreover.7 times between different divisions within the same geography but only 1.were roughly twice as likely to have effective global mobility practices than those that don't. Retrieved from Business Source Complete database. (4). and the mobility of global leaders. The research further examined why some companies are better than others at developing global talent in this way. the strong associations between company financial performance and these global-talent-management practices strengthen our belief that these are important areas on which businesses and HR leaders should focus their attention. 'Overseas experience is not taken seriously and not taken advantage of: commented one senior manager. Perhaps the most provocative finding froll! the research was the relationship between fmancial perform­ ance. the senior managers who took the survey had made. line managers need to feel confident that employees transferring into their units from other parts of the organization meet the same standards that their own people do. Although providing no evidence of true causality and lacking a longitudinal perspective. Global companies should consider devoting more resources and senior-management time to liberating talent 'trapped' in national silos and more wholeheartedly supporting global-mobility programs. and many leave: The quality of the support for mobility a company provides (for instance. It found that those with top managers and promotion systems that actively encourage their people to gain international experience ­ and provide managers with incentives to share their talent with other units .

2. Summarize the cultural factors that according to the survey. On the basis of the survey's findings. how can the cultural experiences of managers returning from working abroad best be used for the company's benefit? 3. In your opinion should be thl? ~hared 'talent evaluation processes' which could liberate 'talent trapped in national silos'? ''i: f!! 264 . Which do you consider to be the key factor? Explain your reasons. correlate strongly with strong financial performance. What.Chapter 12 Cultural diversity in organizations Questions 1.

Learning outcomes After completing this activity you should be able to: @) Indicate cultural differences used in the marketing of brands.. and the differences between them In particular. supplemented with others conceived by the authors. This paper will con" Sider four brands and their respective teams at tl1e operating Company's Berlin headquarters. Making cultural profiles of brands A strong brand is reflected in the culture of the organization. Using this model. a reflection of the people The authors of the original study on which the text below Is based. examined and compared a number of different brands of one company.... Within Cherlon Germany. It has brand teams in each of its operating companies responsible for the sales and marketing in their specific country. Two other elements Appearance and Behaviour (formal/informal) have been added to the profile model to enable the degree of formality in people's beha" viour to be assessed. This relationship Is the foeus of the study below. is an international manufacturer of cosmetic products. Determine the cultural profile of your choice of brands using an adapted version of the model used in Part One to determine a person's cultural profile. The first element added to the model is that of Control: the extent to which head office exercises control over the different brands (flexible/rigid). (? YOUR ASSIGNMENT Read the paper below and answer the questions that follow It. which is Itself working In it. Nyenrode Business Unlversiteit). Two further additions have been made to assess the Fashion sense in the brand (trendy/classical) as well as the Affinity of the brand with the parent company 265 . Cherlon. with its headquarters in New York. The company and brands used In the original thesis have been fictionalized. The important features of each brand will be discussed and then contrasted. the authors drew up a cultural profilo for each of the brands in question in line with the authors' observations and perceptions. To assess the extent to which the brancis differ from each oHler. but in amended form to enable research into brands in general. Brands and their cultures This paper Is based on the Master's thesis written by Erik Sierkstra and Robert Stal (2005.1) will be applied. The model used in their study maintains the layout and some of the values of the Part One model. they developed EI model which is an adapLation of the model used in Part One to determine a cultural profile. Chapter 6. METHODOLOGY USED The cultural profile model used by Browaeys and Price (Part One. it is said that the employees radiate the characteristics of the brand they are currently working with.. Figure 6.

!I. as mentioned earlier. The way the product is to Bra divi Luss beau 266 . This Is offered to both men and women. mainly at Cherlon's head office. To show the difference between these brands. This division tries to create a strong bond with its clients by ensuring that a brand representative visits its main professional clients at least once every five weeks. The image of Ragel reflects the trendy. Flexibility Weak ( ( (\ $Ie I» Being I'II. despite the expectations for German organizations.Part Two Final activities A2. as it were. be marketed is left entirely to the subsidiary.1l. While the behaviour seemed to be neither formal nor informal. Ragel is a prodUct for a younger market. c h II is in ra th PE ev (n! Brand B: Ragel from the men's professional products division The men's professional products division was recently acquired by the company. The affinity with the mother company seems to be strong since the people In the brand team look neat.1. market (Figure A2. The products are manu­ factured specifically for use by hairstylists and colourists.1 . Mara seems to have a polychronic time focus. the style seen within the Mara team was very trendy in terms of hairstyle and. Mara stays in close contact with the market. Although the brand truly 'lives' in the team (being). because the division's marketing is based on door-to-door (salon-to"salon) and rnusl therefore be adjusted for each . Its mcmbcr~ also have to come up wilh their own ideas about how to market and sell the product (doinq). office culture. of a brand culture and the values of one brand can be easily compared with those of another. Furthermore. interviews were carried out with employees working for one of these brands. reflecting head. Informal behaviour Figure A2. The questions asked of each inter­ viewee were focused on how the culture of the brand which the employee was currently busy with differed from other brands he knew or had worked for. The brands described below were chosen from the: '" Women's professional products division Men's professional products division G Luxury products division " Consumer products division. Apart from this intensive contact. Power structure (hierarchy/equality) and Action (doing/being). The three values used in the original cultural profile are adhered to: Time Focus (monochronic/polychronic). life-in-the"fast-Iane of London's young The brand offers consumers a high-priced luxury hair-care product.1. where Ragel is originally from. They are all artefacts. althOUgh the focus at present seems to be on men. they were trendy' suits.the extent to which the brand is associated with Cherlon (weak/strong). the culture appears to be both a being and a doing culture. thE wil att thE arc ten we~ sior whil Mara's cultural profile The first feature of the brand that emerged from the inter­ views was Its obvious flexibility. This is. the brand also has a foot in the door in the fashion world. This means that the people working with the brand do many things at once and do not always stick to a planned schedule. As a hairstylist at fashion shows and a sponsor of young talent in the industry. the team-members who were seen walking around were dressed in stylish suits (rather formal). giving the impression that the people were represent­ ing a trendy brand rather than a classical one. Other questions were also asked to determine how the culture of the employee's brand in the country in question differed from the same brand's culture in another country's subsidiary. Finally. stylish and fashion-aware. They i?(lCh orClipy (l unique position in the com­ pany's portfolio and the images they radiate are different to each other's.1 Mara's cultural profile THE BRANDS Four brands were chosen for analysis from Cherlon's products. These values are aspects of a brand's culture and can be extracted easily from interviews. To gain insight into each of the brands. Brand A: Mara from the women's professional products division Mara stands for passion for fashion. The hierarchy of the brand team appears to be quite flat. All of these employees had worked for other brands. a cultural profile was made of each. were wearing suits. the head office Is stili in London. even though people . Although It has been integrated Into the company.

This Image is reflected In the culture of the brand.1.1. one would expect its members to be dissatisfied with the inflexibility of their task. Brand C: Lussu from the luxury products diVision lU5SU is the only daughter of a vigilant father. it seems to target mature. The interviews. however. Because of Its value. This brand is used to sell products such as haireare. Flexibility Weak ( ( ( ( "El:lI( \ ) ) ) ) Being Informal behaviour Figure A2. however.3 Lussu's cultural profile Brand 0: Tifla from the consumer products division Tifla Is what one could call the young face of the company. Lussu is a rigidly controlled brand. where every step seems to be controlled by head office. This is why it seems so diffi­ cult for anyone to make any changes within this brand until they have proved themselves worthy of doing so. a brand based on high sales and strong image. a treasure well guarded by head office. Lussu seems more of a classic brand than a trendy one. Weak ( ( Ei?K 'I ) Being Lussu's cultural profile The profile in Figure A2. It has a planning system that works according to strictly regulated launch times and controlled tasks and targets. Of all of Cherlon's brands. Cherlon's head office is the 'father' of Lussu's beauty and Lussu is the flagship of the Cherlon group. an eternal beauty who seems so fragile that she must be handled with I . appearance Informal behaviour Figure A2.1. It aprears also to be a very formdl brand. Finally.1 Flexibility great care. All these. The brand conveys a certain sense of equality as evidenced in the way the team's work area has been designed (no closed-off rooms. one can see differences between Ragel's cultural profile i'lnd that of Mara. The parent company's control over this brand seems relatively ri9id. Lussu's affinity with its parent company is very strong: It is a proud image of the company. both in terms of attire and behaviour. Ragel is trendy. skincare. Though It is up to date with fashion. make-up and styling products to young people.1. The brand team Involved con decldl:! for themselves where they want to place posters. advertisements and TV commercials. did not reveal any discontent. Ragel seems to have the Weakest affinity with its parent-company. Brand D is based on high sales and a good image. have been designed in London where Ragel's head office is found. separate from the group While stlll belonging to it. Since the team is not directly Involved in the design process. only glass divisions) and In the way the members mix when having lunch together (marketeers with salespeople.' most hierarchical brands within the company.2. The brand seems to be a strong 'doing' brand. as alf brands of the company should be.3 clearly differs from those of the other brands. The ImpreSSion emerged that Ragel was more a being brand rather than a doing brand: it appeared to be more a brand that judges a person for what they are rather than how they perform. some leeway is offered to allow the team to apply their personal touch. It gives the impres­ sion of being a brand on Its own. Their attire as well as their behaviour appears rather informal: the brand manager as well as the rest of the team walk around the office in jeans rather than suits (internally). Lussu seems to be one of thf. In terms of its overall style. 'classy' ladies who are willing to spend money on their looks. Although any planning Is strict.Part Two Final activities A2. The timing seems to be a mix of polychronlc and monochronic. one that is focused on meeting targets and reach­ ing goals rather than using to the full the personal qualities of Its team members. administrators with art-designers). This seems to be company's representative brand in the Consumer products division.2 Ragel's cultural profile Ragel's cultural profile From Figure A2.

By referring to Figure 6. One can see. Summarize the dlff~rences and similarities between the profiles of the four Cherlon brands. _~r-- . This brand seems to have a rather 'soft' hierarchy: attire seems relatively intormal.1: Time focus (polychronlc/monochronlc).1._ ) ) ) ) Being Weak ( ( ( ('1 OK Informal behaviour Figure A2. then any transfer from one brand to another would entail simply seiling a different product. have certain discretion over the launch price of a new product and in­ store promotions. 4. make a cultural study of brands In cosmetics or other Industries: a) Choose a real company on the Internet that worl with several brands. Ilowever. even though it is not the most informal. c) Develop a cultural profile for each brand using the models referred to In question 1. 2. Activity (being/doing). talk to people familiar with the brands In question and.and choose some of contrastlm brands within the company. what cultural 268 . This ties in with the brand being the young face of the company. the timing involved can be considered more monochronic than polychronic. and Power (hierarchy/equality). a per<. Define In the same way the five new values of the model used by the authors' paper in makinQ the profile of the brands. That is why the differences in cultures described above are so important. with people working for the brands.1 'Model of culture' and the final activity AU of Part One. b) Look at the Information available . reflecting the brand's Image and showing once again that those working with the brand live up to its image. If posSible. how problematic the transfer by an employee from one brand team to another can be: the employee will be expected to dress differently. act differently and make other adjustments to become 'a part of the brand'. This is a brand based on high volume sales for revenues and. 3. Re-read the definitions of the topics in Concept 6.• Part TWo FinClI activities A2.'lIdvlour.1 T1f1a's cultural profile Tifla seems to be more tightly controlled than the other brands discussed (Figure A2. Were this not the case. One can imagine. If possible. at Charlon. brand by brand.4 Tifla's cultural profile Concluding remarks on brands across cultures There are some large differences in the cultures of the brands described above. therefore. The divisional manager at the local subsidiary does. Tifla is also trendy: it needs to spot the newest fashion In the markl'!t and mass· produce it. Tifla's affinity with the company group Is very strong and this Is visible on the packaging where the name of the parent-company appears in slightly smaller letters below the brand name. for this reason. Questions 1.text as well as Images . Flexibility values are important within these brands and how these differ. Those working for the brand wear trendy clothes. control from head office Is considerable. This just shows how much the brands 'live' in the company as a whole. "Iowever. For this reason. make a similar 'model for brand cultures' using the parameters chosen by the authors of this study.1. communicate with people differently. Using a similar procedure.4).on changes along with the change of brand. If necessal you may adapt some of the values used in the models. as does the Ut:.

two large chemical manufacturers in South Africa . the size of the combined forces would give credibility to the operation in the market place. and not just a sales agreement.agreed to combine certain operations and to form a separate entity as a joint venture. Why a joint venture? A couple of years ago. (ed. The author was involved In setting up the joint venture and ends Ills case with 8 critical assessment of the measures Implemented to ensure the venture's SUCCf!SS on the cultural front. Furthermore.iiiiiiiiiiiijiiiiiiiiiiiiiiiiiiiii"ii~=-- --~~"'%------ This activity is based on a case study Into how two chemical companies in South Africa addressed the strategic and cultural issues involved in a joint venture. I . better production scheduling. It was felt that greater economies of scale. As the company now stands. M. set up a stand-alone joint venture. AECI and Sasol own 80 per cent of the shares with the remaining 20 per cent being traded on the stock exchange or held in employee share benefit schemes. Creating chemistry . it is still effectively controlled by the board of directors and shareholders of both AECI and Saso!.-J. Nyenrode University Press. Understand how active measures can promote the creation of a new organizational culture within such a joint venture. The objective of the project was to combine complementary manufacturing plants from the two separate companies to benefit from the effects of internal transfer pricing and the synergies that would be created.a case study This case Is adapted from one written by Fain Ferguson In Browaeys.AECI Limited and Sasol Limited . The reason for creating such a jOint venture. The new venture formed was called Polifin. was to create a company that was separate from the other two companies and one that could grow and develop products and processes that would not be achieved with just a sales agreement. Although the company is now run as a separate entity.) (1996) The Challenge of Cross-Cultural Management. Learning outcomes After completing this activity you will: ~ Gain insight into the issues involved when twocompanies that are culturally different. G €) YOUR ASSIGNMENT Read the following case study and then answer the questions that follow it. but in the same country. more efficient customer service and the creation of a monopolistic niche could be achieved by the joint venture. Be aware of the issues of power involved in such a venture and the difficulties in resolving them.

On the other hand. The fact that these two companies had different year ends also complicated life within Polifin. Information had to be supplied at different times to each during the month and the Information-gathering process often had to be duplicated to supply exactly the information requested.> and formal with much empire building behind the scenes.2 Bringing about the joint venture From inception. medical aid and staff pre-requisites) and to determine the type of control given to divisions. Fortunately. The analysis above reveals the problem faced at Polifin. It was expected to co-ordinate. 270 . The culture of AECI staff was informal with a number of business issues being discussed over a 'beer' in the evening and an informal" open-door. as well as the need to assert power over other divisions. A couple of examples are required to illustrate this: fil The corporate accounting division had the task of co-ordinating and reporting financial Information monthly. A new plant was built to increase the capacity of the organization and a completely new head office was created. first-name basis. the issue of professional culture did not appear to have much effect on the joint venture. Sasol on the other was a fairly hierarcl-. the information flows in and out as well as being the representative with senior management.. the type of offices and the size required and allocation to be given to the various divisions. some division heads and corporate administration being included. with AECI being used to much more informal management and decentralization of power to the divisions. pension benefits. The proJect was made more complicated than the start of a brand new operation by the fact that these· functions already existed and now had to be mOdified or changed Lu fil with the new strategics and directions taken. The team included managers and staff from both founding organizations as well as new staff.h:. provided management with a number of decisions as to where to locate. Two distinct operating styles needed to be satisfied and supported. whereby the nature of authority is frequently challenged. Because of the stringent requirements of the controlling shareholders and the fact that the head wasi second In charge of the joint venture. with sales. there were not a lot of serious cultural issues that the divisions IidUlo address. This move. and responsible for the day-to-day running of the organization. The cultural issues will be addressed at various levels. Culture issues As already mentioned. such as accounting. to resolve personnel issues (such as staff grading. The two companies involved (AECI and Saso!) had very different reporting requirements as well as information needs. or even mOdified to create a new culture. The culture was hierarchical. Decisions had to be made to match reporting methods. quarterlV and annually. Other functions. Profess/oniil culture As is typical of the chemical industry. Consequently. a separate management team was created to run this project. with formal titles being used and staff having to go through the 'right' bureaucratic channels to get issues addressed). senior management mainly had backgrounds in chemical engineering and in this respect found it easy to understand one another.! CUIt'Ult! Two of the subcultures within South Africa are English and Afrikaans. were staffed by people with backgrounds. Power issues The need to win the confidence of senior managers. again. The Afrikaans culture on the other hand is characterized by distinct respect for elders and discipline (especially within a school environment) and the need to this discipline and not to question authority at all stages. the product flow was in a linear fashion with most divisions only being reliant on one other division.. Ndtiv/lC. create and manage the change over of functions and staff to the new company.Part Two Final activities A2. The English culture is based on open and InforllIal company with protocols that were written and unwriUen law within the organization (for example office sizes were determined by the spedclfic level of seniority in the organization. the division . Organizational culture The existence of two subcultures led to a problem in defining the best corporate culture for the venture. a large percentage of the staff came from AECI and Sasol. Consequently. the Sasol staff were characterized by a head of the division controlling a"·. The companies were run differently. led to powet/ issues.

The results of the measures The outcome of the project was the eventual creation of a new identity and culture that could definitely be identlfi~d from the outside (frontstage culture). The problem was that the divisions that came from the AECI group were used to their own standards and deadlines and refused to co-operate. They now had to comply with the new information require­ ments and learn how to present their information in a different way. Bridging cult'ure Occasions were created whereby employees had the opportunity to intIOract. They protected their information base. Neutralizing power imbalance The method used to stop the creation of power empires was to instigate job rotation. This was now done centrally to simplify the cash position of the organization. Clearly the full benefits of synergy were not being obtained. e New pOlicies and procedure manuals were written to define the expectations of the new company. Divisions had previously been allowed to handle their own cash and run separate bank accounts. The result was that at the end of each month.Part Two Final activities A2. Management tours of plants were arranged to meet the staff and to let staff know who the managers were. often supplied information to. Ii1i A new logo was created and a distinctive image of the company portrayed to the public. Other Instruments were used: ~ In-house magazines were introduced to create a feeling of internal culture as well as to enable the 'people' within the organization to get to know each other. f. fi. a couple of telephone calls were required to ensure compliance. shares were awarded to staff throughout the company. A numlJt!f of dnnual events (such as the annLlal milnagcrs' conference) were arranged to bring the two regimes together and to create a new sense of belonging. It reflected the culture of hierarchy and forcing of reliance so that they were noticed. The need to affirm their seniority was strong.2 given a lot of power to force compliance with their reporting requirements. this rotation could lead to a good bridging of the backstage cultures: new managers could develop a deeper understanding of the underlying Issues. there was still a way to go to achieve a new internal culture (backstage Culture). both sides supported by 'their' divisions. 271 . Computer systems throughout the organization were eventually harmonized. Sporting events and social activities helped create interaction among staff and to create healthy competition among divisions. there was also a backstage where the culturf' was definitely one of IJower struggles. This WOUld. A frontstage to the organization could be identified. The efficiency of the organization still needed improvement because lack of total compliance increased the time spent making inquiries at the divisions. The environment had an I'ldversarial feeling in which ex-Sa sol employees faced ex-AECI employees. ~ Senior staff from Sasol wanted their own parking bays and would really create a stir if anyone else was found using them. Once the stock was listed. However. Managers had also to complete newly formatted reports. Power was also removed from division managers. The divisions insisted on maintaining their own way of collating information and. Managers who previously operated in a hierarchical manner were suddenly thrown Into situations that required a different approach. for example. to the corporate accounting division in different formats and with varying degrees of detail. giving the employees some­ thing to work towards and feel part of. However. showing it to be fairly dynamic without too many formal procedures in place. Furthermore. one which was undergoing a few teething problems in its rush to meet consumer demand. apparently hoping to be able to use informational advantages as leverage during the year. Bringing the cultures together Measures had to be taken to bridge the two regimes and to define a new culture to go with the new stand-alone business. it was hoped. lead to a change in management approach and would help to modify the structural ineffiCiencies. (~ Ex-Sasol division heads would only pass on information about their figures on 'a need to know' basis.

