ASSIGNMENT OF

CROSS CULTURAL
MANAGEMENT

SUBMITTED TO:Dr.(cdr) SATISH SETH SIR

SUBMITTED BY:VENKATESH KUMAR

PGDM 6-A
ROLL NO-60

Q1. What is meant by the term culture? In what way can

measuring attitudes about the following help to
differentiate between cultures: centralized or decentralized
decision making, safety or risk, individual or group
rewards, high or low organizational loyalty, cooperation or
competition? Use these attitudes to compare the United
States, Germany, and Japan. Based on your comparisons,
what conclusions can you draw regarding the impact of
culture on behavior?
Ans:- culture is defined as the shared patterns of behaviors and
interactions, cognitive constructs, and affective understanding that are
learned through a process of socialization. Culture is the acquired
knowledge that people use to interpret experience and generate social
behavior. This knowledge forms values, creates attitudes, and influences
behavior (Hodges, 2005).
Centralized versus decentralized cultures are different in which the top
managers or leaders make all the important decisions in a centralized
culture and in a decentralized culture, the decisions are made
throughout the levels. Safety and risk in some cultures are frowned upon
because the results are unpredictable yet other cultures are riskier and
encourage risk taking on all levels. The same can be said about
individual versus group rewards. Some societies or organizations reward
individually and other only based on the group effort.
High or low organizational loyalty in cultures are different in which the
high loyalty in an organization is where the person identifies himself as
an employee of the company and the low organizational loyalty will
identify with their profession instead of the organization. Cooperation
and competition varies with organizations where it depends on how the
organization does. Some encourage competition yet others discourage
it.
The US, Germany and Japan all have different organizations in which
the centralized and decentralized decisions are made. More companies
in the US promote decentralized versus in Japan, a centralized decision
making group is used. In Germany and the US, risks are taken
frequently and encouraged at various levels of the organization yet

Japan has a much more formal risk taking strategy. Japan has much
more group rewards versus the counterparts in the US and Germany in
which individual bonuses are common.
Germany and parts of the US have organizations which frequently spell
out the details of a project or plan but in Japan, it is considered rude and
not done. In Japan and most of Germany, the loyalty of the employee is
high and they frequently identify themselves as a member of an
organization but in the US, titles are more frequent and people identify
themselves based on their occupation.

Q2. What is meant by the term Value? Are cultural values

the same worldwide, or are there marked differences? Are
these values changing over time, or are they fairly
constant? How does your answer relate to the role of
values in a culture?
ANS:- Values are basic convictions that people have regarding

what is right and what is wrong, good and bad, important and
unimportant. Research shows that there are both differences
and similarities between work values and managerial values of
different cultural groups. Cultural differences worldwide are very
different. For example, in the US, we promote individuality,
freedom, competition, directness, and openness yet in Japan,
the opposite can be said. They promote belonging, group
harmony, group consensus, indirectness, and go-betweens.
These values are individual to each country and culture and it is
what defines them as a culture.

Q3. What are the four dimensions of culture studied by

Geert Hofstede? Identify and describe each. What is the

cultural profile of the United States? Of Asian countries?

Of Latin American Countries ?Based on your comparisons
of these

profiles, what conclusions can you draw

regarding cultural challenges facing individuals in one

group when they interact with individuals in one of the
other groups?
ANS:- Geert Hofstede - Dutch researcher Geert Hofstede found that
there is four dimensions of culture that help explain how and why people
from various cultures behave as they do. These dimensions are; (1)
power distance; (2) uncertainty avoidance, (3) individualism, and (4)
masculinity.
Power Distance - The extent to which less powerful members of
institutions and organizations accept that power is distributed unequally.
3) Uncertainty Avoidance - The extent to which people feel threatened by
ambiguous situations and have created beliefs and institutions that try to
avoid these.
4) Individualism vs. Collectivism - Individualism is the tendency of people
to look after themselves and their immediate family only. Collectivism is
the tendency of people to belong to groups or collectives and to look
after each other in exchange for loyalty.
5) Masculinity vs. Femininity - A culture in which the dominant values in
society are success, money, and things scores high on masculinity. A
culture in which the dominant values in society are caring for others and
quality of life scores high on femininity.
6) Integrating of Dimensions - A description of the four dimensions of
culture is useful in helping to explain the differences between various
countries, and Hofstede's research has extended beyond this focus and
showed how countries can be described in terms of pairs of dimensions.

