International Management: Managing Across

Borders and Cultures

Tenth Edition

Chapter 3
Understanding the Role of
Culture

Copyright © 2021, 2017, 2014 Pearson Education, Inc. All Rights Reserved
 Learning Objectives
3.1 To understand how culture affects all aspects of international management
3.2 To be able to distinguish the major value dimensions which define cultural
differences among societies or groups
3.3 To understand the interaction between culture and the use of the Internet
3.4 To be able to develop a working cultural profile typical of many people
within a certain society as an aid to anticipating attitudes toward work,
negotiations, and so on
3.5 To gain some insight into different management styles around the world
 Opening Profile: Social Media Bring
Changes to Saudi Arabian Culture (1 of 3)

Map 3-1 Saudi Arabia comprises most of the Arabian peninsula. All of the countries
bordering Saudi Arabia are Arab countries (meaning that the first language is Arabic),
and all are predominantly Islamic.
Introduction
An understanding of the local culture and business environment can give
managers an advantage in competitive industries. Foreign companies
ignore those aspects to their peril. Differences in culture in other
countries necessitate that managers develop international expertise to
manage on a contingency basis according to the host-country
environment. International managers can benefit greatly from
understanding the nature, dimensions, and variables of a specific culture
and how these affect work and organizational processes.
Opening Profile: Social Media Bring
Changes to Saudi Arabian Culture (2 of 3)
Opening Profile: Social Media Bring Changes to Saudi Arabian
Culture
As of mid-2017, the social media penetration in Saudi Arabia reached
90.2 percent with 18 million on Facebook (53.6 percent penetration, 3
million per day on Twitter, and more than 840,000 on LinkedIn. Each
day, more than 90 million videos are viewed on YouTube. Because70
percent of the Saudi population is under 30 and most own smartphones,
many are turning to Twitter and YouTube out of boredom with the severe
lack of entertainment. In addition, social interaction is closely monitored
and restricted by patrolling religious police addition. The Saudi
government, which is an absolute monarchy with no parliament or
political parties, does review online activity to gather intelligence and
monitor public opinion. Social media have presented a virtual world as a
force for modernity in Saudi Arabia and cause powerful interactions with
cultural mores.
Learning Objective 3.1
TO UNDERSTAND HOW CULTURE AFFECTS ALL
ASPECTS OF INTERNATIONAL MANAGEMENT
Culture and Its Effects on Organizations
Culture
A set of shared values, understandings, assumptions, and goals that are
learned from earlier generations, imposed by present members of a society,
and passed on to succeeding generations
Cultural Sensitivity or Cultural Empathy?
An awareness of and an honest caring about another individual’s culture
 Culture and Its Effects on Organizations
A- A critical skill for managing people and processes in other countries is culture
intelligence or cultural quotient
B- Cultural sensitivity (cultural empathy) is a sense of awareness and honest caring
about another individual’s culture. Such sensitivity requires the ability to
understand the perspective of those living in other (and very different) societies
and the willingness to put oneself in another’s shoes.
C- This cultural awareness enables managers to develop appropriate policies and
to determine how differently to plan, organize, lead, and control in a specific
international setting.
D- Company reports and management studies make it clear that a lack of cultural
sensitivity costs businesses money and opportunities. In a synthesis of the
research on cross-cultural training, Black and Mendenhall found that up to 40
percent of expatriate managers leave their assignments early because of poor
performance or poor adjustment to the local environment. About half of those
who do remain are considered only marginally effective. Further, they found that
cross-cultural differences are the cause of failed negotiations and interactions,
resulting in losses to U.S. firms of over $2 billion a year for failed expatriate
assignments alone.
Culture and Its Effects on Organizations
E- There is research evidence to support that cross-cultural training is
effective in developing skills and enhancing adjustment and
performance. In spite of the evidence, little is done in U.S. firms to take
advantage of cross-cultural research in their corporate training
programs.
Societal Culture
F. The culture of a society comprises the shared values, understandings,
assumptions, and goals that are learned from earlier generations,
imposed by present members of a society, and passed on to succeeding
generations. Culture results in a basis for living grounded in shared
communication, standards, codes of conduct, and expectations.
Culture and Its Effects on Organizations
G- Over time, cultures evolve as societies adapt—by choice or
otherwise—to transitions in their external and internal environments
and relationships. In 2011,
for example, people in Egypt brought about political and cultural
changes as a result of economic conditions and oppression and being
increasingly exposed through social media to what they perceived to be
a better way to live within systems in democratic societies.
Globalization, in all its forms of personal and business contacts and
information crossing borders, brings about changes that result in
cultural diffusion. When immigrants adopt some aspects of the local
culture while keeping aspects of their culture of origin, this process is
called creolization. Some countries, such as France, fiercely protect
their culture against outside influences and insist that immigrants
assimilate into their society and respect their values.
Culture and Its Effects on Organizations
Exhibit 3-1
depicts the variables affecting management functions. These
differences result from the societal, or sociocultural, variables of the
culture, such as religion and language, in addition to prevailing national
variables, such as economic, legal, and political factors. National and
sociocultural variables thus provide the context for the development
and perpetuation of cultural variables. These cultural variables, in turn,
determine basic attitudes toward work, time, materialism,
individualism, and change. Such attitudes affect an individual’s
motivation and expectations regarding work and group relations, and
they ultimately affect the outcomes that can be expected from that
individual
Environmental Variables Affecting Management
Functions
Exhibit 3-1
Culture and Its Effects on Organizations
Organizational Culture
Compared to societal culture, which is often widely held within a region
or nation, organizational culture varies a great deal from one
organization, company, institution, or group to another. Organizational
culture represents those expectations, norms, and goals held in
common by members of that group. For a business example, consider
Apple Computer, whose organizational culture is very organic, or
“loose” and informal with its employees typically wearing casual clothes
and interacting informally.
The Effect of Culture on Organizational Process
Exhibit 3-2