Finally. Eventually.:ation ijnd will slowly drop/adapt their old cultures. The markel became a price taker and this resultQd in impressive profits and cash flows. What were the reasons compelling the two companies to set up a joint venture? 2. 272 . Questions 1. How were these issues addressed at the start? What was done later to deal with the cultural problems? 4. the project appeared to be successful: the results exceeded expectations and surprised the controlling shareholders. and organizing cross-cultural workshops to create awareness.. The author suggests how the cultural conflicts could have been addressed from the start of the venture and suggests that a new culture will eventually replace the previous ones.Part Two Final activities A2. The funding of new projects could be made from cash rather than from borrowings. Boundary-spanning performance An important lesson to be learnt from this exercise was that a better awareness of the cultural differences (and how culture affected lhe' various operations) could have led to fewer conflicts. with raw material inputs being more efficiently used to create the finished goods at a cheaper price and better quality. the development of policies. There were fewer stock failures through increased under­ standing of the flow of products. defining a new. This could have involved reviewing the structure of divisions. people will crashl their own clllturF! within an orQani.2 In economic terms. Managers who had previously worked on a seller/purchaser basis now had closer con­ tact to each other and understood each other's needs better. The synergies achieved created a monopoly within the South African market that was able to undercut internationally competitive prices. The combination of the various divisions created benefits. there is a saying that 'time heals all wounds' and this seems to be relevant here. Furthermore. Perhaps better planning at the start-up phase would have negated the culture differences. company-wide standard that allowed employees to start at similar levels. staff will retire and be replaced with new staff who will become socialized in the new culture. The focus of not just the functional aspects but also the interpersonal aspects could have been addressed a lot better than they were. procedures and practices could have been defined at the start instead of being developed in an ad hoc manner. What do you consider to have been the main cultural issues at the outset? 3. Up-front discussion and negotiations with staff members could have assuaged a lot of their worries. Give your opinion of his suggestions and propose any other actions that could have been taken both at the start and during the development of the joint project. Cultural issues could have bppn ilririrp~sed in advance instead of being left to simmer until conflict brought them to the surface. As time goes by.


draw on the meanings of the culture to which they belong. when communicating. Part Three will focus on those Ideas which we consider particularly relevant.1 displays the communication process between the two. however. Before examining these subjects. the Intention Is to deal with those subjects relevant to communication both in and between cultures without necessarily classifying them. behaviours that Identify a certain culture. Another term.Intercultural communication. Gudykunst (2004) explains the differences between what may appear to be terms with similar meanings. Part Three will not stick rigidly to the distinction between intercultural and cross-cultural communication. as well as key filters through' which messages sent and received must pass. Rather than attempting to summarize all the theories and empirical studies in this area. Although people. The cultural factor has come to be considered as the prime cause of difficulties in the interaction between individuals and groups who perceive themselves as belonging to different cultures. This explains to some extent the considerable amount of literature devoted to Intercultural communication generally and to communication in international business in particular. Including the frame of reference each communicator uses. Cross-cultural commun­ ication has to do with the comparison of the various ways people communicate across cultures. At this point. Communication between cultures Is culturally determined to a considerable extent. Is also frequently used in the same context. it Is worth considering two key terms used in studies on com­ munication and culture. Intercultural communication is to do with communication between people from different national cultures and comprises all aspects relating to the study of culture and communication.Setting the scen~ The relationship between culture and communication is an intriguing one. Figure 111. Cross-cultural communication Is therefore a 'sub-domain'. Although the process of communication can be seen as a way of transmitting the beliefs. 275 . this very culture owes its existence to the exchange of Information between its members. which means that understanding intercultural communication is a prereqUisite to understanding cross­ cultural communication. One has been used In the previous paragraph . however. attitudes. it Is appropriate to first consider the process In graphic form when two representatives of different cultures are communicating. this very process can also be regarded as an agent in shaping this identity. cross-cultural communication.

non-verbal language may cut across the boundaries of language communities. ~) Their assumptions. idiom. i. the particular filters through which the messages pass can lead not just to incomprehension of the messages. slang and dialects. Non-verbal language has also audible elements such as the tone of voice and (the nature 276 .1 Model of communication Frame of reference When communicating. which is at the same time a sort of language community. The verbal use oflanguage has to do with sounds.Introduction to Part Three Frame of reference: Frame of reference: • Knowledge • Experience • Norms/values • Assumptions Message intended Message • Knowledge • Experience • Norms/values • Assumptions Figure 111. It also has to do with the assumptions of the language community with regard to the meaning of words and idioms it uses. the norms of the society in which they live. intonation. Non-verbal language has visible elements. such as gestures.e. As such.e. Suffice for the moment to outline/define the filters involved. i. a systematic framework for handling events. each sender/receiver is unconsciously referring to a framework consisting of: o Their knuwlcugc of the subject undel' discussion. Communication filters Wht:lt: lht: st:llder/recelvef6 do not share the same culture. Although determined by the social groupS using it. The elements that act as barriers to communication will be examined in Chapter 14. but also to their distortion and misunderstanding. grammar. what is taken as fact or believed to be true. The use of non-verbal language is a necessary concomitant of any spoken interchange. <c Their norms. Cultural groups can differ in the way they distribute the total information involved in an interchange between verbal and non-verbal language. facial expressions and eye con­ tact. Use of language: verbal and non-verbal Language can be seen as part of the social process. Its members share certain language habits which are formalized in grammars and dictionaries. as well as body posture and physical distance between those involved in conversation. \::' Their experience in professional or individual terms. its use allows entry into a social organization. both regional and occupational. the connotations attached.

showing respect for an elder or superior. may be problem-solving in approach. so I'll go. The wife shouts 'Darling!' and the husband. When the wife says 'Darling!' she probably means 'The door bell has rung. indirectness as being submissive? Face . The way such thoughts are communicated depend on a number of factors. St)lles of thinking and communicating How people think and how they express their thoughts appears to be determined not just individually but also socially. but they are often wrong 277 .the spoken word mayor may not be the primary means of communicating.the extent to which communicators wish to 'get to the point'. particularly Chapter 14 on commun­ ication barriers and Chapter 17 on dealing with conflict. understate matters? Is assertiveness seen by the other as related to the previous two aspects: is exchange of information and opinions the primary goal of a conversation. Such generalizations can be true. Pattern~ of thought involved in discussing the fortunes of i:l.Introduction to Part Three and frequency of) interjections. suggest. 1990) show the importance or otherwise for the interlocutors of the situation they are in and their relationships. company. very few words can convey a lot of meaning. but rather the contradictions and complexities inherent in running a concern. The husband is reading his newspaper and his wife is having a bath.' Whenever something is said. As we saw in Part One. high-context and low-context styles of communication (Hall and Hall. but a lot has been said. Do they cut straight to the perceived 'truth'. even if they look or sound the same. the subject can be approached without the idea of a 'problem' being in mind. maintaining the relationship. so I can't answer it. The doorbell rings. using a cause/effect analysis. Please could you go to the door?' When he replies 'OK!' his message is probably 'I realize you're in the bath and can't go the door. Particular attention is given to non-verbal language and differing cultural contexts in Chapters 13 and 14.1 ~ 1 These elements will be dealt with in various chapters. Here is an example from life aL hUlIle which shows how. 1 1 Stereotypes are beliefs based on generalizations made about another group of people or their individual members. including: " Context . within the given context and the relationship between partners. The assumptions underlying the various elements of non­ verbal language may differ from one language community to another. avoiding confrontation and pro­ moting harmony? j . Equally. or is it more to do with saving face. an act of communication is being performed. I'm in the bath. getting up from his chair and heading for the door shouts 'OKI' Only a couple of words have been spoken.j ~ ifID . or do they imply. But is the act always understood by the other? Is the intention behind the spoken word always clear to the other party? This matter of context is in turn related to: flo Directness . for example.

according to social identity theory.lrt Three: L I I :! i 1III because they are based on inaccurate information and resistant to change. is to do with the idea that a person's identity is created primarily through their membership of a group (the in-group). Part Three is by no means comprehensive. respect and intimacy considered appropriate by one or the other. a prejudice being an attitude that is often negative towards another social group. This has to do with how those communicating perceive each other's social standing. Aspects of relation management will be dealt with in various chapters. Chapter 14 will deal further with stereotypes as une of the main barriers in intercultural communication. and the way this is reflected in the interactional hehav~our. Group members tend to regard their own group as superior. In dealing with people from other cultures within a company. .dcqncer)t. even thOUgh there are no obvious reasons extrinsically. Face-to-face management relations across cultures. As stated earlier. This introduc­ tion also contains a selection of literature on the general area.Chapter'an. E' . As such. or with cross-border business clients.i Introduction to P. Forms of communication in business practice. Hierarchical considerations can also come into play: when employees from different hierarchical levels and cultural backglOunds have to work together. The concept is divided into four sub-concepts: () A model of communication. have prejudicial attitudes towards other groups and may be prepared to discriminate against out-groups. such as (lack of) eye contact. in this communicatior process the identities of the cultures in question. A range of factors may be involved. 15 and 16. "Vb /i business is being done with other cultures. ( manager will use the normal channels of communication. The source of prejudice. including the degree of (in) !'I I . A number of factors can affect the process of communication. will play at important role. there are unconscious behaviour elements that can support or contradict spoken communication. including Chapters 13. However aware interlocutors may be about the question of managing working relationships. status may be a barrier in communication hetween them. communication is the most important cause /i 278 'i .QVerview· Chapter 13 Business communication across cultures This chapter introduces the concept of communicating in and between cultures. Readers who wish to go into more depth on the areas chosen should turn to the list of further readings. they reflect one or more prejudices. or tone of voice. ® Language during business encounters. (. I /i Chapter 14 Barriers to intercultural communication II Perception is the key word in communication and is largely determined by culture. Management of relationships I. However. and the resulting interactions.

Introduction to Part Three misunderstandings. ~\ Team tasks and processes. £. Thc concept is divlJed into three main topks: (. with particular reference to Afro-Western teams. Chapter 16 Working with international teams This chapter introduces the concept of group processes during international encounters. The concept is divided into three sub-concepts: c Teams in organizations. After defining the word 'team' and the elements involved (types and roles). The issue of strategy adaptation when negotiating with counterparts from other cultures. The filters mentioned in the introduction will now be regarded more closely in terms of barriers to cross-cultural communicalion. It is important to know where stereotypes come from and how best to deal with them.Perceptions and stereotypes. this concept will focus on a common phenomenon of global business. This applies across the board . Key facets of negotiation in an international business context and the various types of interaction that may result. Particular attention is paid to stereotypes because of their important role in relations between cultures. Chapter 17 Conflicts and cultural differences This chapter introduces the concept of understanding and dealing with conflicts.. The concept is divided into four sub-concepts: o What are communication barriers? G Non-verbal behaviour as a barrier. It will then examine the management of conflicts.from one-to-one encounters to marketing campaigns. namely international teams and their functioning. ( Assumptions and culture. The concept is divided into five sub-concepts: ~ The nature of conflict: when conflicts happen and factors involved. particularly the different approaches used in Eastern and Western cultures. ". Culture.:. {. (. A model of conflict styles: how modes of communicative behaviour during conflict can be classified. 279 . The final part of the concept will deal with the management of multicultural teams. Ch5pter 15 NeQotiatlllg intG'l"l"Iationally This chapter introduces the concept of approaches to ncgotiating iii un intercultural corttext. The nature of negotiating from both a Western and non-Western perspective. This concept will first give a general overview of conflicts and their sources before looking at the role emotions can play in different cultures. emotions and cont1ict: how different cultural values influence the role of emotions in conflict situations. The management of multicultural teams.

~" -_. 2. References Gudykunst..-.. Thousand Oaks.. The main components involved in adapting and developing communication skills appro­ priate to a cultural context. How intercultural communication can be made more effective... You are required to decide on company policy.R. A simulation: Negotiating internationally. Yarmouth.~. -. ~. Mediation and cultural transformation: how third party intervention andlor the practice of mindful communication skills can transform the perception of conflict and the attitudes of those involved. . (lJ Chapter 18 Developing intercultural communicative cornpetence This chapter examines how an individual can meet the challenges involved in communicat­ ing with different cultures through developing an intercultural communication competence. Fina! activities Part Three contains two extra activities: 1. and Hall.. (ed..) (2004) Cross-Cultural and Intercultural Communication. CA: Sage. . 280 . . W. It has the concept of becoming a competent intercultural communicator at its core. .' . <£ "'. b How intercultural competence can be achieved through collaboration between those communicating interculturally. (. particularly with regard to the location of production facilities... This concept is divided into four elements: t. This presents a series of events in the recent past of a company on the international takeover path and describes the perceptions of those involved.loping a third culture between parties to allow the emergence of a shared system of values. The ethical component as a component of intercultural communication competence. Hall. M. You will be taking part in a meeting of depart­ ment heads within a newly merged company.Introollction to Part Three ~ Management of conflict (with particular attention to the Asia-Pacific region): the culture­ based views of effectiveness and appropriacy in conflict resolution. How intercultural communication can be affected by the cultural differences between those involved. (1990) Understanding Cultural Differences. EJ. What you will gain After working through Part Three you will gain more Insight into: @ How culture affects communication. DevP.B. ME: Intercultural Press. j.-. A case study: Vechtel: adapting an international approach to a local market.

The concept in Chapter 13 first examines the elements involved in inter. they must also be able to com­ municate. This is not really the case. Learning outcomes After reading this chapter you will gain an understanding of: e The different components that have an influence on the process of communication. The increas­ ingly global nature of business and the growing interaction between cultures is adding to the complexity of doing business. €:C The role of communication in business practices. Instead. to intercultural communication. the development of globalization in business has compelled managers. intercultural communication comprises all forms of communication both within and between cultures. Managers in such companies musl therefore be able to operate on an international level and deal with other cultures.and intracultural communication before looking at communication in business. particularly in the area of communication skills. New management skills are necessary. Chapter 14 follows on with an analysis of a number of barriers. These requirements go far beyond the standard recipes for management from early busi­ ness studies where the emphasis was very much on a universal approach. As Ladmiral and Lipiansky (1989) indicate. It is no longer enough for them to be aware of the existence of cultural differences.comparisons between cultures. employees and customers to take increasing account of intercultural relations. one which took no account of relativity or diversity. it is individuals who 1 1 281 .As seen in Part Two. This concept should be considered not just in terms of. The composition of staff and clientele is changing as companies start up operations in countries across the globe. both verbal and non-verbal. negotiate and work together with business partners from other cultures. the term 'intercultural communication' could implv that it is the cultures and identities that are in contact. j As discussed in the introduction to Part Three. but also'in terms of the process of interaction and exchange between different cultures.

human communication does not emphasize the addresser and the addressee. That is why in human communication . i.e. feeling and living into the interaction. lifestyles and thought processes belonging to their respective cultures. who were based at the Mental Research Institute in Palo Alto in the US.e. already referred to in Part One. of course. including a network of relations that cannot be broken up.. they cannot be isolated. 282 . to which this chapter now turns. collaborated in the 1950s and 1960s on the theory of communication and the relationship between the individuals. This approach Lo communication brings us to the model which we presented in the introduction Lo Part Three (Figure III. Furthermore. Communication does. but more important than the message in the exchange between protagonists is the interaction.the question of interpretation remains crucial (Donnadieu and Karsky. it is subject to interpretation due to the interaction itself. These researchers. They maintained that since both addresser and addressee are in perpetual interaction. It is this role. . according to a model proposed by researchers known as the Palo Alto Group. it can be concluded that not only are the relations between those communicating an important factor. 2002).and even more so in intercultural communication . codes. Without going more deeply into the concepts of the theory of communication. the relation between the persons communicating and the context of the communication. in general terms.1 . they unconsciously make use of a frame of reference whkh. and <1 However. the information in the message does not have an absolute value.l). Their interaction should not just be seen in terms of a set of relations between the cultures. but also the role of context. the norms of the society in which they live). consists of: c knowledge (about the subject under discussion). Everybody is involved in a network of relations woven by the cultural group (the ethnic group or society in question). c norms (i. namely the addresser and the addressee. prejudices (with regard to each other). but also as a dynamic process (therefore one implying change) whereby the cultures are defined both through their own characteristics as well as through their interactiun with each other. a fabric created by the individuals or groups from different cultures and woven from the perceptions they have of each other. Intercultural communication can be better defined as an interactive phenomenon rather than one involving comparisons between cultures. These authors therefore consider that intercultural communication can be seen as a 'fabric of relations'. The emphasis is not on the message. with particular reference to the business environment. i~ 1 Chapter 13 Business communication across cultures ~1 are interacting and it is they who bring their culture's way of thinking. These cultures are non-homogeneous social groups that are forever evolving. but on the whole system of com­ munication involved. A model of communication The schematic representation of the model in the introduction emphasizes the actors involved in the communication. This definition therefore takes both a systemic perspective (involving sets of interrelations between individuals) and a dynamic one (whereby the interrelations can change). This determines the information exchanged. When they communicate. require a message (form and content). G experience (in professional or individual term~). as well as the values.