African cultures involve many aspects of music, dance, art, and

storytelling. With more than 1,000 languages spoken and many different
religions and tribes, Africa is rich in cultural diversity. African American
homes also have remarkable diversity, with notable differences across
regions of the U.S. Families often include immediate and extended

relatives, with a collectivistic worldview and sense of shard community.

For this and other cultures that value a collective lifestyle, tactile learning
and cooperative grouping instructional activities may be better as they
parallel the context for learning found in their cultures.
American Asians make up about 55 of the United states' population and
are one of the fastest growing groups in North America. Asian
Americans are highly diverse, with dozens of ethnic backgrounds and
languages, including individuals from Chinese, Japanses, Korean,
Indonesian, Laotion, Philippine, Thai, and Vietnamese ancestry.
Asian Americans commonly face challenges in establishing cultural
identity. This is expecially true of second-generation immigrants who
struggle with the balance of traditional cultural ideas and the pressure of
assimilating into the very different American cultural society. When
working with individuals of Asian ancestry it is important to understand
three of the main Eastern phiilosophies and their impact upon Asian
culture: Buddhism, Confucianism, and Taoism. Within these
philosophies families are highly structure, hierarchical, and paternally
oriented. Family systems are also taught not to bring shame to one's
family and that the welfare and integrity of the family are very important.
The philosophies also teach principles of peace, balance, and harmony.
This is one reason why some Asians may tend to avoid confrontation or
appear passive, indifferent, or indecisive. Using indirect methods of
communication may be appropriate for some Asians with strong ties to
their ancestral culture.

Q4. What are the characteristics of each of the following

pairs of cultural characteristics derived from Trompenaars
research: universalism vs. particularism, neutral vs.

emotional, specific vs. diffuse, achievement vs. ascription?

Compare and contrast each pair.
ANS:1) Universalism vs. Particularism
a) Universalism - The belief that ideas and practices can be
applied everywhere in the world without modification.
b) Particularism - The belief that circumstances dictate how ideas
and practices should be applied and something cannot be done
the same everywhere.
2) Individualism vs. Communitarianism
a) Individualism - Refers to people regarding themselves as
individuals.
b) Communitarianism - Refers to people regarding themselves as
part of a group
3) Neutral vs. Emotional
a) Neutral Culture - A culture in which emotions are held in check.
b) Emotional Culture - A culture in which emotions are expressed
openly and naturally.
4) Specific vs. Diffuse
a) Specific Culture - A culture in which individuals have a large
public space they readily share with others and a small private
space they guard closely and share with only close friends and
associates.
b) Diffuse Culture - A culture in which both public and private space
are similar in size and individuals guard their public space
carefully, because entry into public space affords entry into private
space as well.
5) Achievement vs. Ascription
a) Achievement Culture - A culture in which people are accorded
status based on how well they perform their functions.
b) Ascription Culture - A culture in which status is attributed based
on who or what a person is.

ASSIGNMENT -2
Q1. What do you understand by the EPRG model of CrossCultural Management as adopted by MNCs?
ANS:- Dr. Howard V. Perlmutter is a world authority on globalisation and
pioneer on the internationalisation of firms, cities and other institutions.
Trained as a mechanical engineer and as a social psychologist,
Perlmutter joined Wharton's faculty in 1969. He specialised in the
evolution of multinational corporations (MNCs) making predictions to
how their viability and legitimacy would change.
Perlmutter is the first academic who identified distinctive managerial
orientations of international companies. "The more one penetrates into
the living reality of an international firm, the more one finds it necessary
to give serious weight to the way executives think about doing business
around the world". These organisational world views are shaped by a
number or factors such as the circumstances during which the company
was formed, the CEO's leadership style, its administrative processes,
the organisational myths and traditions. Perlmutter stated that these
cultural orientations determine the way strategic decisions are made and
how the relationship between headquarters and its subsidiaries is
shaped. In 1969 he bundled his insights by publishing the EPG model.
Perlmutter's EPG model states that senior management at an
international organisation holds one of three primary orientations when
building and expanding its multinational capabilities:

1. ETHOCENTRIC (home country orientation)

The general attitude of a firm's senior management team is that
nationals from the organisation's home country are more capable to
drive international activities forward than non-native employees working
at its headquarters or subsidiaries. The practices and policies of
headquarters and of the operating company in the home country
become the default standard to which all subsidiaries need to comply.
This mind set has as advantages that it overcomes a potential shortage
of qualified managers in host nations by expatriating managers from the
home country, creates a unified corporate culture and helps transfer core
competences more easily by deploying nationals throughout the
organisation. The main disadvantages are that an ethnocentric mindset
can lead to cultural short-sightedness and to not promoting the best and
brightest in a firm.
2. POLYCENTRIC (host country orientation)
This world view has as dominant assumption that host country cultures
are different making a centralised, one-size-fits-all approach unfeasible.
Local people know what is best for their operation and should b given
maximum freedom to run their affairs as they see fit. This view alleviates
the chance of cultural myopia and is often less expensive to implement
than ethnocentricity because it needs less expatriate managers to be
send out and centralised policies to be maintained. The drawbacks of
this attitude are that it can limit career mobility for both local and foreign
nationals, isolate headquarters from foreign subsidiaries and reduces
opportunities to achieve synergy.
3. GEOCENTRIC (world orientation)

This orientation does not equate superiority with nationality. Within legal
and political limits, executives try to seek the best men, regardless of
nationality, to solve the company's problems wherever in the world they
occur. This attitude uses human resources efficiently and furthermore
helps to build a strong culture and informal management networks.
Drawbacks are that national immigration policies may put limits to its
implementation and it might be a bit expensive compared to
polycentrism. It attempts to balance both global integration and local
responsiveness.
Perlmutter's observation was that most MNCs start out with an
ethnocentric view, slowly evolve to polycentrism and finally adopt
geocentrism as the organisation familiarises itself more and more with
conducting business on a global playing field.
In 1979 Perlmutter and his collague David A. Heenan added a fourth
orientation to create the EPRG model: the R stands for a regiocentric
approach falling in between a polycentric and geocentric orientation.
Regiocentric or regional orientation is defined as a functional
rationalization on a more-than-one country basis. Subsidiaries get
grouped into larger regional entities. Regions are consistent with some
natural boundaries, such as the Europe, America and Asia-Pacific. Both
polycentric and regiocentric approaches allow for more local
responsiveness, with less corporate integration.

Q2. Elucidate the reasons for success and failure of joint

ventures worldwide. Give five suitable examples in each
case?
ANS:- Joint ventures are the most common means of getting goods into
foreign countries. In a joint venture, a multinational teams up with a
company in a host country to share risks and complementary
capabilities. Although contractual agreements are similar to joint
ventures, the latter differ in the amount of input and control the
companies share. The company in the host country may provide
important access to local channels of distribution, government contracts,
and supply sources. Or, it may bring technological or marketing skills to
the table, or serve as a source of capital. Often times, a joint venture
allows the multinational to bypass trade restrictions and overcome
nationalistic barriers to success in the foreign country.
The primary risk inherent to joint ventures, in additional to normal market
risk, is that the interests of both parties might conflict. This usually
occurs because the local company is viewing the operation within a local
context, while the multinational is looking at the venture as just one
element of an overall global program. Discrepancies often arise over
how much profit to plow back into the operation, how to handle transfer
pricing issues (how much affiliated companies should charge each other
for various goods and services), and product and market decisions. In a
worst-case scenario, the partnership deteriorates to the point where one
or both partners fail to benefit. For this reason, most successful joint
ventures have a definite leader that maintains more control, and
assumes more risk, in the venture.
Businesses of any size can use joint ventures to strengthen long-term
relationships or to collaborate on short-term projects.

A joint venture can help your business grow faster, increase productivity
and generate greater profits. A successful joint venture can offer:

access to new markets and distribution networks

increased capacity

sharing of risks and costs with a partner

access to greater resources, including specialised staff, technology

and finance

Joint ventures often enable growth without having to borrow funds or

look for outside investors. You may be able to use your joint venture
partner's customer database to market your product, or offer your
partner's services and products to your existing customers. Joint venture
partners also benefit from being able to join forces in purchasing,
research and development.
A joint venture can also be very flexible. For example, a joint venture can
have a limited life span and only cover part of what you do, thus
limiting the commitment for both parties and the business' exposure.
Joint ventures are especially popular with businesses in the transport
and travel industries that operate in different countries.

