Culture,

Management
Style, and
Business
Systems

Chapter 5

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
 LO1 The necessity for adapting to
cultural differences

LO2 How and why management

styles vary around the world

Learning LO3 The extent and implications of

Objectives
gender bias in other countries

LO4 The importance of cultural

differences in business ethics

LO5 The differences between

relationship-oriented and information-
oriented cultures
5-2
 Business etiquette is largely driven by cultural norms.

Cultural analysis often pinpoints market opportunities, gives

companies a competitive edge

Knowledge of the management style existing in a country and a

willingness to accommodate the differences are important to
success in an international market

Business Customs in Global

Marketing
5-3
Requires
Adaptation
▪ Adaptation is a key concept in international
marketing
▪ To successfully deal with individuals, firms,
or authorities in foreign countries, managers
should exhibit:
1. open tolerance,
2. flexibility,
3. humility,
4. justice/fairness,
5. ability to adjust to varying tempos,
6. curiosity/interest,
7. knowledge of the country,
8. liking for others,
9. ability to command respect, and
10. ability to integrate oneself into the
environment

5-4
Cultural Imperatives, Electives and
Exclusives

Cultural imperatives: Cultural electives:

business customs and expectations that areas of behavior or to customs that cultural
must be met, conformed, recognized and aliens may wish to conform to or participate
accommodated if relationships are to be in but that are not required
successful

5-5
Cultural
Exclusives
Customs or behavior patterns
reserved exclusively for the locals
and from which the foreigner is
barred and must not participate

5-7
 The Impact of
American Culture
▪ Ways in which U.S. culture has
influenced management style include,
but are not limited to, the following:
1. Personnel selection and reward
based on merit
2. Decisions based on objective
analysis
3. Wide sharing in decision making
4. Never-ending quest for
improvement
5. Competition yielding efficiency

5-8
 Differences in Management Styles
Around the World

▪ Authority and Decision Making

• In high-PDI countries subordinates are not likely to contradict bosses, but
in low-PDI countries they often do
• Three typical patterns exist:
1. top-level management decisions,
2. decentralized decisions, and
3. committee or group decisions

5-10
Management Objectives and Aspirations

1 2
Security and Mobility Personal Life
• Personal security and job mobility • For many individuals, a good personal
relate directly to basic human and/or family life takes priority over
motivation and therefore have profit, security, or any other goal. .
widespread economic and social
implications.

5-11
 Affiliation and Social
Acceptance
3
In some countries, social acceptance and affiliation by neighbors and
fellow workers appears to be a predominant goal within business.

Management
Objectives
and
Aspirations
Power and Achievement
4 Although there is some power seeking by business managers
throughout the world, power and achievement seem to be a more
important motivating force in South American countries. In these
countries, many business leaders are not only profit oriented but also
use their business positions to become social and political leaders.
5-12
 Exhibit 5.1
Annual Hours Worked
5-13

Source: OECD, Labor Market Indicators, 2012. 5-13

 Face to Face
Differences in Communication
Communication Styles Internet Communication

According to Edward T. Hall, the symbolic meanings

of time, space, things, friendships, and agreements,
vary across cultures

Differences in
Management Hall places eleven cultures along a high-context/low-

Styles Around
context continuum

the World Communication in a high-context culture depends

heavily on the contextual (who says it, when it is
said, how it is said) or nonverbal aspects of
communication

Communication in a low-context culture depends

more on explicit, verbally expressed communications

5-14
Exhibit 5.2

Context,
Communication, and
Cultures: Edward Holl’s
Scale

5-15
Speaking of office • Notice the individualism reflected in the
American cubicles and the collectivism
demonstrated by the Japanese office
space organization

5-16
Differences in Management
Styles Around the World
▪ Formality and Tempo
• Level of formality in addressing business
clients by first name
• Level of formality in addressing your boss by
first name
• Tempo or speed in getting “down to
business”
• Perception of time varies in many cultures

5-17
 M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and
Scandinavians

Most low-context cultures operate on M-time concentrating on one thing at a time

They divide time into small units and are concerned with promptness.

M-time is used in a linear way and it is experienced as being almost tangible in that one saves
time, wastes time, bides time, spends time, and loses time.

Differences in Management Styles Around the

World
(P-Time)
5-18
 P-time, or polychronic time, is
more dominant in high-context
cultures, where the completion
of a human transaction is
emphasized more than holding
to schedules.
Differences in
P-time allows for relationships
Management to build and context to be
Styles Around
absorbed as parts of high-
the World
context cultures.
(P-Time)
P-time is characterized by a
much looser notion of being on
time or late. Interruptions are
routine, delays to be expected.
P-time is characterized by the
simultaneous occurrence of
many things and by “a great
involvement with people.
The P-time system gives rise to
looser time schedules, deeper
involvement with individuals,
and a wait-and-see-what-
develops attitude.
It is not so much putting things
off as it is the concept that
human activity is not expected
to proceed like clockwork.
5-19
 Most cultures offer M-Time managers
As global markets
a mix of P-time and should learn to
expand, however,
M-time behavior, adjust to P-time to
M-time more
but have a tendency avoid anxiety &
businesspeople
versus P-Time to be either more P- frustration from
from P-time
time or M-time in being out of
cultures are
regard to the role synchronization
adapting to M-time.
time plays. with local time.

Differences in Management
Styles Around the World
5-20
• 5-21

5-21
 • Differences with respect to the
product, its price and terms, services
associated with the product, and
Negotiations finally, friendship between vendors and
Emphasis customers

Differences in
Management
Styles Around • American companies are embracing
the World the market orientation philosophy
• Other countries are still in the
Market traditional production, product and
Orientation selling orientations

5-22
Gender Bias
in
International The gender bias against Gender bias poses significant
Business women managers exists in challenges in cross-cultural
some countries negotiations

5-23
Female Directors on Corporate Boards

5-25
Business Ethics

▪ Business ethics is complex in the

international marketplace because
value judgments differ widely
among culturally diverse groups
▪ Corruption varyingly defined from
culture to culture

5-26
 Existence of different levels of
corruption, bribery, and fraud
The Foreign Corrupt Practices Act
1977: Imprisonment for bribery

Business
Ethics Bribery creates a
major conflict
between ethics and
profitability

5-27
Transparency
International
Corruption
Perception
Index 2011

5-28
Transparency
International
Bribe Payers
Index 2011

5-29
 Bribery
Voluntarily offered payment by
Bribery: someone seeking unlawful advantage

Variations
on a Extortion
Theme Payments are extracted under duress by
someone in authority from a person
seeking only what they are lawfully
entitled

5-30
Bribery:
Variations on a Theme
• Involves a relatively small sum of cash, a gift, or a
service given to a low-ranking official in a country
Lubrication where such offerings are not prohibited by law

• Involves giving large sums of money—frequently not

properly accounted for—designed to entice an official
to commit an illegal act on behalf of the one offering
Subornation the bribe; involves breaking the law

5-31
 Does the action
(1)Utilitarian optimize the “common
good” or benefits of all
constituencies? And,
ethics who are the pertinent
constituencies?

(2)Rights of Does the action respect

the rights of the
the parties individuals involved?

(3)Justice or Does the action respect

the canons of justice or
fairness to all parties
fairness involved?

A Framework for Ethical

Principles
5-32
 Exhibit 5.7
Dimensions of Culture: A Synthesis

5-33