The message is implicit. individuals learn from childhood which types of information they need to retain and which they can dispense with. Knowing the physical context. they ap'pear to be fixed for life. Another aspect of the process of communication raised by Hall. Hall and Hall (1990) established two groups of cultures. \-\<'hel1 an intruder enters this zone. In high-context cultures. i. the degree of sympathy towards the individuals concerned. Similar understandings of the culture in which the commullkation takes place is critical to the success of the communication. its own way of percl:iving self. the one may have a very different idea as to what is important in their communication. its own way of thinking of activity. smell. the information of any message is contained in the message itself. helps assign the desired meaning to the words communicated. The component of context helps identify the extenl to which the source and receiver have similar meanings for the communicated symbols. one can predict much of the communication to a high degree of accuracy. These two cultures lie at the extreme ends of a continuum. they are inclined to talk generally about this and that. As soon as these perceptive models have been developed. the situation in which the individuals are confronted and also the culture(s) involved. Proxemics and cultures ·n n Ie r s I I I The term proxemlcs was coined by Hall (1966) to describe the study of how people perceive their social and personal space. about life in general. one often neglected but also important in the relation between cultures. This entails being able to work out the 'silent' messages being communicated through the distance separating people when they are interacting. Culture is also context. in the relation­ ships between the people invnlved and the slLuation where people are communicating. Knowing each of these helps people assign meaning to the symbols. on the other hand. as well as in terms of the senses (touch. This space is a sort of persomll territory. According to Hall. a zone of protection or eyen of defence. people may feel uncomfort<lble. age. Every culture has its own world view. As Figure 6. . In low-context cultures. sight and sound). not only in terms of what can be perceived. personality. called high-context and low-context. when the Swiss and the Japanese meet. The choice of the environment. is what he called 'proxemics'. most of the information is contained in the context where the message is being sent. Hall and Hall place the Swiss in the low-context group and the Japanese in the high-context group. Different cultural frameworks define the information received by our physical senses. but also in terms of what can be eliminated.e. and to do so in order to get to know each other. The difference between them was the degree of importance attached to the context of any message. in the words used.1 Communicating in and between cultures 19 The role of the 'context' in communication Context can be defined as the environment in which the communication process takes place and which helps to define the communication.e.2 in Chapter 6 shows. The Japanese. The main factors int1uencing personal space are: gender. i. When representatives of high-context and low-context cultures are doing business. prefer not to talk directly about the business at hand. and its own system of social organization. time and human nature. Hall maintains that awareness of the differences between cultures with regard to proxemics is indispensable when interacting with other cultures. The message is explicit.Concept 13. For example. Personal space is characterized by an invisible zone with distinct boundaries. the former may prefer to come quickly to the point and get down to business. the context.

is becoming the most common form of written communication within many companies . this can impair communication because of an increase in anxiety. for example. the differences in personal space between Arabs and Americans: Arabs. and it can take many forms. This is a non-verbal aspect of communication in the working environ­ ment to which managers pay little attention. Hall. Small personal space Large personal space \ [-- ~rabs Indi~ns a~d PakistaniS EJSians . Hall. the occupants may well apologize to their neighbours for sitting so close. Even if managers use all these forms in their business practices. Each culture has a preference for certain sensory receptors. in fact. 1969: 149 Watson compares the distances between people in conversation in different cultures and makes a ranking according to the differences in the size of their personal space. or display non-verbal behaviour (such as deliberately looking away).. it seems. Electronic mail. prefer a smaller personal space than Americans because the former are more susceptible to the olfactory dimension. Communication also refers to the meaningful exchange process by which verbal and nonverbal information is shared through messages. The question of which forms of communication to use is one that should receive more attention in business as well as in research into communication generally. who may be turned down if she doesn't 'smell nice'. the ensuing anxiety among staff can hamper communication and thus the efficient running of a business. makes a link between smell and a person's disposition in the Arabic-speaking world. Research supports the hypothesis that if someone's personal space is violated.. If tables in a restaurant are placed in a way that does not respect personal space..1 Proxemics also relates to the places where people move and the places where they work.. they each have different perceptions of the effectiveness of these forms of communication and may therefore prefer some over others. When couples are being matched for marriage.. If managers do not take the concept of personal space into account when seeing to the organization of offices and arrangement of desks.-----' F'igure 13. The ranking. . Chapter 13 Business communication across cultures ~ i~ I I Corraze (1988) reports on investigations made by Hall (1966. for example. '-.. including skin odour.1.. Forms of communication in business practice Many channels of communication are available to managers.. Hall postulates that the distance between individuals is related to the preferences each culture has with regard tu the sensory inputs used. from small to large is illustrated in Figure 13. 1969) and Watson (1970) into the differences between cultures with regard to the notion of 'personal space'. Take. the man's go-between will sometimes ask to smell the girl.

or give their colleagues and subordinates feedback and instructions. however. . could also be considered as communication by means of the electronic che nnel. NB: any of the written documents listed above. facial expressions..•·· . A Japanese businessman. on the other hand.!·O.-..Concept 13. would consider this to be intrusive or aggressive.. Culture and choice of communication mode The choice of communication mode can be influenced by cultural factors. 285 . if attached to emails. Mead (1990: 84) gives an example with regard to telephoning. both externally and internally: managers use it to call a meeting.••••.Wr'ilteN :'. }EI~ctr:OlljcjdigltaL .. prefer to communicate by talking face~to-face in a meeting or informally. A US businessman would consider it quite normal to make a 'cold call'.1 Communicating in and between cultures Table 13..··•• 'i ••.• '<. or correspond with customers and clients.1 summarizes the main channels of business communication.. tone of voice.. ' .::·. or by using video teleconferences.· i'.:. Some managers. and body language generally. Table 13.oral·••··'. by making phone calls (including conference calls).. The email used for many purposes.Me#lum·.. such as gestures.' I I X X X X X X X X X X X X X X X X j I Instant Messaging (synchronic) Training sessions I Presentations. speeches ---.1 Channels of business communication .'. J.'·.~ X X X (Telephone) conversations Conference calls I I I X X X X X I (Online) meetings Online forums/blogs/social networks ! Voice mail (asynchronic) Video teleconferences (synchronic) Electronic mall (asynchronic) X X 1.•••. preferring instead to find a third party who can 'vouch for your credihility and make a formal introduction~ Ii I. to phone a stranger with whom he thinks he could do business.J I I I Press conferences Press releases Memu!> Proposals i I I Letters Reports I I I I - X X X I ! I I Fax L.. These ways of communicating in turn involve the use of some or all of the non-verbal elements of communication.

Others who consider emails to be more conversational in nature may dislike the distancing effect of a formal written style and the lack of explicit information or opinion. false starts. As with any written form of communication. Another sender/recipient. particularly if direct answers are not given to direct questions. It could be argued that the use of email. of course. it can also contain many pitfalls when used interculturally. whereafter the written mode can be considered as a means of communication.-~ --------_. However. in theory. there are no facial expressions to mitigate or clarify messages. Chapter 13 Business communication across cultures This is. just as other forms of computer-mediated communication (CMC). meeting the formal requirements of language accuracy and text cohesion of a written text. for example. Computer (or 11lOtlile)'mediaied comnwnicai'ion As was said earlier. The oral mode is used to set the conditions for co-operation. blurs the distinction between the oral and written messages for many of its users. Differences in expectation and resulting behaviours in both the intra. If the company asked to respond is not accustomed to such direct approaches. They may take offence. hesitations and inaccuracies. through inaccurate language ilnd poorly structured text (These points are discussed in the next sub-section with reference to using English as the medium of communication. but to request instead a face-to-face meeting with representatives of the company concerned. if they are not addressed at the start of the email or if the style of the message is too direct or casual.or inter-cultural. It puts forward a comprehensive business proposal and expects a similar response. provided the relation­ ships established are scrupulously maintained. electronic mail is being increasingly use4 as a way of sending documents. However.~~~---~. may regard the message sent as being the start (or continuation) of a conversation in writing. of a thread of messages.and inter­ cultural context are discussed in a literature review. in which Waldvogel (2001) found that many of the gender differences in face-to-face interaction were carried over into CMC and even accentuated: 286 . in the eyes of the possible business partner. time to reflect upon and discuss the process as they are communicating. of course. may be intent on what it considers 'efficient' communication when dealing with a business in a 'collectivist' culture. cultural issues can lead to misunderstanding and even antagonism. related to the cultural dimensions discussed in earlier chapters. particularly if it contains careless language. The style will reflect more the spoken word with its slips of the tongue. Such differing expectations. Pwblems of comprehension may arise.) Also. A business from an 'individualist' culture. for example. A sender or recipient may expect an email to be the equivalent of a letter or memo. a good relationship can be established before any discussion of the proposal is entered into since. CMC can help to alleviate discrepancies because both sender and receiver have. be they intra. however. The recipient of an email may consider its style too formal or informal depending on what their expectations are. requests and information generally to colleagues and (potential) clients. In this way. efficiency and speed are less important than establishing trust and confidence. even though it offers many advantages in terms of speed and efficiency. need to be recognized and managed by the communicating parties. Any resulting misunderstanding or incomprehension can be communicated and dealt with in later messages. it may well decide not to deal with the proposal directly in writing.

Between English-speaking countries. understand the cultural references and respond appro­ priately. is con­ trolling the whole exchange without bearing the responsibility for the outcome. However. In this supposedly liberal academic environment. in a way. and their messages were considerably longer.. Waldvogel. apart from practical problems (including the availability of interpreters and the cost involved). However. This goes also for II II f-':. When this is not possible. the manager is able to 'tune into' the other's culture. such as the UK. power-based and hierarchical. They took little Interest In what women had to say... necessitat­ ing the use of an intermediary to translate. the presence of an intermediary can hamper the establishment of a relationship between the parties. there may be a shared language. The focus of interaction may well become the interpreter who. An (expat' manager who has worked and lived for a long time in one country or region may well be in a position to perform this role optimally. This may remove the obligation of managers to learn their counterpart's language and ensure that communication runs efficiently.Concept 13. the pure exchange of Information takes second place to the exchange of views.' Herring found that while women value politeness. Although messages posted by women contain somewhat more interactional features they are also more informative. Significant gender differences are found in how electronic messages are oriented ••. men operate in accordance with competitive values which result In violiltlons. One interlocutor uses the mother tongue of the other. CMC was found to be male-dominated. . Interaction is necessarily delayed and the role of non-verbal communication reduced. 287 . norms. there is always the question of reliability: is the translation accurate? Is the interpreter able to convey the full nuance of what is being said? Moreover. They participated at a higher rate than their numerical representation Justified. pick up all the nuances. a number of options present themselves: (i. <.. Men dominated the 'talking' time... Many regard this as the best solution: by becoming truly bilingual. Both sides could insist on using their native language when communicating. including flaming. 2001: 7-8 Language during business encounters The previous discussion assumes that the two business representatives are able to com­ municate even though their native languages are different. such as the UK and the US. there can be enormous differences in the level of expression in both written and spoken language.1 Communicating in and between cultures There is evidence that women and men communicate In different ways on the net. of conventional polite"". A study of two academic groups conducted by Herring (1996) reveals that 'Both men and women structure their messages In an Interactive way and that for both. which seems to have resulted In a decline of female participation. in contrast with male messages which most often express (critical) views. Differences in pronunciation can also add confusion. but British and US managers must sometimes check the meanings of words that their counterparts use. whether they come from different cultures or not. and this can affect communication generally. Within an English-speaking country. managers who are operating across many cultures and making forays into new countries cannot be expected to acquire the language of every culture with which they are (about to be) involved.f I: It is worthwhile mentioning here problems experienced by interlocutors who share the same language.

rain check.Il~lj!\h and South African-English.-.":. ball park. And are strategic fit or bread and butter really so hard to figure out.~. English frequently serves as a means of com­ munication between companies whose managers have acquired the language as part of their education and have been exposed to it through various media. This language is often referred to as 'international English'. English: a neutrallanguaqe? A third possibility for managers who cannot communicate with each other through their mother tongues is for them to share a neutral foreign language. sing from the same hymn sheet.. whole nine for assessing untapped opportunities. sanity check. But the list of buzz phrases that were reported as being at the same time most common and least understood was intriguing: Low-hanging fruit. some from the standard are not alone. History shows how the use of a 'lingua franca' (common language) has been indispensable to the development of trade in many parts of the world. gap analysis. in context? It would seem so. talk off-line.. Nothing very new or startling so far. so some of us have been exposed to it..:. A survey of a thousand office workers in Britain was published last week by the firm of recruitment conSUltants Office Angels. for a target that's easy to reach.:i. good enough reason for sticking to plain English the rest of the time. It reported that two-thirds of office staff used unnecessary jargon terms.~_.._·_·_··_.:.•_ _____._.worldwidewords.·:j~ speakers of other dialects of English such us Indian-English. e-tailing. ---­ ·Lu. but is difficult to define exactly because it has evolved organically on the basis of how non-native speakers use English. get in bed with.) Some terms are odd and would stop almost anybody for a moment-low-hanging fruit.• :. You can see that phrases like rain check.::.•• _~_·_.C~ . Giving bored attendees at meetings the chance to play buzzword bingo is hardly a substitute.'. But several . It's clear that jargonisers in British offices are picking up terms from American-English. But what the survey shows is that people are easily confused by the unfamiliar..~_.llturE'~ ..htm.. blue-sky idea.have been in British-English for many years. · 'I Chapter 13 Business communication across cl.such as level playing field. touch base. and gap analysis. ~ . It is said to contain words and phrases that are generally understood across the world.._C.. think outside the box. and blue-sky . 288 ._. helicopter view. win-win situation. ThOSe using it may often need to readjust their use of the language while using it to accommodate Meeting-room jargon: just fuel for buzzword bingo? By Michael Qulnlon If you can't understand half of what your colleagues are saying in meetings. Source: www.._ _ .1 shows how native speakers of English in the UK can be confused by the plethora of business terms taken from American-English._ _ ~__ .. holistic approach. and 10 per cent thought it made the most frequent users sound pretentious and untrustworthy.~ . (But one supermarket in Britain uses rain checks as its name for the vouchers it gives out when special offers are in short supply. _~_. Jargon is all right in its place.-. level playing field.. helicopter view.. but mostly from business jargon.. bali park and touch base could confuse hearers in Britain. Nowadays.c. because we literally don't play the game. ticks in all the right boxes. take heart ._.~_..""ii'.'''-'~. for an overview. Spotlight 13.. strategic fit. bread and butter. It appears to be devoid of com­ plex grammar constructions and of all but the most common idiomatic phrases. benchmark. put to bed. benchmark. from the survey. But 40 per cent of those surveyed found it irritating and distracting. accessed 1September 2010._·_-'--' _ _ . The survey suggests they are doing so because more business people have access to the American-dominated internet. big picture. finger in the air. for the usual reasons of wanting to confuse opponents and seem superior.. Singapl\re-F.

How motivated are people to use a language that is not theirs and which does not allow them to assert their own personal or cultural identity? Mini-case 13. let alone a particular sort of English. Such problems frequently occur during exchanges of emails when messages sent in simplified telescopic form can result in misunderstandings or incomprehension. Stripping culture off any language. be it CanaJian-Engllsh. of course. the question of language as a potent way of expressing cultural identity.or American-English. the adapted text may have lost a good deal of the intended meaning of the original. for saying something that expresses much more than the wOl'ds used.or African-English. there are problems. a way of shedding the cultural connotations of British. he got a puzzling response.Concept 13.lS a sort of default language. Some observers regard international English as a move towards cultural neutrality. III Straight-talking. The connections between thoughts. A speaker using English as a neutral foreign lan­ guage may well suffer similar problems to native speakers using English to communicate with non-native speakers. adopts English as its official language. This goes particularly for emails written in idiomatic. A report in writing in a 'stripped down' English ­ particularly one using 'bullets' of information . it has considerable limitations: discussion can be superficial and communicating thoughts difficult. Hong Kong-English. Baffled. education and business. and may be unable to modify his pronunciation since it is part and parcel of the way English is used in his country of origin. The language can be deprived of iL~ deeper meaning. . telegram-style language that may be appropriate for an office colleague. which was once a Chinese state­ owned enterprise. but not for a client in Bangladesh. The basic problem is that language is the very expression of a culture.1 Communicating in and between cultures differences in knowledge and understanding between the speakers concerned. English-speaking culture brings communication problems By JustIne Lau When a Hong Kong-based analyst recently called computer-maker Lenovo's Beijing office and asked for an employee by the English first name on her business card. Even here. Caribbean. clear context and any oral explanation. A noble attempt to simplify English may cause more problems than those it was intended to solve. especially when it is heavily influenced by that used for the mother tongue. for example.may not in itself prove easy to understand by a non-native speaker of English. However. ~ 289 . The speaker may not be aware of the breadth of his vocabulary compared with that of his counterpart. Over and above such problems. there is. however. This goes equally for written English. Deprivt:u uf proper cohesion. This is particularly the case when the speaker in question is from a country where English is used as the second language of communication in. The operator told him the person did not exist. There may be less room for nuance and subtlety. He was put through to her office immediateiy. ideas and information may become more diffllSf' or even non-existent.1 shows what can happen when a company. he called back and aslled for the same person in her Chinese name. can impoverish the semantics of the language and reduce its whole pow~r of expression. The differences in pronunciation may also need to be considered.

Lenovo hired Bill Amelio. where the pressure of differing social norms can disturb the communicative relationship. A formal first meeting between a US manager and a German manager. . The very exchange of names ('Hi! I'm Ron Smith. _.. The spontaneous move by staff to adopt English names may be causing slight confusion.--. .') can be the start of a precarious scenario. (1 ' ~'! ' . Fnglish-spf!'ilklnlJ mltllrf' hrlnt)'i rnmmllnlriltlnn prnhll!m<. . :1 ii' " iq h "J L. particularly with regard to their respective positions and responsibilities..:. for example. Whatever the language chosen. a former Dell executive._. Financial Times.-_.. particularly when English is being used: using 'you' goes hand-in-hand with informality for the American.'_'n"___ .. encounters occur in situations and contexts where the expectations of the inter­ locutors may be very different. i< :i.. . .. This brings us to the question of face-to-face business encounters... which acquired IBM's PC unit last year.. ... 31 (Lau.. . [sut]It has realised that in order to become a true global company. The first encounter I....:·. Stoldt. Somef!" from <. 09/11/2006. But now since a lot of our commun­ ications involve our US colleagues. some people may find it easier to have an English name: says one Lenovo employee. Dr Peter Stoldt.-_.. ". p. J. the formal version of 'you' in German which establishes a certain distance between speakers.' . Some employees at Lenovo. but it underlines broader changes In the company's culture that analysts see as key to its success in managing the acquisition of the IBM unit. .'. even if it takes place in a shared language.. an allalysl i:lll:3i:lllk ur Chilli:l Illler naliullal.1' .. . now receive internal emails from a ~ohn' or 'Mary' whom they struggle to identify until they find out their Chinese names. 'Lenovo used to behave like any state-owned enterprise. Questions 1..'Hello._. 'In the past. . It moved its headquarters from Beijing to North Carolina and changed the official company lan­ guage from Chinese to English.~o.. to be its chief executive. What else do you think would need to be done for this new culture to be established? Face-to-face management relations J ..trillght-tillklnQ. The German possibly does not share the optimism and (superficial) friendliness of the .1'1 :. ITI :1 II Chapter 13 Business communication across cultures What the analyst encountered was a Lenovo in flux where the transformation of a corporate culture has yielded occasional moments of confusion even within the company. Shortly after the deal.).• •••• " . we used to call each other by Chinese names. the first step is to drop some of the old habits: said Randy Zhou. u: 290 t'j The way different cultures pursue the formality mode indicated earlier reflects tendencies within the cultures concerned._". friendly and eventually informal relationship whereas the other is more reserved in exchang­ ing information. whereas the German may use 'you' as the equivalent of 'Sie'. . _ w _ _ _ _.--. It is also establishing a straight-talking culture Inside the company. The very start of an encounter can indicate clear differences....:. How do you think the adoption of English by the company would help establish a 'straight-talking culture'? 2. may show how the one is intent on establishing an open. Two conflicting functions of the meeting (cultivating social ties and exchanging information) may well be pursued with growing unease by the two parties. _ _ .

may certainly ease the process of understanding. Once the relationship between managers from different cultures has been established. for example. Japanese colleagues are present. Once lIlt:: Japanese manager has deemed it appropriate for business with his Western counterpart to be pursued. whereby the context involved plays a decisive role. Taking turns to speak. the maintenance of such a relationship can be fraught with difficulty. As Mead (1990: 118) indicates in his list of habits a good listener needs to develop: . the Japanese may well be prepared to communicate (and possibly behave) more informally in a Western setting . a crucial element of any conversation: understanding not only what is being said but evaluating the meaning of what is being said. that Is. Listening carefully to what is not said is just as important. one interlocutor may be focused on his particular take on matters. For example. to be able to take turns when speaking. he is more intent on establishing the other's credentials and clarifying the potential of a business deal._ . it will become apparent to any foreign visitor in a Japanese setting that addressing a Japanese manager by his first name is inappropriate: office relationships retain a formality not experienced in many Western business cultures.-----_. In another (Western) setting. On the other hand. as will asking questions to check on understanding. Any attempt to counter this can result in extreme embarrassment for the Japanese manager and his colleagues. This means process' ing the message in terms of the differences between your and the speaker's personal and cultural priorities. One interlocutor may expect those involved in a meeting.'. then he may be prepared to drop his guard and enter into a less formal style of communication. and the American will adapt his (verbal) behaviour correspondingly. The use of a shared second language will probably necessitate a check on the intended meaning of words or phrases used. . with the German developing an antipathy towards persistent affability. some kind of negotiated communication mode may be established. one may consider pauses in the conversation to be appropriate for reflection. C(')nver~aUoflal styles If a business relationship develops. rather than interrupting each other. Hnw~v~rj if other. the other may involve his 'ego' much less. The context of meetings can determine the nature of such encounters. however._. for what the sender thinks is so obvious as to be redundant or what is so new as to be outside his or her experience. less involved.: 291 . of long as his authority is not questioned. the other may prefer to make more negotiable contributions and be less conclusive. Another element to take into account when evaluating the contributions of other inter­ locutors is their facial expressions.• Concept 13. the other may shy away from silence and fill up a gap as soon as it appears. the more formal style will be retained.1 Communicating in and between cultures other. the other may assume it is his right to interrupt as and when necessary. Listening is. and possibly a rephrasing of statements to clarify understanding. Any attempt by the American to break through what he considers to be the rather cold reserved manner of his counterpart could have an adverse effect. first-name terms may be the norm and insistence on using a title and surname may proVf~ R barrier to establishing trust and collfidence in that setting. one may tend to make assertive. conclusive statements. Listen for what is not said. particularly when different styles of conversation are used.