An example of a successful joint venture that later soured involved Xerox

Corp. In an effort to broaden its global presence, Xerox entered into a
50-50 joint venture in the 1950s with Rank Organization of the United
Kingdom. Xerox signed an agreement that essentially gave Rank-Xerox
the exclusive rights to manufacture and sell Xerographic machines
outside of North America. As time progressed, Xerox outgrew its markets
in North America and wanted to sell its machines in other countries.
Because it had signed away its valuable rights to conduct business
overseas, it was forced to slowly buy back those rights at an estimated
cost of $300 million over 20 years.

Cingular (the cell phone provider) was a joint venture between SBC
and BellSouth. (SBC then bought AT&T, rebranded itself as AT&T, then
bought BellSouth, so Cingular is now AT&T Wireless).
Aera Energy is a joint venture between Exxon and Royal Dutch Shell.
Morgan Stanley and Citigroup are currently forming a joint venture
between their brokerage units Morgan Stanley and Smith Barney.
successful its nokiasiemens and virgin and tata tele services
and unsuccessful is philips and lucent technologies

Q3.

The

three

major

areas

critical

to

expatriate

preparations are cultural training, language instruction,

and familiarity with everyday matters. Elucidate this
statement.
ANS:- cultural training deals with the manifestations of culture in the
workplace and has many applications. Its main purpose is to evaluate
and constructively tackle the challenges cross cultural differences can
bring to the workplace.
A few examples of the courses we cover can illustrate the different
applications of cross cultural awareness training:
Cross Cultural Team Building Training will aim to raise team
members' awareness of each other culturally in order to foster mutual

trust, respect and understanding. The result of which will be clearer lines
of communication.
Cross Cultural Management Training aims to equip management
staff with the knowledge and skills to effectively supervise a multi-cultural
staff. Cross cultural awareness training results in a more convivial and
understanding work environment.
Cross Cultural Negotiation Training assists negotiators involved
with foreign clients or customers with whom they are discussing possible
terms and conditions.
Cultural Diversity Training offers HR staff support in helping them
understand their responsibilities to ethnic minority staff and/or look at
ways of nurturing harmonious inter-personal relationships at work.
Culture Specific Training is generally aimed at individuals or
teams that regularly visit a foreign country or who frequently interact with
overseas clients or colleagues. Such training usually focuses on areas
such as values, morals, ethics, business practices, etiquette, protocol or
negotiation styles with reference to one country. This better equips
participants with the key skills that will help in building successful
business relationships.
Language instruction emphasizes spoken vocabularies and
pronunciation, covering grammar and written language only when
required. From the first lesson, students learn by listening to and
speaking in the foreign language, getting immediate feedback and

guidance. The courses tolerate incorrect pronunciation and guide

students extensively on how to improve it.
Acting as comprehensive cultural tutors, the courses teach practical
cultural knowledge, sensitivity and awareness including non-verbal
gestures, etiquette, and norms of politeness that are critical for
successful communication.
Students play fun, immersive, interactive 3D video games that simulate
real-life communication by role playing with animated "socially intelligent
virtual humans" that recognize students' intent, speech, gestures and
behavior.
If students speak and behave correctly, the virtual humans become
trustful and cooperative, and provide information that students need to
advance. Otherwise, the virtual humans are uncooperative and prevent
students from "winning" the game. For example, in one scene in the Iraq
Arabic course students can speak perfect Arabic and still offend their
virtual Iraqi host by not asking him to enter the house first or by later
talking to his wife without observing Iraqi cultural protocols.
We promote extensive levels of engagement, motivation and practice by
providing "free form" storylines with very wide ranges of game-play
paths, interactive dialogs and action options. The storyline's drama,
exploration and elements of surprise include opportunities to learn from
getting into trouble and trying to gracefully get out of it.
Not all virtual humans are the same; each behaves according to its
individual personality, emotions and intent, consistent with the storyline
and in response to student actions. For example. in another Iraqi
Arabic scene, the student's disrespect towards two virtual Iraqis elicits a
passive response from one and insults from the other, but students can
fix the problem if they know how to react to the Iraqi's complaints.
Numerous exercises, quizzes and tests continuously monitor progress
and measure the students' level of proficiency, helping them stay
motivated. Courses adjust themselves automatically to the students' rate
of progress, letting them advance at their own pace.