for example. such expressions give important signals in social and business interaction. will express attitudes that are diametrically opposed (such as aggression and friendliness). Maria: 'We use the phrase "Enough smiling!" meaning "Cut it out!''. sex and corruption. but also with piety. a smile in Russia . The length of visual contact. In social and business encounters they can play an important role when expressing the degrees of domin­ ance between people with different levels of status. however. A persistent look can make the inter­ locutor feel like escaping or responding with signals of aggression. When someone actually aVt!rls their gaze. An interpreter is essentially an outsider who is most probably not familiar 292 . but many executives still rely on interpreters to explore and develop business opportunities abroad particularly in regions of the world where local companies have not yet been able to develop sufficient English language skills within their workforce. 2007: 13): Anyone who has been to Russia knows how unbelievably sullen the people look. The act of smiling might be assumed to have a similar function across the world as a signifier of happiness. I maintain that a smile actually has another function . depends to a greflt ('xtent Olllhe C1lltl1t!i1 origin of lhe interlocutors. sends a totally different message to that sent by a smile in the West. observation that has been scientifically corroborated. My teacher of Russian. A smile In Russian culture. the word 'smile' often evokes a negative feeling. However. according to the context. Any perceived degree of status can. They hardly ever smile but instead give all the signs that life for most Russians is Just hell. Cultural differences can playa significant role in the way facial expressions function. together with the historical background: My teacher spent over three years researching the subject and· interviewed hundreds of Russians and non-Russians. obtained her doctorate from Moscow University with a dissertation entitled: 'A comparison between the function of the smile in Russia and its function in western cultures. Such looks are therefore often associated with feelings (unease. They are totally linked to the context and differ according to whether the context is dear or ambiguous. Here is an account of how a Russian smile can be interpreted (Sauer. In some cultures this act can have a negative connotation. Having a third party involved in encounters with (potential) agents or clients is fraught with difficulty. Trumble's (2004) book A Brief History ofthe Smile reveals many of the nuances attached to this physiological process.when shown to a stranger .which means the opposite.has a negative connotation: 'He's pulling my leg!'. Through his enlightening account Trumble shows that smiling intersects not just with happiness.Chapter 13 Business communication across cultures Facial expressions during interaction Facial expressions have been analysed more frequently in terms of the emotions expressed than in terms of their effect on human relations. We sometimes arbitrarily attribute a dominant status to someone because they are able to talk very fluently and kllowlt!dgeably during a discussion. this can be interpreted differently. Facial expressions are also connected to the status of the interlocutors. According to Maria. but in others it may be seen simply as a sign that the speaker is changing direction in the discussion. while in English you say "Keep smiling" . or 'He's criticizing me!' In Russian.' i Interaction through interpreters English may be the working language during many international encounters. embarrassment) which. have causes unrelated to a person's actual social position.

nor with its expertise in the area under discussion. (or rnoblle)-mediated communication in !)articular al-e changing the way people communicate. 02/02/201U. Financial Times. at a personal level. rather than establishing eye contact and developing a rapport with each other. the French insurance group. prefers the literal approach. including the context. Ms Olivier. Her Interpreter translated this as "difficult". 'Ms Olivier was sometimes told thnt i'l task would be "muzukashil". Moreover. which Ms Olivier took to mean tough but do-able. She believAs that relying on the interpreter's potted version is risky and makes you even more of an outsider. it is important to make yourself knowledgeable about its culture. of the 'loading' which the words contain. Misunderstandings prompt the question of whether it is better to work with interpreters who translate word for word or with those who sacrifice literal accuracy to get across the spirit of what is being said. allow a better understanding of the new frameworl\ of intercultural business communication. The numerous ' given in this enapre." she adds'. the actual communication may still be unsuccessful because signals in a translated utterance may not be picked up by the receiver since he/she is unaware of the cultural context. "If you are living in a country.1' From A matter of Interpretation. The question of interaction between people from different cultures will be examined further in Chapter 18. vice president of Axa. This chapter has given a brief outline of the theory of communication. The tendency to use stereotyping is also ever-present during such encounters and these will be discussed in Chapter 14. there are other elements that come into play. encountered when dealing with a Japanese subsidiary which was struggling to survive in the market. who has since learned Japanese. the interpreter may end up becoming the focus of any interaction between parties. Even if the interpreter manages to translate expertly. Even if language remains the dominant factor in communication situations. nor with its culture. 293 . Developments in compute. they may well tend to concentrate on the interpreter who is speaking directly to them.Conclusion with the company for whom he/she is working. The manage­ ment of relations during such encounters has also been examined and this has shown the many facets of communication that people from different cultures need to be mindful of during face-to-face meetings. Dealing with a Japanese subsidiary In her article 'A matter of Interpretation'" Alicia Clegg gives an account of the problems which Gaelle Olivier. Only when her team repeatedly missed deadlines did she begin to understand that muzukashil is a cultural euphemism for saying "It is impossible and we cannot do it". interlocutors may still experience problems because of their cultural bacl. 16 (Alicia Clegg). which is indispens­ able to a better understanding of intercultural communication. p.grounds. Even if they share a common language (English being increasingly used in business by non­ native speakers). proxemics and facial expressions. This concept has presented the main forms of communication exchange and addressed some of the issues involved in the choice of language in business encounters. 1 .

Chichester: John Wiley. (1990) Understanding Cultural Differences. J. f~eferences Cor S. Hall.nn to c:11'!r. identity and intergroup communication. Quoted by Corraze. The concept examined three possibilities with regard to the use of language during a business encounter.B. (198B) Les COm" municatlons non-verbales.R. (2004) A Brief History of the Smile. A.:t1 . Donnadieu. London: Bodley Head. 4th edn. E. (1970) Proxemic behavior. (2001): 7-8. Mead. 179. M. (2002) La systemlque. 294 .htm. New York. Quoted in: Waldvogel.R. does not allow the protagonists to be certain of the oLltcome of their encounter. FUI"thel' reading Gudykunst. NY: Bantam Doubleday Dell. M. E. A fourth possibility is for the manager in question to learn the target language and employ translators. and Hall. and Karsky. and Lipiansky.r. www. In your opinion. (2001) . Cross-cultural communication research tends to be comparative and focuses on cultural communication the role of communication and cultural identities. Yarmouth. Thousand Oaks. which is specific to each situation.t hi'lr. What. 16 June: 13. cultural influences on the expression and perception of emotions. Waldvogel. The Hague: Mouton. In his role as editor. The difference lies essentially in the subject area beinQ researched. and adapting to an unfamiliar culture. Intercultural communication includes all aspects of the study of culture and communication. communication in intercultural relationships. Het Parool.) (2004) Cross-Cultural and Intercultural Communication. (ed. Amsterdam: John Benjamins.Email and workplace communication: a literature review: Wellington. R. Ladmiral. Watson. France: Editions Liaisons. W. CA: SaQ&. EJ. (1996) Computer-Mediated Communication: Linguistic. (1989) La communication interculturelle. J. are the factors that can influence the outcome of an intercultural Interaction? Explain how these factors can influence the outcome. Social and Cross-cultural Perspectives.vuw.M. (1969) The Hidden Dimension: Man's Use of Space in Public and Private. (2007) 'Gimlach'.B.T. Trumble. Gllrlylmnr. G. NY: Basic. the interaction.ify the c:ontriblltions from experts in the field into two distinct cateQorles: cross-cultural communication and Intercultural communication.M. (1966) The Hidden Dimension. (1988) Les communications non-verba/es. When two people from different cultures meet in a business situation. accessed 1 June 2008.T. O. c:hor. What advantages does this combination afford those Involved? 2. New Zealand: Victoria University of Wellington. The book covers such topics as: language and verbal communication across cultures. Herring. Sauer. W. Paris: Armand CoHn. Rueil-Malmaison. Hall. ME: Intercultural Press ANC. New York. J. (1990) Cross-Cultural Management Communication.Chapter 13 Business communication across cultures :1 "j :~ 1. Paris: Presses Universitaires de France. Iwp/docs/ops/op3. Hall. J. J. E. nonverbal communication across cultures.

The practice is informal and has no legal significance. When students enrol In Chinese universities. 'I liKe to see myself as a great and extraordinary person: Super said. and Eddie was already gone before I could choose It: said Eddy Wu. Eddy said more people. People usually adopt only English first names and retain their Chinese family name. 'Promise has more profound meanings especially with the biblical bacKground of the promised land: she said.its meaning. with Chinese names that potentially mystify foreigners often being replaced with English aliases that amuse them. This is particularly 295 .' While most Chinese with English names reserve their use for times when they are in the company of foreigners. a 30-year-old writer in Beijing. and that she saw a philosophical connotation in it. 'So I said "OK. twelve years ago. English tutors and foreign friends. But I still enjoy having it: Most Chinese take their English name . a paralegal in Beijing. let me taKe Eddy with this other spelling. Eddy said. 'My. 'People wonder about my name all the time and are always asking me to explain it. explaining that he wanted the name because it sounded liKe his Chinese name. Now. parents tell me how once any foreigner on the street would be sta'red at. Sometimes. China is developing very fast and Chinese are becoming very modern. Xu. The process of picKing the name often involved weeKs of discussions between the person. Possessing one was a status symbol indicating that a person had been to college and rubbed shoulders with the 'Iaowai'. Pocha DI. a student at Beijing Forestry University. prefer using their English names. as China widens its reach abroad and as the number of foreigners living in mainland China swells. '1 began to use it when I was a freshman in college. and its associations with historic figures ~ very seriously. said he chose his English name because it is a literal translation of his Chinese one. urban Chinese. Promise and Wendy For ·pragmatlc Chinese.list the schools circulate. Super. adopting English names has long represented a way for them to bridge the linguistic and cultural gap. That English names are now ubiquitous in urban China is a sign of the country's progress. and some people I've met have expressed their Kind appreciation and curiosity about my choice: In nineteenth-century China. Students race to snap up the 'best' English names on a.English names catch on among Chinese: Young bridging a gap with West By Jehanglr S. choosing an English name was the privilege of only a handful of elites. said her English name was a rough translation of her Chinese one. especially young women. Chinese sages would then vet the short list of names for their tonal qualities and astrological powers. Di. they were so unusual: he said. Xu and Wentao now answer to Eddy. the Puntonghua word for foreigner. its sound. 'Now. 19." . Promise Hong. they routinely are required to picK English names as a way to prepare themselves for life in their increasingly Westernized world. 'Popular names liKe Michael and Alex go quite fast. Chao. Super Zhang. Chao. the results can be quirKy. 25. picKing an English name has become a rite of passage for most young.

com/news/world/asia/artir. meetings are usually held in English. 40. head of the Unice employers' organization. he said it was because he had been 'profoundly shocked' to hear a French industrialist speaking in English. since the Chinese write their family name first and given name second. a country proud of the historical importance of French as the language of politics and culture. Source: Bo~lull GloOe. president of France at the time. What are the reasons given for young Chinese adopting an English first name? 2. 1 october l006. Do you think that this custom can help to improve communication between China and Western countries? Explain why. said she chose her Enylish name because her Chinese name is Ping and the Mandarin word for apple is 'pingguo'. Questions 1. when written [Ising a certain character. Wentao Zhang. Why English is de rigueur in many French boardrooms By Tom Braithwaite in Paris and Chris Smyth When Jacques Chirac stormed out of a meeting at the European Union summit.' she said. explain he had decided to deliver his speech in English because it was 'the language of business'.boston. she said.les/2006{10/01/en9iisr'I_llillTles_catrh_on_amon9_chinese. are not enough to bridye the cultural gap. the French finance minister.. began calling herself Wendy while living in New Jersey for 15 years. Adding to the confusion is that Li. The behaviour of Jacques Chi rae. sidesteps the pitfalls of trying to find English translations of Chinese names. once chaired by Thierry Breton. 296 . 3. not every Chinese person has an English name. 'People (in the US) used to find it really hard to say my name. 'It just makes things easier. Mr. the French president may wish to stay away from a number of his nation's boardrooms. And sometimes. provoked many discussions on the role of English in French society. means pear. born in 1932. do you think the use of English names brings to the Chinese way of doing business? Explain your point of view. Of course. If any. www.Chapter 13 Business communication across cultures true for Chinese immigrants in the US and other English-speaking countries. who use their Western names to help them fit into their new world. farmers and workers look surprised at the thought of taking an English name. . In the sleepy hamlets that dot the countryside. Many foreifjllers accustomed to tile Western format assume that Li means apple in Mandarin. But in the boardroom of Air Liquide. The text below highlights the problem of cultural identity by describing developments in France. Apple Li. But one problem remains: her business card reads Li Ping. so I began saying ':.Just call me Wendy" and it worked really well: This phonetic approach. What changes. So too at the media group Thomson. On this basis. Chirac's outrage was all too visible on Thursday night when he heard Ernest-Antoine Seilliere. picking a new name that sounds like your original one. the French industrial gases group. name­ changes alonp. 21. accessed 1June 2008. the. a travel agent in Beijing.

regularly take place in English. the director of CeQos. 25/03/2008. while competence in the language is compulsory for managerial recruits at Renault. and Smith.). 'It's the language of the oil industry. C. At France Telecom . a mrmrtlJe­ ment training schOol. the oil group.where Mr. Seilliere's meeting. is English used more and more in French boardrooms? 3.English is commonly used in internal memos. Air France-KLM holds meetings of 'the strategy management committee' in English.' said Jean-Louis Muller. Muller said the rise of English in French boardrooms appeared unstoppable: 'I witnessed a meeting at [engineering group] Alstom where there were only French managers in the room but English was still the language. both defence groups. What. p. French companies choose English because they do most business outside France and because of an increased foreign presence on their boards.' Source: from Why English is de rigueur In many French boardrooms. Questions 1.. Breton was also once chairman . 'The English language has connotations of liberalism. 'The defence ot the French language by politicians and unions is the defence of the French social model: Mr.the French government has stakes in.2 who joined his president in boycotting Mr.. according to the interviews. Mike Quigley.. according to Jean-Louis Muller. What may explain the sudden departure by the president of France when a French industrialist used English to address the summit meeting? 2. 8 (Balthwalte.Activity 13. FInancial Times. English is also the lingua franca at Thales and EADS . Meetings at Total. T. even when only Frenchmen are present. Why.' explains a spokeswoman.. the chief operating officer and heir apparent at the telecoms equipment maker Alcatel. do French and English seem to represent in terms of cultural identity? 297 i. is an Australian who does not speak French. ..

to a considerable degree culturally determined. When the sender and recp.Ii I: III Apart from the framework of reference examined in Chapter 13 and the context of the communication. expected that the communication between individuals from tWo different cultures will be disturbed. The barriers involved will be examined in the concept of this chapter.since a framework of reference is. Howevei.iver in this figure are frum different cultures. with misunderstandings occurring when the sender and receiver do not share similar meanings for the communicated symbols. the communication process may be impaired through misunderstandings and may eventually break down. What are communication barriers? Ideally.. olher elements play an important role in intercultural communication. The importance of the effects that barriers have on communication in business. for example . The break­ down in communication is often to do with either too much information (information overload) or too little information.should not be in conflict. as described in Figure 111. for communication to take place. Concept 14. the frameworks of reference being used . it is to b~:.1 examines the obstacles preventing the effective flow of information within an organization.1 in the Introduction to Part Three. Learning outcomes After reading this chapter you will gain an understanding of: (i. The context of communication is often complicated by the question of culture. or it can be caused by communication that is misplaced. . These obstacles relate to either the failure of individuals to communicate effectively. and values. Those components of communication that can create obstacles in intercultural communication. inaccurate or incomplete. These are essentially barriers to the communication process.with regard to norms. €'. It may also involve the context: personal and environmental factors can impair the quality of the information received. or the failure of systems to make effective communication possible.

Breakdowns in communication commonly occur when the context· o(. ~ making t:.ageJ:'. hand gestures and modulating the voice by adding rhythm and emphasis to reinforce the verbal message.~-~cltures are many in n~ber and nature (see Figure III. posture and the distance between sender and receiver. moreover..tllune.1? Is it') replacing spoken language when it is impossible for some reason (physical barriers.-.lClive (monologue) or commLtnicauve (dialogue)? Is it done voluntarily or spontaneously? We know from the many researchers who have investigated this phenomenon that antiquity was also fascinated by it and. or indeed replace.9. a meta-communication is an act of communication between two pro­ tagonists that also communicates something about the communication itself. The nature of this meta-communicative behaviour is determined by personal. i Concept 14. Before looking at these barriers in detail.kes on an intercultural dimension.2l:!a!. or about the relationship between the two protagonists. fafiiiJ eg. and by the way the receiver reacts to the signal on the other. meta-communicative functions can also include: @ making gestures to complete messages when information is missing (e. social.tll!e~. that non-verbal communication plays an important role in communication as a whole. The interactional nature' of face-to-face communication therefore t. unknown foreign language). ~ommunication problems may happen not only during meetings or negotiations. In terms of non-verbal behaviour. The nature of the interaction itself may be modified by the intended character of the non-verbal signal of the sender on the one hand.~k~':~--~'~ -~ SUCli-disturDmgfactors betw~. What this term encompasses is so large that this discussion must confine itself to ges. or both.!pI:.d1ngs between the speaker and receiver and these call dearly be of great importance for communication in business. relational and cultural factors.1 Barriers in cross-cultural management communication Some problems of this nature can occur when doing business with foreign partners. These are all closely allied to. when gesturing to indicate someone's height or size). I I ~ Non~verbal behaviour as barrier Is non-verhal hehaviour natnral or \. A barrier can lead to a business opportunityranmg thrJ~gh and/ur a business relationshiP ending. verbal communication in terms of producing messages. the dominance of other sounds.. work­ ing with foreign colleagues in the same company.tll]g~~o1!1. all these also have a communicative value over and above verbal communication. this chapter will discuss some notions that offer insights into the causes of misunderstandings in communication between cultures. !jome barriers to communication origi~at~fro'm:-cultUraI misunderstaD.~ t1:i.~f~ate·Ci between the-sen:aeranarecehrerTsUndear.g. In short.. The cultural dimension of non-verbal behaviour is apparent once the b. ur wilhin a juinl venlure wilh a fon::ign company.l&uage used by interlocutors from different cultures is compared and contrasted. Meta-communication and non-verbal behaviour In its basic form. They may even contradict the accompanying verbal messages. All 299 .nression (including affective expressions such as laughter or showing anger).1 in the Introduction). but also during informal situations.

If the gesture or expression made is unknown in another culture.• 14 Barriers to intercultural communication cultures use forms of body language to communicate. however. the non-verbal signals used in a certain context may therefore not only differ but also necessarily influence other consequent non-verbal signals. Communication could be interrupted Of. pulling one's eyelid down with the forefinger means 'I don't believe you!' In Italy.' in France and the Netherlands (Figure 14. Those communicating across cultures therefore must be careful not to assume that certain gestures have the same meaning as in their own culture. then its meaning will not be understood.dtures. for example. Other gestures.' or 'have had enough of . depending 011 the cultural context. . if an incorrect meaning is applied by the 'receiver'. this coURTcoi1vey indifference. . may not ~\\JLe be so universal: a nod of the head may well be expected to indicate affirmation and a shake negation. . How is it possible to determine whether the sender (if from another culture) has intentionally chosen to transmit a non-verbal message with an exact purpose or whether he is pretending to do so? The receiver is expected to respond to the signal given by the sender who in turn may need to fe-adjust his communicative goal. sadness and fear are considered to be universal. the question of the intention behind non-verbal language must also be addressed. resignation or ignorance. ~houia:ers. vary the non-verbal messages so that the desired goal is eventually reached. they also reveal certain characteristics of a culture's collective mentality. In France. depending on the cultural context. Non-verbal behaviour therefore can be crucial in face-to-face interaction. diverted. Furthermore. Figure 14.. When those interacting come from different cl. the causes of these expressions may be different. however. Furthermore.1).1 'I've had enough!' 300 . to convey the idea that someone is stupid can be cOllveyed in several ways. When a speaker ~'ai~e~Hhi. but the meaning of these forms is subject to different interpretations according to the cultural background of the interpreter. Ii Non-verbal interaction Although facial expressions communicating anger. the same gesture means something very different: 'I'm keeping an eye on you!' Since gestures are a purely cultural acquisition. but some cultures nod to negate and shaketo affirm (for example the GreekSgrve a]hak'e of the head to sanes'). Let us compare the expression 'to be fed up with.

we look at the past with Cresswell (1968). In Korea. This is especially the case where an interlocutor is a stranger. but it is also highly appreciated as a style of discourse. there is a crucial difference as to where the hand movement stops. Just as with translating from one language to another. using English as a means of communication can make the situation easier when doing business. it can also be con­ sidered as being impolite in situations where active participation by the interlocutors is expected. When the Dutch are interacting with the French they can easily come to the conclusion that their interlocutors are very emotional and excited since. A century emphasize the rhythm of their speech. the hand stops at the top of the head but in the Netherlands it stops earlier . of agreement or disagreement. such 'exaggerated' use of gestures is only witnessed when very strong emotions are at play ( the neck. he reminds us that in the eighteenth century there was disapproval of the tendency ofthe English to use gestures when speaking. As seen in Chapter 13. If. that misunderstandings do not occur. Thesc pauses l11usl not last too long. We can only make tentative explanations about how certain gestures and body lan­ guage generally came into being. It should be said at this point that such examples of non-verbal communication arc simply styles of communication and do not indicate that a particular culture experiences more or less emotion. appears to be the exception: even if silence is preferred to verbalization. the French are very expressive and use the whole upper part of their body. However. In Thailand. language differences can be a dominant factor in any commul1!calion barrier and can even be an insurmountable one.Concept 14. but this does not mean. for example. it can be difficult to convey the full meaning and nuances of expression.'.1 Barriers In cross-cultural management communication The gesture for these words is made in the same way by raising one's hand to the head. silence is not only a sign of respect. their calm self-possession! Non-verbal communication barriers in business Although verbal communication is essential in business contacts and can be the main source of misunderstandings between cultures. Asian cultures discourage verbalization since it contradicts the principle of modesty. Therefore. 1989). However. In France. Tht! Dutch. silence is preferable to the improper use of words. In Western cultures. however. non-verbal communication can also be a source of misunderstanding and irritation. for example. silence marks p~mses in a discourse. of course. Silence can also be a cause of misunderstandings. unlike those in oriental cultures where any time without a word being spoken is an integral part of communication. in this example. it is more than only a difference of gesture: the gesture represents a cultural attitude that here expresses either the limit of exasperation or loss of patience. research carried out into the use of body language by Dutch and French people from a similar business environment showed how great the differences were. For example. the English were characterized for their 'phlegm'.or just one arm . 2003: 62). Japan. usually limit gestures to the use of their arms . the way all sorts of feelings are expressed can be so different betwetr. When using gestures. particularly between Western and Asian cultures. This is due to the unstable nature of the values of gestures associated with a language. toward: 301 . However. in their culture. cultures that it can result in representatives of one culture having negative feeling. on the other hand. This applies even to native speakers of English who come from different countries. for example. remaining silent 'is considered more negative than it is in America' (Tae-Seop Lim. however.

There is a gap between the explanations that people give for their behaviour and the real motives for the behaviour. every culture has assumptions t. for the most part. there is a difference between what people say and what people want to say (Schneider and Barsoux. in Nordic European cultures. related to presumptions as to how people think that things work. Time-related cultural assumptions relate to four common questions: ( Is time considered as a scarce good (economy of time)? ( Are tasks performed simultaneously or one after the other (monochronic versus polychronic) ? Is life seen as a continuity or as cyclic episodes? (. one has to respect these assumptions. being a member or not. as well as to particular roles in society (such as the perfect politician. related to the presumed likings of people.14 Barriers to intercultural communication another. statements may be given about values and ideas. 0-. 302 .or excludes . The strict opposition defines the content of the 'out-gwup' and 'in-group' whereby t111. 2003). Assumptions may have: a co nitive dimension. That is why assumptions can generate a lack of understanding and misunderstandings when people from different cultures are communicating. As seen in Part One. belonging or not belonging. Barriers Apart from a system of values.: group space includes . or successful businessman). and a directive dimension re 0 the presumed choices of people. about what is true and what is not.hat are seldom tested for their justifiability. The creation of such prejudices is not the differences in themselves but the way in which the differences are interpreted. social class). This can be seen. To be accepted in a culture or subculture. the present or the future? Cultural assumptions that are space-related have to do with being 'in' or 'out'. mostly normative in nature. They are related to the main sudo-demographic categories (age. Cultural assumptions are difficult for foreigners to detect because they are not easily expressed and are. Out-group orientation is based on the assumption that there is a unity of mankind beyond the borders of in-group spaces. space or identity. Identity-related assumptions relate to self and others and are aboul the ideal conduct in certain social contexts. sex. nations and cultures. In the same way. Usunier and Lee (2005) provide a framework for the evaluation of the problems and combine three dimensions. hardly understood by the insiders. In-group orientation does not completely exclude out-group orientation. where a strong sense of national identity goes along with a strong commitment to the development of the poorest nations and international organizations.~: Assumptions and culture Cultural assumptions evolve as basic human responses to fundamental problems. Cultural assumWon~ can be related to time. but the underlying assumptions are gener ally unclear. an dimension. for example. Is the orientation in time towards the past. These are affirmations.families.

His mood worsened when he read a memo on his desk. Sometimes. His tone was friendly: We have done everything possible. As such. His reaction was as follows: Firstly. that mean in one mim~te or an hour? These words can han~ a very different meaning in Indonesia than in Germl1DY. The two weeks have elapsed and now it's a simple matter of whether the goods are here or not. !"aul wBsfiabberg!lsted by wh!lt he considered to be French arrogance. Delivery delays had almost become a routine problem in his dealings with the panmt company. A Dutch supplier will in all likelihood think that the product must be delivered within two weeks: he feels contractually bound to this delivery time.there has been a delay.what with the renovation of the pro­ duction area and the holiday period. 'men don't cry' (Oomkes. however. This problem of interpretation is not a language issue but a cultural one. may well think that he will do everything he can to dispatch the goods by the date given. This can also be seen in the use of words describing time such as 'soon' or 'straightaway'. But don't worry: It's only a question of time now .g. The question is: what does a Dutch supplier mean by 'delivery date' compared with a French supplier? Delivery date: two weeks Paul had recently begun working as the pur­ chasing manager of a French-owned company in the Netherlands. in English. that he had not yet received the goods on order and that they must be delivered . otherwise he would have to turn to an outside supplier. and secondly. three pages of It. assumptions about 'how things are' are often disguised suppositions about 'how they should be~ Moreover.a little patience and all will be fine. but the assumptions underlying the words may differ fro~ure to culture. The reply came by email.Concept 14. A French supplier. He was in a bad mood because of a delay resulting from a bottle-neck. The memo informed him that an order to be supplied by the parent company had not yet been delivered.1 Barriers In cross-cultural management communication What 'should be done' is generally close to what is believed to be the 'nature of things'. Does. That's the only thing that counts here.1). once the values of a group are institutionalized and assimilated. although It should have arrived two weeks previously. I don't understand French. The words are clear. However. written in French by Jacques. the production manager. a value acts as a self-fulfilling prophecy and causes behaviour that complies with the idea. He sent a very business-like reply stating briefly. Imagine you receive an order confirmation from a supplier stating that the delivery date of the order will be two weeks. but you see . 1987). the delivery date had been clearly indicated in the order. as well as the specifications of your order . namely in two weeks' time. A simple example from the business world shows how they can even lead to conflict (Spotlight 14. .as soon as possible. e. they acquire a kind of existential validity for the members of the group. For him this date is a promise that is still subject to negotiation. assumptions can create all kinds of problems.

1 Who is saying what about whom? Who/About whom? German5 British Amoricans Spaniards Dutch What? They're pretentious They've got no sense of humour Th~y're chauvinist They're hypocritical They're arrogant I ~ench____________________________L-T_h_ey_~_e_i_nd_i_vl_'d_ua_l_is_ti_c________________~ Source: Based on Gruere and Morel (1991). They see themselves as being much more tolerant of other nationalities than the French and do not so readily express their feelings of superiority. The Dutch could well consider the French as chauvinist. refer to itself as being individualistic because in the West this is generally considered to be a positive trait. They will react strongly because they feel personally under attack and deny belonging to the group being characterized.I I I Chapter 14 Barriers to intercultural communication Table 14. They will defend their own personal identity and see their national identity more in terms of 'them' rather than 'us'. In their eyes the Americans may come over as people who wish to impose on others what they think is best for them.1 is an example of an introduction to the question of stereotypes. In the right hand column is a list of stereotypical remarks made by or about a number of Western cultures given in the left hand column. Perceptions and stereotypes Table 14. However. and the Dutch view them as the embodiment of arrogance. all the comments given on the right could be applied to each other by all the nationalities in question. for example. Some generally perceived stereotypical characteristics may well emerge from such an exercise: the British could consider that the Germans have no sense of humour. Europeans may consider themselves superior to the Americans. However. The Germans consider the French to be showy. Can you work out which nationality says what about whom? The French could be the subject of all the stereotypical remarks in Table 14. So when asked to apply a stereotypical characteristic to itself.1. the Spanish as hypocritical. every culture listed above could. 304 . these individuals will. but do not express their feelings of superiority so crassly. And the French see them­ selves as individualistic. The British may even see them as having no sense of humour. All the European nationalities could well consider the Americans to be arrogant. not recognize themselves in the profile made. Every culture sees its own system of values in a positive light. if individuals of a specific nationality within a multicultural group are confronted with negative rather than positive stereotypes of themselves by other nationalities. They are very serious and any humour a German displays does not fit into the British concept of what is funny. according to Lipianski (1992). the Aineric:ans see them as chauvinistic.

1989: 138). Ethnocentrism. For these authors: 'It is a question of knowing at the same moment the identity of my interlocutor and what elements of my own identity (sexual. were less affected by ethnocentricity.g. Indeed. relatives from foreigners. but it is an identity that the people may not recognize in themselves. professional. the belief in the superiority of one's own ethnic group. in its most simplified and elementary form. Usunier and Lee (2005) report that highly ethnocentric consumers. they also found that the resistance experienced by foreign companies to their products depends on the product category (e. As seen in Chapter 11. are likely to believe that purchasing imported products harms the domestic economy and causes unemployment. but also in other areas of management. The perception of the other always has a projective nature and can only have one's own culture as base and reference. it is advisable in marketing to tread very carefully when it comes to stereotyping across consumer nationalities. According to Ladmiral and Lipianski (1989: 145).1 Barriers in cross-cultural management communication Identity as an obstacle to communication National identity therefore appears first as a compulsory image imposed by the outside world. It leads to any perception being made through a barrier lhat is unconsciousl). It may characterize people with the same nationality. opinions and interpretations . when people meet for the first time it is difficult to avoid asking and answering questions to do with identity (Who are you? Where do you come from?). 305 . Younger consumers. The conflicts of ideas. I Concept 14.lkewise. they found.. L. national.also in the interpersonal relations between individuals of different nationalities . Such an attitude has con­ nections with the stereotyping of others. there is no communication without identity and iden­ tification of the persons present.I . Ethnocentrism is both a cultural fe<lture and a psychological pheuomenon. It is the intrinsic mechanism of distinction separating mine from yours. made up of our own values. Stereotyping in advertising Stereotypes can be a disturbing factor not only in communication. this identity dimension influences communication. people here from people elsewhere. ideological) are going to be required during our exchange. 1989). This means that domestic companies may benefit to a certain extent from ethnocentrism. 2002: 133 Ethnocentrism is inherent to any membership of a socio-cultural. and on the other hand the opponent for whom we feel aversion (Ladmiral and Lipianski. social. the tendency exists to describe and Judge the value systems and dominant practices of other cultures from the standpoint of one's own. In intercultural encounters. However. wine. However. ethnic or national group. Consumer attitudes and perceptions about foreign products are highly influenced by ethnocentrism. identity can also appear as an obstacle to communication because the iden­ tity of both interlocutors defines and sets the limits of the exchange. cars) and the consumers targeted. namely the double who reflects our own image. is responsible for forming prejudices and stereotypes ­ 'ready-for-use judgments' (Ladmiral and Lipianski.refer to identity conflicts: on the one hand there is the alter ego. who are usually older people. Edgar and Sedgwick. This phenomenon is called ethnocentrism and refers to the values of one's own culture even when dealing with others who cannot share these values.

Chapter 14 Barriers to Intercultural communication 'Unleash the power of the Hispanic market by avoiding these pitfalls' By Mary Baroutakis While writing this article. the amount of calls to the free phone number in the commercial seeking more Information was very disappointing. marketers like to do this because it keeps everything nice and organized. An even worse scenario is forcing the use of a general market commercial (re-shot with Hispanic actors) to target HispClnics. or their grandmother or tllei!' ~isler In Latin America. It Was shot on location in many parts of Latin America and the scenery was breathtaking. that the first research company had misread the results. however. that they are very close to their extended family. A while back. It was a happy commercial but also one that provided factual Information about the calling plan. It showed vignettes of people abroad receiving calls from their family in the US. In this new spot. the calling plan was 'the hero' . After a couple of months on the air. The client wanted to define the brand the same way In the Hispanic market. this was the first time this client had advertised 306 . The commercial was absolutely beautiful. the beautiful scenery and the feeling of nostalgia for their family and country. It isn't that the general market strategy is plain wrong. Thf'Y had been distrueted by lI'le~!:! Wdf III sceJles and completely forgot about the calling plan! OUI client decided to start from scratch. Even though the target audience understood the main message and liked the spot. I can't count the number of times that marketers have decided to use a general market approach before any testing has been conducted among the intended Hispanic target. The background music score was very nostalgic. they called their motner. all they retained were the bittersweet images of the people back home. It is also the path of least reSistance: upper management will buy into their plans faster and it's easier to deal with one strategy. A new commercial was shot based on our findings and recommendations. Overusing Hispanic traits We have all heard again and again that Hispanics are very family-oriented. that children tend to live at home after they reach 18. o cloning a general market strategy for use in the Hispanic market.-tested this commercial uncovered very positive findings tor the client. There are many. Here's an example of both pitfalls.but not to the free number to inquire about the CAlling plun. Cloning the general market The next pitfall is using a general market strategy for the Hispanic market. they made a call . Using a general market strategy may be effective but this can only be determined after testing various options. Before taking this step. This new commercial broke all previous records in number of calls received and new subscribers to the plan.not the family or the scenery. The execution had gone over­ hoard using warm-and-fuzzy family scenes and nostalgia to sell its ploduct. The client was perplexed. we tested a commercial for a drink that was being soid as 'offbeat and wacky' in the general market. it's just not the one that will attract most HispaniC consumers. By the way. I tried to narrow down the number of pitfalls that marketers encounter when advertising to the Hispanic market. Instedu. and 10 keeping Hispanic advertising less ambitious and far more conservative than that aimed at the general market. This brings me to the first common mistake: the overuse of the above traits in Hispanic advertising and how this can sometimes weaken or cloud a selling message. I will address the three that I come across most frequently: It overusing Hispanic traits in ads. A few years ago. We've also heard that Hispanics tend to be emotional and sentimental. that they take care of their elder~. but for the sake of brevity. After people saw this commercial at home. Generally. advertisers must be sure that this will be the most compelling strategy. We did so and found. so a number of commercials were produced using this strategY. They listen to their hearts a' lot and value relationships. a telecommunications company aired a commercial introducing a new plan for international callers to Latin America. What happened? Why was there was so little interest? The client contacted us because they wanted another firm to re-test the spot. to the client's and agency's amazement. The research company that prp.

Hispanic consumers complain about this phenomenon all the time. that 'out-of-the-box' commercials do not appeal or are not understood by Hispanic consumers.quirks. give some principles for avoiding cultural mistakes in situations similar to those described in the case. which they described as cutting-edge. Regarding your own country. Source: Quirk's Marketing Research Review. for creating less-ambitious Hispanic ads . When It comes to the general market. offbeat personality would sell in the Hispanic market.and what was being presented went against that perception. however. . run-of-the-mill commercials to attract its Hispanic target? Unfortunately. the announcer comes on and tells him: 'Relax. New things happen all the time and that's why studies are conducted every day. When the father finds out. You would never ask such a general question of your agency or researchers. confused peoplel We also tested a commercial for an ice-cream brand that was a word-for-word adaptation of the general market spot. the spot used humour to make its point . These commercials may be new but they always come across as old and article 20000402. we need to examine the way stereotypes are formed.American humour translated into Spanish. innocuous commercials are good enough for the Hispanic market or even worse. the root of many of these marketing mistakes is the result of preconceived notions or impressions about ethnic markets. Hispanics had their own image of the product . In this case. everyone agreed that this would not be the right time to enjoy this product. Unfamiliar with this drink's general market spots. we tested some commercials for a sports drink that strongly appeals to Hispanic male teens and young adults. more run-of-the-mill advertising falls short of achieving goals. For example. The American market is not a static market. What he neglects to say is that he intends to use a scouring pad. without knowing if this wacky. But we all know that big budgets don't always lead to great commercials nor do low budgets result in poor advertising.aspx?o/o20searchlD=2071341. soccer. which we were going to test. The spot features a couple of vignettes. however.k their horses'. The focus group participants rejected this strategy. and enjoy some of our ice cream: No one saw the situation as funny. was for weird.they saw it as fun and friendly . the other did not. Less ambitious. One tested well. There is another possible reason.1 Barriers in cross-cultural management communication to the Hispanic market and this was the first piece of Hispanic research it had conducted. It should not be used as an excuse. . What is odd is that there are people who answer this question. How would you summarize the suggestions made by the author for avoiding the three pitfalls mentioned? 2. in other wurds. They felt that this product. baseball) in different venues (the park. Yet this question is asked every day of Hispanic agencies. the client and the agency had already produced five radio commercials. And. conSUltants and primary researchers. April 2000. Having seen how stereotypes can be a disturbing factor in marketing as well as communica­ tion. the gym). It shows a little boy telling his father that he's going to wash the family car. The one we hear most often from Hispanic agencies is that HispaniC production budgets are much lower than those allocated for the general market. to lower standards in the Hispanic market. as presented in the radio executions. running Iliure 'In­ the-Iwx: less I!lmbiliuus advertiSing in the Hispanic market. Why does this happen? Many reasons are cited. ignoring the fact that things are constantly changing in the Hispanic market as well. the beach. no client expects Its agency or researchers to be experts on Americans and the American way of life. accessed 1 September 2010. Inordinate caution Another mistake advertisers make quite frequently is 'holding h"lI. In other words. These consumers couldn't help com­ paring them with the general market commercials. Think for example what you would say as an American if someone asked you 'What are Americans like?' You probably wouldn't even knuw where to start or what to say. Questions 1. How many times have we heard the phrase 'Hispanics take everything literally'? This is generally true in instances where the audience is looking for concrete information. They complained that the Hispanic commercials for this prorluct constantly showed young rndl!!s like themselves playiny different sports (basketball.the idea that simplistic. And the question remains: why does a leading-edge product use tired.Concept 14. especially with Hispanic teenagers and young adults who are bilingual and also watch American TV and tend to compare the Spanish with the English language ads. http://www.

A stereotype is therefore a confirmation of prejudices rather than the result of accurate observations of reality. On-site production would be too costly and. and the identity of the man propOSing the co-operation in the first place.d for a request in writing because the Dutch marketing man' ager had lJul forward his query without any preliminaries. People may be classified in some way socially on the basis of a perception of common attributes: people may perceive them as members of an 'in-group'. As prejudices are 308 . explaining that he would like to buy this product because the US company was unable to supply the small amount which they required. A stereotype is a series of images created in our minds with regard to a group or groups of people. When told this. and had not fully introduced his company.2 illustrates how a prejudice can lead to unjustifiable behaviour of one group towards another. 'Yes' was their reaction. If the person being judged does not conform to these in some way through their behaviour­ or simply appearance . So the marketing manager phoned the French company. which may be positive or negative in nature. are basic. Spotlight 14. the Frenchman wondered: 'Who the hell was this guy with the funny accent?' To summarize the building process of stereotypes. Comments. is supported or provoked by our cultural environment: family. there was a US company already manufacturing this product. the tendency is for that person to do so using these norms and values. The minimum amount they stated was much more than the Dutch market would warrant. The marketing manager decided to phone this supplier. besides. The Dutchman was told to put his request in writing. After he had put down the phone. in this context: cultural groups.Chapter 14 Barriers to intercultural communication Building stereotypes In specifically cultural terms. 2005: 333). Why could they not simply give him the informo' tion he required over the phone? The French manager had askt. but only if a large quantity were to be ordered. friends and the media can fill us with stereotyping images of all kinds. The Dutchman was really shocked by this reaction and accused the French of being odd. the starting-point for building stereotypes is the norms and values of the culture concerned. sharing a system ofvalues or as members of an 'out-group' whose values counter theirs in some way. the US manufacturer suggested the Dutch company contact a partner of theirs operating in France. inclinations to act and beliefs' (Myers. He needed to know exactly which company he was doing business with.then a negative judgement will probably be made. Talking in French to the manager of the production department. These images are over-generalizations made through selective perceptions (self-perceptions) and information that corresponds with our beliefs. categorize nationalities in a way that sustains a culture's norms and values. The Frenchman could not therefore 'place' the person on the other end of the phone. he gave the name of this company in the usual way. The development of prejudices. When someone from that culture judges someone from another culture. which are a 'distinct combination of feelings. jokes. irrational reactions that depend simply on how someone views the group in question in terms of their own cultural preferences. commercials and anecdotes can create and perpetuate stereotypes. The misunderstood marketing manager A Dutch company wanted to introduce a new product into its range. it can be said that prejudices.

extract from Isabelle Collet (2007).1 Barriers In cross-cultural management communication confirmed over and over again through such selective perceptions. Most people regard the information and computer technology (ICT) sector to be a male preserve. as well as the dean. the capital. especially those who have lived in South Korea. " '<.iness world Cazal (1993) raises the question of stereotypes in business relatillg to Confucianism.: . Le Monde Diplomatique.\ \ Concept 14. S". such a statement raises smiles. cultural stereotypes may also display positive traits.' (Caz81.:'!llt. they consider the majori!\' of the $tereot~T':~ (rOil'. This system of thought was referred to in Chapter 2 when the importance of loyalty in Chinese business relations was being discussed. However. is perceived in the West and in Asia. In France.3. StereotVPE\$ in the Confucian bus.. Foreigners. Some Asians are crit](. leT is a very masculine sector. it is the only scientific profession where there has been a very large fall in the proportion of females employed. outside Malaysia. June: :1 However. He reminds us of an important charllctel'istil. This issue of prejudices and stereotypes is illustrated in Spotlight 14. it as being negatiye in nature. all those in positions of responsibility in the department are women. which he defines as 'a specific discourse constructed to maintain the economic development and performance of [Asian-run] companies' (Cazal. since the majority of ICT workers in most countries are male. This is indeed the case. Cl1zal emh LIp 309 I '\. as indicated earlier. observe that Confucianism still survives in social relations. The reasons she gives tire that leT is clean work. however. Malaysia. such as those within the hierarchy based on age. does not require much phys­ ical strength.. is an exception. stereotypes are not always based on prejudices. <1~. gender and qualifications. J99. Cazal wonders how present-day Confucianism. 1993: UHl). Nowadays.uliur. ii.. Source.] alibi for po\iticai. including the dean. a subordinate is not expected to adhere to these Confucian principles. and allows those employed in it to work at home.. sociul ann managerial abuse.still see that it reflects a philosophy thM rests on the principle of harmonv. In contrast. however. The head of the department says she has nevt!r cot')Slderpd leT as a male discipline: 'I do not see anything male in leT!'. \ Delete stereotypesl leT is a male profession! In Malaysia. In Penang. is an activity exercised in the service sector. 65 per cent of the leT students and seven of the ten leT professors are women. A slereotype may have an intrinsic quality as shown in the passage below on the perception of Confucianism in the world of business. particularly when people perceive that there are aspects of another culture's norms and values that reflect their own and in an exemplary way.11 of Confuciani~m. of Confucial1lsJll whereby formal value is attached to status in the sense that a person in a subordinate position must behave in a way that conforms to that of his interlocutor. 'L'informatlque s-t-elle lin s~xe7'. In the faculty of information technologies of Kuala Lumpur. Although these people . people develop stereo­ typical images that come quickly to mind and which serve to legitimize the statements people make about another culture.\: hID).

and it is by the process of communication that it succeeds in doing so. even though it is based on prejudices and imperfecL information. In other words. as seen in this chapter. rather than the differences. Finally. as well as time and space (see Chapter 13). the culture of these people would be perceived as the one and only culture in the world . even if this unity is to be found at a practical level. 'what happens between cultures is per se an element of culture'. South Korea and Japan lacks unity and homogeneity. this identity is maintained because. In the best of all possible worlds. Not only do the specific characteristics of the speakers playa role. Furthermore. according to Todorov (1986: 16). And that explains why doubt can be cast on the unity of Confucianism as a doctrine in countries such as China. the encounters between cultures often destabilize the process of communication. namely interaction. a stereotype can be seen as an articulation of this differentiation. the expression of a culture . fight against them or simply ignore them? The best route may lie in the views of those anthropologists (including Caroll (1987) and Hall (1983).evolves without any loss of identity. the first stage in the process whereby the existence of another culture is acknowledged. 310 . it should be noted that there is a dynamic element present when two people are communicating.• Chapter 14 Barriers to intercultural communication by questioning whether present-day Confucianism is itself a stereotype since its principles are far from the founding precepts in the teachings of Confucius. this doctrine as applied in countries such as China. At the same time. Moreover. The variable nature of the interaction makes every communicative situation unique and therefore unpredictable.the worst of all prejudices. Only then would stereotype~ eventually disappear. Even if classic Confucianism serves as a reference. Several articles have commented on and misrepresented Confucian thought. A stereotype is. All its characteristics must be perceived in terms of those characteristics of others. cross-cultural researchers are attempting to find perception areas that cultures share. Every culture proposes a structure which. Furthermore. The following chapters will deal with the application of these concepts in specific domains such as international negotiation and ­ international teamwork. thanks to these intercultural contacts. people would be able to place another culture in its own context and so avoid judging a culture on the basis of their own. South Korea and Japan. it can be argued that stereotypes are a necessary way of establishing one's own cultural identity. who approach the question of cultural differences without battling against stereotypes or with· out creating stereotypes to replace the old ones. forces its members to conform to it. Nevertheless. this does not mean that you are unable to conduct the conversation well. If a cultural group cannot compare itself with other groups then it cannot become aware of what it is. If you are aware of the barriers when communicating with your interlocutor. the vacuum created would inevit­ ahly he filled by those who had set them aside. but also the structure of the situation-and the context.and thereby the way it communicates . In this context. . if stereotypes were to be somehow set aside. after all. even if it is not unchanging. The concepts described in Chapters 13 and 14 can be used as a basis for any form of communication in the professional domain. It is better when dealing with other cultures not to fight against stereotypes and prejudices. Dealing with stereotypes The question remains: what is the best way of dealing with prejudices and stereotypes? Is it best to try and suppress them. On the contrary. create barriers and lack of understanding between the interlocutors.

can lead to misunderstandln95 and which of them CCifl lead to conflict'? Explain your choice. Edgar. and Sedgwick. What is your opinion of this statement? 2. Caroll. however. R. Cresswell. (1990) Cross-Cultural Management Communication. in Bosche. this book remains a useful reference. M. Breukelen. The author shows how manage­ ment priorities are decided and communicated in different cultures and examines the organizational problems managers may face when operating in other cultures. When you are doing business with other cultures. M. You have just read about barriers to communicating with other cultures. (1993) 'Ethique et management interculturel: Ie cas du confucianisme d'entreprise'. R. Cazal. The culture of the interlocutors filters the information and interprets it according to their own reference framework. Paris: Editions Nathan: 181-192. (ed. (eds) (2002) Cultural Theory: The Key Concepts. D. remain the most important barrier in communication.-J. and Trompenaars. it may help you at the beginning of the interaction. Chichester: John Wiley. (1968) 'le geste manuel associe aux langages'.Conclusion and Points for reflection This chapter has elaborated the model of communication given in the introduction by look­ ing at barriers to intercultural situations in general and in those In business in particular.-J. Barriers can build up at various levels: badly interpreted gestures. Le management interculturel. M. stereotypes particularly arise in meetings and negotiations. Despite its age. Browaeys. R. It focuses on understanding management cultures. F. london: Routledge. stereotypes. (1989) Les gestes conversationnels et les differences culturel/es en France et aux Pays-Bas. others can degenernte into conflict. A. They are very difficult to deal with since they are formed by the identity and the perceptions of individuals. concrete words having an implicit meaning. Stereotypes appear in all cross-cultural situations. References Browaeys. 10: 119-127. Which of these barriers. P. Paris: Editions du Seull. This book explores the many aspects and problems of cross-cultural communication encountered by managers. Amsterdam: Universlteit van Amsterdam. and explores how situations within the context of different cultures and markets can be interpreted accurately. Some of these can lead to misunderstandings. in your opinion. further reading Mead. (eds) (2000) Cases Studies on Cultural Dilemmas. Langages. (1987) tvidences invisibles. 1. a smile expressing the opposite of satisfaction. If you are aware of the stereotypes of the group you are dealing with. Netherlands: Nyenrode University Press. 311 .).

(1983) The Dance of Life. Ladmiral. Paris: Armand Colin. in Gudykunst. (1986) 'Le croisement des cultures'.-M. P. Hall. (2005) Marketing across cultures. Tae-Seop Lim (2003) 'language and verbal communication across cultures'. J. Usunier. J. CA: Sage: 53-71. NY: McGraw-HilI. Thousand Oaks. communication interculturelle et dynamique des groupes" in Interculturel: groupe et transition. New York.G. uere. Amsterdam: Boom Meppel. Harlow: Pearson Education. (1987) Communicatieleer. EJ. (ed.-L. Toulouse: Editions Eres: 59-70. Paris: Editions Eyrolles. E. and Lipianski. Schneider. T. Cross-Cultural and Intercultural Communication. F. (1989) La communication interculturel/e. 4th edn.R. NY: Anchor Press/Doubleday. and Morel.-C. Communications.Char 0" 'rs to intercultural communication .A.). 312 . and Lee. J. Oomkes.C. and Barsoux.ais et communications interculturelles. (2003) Managing Across Cultures. New York. (1992) 'Identite. D. J. Myers. Lipianski.M. Harlaw: Pearson Education. 8thedn. 43: 5-24. Todorov.-P. E. S. J. (1991) Cadres fran.R. 2nd edn.B. W. (2005) Social Psychology.

.Bm. country. he says that.eourse'.:mentUnited Nations Security Council seat.. say at the airport or main station. .isinore than national amour propre..000 drivers wl'w recently struggled through a 'World Cup language .'ading companies and cultural orgunizationsand dozens of local authoriLiI:!:-i. he was one of 4. .5wddehwe fGermansrhave become good lo(ikirig.. tolerant arid moderri.. An image overhaul for Europe's largest economy is the prize in its sights.lE. despite the tongue-twisting. Rode Is in.. Its World CupcampaignlTlarks hot only a new milestone in its engagement with the world but also a form of laboratory experimentinwhether imageoffensives Many are sceptical. Taking a break fI 0111 learning how to gUide tans through Berlin.ousands of Initiatives in the most ambitious attempt bya country to alter the way it is viewed. reHable but a touch boring.. Ms Merkel·. £6. Since 1990.15Wrong:VoUcan'tde'cehie'peoPle:" .€10m ($12.a seniorGerman official is disarmingly candid. Answer the questions that follow the text. chancellor Angela Mer~e. The transformation is seen as vital if Berlin is to maximize the country's post~reunification potential on the worid stage. A bit like the cars and household goods for whkh weare famous. We need to show we are more than this: friendly. but one"sidedway. .amed~argues: 'You can't market a country like a waShiI19p9wder.. 'An opportunity of this kind will not returnfotanother 50 years. . the course was worth it.To. A German ambassador. Germans are seen as efficient. whoejeclined to. .next month's football World Cup is about a lot more than its (pretty slim) chances of lifting the trophy. A stocky man with a strong local accent who speaks little English. good company.allora. surprisingand fun.' says Franz Beckenbauer. . . 'When people arrive in Berlin..rnment. True lu ltle tournament motto 'Atime to make friends'. ..' At stake . funny work.positive. Robert Rode. .. and the first German they talk to is a bus driver who either cannot understand them or tells them to go and ask someone else. .' .. then that doesn't create a very good impression: Mr..can just teU gthers.. bursting with ideas\ But as teams arrive in Germany this week ahead of kick-off onJune<9.. heralded· the tournament as 'a unique chancefo( Germany to present itself as a welcoming. have planned th. ana 313 . Germans aim to spring a World CUp surprise: they're fun Soft power: The nation long seen as dull Is plotting an image overhaul that could help it punch Its weight on the international stage By Hugh Williamson III For the host cciuntry Germany. believe you . . be n. that. a Berlin busdriver.. The business community alone has investedmorethan.' ..'I I ! Read thete.8m)tbpromote Germany as a 'Lano of Ideas'. . president of the German. understandsthe scale cif the challenge.. .xtbelow which describes how Germany tried to Improve Its Image during the 2006 World Cup which was held In Germany. Germany has stepped upits public diplomacy. 'The world generally sees usln a. as it has increased its role in international peacekeeping operations and intensified efforts to gainaperm.1 andheJCJ()vp. tournament organizing committee.

'Emotional aspects. this approach was partly behind the decision to use the World Cup to alter Germany's image abroad. mayor of Nuremberg. and giant sculptures in Berlin of football boots and aspirins to Illustrate the wonders of German creativity. given the post-Cold War complexity of public diplomacy. : Worst of all was last month's apparent racist attack that left a young Ethiopian man in a coma. Germany's campaign is part of a broader debate on the value of public diplomacy and 'soft power' . Attempts to stir national pride raise some discomfiting parallels.. The number of tourists has noticeably increased .. Meanwhile.. says the World Cup will remain in the minds of tens of millions of global television viewers.. points out that in twenty years. Germany is not the first country to attempt a national repackage itself as 'Cool Britannia' early in Tony Blair's premiership. Britain tried . director of Berlin's Institute for International and Security Affairs.. and in this context 'Germany . and military might. however. value systems and political influence'.in part the result of an official tourism campaign but also· reflecting a 'word'of'mouth' effect from the World Cup.Chapter 14 Barriers to intercultural communication Germany's endeavour. includes a €30m arts programme linking soccer and . 'States are increasingly in competition for markets. [German] lifestyle brands such as Adidas and Boss. ran a less elaborate image campaign than Germany's. Germany's over­ seas cultural agency. Yet a series of organizational and other problems that have blighted tournament preparations have brought negative media coverage. (former) West Germany went from post-war international pariah to economic beacon . Japan. Perthes believes government campaigns can only ever have a modest impact. Experts· argue that such incidents are unlikely to undermine Germany's broader campaign. Nathalie Thiemann-Huguet. But visitors were surprised to find a country more vibrant and accessible than many had expected. tourists . Volker Perthes. make them think: "Germany is different to the country I imagined": he says. Most recently. which started three years ago. a Harvard professor and author of Soft Power: The means to success in world politics. the city infamous for Hitler's Nazi party rallies where England is due to play one of its games. According to an internal German government strategy paper seen by the Financial Times.. 'We have to surprise people. or wash it away by just being happy: says Ulrich Maly.. such as street cafes in Munich . for example. must take a position'. Ulrich Sacker of the Goethe-Institut. co-host with South Korea of the 2002 World Cup. the paper concludes. 'Tangible threats or payoffs' are replaced by initiatives to influence stereotypes about a country.. while about 2.000 foreign journalists have registered to use pictures and TV footage on 'positive aspects of Germany's economy and society'. and the happiness of reunification in 1989/90' need to be emphasized. argues that it can be used to complement traditional diplomacy. culture: a 'friendly service campaign' involving handbooks on how to welcome foreign guests.with limited success . Michael Reiffenstuel of the foreign office enthuses that the World Cup provides a 'unique com' munications opportunity'.. Mr.the tools increasingly used by national governments to deepen their influence without resorting to economic . Ms Merkel was forced to allay concerns in the United States Congress that Germany was ignoring an alleged rise in illegal trafficking of prostitutes for the tournament. of the business-led Land of Ideas programme. but that this must in turn be seen as only one element in reshaping its image. It notes that foreigners' images of Germany often 'lack emotion' and 'exclude the [country's] more dynamic developments over the last 20-30 years'. . In a section on 'Germany's Image Abroad'. But rhetorically posing the question 'will the country's image after the 314 . the paper argues. The Japanese government has since deployed 'soft power' to exploit the popularity of manga cartoons and Japanese deSign and fashion.only to see its attempt to present a more open face to the world go 'terribly wrong' when Israeli athletes were murdered at the 1972 Munich Olympics. Joseph Nye. 'You can't conquer history. says the giant sculptures in Berlin have become a 'major tourist attraction'. In Germany the jury is out on the campaign's impact.

. One of our main tasks was to get some important information about a fraud. SourCei~adapted fromerowa~V:sandTr()~penaars (2000): case 11.Jhe right information. my analytical skills. Theifformer .Referrlng to Concept 14. To what extent Is the problem presented In t~e case a cClmmunlcatipn probleni? . I followed the codeofbehaviQur expected of someone in my pOSition and kept the staff at a distance.H. p. non-appearance. Copyright © The FlnancialTlmes Ltd. from Germans aim for a World Cup surprise: they're flJn The Financial Times. Then answer the questions below. Read the following account of an Indian's experiences when inspecting a local bank in India. my management education and my past success in meeting deadlines.alreadybeen suspended for his suspected involvement inthefraud.for the. upbeat answer: 'I don't think so. They claimed they had no idea. . ate different food and enjoyed a very different climate. Consider whether each of these reflects your own individual perception or rather stereotypes of German culture. The people working there were very Old compared to employees of other banks Ihad visited and they behaved towards me in an lndifferent and uncooperative manner. The branch was in a small tnwn which was vcry different Lu what I was used to: they spoke adiffere·nt language there.. Find expressions In the text that characterize the Germans.' . . I was proud of my experience in inspections. At least something from the campaign will stick: . I was assisted by a junior officer.1 I Activity 14. managed to mix with the staff but was unable to get hold of the information needed. Many of thestaffmer'nbers had been working inihe branch for decades and had developed close relation­ ships with each other. 22/05/2006.' . I dedin~d offers of lunch or eventeaorcoffee so that these should not be con­ Sidered as some sort of bribe. butnothi'1g substahtialemergeq. comment on the statement made In the text:'you can't rnarketa country like a washing powder: '2. determine the .brwere they afraid of being reprimanded by their bosses? The information I needed was crucial i3nd could be obtained only from this branch. giving delays and unavailability as reasons .). Eventually he also . . 2. How do you think the author COuld try to get hold of the information needed? 315 .'..chain of events.19 (Williamson. . I felt that the local staff were making one excuse after another notto come up with. The days passed. Questions . Were they perhaps trying to protecttheircollei3gues. he provides his own.became rather reluctant to get items of Information requested.branch manager had . . establish accountabilfty and pass on the ·information to the team which was inspecting the head office of the bank. Questions' t . Source:.lluw the fraud was COmmitted and were reluctantto show methe relevi3nt records. Time was running out. My colleaguei who was from the same region and of a similar age.2 World Cup return to the cliche about theuQlyGerman?'. . Meeting a brick wall I was working in the inspection department of the Central Bank of India and was given an assignment a few years ago to inspect a branch of a private commerCial bank.

' Understand how the perception of negotiating can differ from culture to culture. one from the US.negotiating and team-work. at the same time. (} Be aware of how these different perceptions can affect the negotiating process between parties from different cultures and the eventual results. ideas are put forward for resolution and where a solution of some kind is eventually reached. facets of cross-cultural business negotiation are described and applied to an examination of possible problems in the interaction between two negotiating parties. As Fisher (1980) indicates. 316 . Implicit in these works is the assumption that the participants share similar approaches. Learning outcornes After reading this chapter you will: . (1'. First. The chapter then moves on to examine a framework that can be used to address the Issue of strategy odoptation when negotiating with counterparts from other cultures.xamines one crucial component of international business dealings . take account of the skills of the individuals involved. Finally. the literature on negotiation is preoccupied with tactics and strategies that can be applied universally to achieve a result. It is seen as a process whereby a problem is deliberated.negotiating. the other from China.- Having given some attention to theories concerning cross-cultural communication. This chapter E. attitudes and principles. the following two chapters will examine two particular aspects of intercultural communication . the question of an inter­ national negotiating (meta-) culture is briefly discussed. The nature of negotiation Negotiating is essentially regarded in the West as a problem-solving exercise. Be familiar with strategies of negotiation that are culturally responsive and which. Thereafter. the nature of negotiating from a Western perspective IS consldereu and compared with a non-western viewpoint.

Negotiators from cultures deemed to be 'collectivist' tend to avoid open conflict and prefer to maintain formal harmony durilfg negotiatio~s. or that the behaviour displayed by both parties . some facets of negotiating need to be established as a framework of reference.concept 15. The distributive approach involves trying to get a piece of what they call a 'fixed-sized cake'. As Fisher (1980) points out when recounting the words of a Japanese business executive. each of which will be briefly examined and exemplified below. Por the Japanese !inch a meeting of parties is a ctl'tmonial occasion where a s~al of approval is formally applied to what has been put together in a patient consensus-generating process 'behind the scenes'.1 presents an overview of these facets. These facets incorporate all the variables given in the 'Model of Culture' introduced in Part One of this book. (2000). Negotiators in an international context are participat­ ing in a communicative event where assumptions and expectations may not be shared. With the former. rather than between groups from the same culture. This section aims to outline some key aspects of negotiating in an inlemational COiUexl.reflects similar motives. dev~opi:l~E~~tual 317 . the result is 'win-lose'). though. then those involved need to try and work out what is going on in the minds of their counterparts. This contrast of views reflects the possible perils of negotiating across cultures. is an apprupriate method of analysis in this respect. which usually means that others lose out in some way (i. where the persuasive delivery of l'atiOl1aJ ilrt. Behavioural predispositions of the parties (fl Ttltt'rl1el'sonal orientation. trying to gain the best deal for themselves. The individualism/ collectivism dimension. Those adopting integrative strategies are trying to expand the 'cake' by collaborating in a problem-solving approach to try and get a 'win-win' result. Table 15.nments is all-important. However.even if similar in nature . PartlOpants cannot assume that the 'opposite party' will have motives that chime with their view of the world. even the very act of negotiating can be an alien concept to other cultures.2~~parts. Those from cultures deemed to be 'mgiviiUall:>L' ~e ex eeted to act mOTt/in self-interest and will n9t shy away from being overtly com:Qetitive and confrontational. if negotiations are taking place between societies/cultures. They are presented here in a way that allows the cross-cultural process of negotiation to be more clearly perceived. One fundamental issue has to do with how the negotiating parties relate to each other and to the context of the negotiation. referr~il to in Chapter 2.e. e focus is on ~tablishing good relations with negotiating ~. This is evident in the way negotiating is dealt with by Whetten et al. Usunier (2003: 104) sees three facets of cultural differences affecting international market­ ing negotiations.1 Approaches to negotiating in an international context The Western approach focuses on what happens between parties. The negotiators are adversaries. He makes it clear that the Japanese do not have in their culture the idea of a meeting where a conflict is resolved through a compromise acceptable to all sides. First. The authors address the sub­ ject in a chapter on constructive conflict management whereby they distinguish two types of negotiation strategy predominant in Western culture: the distributive and integrative strategy.

was not averse to taking risks. This has clearly to do with the (lack of) uncertainty avoidance tendencies of certain cultures. whereby both sides agree to work together to get a so-called 'win-win' result. concepts Iron"cast deal or less explicit agreement r:!pect and trusl as a P~~~~. The context. but respect may tend to result from the skills shown in reaching a good de~Coming to a-satisfact~EY. is implicitly an intra-cultural one. Also exami~ed -.. where approval for any deal involves th~ appruv"l of a number of bodies or committees may well be reluctant tn t:lke \1S many risks as negotiators who need to consult their superiors less often. Underlying concept of negotiation ® Negotiation strategies. @ Power orientation. may be regarded as the most effective form of negotiating in Western business literature. What distinguishes Japan from cultures that are more willing to face risk and the consequent ambiguity is that it pays considerable attention to risk-management. having been delegated negotiating power and a certain room for manoeuvre. renowned for its high degree of uncertainly avoidance. and (lack of) uncertainty Trust or mistrust as basis Logical.c!. The integrative approach. finite process or ongoing dialogue Work towards specific. rel~J:!.t:~I:_With the latter.Q. Japan takes very well-calculated risks and its industry has benefited considerably as a result. it should be noted that uncertainty and risk avoidance do not necessarily go hand-in-hand.e. how a company in Japan._-. In an inter-cultural situation. Rather than dealing with risk in a cavalier fashion. or more towards principles. how are they chosen and what is their role in the company? What qualities are attributed to the person in that position. however. However.. and who is actually calling the shots? @' Willingness to take risks. described earlier whereby negotiation teams collaborate to get the best result. Are the people involved able to negotiate.= the deal j's-fo"j="them-fh-e ma-iu-obje-cti'. This is in one sense closely related to power orientation. the oppositional nature of negotiating 318 .1 Facets of negotiation Negotiation facet Behavioural predispositions of the parties Elements Interpersonal orientation Power orientation Willingness to take risks Underlying concept of negotiation Negotiation process Negotiation strategies Strategic time"frame Styles of negotiation Outcome orientations Source: Usunier (2003). Negotiators from strictly controlled bureaucracies.-Partone-:thfS dimenston relates to the question of who has formal influence and who has actual influence on the negotiating process.2 in Chapter 8 showed. concrete goals."./ '" .Chapter 15 Negotiating Internationally Table 15. concepts Harmony. however. Spotlight 8.conclusi.2E. self-interest Formal power (Informal) influence Negotiating party's degree of delegated decision-making.~~iP!_c~:!_a~l1Jrp'~ay a part. for example.

in their eyes. 319 G> . However detailed a conclusion. the status of the document for negotiators may vary: it may be seen either as a cast-iron document determining exactly how matters should proceed. Low-context negotiators are mOre explicit. The high/low context dimension. Between these extremes lie agreements that will vary in terms of detail and explicitness. The long pauses or silences which they bring to the discussion allow for consideration of what has been said and of the circumstances surrounding the discussion. or if one or the other team does not feel that the best deal is necessarily the best for them. Changes may well be needed later on to improve the situation for all those involved. with the 'universalists' frustrated by the concern for details rather than the more important principles and concepts.1 Approaches to negotiating in an international context may come to the fore if one or both sides do not trust their counterparts. Negotiating is considered to be just part of a dialogue between business parties whereby any deals made are not necessarily regarded as immutable. and then closing a deal within some agreed-on time-limit. but as a reflection of the wish to initiate or continue co-operation. The very idea of preparing some sort of final document following on from a negotiation phase concejJl of an outcome may even be seen as superfluous. The establish­ ment of trust may precede any discussion of details. 6\1 Strategic time-frame. or a detailed account of the agreements reached and the ways in which these are to be implemented. This is where the universalism-particularism dimension referred to in Chapter 5 can be reflected in the way negotiations are made. or as a statement of good intentions. however. The establishment of trust as the starting-point enables such flexibility and improves the nature of the collaboration. the discussion. With different concepts of negotiation come different styles. The idea of following a 'logical' process. . starting with orientation. and the 'particularists' frustrated by the very broad approach taken by their counterpart which. the interpretation of the 'document' may well differ since the wording will not necessarily refer to all the assumptions underlying any agreement. covered in Chapters 6 and 13. opinion rather than evidence? If present in a negotiation. possibly in some form of package. Negotiation process f) Styles ofnegotiation. makes it difficult for practical decisions to be taken. with principles being established by which an agreement is eventually reached. Moreover. then coming to a series of agreements. plays a key role in the style of communication during negotiations. It will come as no surprise that the polarities described above are reflected in two types of outcome: a rather vague statement in which the parties involved express their mutual trust and desire for mutual co-operation. A concrete decision or statemenl. High-context negotiators tend to infer. exact and direct than high-context negotiators. which may not be realized. Their outspokenness will not necessarily be appreciated ur accepted and the reciprocity they may expect from being explicit in their dealings is unlikely tu be realized. this stark opposition of styles can cause both sides headaches. is unlikely to be made as a result of their reflections. Is the focus on general issues or is there a concern for dealing with (a range of) specific issues? Is negotiating more to do with feelings than facts. Any business relationship involves continuing negotiation at all levels: a statement of some kind after a negotiation phase is not the end of the slory. allude and do not always ff:'el compelled to take turns i1'). Outcome orientations. will contrast strongly with what could be called the dialogue approach.Concept 15.

-­ \) ~ tc. The boss will probably have been delegated considerable leeway in the negotiating process. 'the US. Imagine them facing each other across the negotiating table (an image C~\ that is itself culture-determined!) and imagine how they are likely to react to each other's "Id.~l or. The deference shown by subordinates and experts towards the boss reflects the hierarchy within the team. Chapter 15 Negotiating internationally Cross-cLJltural negotiation In practice: the US ~nd China The facets of intercultural negotiating outlined above will now be used to profile two contrasting cultures.. Underlying concept of negotiation Negotiation strategies There are two main approaches used in the US towards negotiations: the cUlllpetiti\Te (...b-s1 rtf?. Americans might feel that the wish by their Chinese counterparts to . the deal is seen as the objective of any negotiation while for the Chinese a negotiation is just part of the process of forming a life-long relationship. f~<:uJ'r UM. .\. particularly if there are a large number of people in the delegation.c\ ~dlol·..'i... Risk-taking is part of the game and seen as inherent to getting th~ best deal possible.:.>ljsh frien<. bottom­ line approach is at odds with the Chinese need to establish a good rapport before talking of a deal.d::e5. the consensus-building process is undergone not only between the negotiating teams but also within the Chinese team where a number of interested parties both from within the company as well as outside the company (essentially gowrnment bureaucrats) are involved. M. should lead to a definitive contract to which both sides are expected to adhere.~ ~vJd '~AL\\". Both approaches. although this will have been carefully dis­ cussed with headquarters beforehand. however.«-vJQ. achieving joint profits using an objective') approach and integrative ('win-win') approach...ef3~IfaJ~ura! predispositions rl~_J ~ WZ ~ J'l()~ c.Yo lG'nterpersanql orientation L. \Xl ~1V<!.. Pressure from the US side to get a deal will be stonewalled until all interested Chinese parties are satisfied.-u. The latter approach involves both 'sides' focusing on mutual interests rather than pre-determined positions. The former approach involves taking up an initial position and then making concessions if necessary to reach a com­ promise agreement.. even if the language used between them is informal.vapproach to the task at hand. A focused. For the Chinese...' C'i~~_ k~<-~2) c.. This dependence on consensus within the negotiating team means that any risk-taking behaviour within or before negotiations needs to be carefully orchestrated. The US team may find it diffi<::ult to determine who is leading the negotiation on the Chinese side.1sWp is one way of getting a better deal later on in the negotiation(s).. Power orientation It is usually clear where the power lies in a US negotiating team.

For them. The Chinese reluctance to give information is noted in the literature on this area as well as the resulting frustration amongst Western negotiators. including Faure (1998). vresum~ ably because a more systematic collection of information has been neveloped in Chinese companies. namely a persistency whereby the negotiator does all he can to exploit his opponent to the maximum. However. A deal made at the end of a negotiation remains in their eyes negotiable in the long-term since both parties could benefit more from an improvement of some kind in an agreement made. times are changing in China: a freer exchange of information is now being applied in negotiations.1 Approaches to negotiating in an international context The Chinese will probably find it difficult to take such a linear approach. Strategic time-frame For the Chinese. HaVing said that. eager to get a lot of information to enable them to pursue their way of negotiating. forcing behaviour (the cognitive dimension). However successful information exchange may be. note that there is also another side to their strategic behaviour. as Kumar and Worm (2003) discovered during research on business negotiations with the Chinese. Establishing a relationship entails getting to know your partner well. Moreover. the majority of their Western respondents noted that their Chinese negotiating partners were willing to disclose information .Concept 15. Detailed terms of any agreement need this strong consensual basis. First. all agreements are based on trust and goodwill. the notorious ancient Chinese warrior). so a firm contract is superfluous. the process of gaining trust and con­ fidence remains. a negotiation is not a one-off event but a step along the path to a harmonious and mutually beneficial relationship in the long tcrnl. therefore. Ne. a negotiation is just orte. however. of greater import than facts and figures. in turn. This raises two interesting issues in relation to the negotiating process. However.:e. They. Second. . 2003).of many encounters whereby the principle is to build a business partnership for the long term. the importance of face to the Chinese: asking for information they do not have could be seen as an unintentional way of causing the Chinese to lose face. This attitude can be frustrating for Americans since for them time is of the cssem. co-operation 'with the Chinese still has trust as its bedrock. observers.gotiating process Style of negotiation US negotiators will be concerned with specifics. for the Chinese. are willing to give a lot of information as long as this is part of an exchange. Hence a lot of questions will be asked to do with the interests and personalities of the other team rather than dealing directly with the details of any deal or joint project. Only when they have sufficient input can they gain a clearer idea of the other party's concerns and interests and so establish or modify their negotiating goals. In US terms this could be seen as a combination of affiliative. The style is what Faure sees as a combination of 'joint quest' and 'mobile warfare' which the Chinese negotiator uses to try and outflank their opponent (a reference to the tactics of Sun Tsu. integrative behaviour (the affective dimension) and competitive.provided they had it! As another respondent remarked: 'Chinese firms are not accustomed to collect(ing) information' (Kumar and Worm..

relationship-developing nature of the Chinese. the expected frustrations and irritations evident. will they ever really consider us to be a member of their culture? Try as people may. First. Although the explicit. Outcome orientations For the US negotiators a detailed contract is the ideal conclusion to a negotiation.eakd. behaving as the Romans will not make them Roman.preferring shol£vaguercontractSthat signify thewiiITngness of both sIdes to2mmit tQ.. it does nol Lake account of the dominant role of one or the other partner: the Rome i~estion may well yield culturally to its counterpart. one which is~!h. particularly with regard to the implementation of the deal. direct. do a~ the Romans do? .. a contract is a formal moment in the development of a relationship. there is a questionable assumption underlying this maxim . Are internatiollall1e~utiaLurs expected to adapt totally? Is the maxim 'When in Rome. The legal aspects are also given considerable attention. Much of the literature 011 lleguLiaLing internationally tends to focus on the rituals of negotiating in other countries and. fact-oriented.onside~_to _~~~~s~ern legalistic detaYs..t<:>_~~~~d getting tied up in W~!~Y}n~_~. Detailed points are b..~joi:qt projeE!_of _~.mmered oUi1nih'. therefore. When in Rome. ~d.s. gives a convenient outline of the systems of values Lhey embrace. One implication of this (although it is not tested in this study) is that Western managers may be able to conduct their negotiations more effectively/efficiently when dealing with Chinese who are younger. On the basis of a finding made by Kumar and Worm (2003) in their survey.. The opposition in expectations and attitudes are clear.rfi~~se of the negotiation.i!illL~~ed. further negotiations will take place on the basis of the goodwill and friendship established. Rather than being the last worcrori-ilie-Jeal. cause-effect nature of discussions as favoured by the Americans contrasts strongly with the generally consensus-focused.'i Negotiating internationally A word of reservation is appropriate here. How can both sides resolve this dilemma? A framework for dealing with apparently conflicting cultural values is presented in the next part of this concept. The Chinese t~n~ . the Chinese and Americans face innumerable difficulties around the negotiation table. He sees that international negotiators in today's global business cannot resort to a 'one-size-fits-all' approach when confronted with a variety of 322 . Finally. Perhaps younger Chinese are also more comfortable with a lower position on the high/low context dimension referred to earlier. younger managers who are involved in negotiations are more in tune with Western behavioural norms. some younger Chinese may be more comfortable than their older colleagues when negotiating with Americans.that a 'Roman' will alwaysact as a Roman with a non-Roman in Rome! This last point is one of a number put forward by Weiss (l994a) when examining cultmal aspects of negotiating. is it ever possible to 'do as' the Romans? However much we try to behave as the other party does during negotiations.. All in all. do as the Romans do' appropriate? The simplistic nature of this approach raises issues. Little attention appears to be given to the question of the extent to which a negotiator should adapt to lhe cultural values of the other purty. particularly in the case of non-Western countries.!!l~Jdnd.

. involved . In negotiations this means that the least both parties must be able to do is: .lme very Millers Associ. only politiCians. starting from an initial refusal to even in the negotiatIons paid a visit to the US Rice discuss the issue. Weiss says. that both countries needed seven ypars to come to rl:!rusal to make some sort of deal in this area an agreement on importing US rice into Japan. where necessary. a productembeqded In .1.. ® interpret these in such a way that they can detect common and differing standpoints as well as changes made to these during the negotiating process.considerable power in business and Blaker (2002) describes in considerable detail society. a reacted defensively throughout.n essence as an attack' m1'lchlne 8S well as private yroups of individuals on Japanese cUlture..1 Approaches to negotiatIng in an international context situations and individuals.· The Weiss strategic framework The framework Weiss drew up is given in Figure 15. as indicated earlier. who wielded . The Japanese bec. He proposes strategies that. tortuous path towards a settlement..Aleen the parties involved. This consensus­ the country's development. Rice and nemawashi Blaker (2002) presents a case study which high­ when It was clear that the question of rice lights American and Japanese behaviour when imports was more a· multilateral issue.· A consensus had to be the Japanese consider It to be an Indispenslble created within the country that discussions with part of their culture. the US could actually go ahead. could have a serious effect on Japan's trading Rice was. but also the whole bureaucratic market was considered l. and even dele­ He considered that the US set the negotlat­ gations and personal envoys went to the US to ing agenda. however. the skills of others. In any communicative situation between two parties. the knowledge and skills required to perform these crucial acts is often limited. compromise plan was likely to succeed.ltion to see whether the final active outside the negotiating arena. is a strategic framework allowing the parties to make sense of the negotiating process as best they can. and that the Japanese essentially explore possible agreements. Weiss advocates instead approaches that reflect the skills of the individuals involved. a hIghly sensitive issue since activities generally. At every negotiating step the interested the long. ensure that communication is maintained as the negotiation proceeds. while being culturally responsive. What is needed. reflect the negotiators' own skills and the circumstances in which they are working. one aim is to make sense of the interaction. and still is. the whole Japanese group of people not officially Involved process. The strategies in bracketsteflect a co-ordinated approach bet<. The US demand building process. called nemawashi. using their own attributes and. 323 . .Concept 15. Towards the end. domestic parties were consulted. It shows in an organized form the culturally responsive strategies that can be adopted according to the level of familiarity that each negotiator has with the other's culture.not made in 1986 for access to the Japanese rice. I € However. recognize each other's ideas and the types of behaviour that form an international part of the negotiating process.

btlt also any strategies that correspond to lower degrees of tamiliarity. however. This could include.. The negotiator can go some way towards making a compromise by altering his usual negotiating approach. Before briefly examining the strategies. or being more 'upfront' with providing information. Negotiator's familiarity with counterpart's culture High Figure 15.. extensive exposure to the culture concerned and previous succ(:!~sful social interactions with those from the culture in question. following the etiquette Ilsed by the counterpart. Tinkering with just part of the process. pleading ignorance with the other's culture and language. High familiarity entails fluency in the predominant language. note that: () 'Familiarity' is the term Weiss uses to denote not only one party's knowledge of the other party's culture.---------.and it may be exacerbated if the counterpart finds this half-hearted approach (!J 324 . a third-party of some kind can be introduced to help out. The result may be further hindrance to agreement if the counterpart regards this as arrogant behaviour which lcsults in a disadvantageous sitUi. The negotiator may also explicitly persuade the counterpart to adapt his approach._---g----' Low """"".1 Strategic framework for negotiating Source: Weiss (1994a): 54. : r Counterpart's familiarity with negotiator's culture Adapt to the counterpart's script (Co-ordinate adjustment of both parties) Employ agent or advisor Embrace the counterpart's Low~~__ (m_v_o_'v_e_m_e_d_~_ro_r_)__~~_____s_c_ri_p_t______~ ---. but also the ability to apply this knowledge effectively to the interaction. The strategies proposed by the framework are: 15: If a negotiator has low familiarity with the counterpart's culture. According to Weiss (1994a). negotiators may consider using not only the strategies appro­ priate for their degree of familiarity..~.. modifying the usual time frame.a Chapter 15 Negotiating internationally High Improvise an approach (Effect symphony) Induce counterpart to follow one's own script . This can be an agent who takes over the negotiating role (thus creating other possible problems. may create more confusion .--_. or an adviser to help in preparations and during the process. but every respect for them. I'OJ example.1tion. provided the counterpart shares a similar familiarity. (J:) 'Script' is the term that Weiss uses to denote a standardized sequence of behaviour expected by th(:! perSOll cOllcemed. especially with regard to accountability and trust). If the negotiator has a moderate familiarity with the counterpart's culture. then the negotiator has two other options.

1. This can be done explicitly at the start. which may draw on their familiarity with both cultures but is unique to their relationship. or implicitly through a gradual blending of elements from the respective cultures.allow an impromptu free-for-all. Predict and influence the counterpart's approach. whereby both parties negotiate as to how the negotiating is to proceed.Concept 15. 4. They see the limitations to what they term 'principled approach' in complex international business negotiations and called instead for a collaborative. Finding a balance between culture group and individual considerations is difficult. It allows aspects of each other's culture to be brought to the foreground or pushed into the background as appropriate. This involves considerable reflection on one's own culture as well as careful investigaLinn into the counterpart's culture. ~ the most feasible. culture while investigating others. pushing stereotypes aside and encouraging the development of a relationship that is not just based on the deal.1 Approaches to negotiating in an international context unacceptable. the most acceptable in terms of the manager's own values. 325 . 3. This final strategy takes further the idea of a synergistic approach to negotiating as pro­ posed by Adler with Gunderson (2008: 237). This approach highlights a regular message in this book: reflect carefully on your own . Weiss (1994b) presents a step-by-step procedure for deciding which of the strategies put forward is: t> @. they argue that the very diversity of culture could help to increase the search for creative options for mutual gain. Weiss (1994a) is careful to point out that this does not . i. This collaborative approach is considered further in Chapter 18. The five steps Weiss (1994b: 86) proposes for selecting a negotiating strategy take account of these complexities. but rather a sensitive dialogue whereby both parties take account of each other's individuality as well as culture. 2. it calls for both parties to consider their relationship as individuals as well as members of different cultures. More promising is the idea of co-ordinating adjustment. The concept in the m:xt chapter takes Lhis appwach huthcr when considering international team-work. focusing on each other's attributes and skills as well as the circum­ stances. In his follow-up article to the one already outlined in the concept. Choose your strategy. 5. particularJy as the degree of variation wiLhin a particular culture group can be considerable. Consider the relationship and circumstances. the extent to which it will fit with the counterpart's possible approach. Le<lrn the m·gotiation script of Llle counterpart's culture. the most appropriate in terms of the relatiunshlp and circumstances surruunding the interaction. Here. therefore synergistic style of negotiating. Weiss takes this approach further by talking of effecting symphony.e. cultural. Weiss refers in particular to the medium of discussion and gives an example of a third language being used (presumably with some of its cultural baggage) in a high-level negotiation. Reflect on your culture's negotiation script. Moreov~r. While recognizing the extra problems caused through cultural differences. @ Those parties that are highlyfamiliar with each other's culture may improvise during the negotiating process. both parties go beyond their home cultures and create their own approach.

(eds) (2003) International Business Negotiations. This focuses on the factors that affect the negotiating process between parties from different cultural and national backgrounds. And. Chapter 15 has examined three facets of cultural differences in international negotiations. . What other ways of preparing for a cross-cultural negotiation do you consider to be (more) useful? Further reading Fisher. It explores the problems faced by Western managers while doing business abroad and provides guidelines for international business negotiations. Yarmouth. taking account of the negotiators' own skills and the circumstances of the negotiation. negotiators in China are urged not to say or do anything to embarrass the Chinese participants. with particular reference to Japan. One very important facet is the concept of negotiating: do people consider it to be more to do with problem-solving within a given time-frame. (1980). 1.-C. . International Negotiation: A cross-cultural perspective. Another guide to negotiating suggests that those negotiating in the US should be prepared to partake in preliminary small talk with their counterparts at the start of a meeting. articles and websites on Interni:lliullal negotiations that offer 'dos and don'ts' on how to negotiate with parties from different cultures. and Usunier.Chapter 15 Negotiating internationally . G. France and the US. N. I I j . Aims to enhance understanding of the effect of culture and communication on international business negotiations. as well as their expectations about the outcome. J. mutually beneficial relationship? People's perception of negotiating colours their style of negotiating. To what extent do you think such prescriptive advice is useful? I 2. of course. or is it just one aspect of a continuing dialogue between parties who are beginning or continuing a harmonious. For example. using examples from different parts of the world. Fisher puts forward a conceptual framework for the negotiating process and allows negotiators to manage the process more effectively. and not be surprised if a gift cannot be accepted. The strategic framework of negotiations presented is a culturally responsive instrument. ME: Intercultural Press. In particular. Ghauri. I There are many books. This chapter has also addressed the question as to what international negotiators should do when having to contend with such differences. or point at anyone. or to raise their voice. the book discusses negotiations for different types of businesses. Oxford: Elsevier. 2nd edn. it influences the way they tend to behave during the negotiations.

327 . in Blaker. and Usunier J. S. 2002) International Dimensions of Organizational Behaviour. (2000) Developing Management Skills for Europe. Harlow: FT Prentice Hall. 2nd edn. M. (1994a) 'Negotiating with "Romans" ': part 1.O. Oxford: Elsevier: 97-136. Sloan Management Review.. Negotiation Journal. (2003) 'Cultural aspects of international business negotiations'. (1994b) 'Negotiating with "Romans" ': part 2. (1998) 'Negotiation: the Chinese concept'. J.-C.F. International Marketing Review. G. Whetten. (1980) International Negotiation: A Cross-cultural Perspective. Weiss. 35 (3): 85-99. N. E. K. V. and Vogel. Kumar. (2008. Washington DC: US Institute of Peace Press. N. and Worm. Weiss. in Ghauri. Sloan Management Review. (2002) 'Negotiations on rice imports'. A. S. (2003) 'Social capital and the dynamics of business negotiations between the northern Europeans and the Chinese'. Case Studies in Japanese Negotiating Behavior. 5th edn.J. Faure. M. Cameron. R.. Giarra. 20 (3): 262-285. and Woods. M. 14 (2): 137-148. (eds). with Gundersen. 35 (2): 51-61.E. P.References References Adler.E. G. International Business Negotiations. ME: Intercultural Press. Blaker. Fisher. Usunier. (eds). Mason: South-Western Cengage Learning.-C. D. Yarmouth.

Once the base for the relationship has been established. Highly indirect. . Others will be experts who have talked in great detail to the counterpart Power orientation I '-'. A negotiation is part of the plocess of developing a relationship. often before formal meetings between the two sides where the focus is less on problem-solVing and. The leader of the negotiating team will probably be the motor behind this consensusbuilding. Willingness to take risks The concern for consensus will make the Japanese unwilling to take risks: intensive pre-negotiiltion pnmaration.2 below gives a brief description in note form of the typical approach by the Japanese to negotiating. disagreement or haggling involved . The establishment of a (further) stage in the relationship is what really counts: inevitable changes in the circumstances of both companies will necessitate later amendments anyway .'." . 'direction-taking' Patience is the key.2 Behavioural predispositions '< """'. as Fisher (1980: 32) calls it. .'.Negotiating with the Japanese Table 15. Strategic time-frame I Negotiation process I stVl" of n••oll. using the framework given in Concept 15. ' Wish to establish personal rapport: essential for building trust . highly formal communication. based on mutual trust and confidence. Table 15. . review5 before and during the negotiation. .the basis for doing any business.'. detailed contract..".. A negotiation is a face-to-face ceremonial and very formal moment when a stage of partnership development has been rounded off Any decision requires consultation and support at ali levels of the company.1. details can be discussed and agreed upon.lI00 Outcome orientations . High-context negotiators: many allusions and inferences to the situation Prefer a short written agreement to a definite.}. no impulsive I f:lsponse to proposals from the other side Underlying concept of negotiation Negotiation strategies Doing business is a continuing affair. Interpersonal orientation > ['. Considerable care in preparation of a deal will allow its implementation to take place quite quickly '.'~. Time-consuming entertainment as part of that process. No confrontation.face-saving a key requirement..

" .You represent a company from yoUr own coun~ryand are about to meet either a US ot~ Jal. . these steps are given again below: . . Predict and infiuence the co~nterpart'sapproaCh. Learn the negotiation script of the counterpart's culture. . . ' ../otlenvisage itill$ingt~e~trategy cllOsen. ..' \ " " .3.. reqardtothe Japanese approach to negptiating.'-.! table.ed to: " ' .with whichyouarefamlllarandn9tewhatyouc9nsider to be the . scenario fprthen~g'otlatlol).@ pe$crij)Elther~lationship.'. (qutlined iI'l .Jslng thein.t. . 'Choose your strategy. natweofanypossibleaQrepment). ".' -. Choose another culture . ' " " Selecting a negotiation strategy The aJm of this activity is for you to use the five step!! Weiss puts forward as away of selecting a strategy fora particular negotiation with counterparts from another cUlture.' '. if~riY. ' .lanese negotiating team.proposedby.concl:pt) that you believe to be appropriate. ' " . Wel~sinhis.'-' . "2.. .gotiating strategyfrolllthose'.' Reflect on YOllfculfure's negotiation script: ' ~.ConsIder the relationshipanc.. ..l circumstances.@PestrU:ietheclrcumstancesofthenegotiati()n (includln9 the experience 9f both teams in '. crQ!is·culturalneg~tiation. '.. strategicframeworlt . . internatlCinal bUsiness and the. " • to questioril: ' Describ~thef1eqotiation:pr6ces~as.fofmatlon from yourrespollse " Choose one'" ne. that allows yquto deJermlrie the degree of familiarity . ' 2.-.1ofthis chaptQr's. For ease of reference . 4.outthe. that both sides mayh~yewithregardstoea. .5. " . .You will ne.. '..~hother'sculture. " . that youhave developed wIth your counterparti• . . ."- .' '-329' .' . Imagine that you are .aboutto take parfln~ninternational. . ._ Questions l. . differences with.".slmUarltiesor.Sketch.Figure lS. . .1. Imagjn~hovvaJapanesepartyan~apartyfrom the other culture chosEm WOllldreactto each other over thenegotiatlnl.c.

The word 'team'. I Teams in organizations The word 'team' can be defined as a small number of people who work together for a common purpose and hold themselves collectively responsible for what they do. Senge et al. which comes from the Indo-European deuk (to pull). how do teams composed of people from dif­ terent culturell ()ppri1t!. Learning outcomes After reading this chapter. or occasionally meet. (I The importanc:p nf commLlnication in ths management of teams. the international team. The final part of Concept 16. this concept will focus on global teams.1 will deal with the management of multicultural teams. It was not until the sixteenth century that the word took on its modern meaning of ' a group of people acting together: This recent definition includes all those who are working both inside and outside the organization.Having considered communication barriers in cross-cultural management and aspects of negotiating internationally.>7 After defining the word 'team' and the elements involved (types and roles). This is because a team can also be agJobaJ network of specialists who communicate with each other digitally. attention now focuses on an increasingly common phenomenon of global business. Knowing that cultural backgrounds have an enormous influence on how people behave. Senge et al. even if they are not regular participants. (1995) give us the example of large. 330 . (1995: 354-355) define the word as 'any group of people who need each otherto accomplish a result'. technologically oriented organizations that ha\'e learnt to design their infrastructures on the basis of this broad definition of a team. with particular reference to Afro-Western teams. their processes and the effect of cultural differences on these teams. The cultural factors that influence teams working in organizations. you will gain an understanding of: t. has always been understood in terms of people 'pulling together'.

together to complete a task. Copyright ~. Is consistency and its encourage­ six continents. Such teams have no supervisor. different ways.). These teams can do the same as the other types mentioned . ' actiVities for people to work in pairs or threes. 'The teams that were more successful put in an effort someone who is Mt Involved in ~yeryday team activities to try and build trust: she says. Consider Spotlight 16. some of thRm might feel more su(. 13 (Maitland. has to stay in work mode until well past 8. Employees in these teams are directly involved in the decisions made concerning work. take decisions. they meet through a tele­ ment among other team members: they add. II.30am in New Jersey while her colleague in Sydney. information.Concept 16. 'They can try and get people to share some It is the kind of dilemma that faces any geographically level of social information. this modern way of working in international teams has generated other problems. Jenny Goodbody's team of six people is spread across development of trust. inVolved in solving i11djor IsSues. Team leaders can help to build relationships in isolated if they had fewer opportunities to talk as a group. Ms Gooclbody found that the first stage. for example about their country dispersed team that has to communicate through emall. of management behaviour. While trust Is cruelal for every team to operate conversations that tf')ey have with individual members for effectively. The Financial Times. Virtual.30pm. Their position in the hierarchy is usually the same. trust'building much more quickly. see each other. sor is to show. or at least amplified them. Once a week. 'One of the key things for the spon­ ..1. ' team often assume that trust will ComE! abOut automatic­ Virtual teams need a strong 'sponsor' from the start ­ ally. ¥li e Cross-functional. Self-managed. or their family: As team co-ordinators. if ever. Most international virtual teams exist only through necessity. 'Virtual teams' endeavour to build trust: Global communication: Alison Maitland looks at how companies create corporate harmony between colleagues in different parts of the world. companies are becoming more and more dependant on virtual teams. Part ofthe problem Is that people working in a virtual ingpeople with emalls they don't need: she says•. Tile FinanCial meet face-to-fRee. ment of team trust: Australia.\:!:!ss.1 Groups processes during international encounters The teams found in organizations can differ in kind according to their objectives. i!l the most important Ih determining tired. they also need to telephone calls or video conferences rather than face­ know how to summarise relevant information from the to-face. 'Managers conference. With the ones that didn't 09/09/2004. interest in the team's progress and be know each other in smaller groups: . Such teams meet regularly to discuss and put forward suggestions such as to how to improve work processes and methods. A face-to-face group meeting at the start is important. which means that she must be wide awake can als6 act in sensitive way to the stage of develop­ by 6.. 'There's a fine line between making sure everybody is aware of What's going on and inundat­ Who rarely. On the ullT!:!r hand. iThe teams that got together once could kick off that Source: from Globa! communication. when the team This would mean that at least two of the team would beless is actUAlly formed. Although there seem to be fewer problems nowadays on the technical front. to overcome geographic distance or time differences. identified as supporting the a 331 . it is harder to build that trust among people the rest of the group.' . even if they come from different domains.but can also increase in size by co-opting members from other organizations such as suppliers or joint partners. Robbins (2000: 106) proposes four types: ® Problem-solving. accomplish tasks . 'They hadshorHerm but who represents their interests at a senior level In the . getting to parent organization. The members of these teams come from different departments and work ~ In business. it was slower: 'An importanl dspect Times Ltd.

varies from culture to culture. These assumptions will in turn determine the frequency of the meetings and contacts and the time needed for the group to function. but also shows that developing a climate of trust is a challenge for multicultural teams. lastly. as representative of a profession.1 Trusting other people Source: based on Inglehart (1997) as quoted by Schneider and Barsoux (2003). as Schneider and Barsoux (2003) point out.Chapter 16 Working with international teams Spotlight 16. the concept of trust ­ and ways of developing it . which includes sharing common norms and values.1 shows the results of a survey showing the degree of trust in other people in different cultures. When the members of a team display complementary skills to achieve a certain goal. as well as uelermine whether the meetings will take place face-to-face or by telephone. they enable the creation of social rdaLions. Team roles What types of roles need to be performed within a team? There are two roles for each member of a team. Cultures also have different assumptions as to the purpose of groups and teams: these are to enable