U.S. Culture Alternative Function Affected

Individual influences Life is preordained Planning, scheduling
future
The environment is People adjust to the Morale, productivity
changeable environment
Hark work leads to Wisdom and luck are Motivation, rewards
success also needed
Employment can be Employment is for a Promotions,
ended lifetime recruitment
Culture’s Effects on Management
Culture’s Effects on Management
H. Which organizational processes are most affected, and how, is the
subject of ongoing cross-cultural management research and debate.
Contextual intelligence refers to the ability to understand the limits of our
knowledge and to adapt that knowledge to an environment different from
the one in which it was developed.
Convergence describes the phenomenon of shifting individual management
styles to become more similar to one another. The convergence argument is
based on the belief that industrialization and worldwide coordination and
competition tend to factor out differences in organizational level processes,
such as choice of technology and structure. Lee, Roehl, and Choe found that
globalization and firm size were sources of convergence or management
styles.
The effects of culture on specific management functions are particularly
noticeable when we attempt to impose our own values and systems on
another society.
Culture’s Effects on Management
The first step toward cultural sensitivity is for the international manager
to understand his or her own culture. This unconscious reference point
of one’s own cultural values is called a self-reference criterion. This
awareness helps to guard against adopting either a parochial or
ethnocentric attitude. Parochialism means that one expects those from
or in another country to automatically fall into patterns of behavior
common in their own country. Ethnocentrism describes the attitude of
those who operate from the assumption that their ways of doing things
are best—no matter where or under what conditions they are applied.
The manager’s next step toward establishing effective cross-cultural
relations is to develop cultural sensitivity. Managers must appreciate
cultural diversity and understand how to build constructive working
relationships anywhere in the world; this includes not stereotyping an
entire group based on the generalizations, and understanding the role of
subcultures
Culture’s Effects on Management
One way for managers to anticipate the probable effects of an
unfamiliar culture on an organization’s outcomes and processes is to
develop a cultural profile. Managers should never assume that they can
successfully transplant America’s, or Japan’s, or any other country’s
styles, practices, expectations, and processes. Instead, they should
practice contingency management. Contingency management requires
managers to adapt to the local environment and people and to manage
accordingly.
Culture’s Effects on Management
Summary of definition
Convergence—the phenomenon of the shifting of individual
management styles to become similar to one another
Self-Reference Criterion—the subconscious reference point of one's
own cultural values. Many people in the world understand and relate to
others only in terms of their own cultures
Parochialism—occurs, for example, when a Frenchman expects those
from or in another country to automatically fall into patterns of
behavior common in France
Ethnocentrism—describes the attitude of those who operate from the
assumption that their ways of doing things are best—no matter where
or under what conditions they are applied
Under the Lens: Religion and the Workplace
Since the basis of a religion is shared beliefs, values, and institutions, it
is closely aligned with societal culture
Religion and culture are inextricably linked
Religion underlies moral and economic norms and influences everyday
business transactions and on-the-job behaviors
Foreign managers must be sensitive to the local religious context and
the expectations and workplace norms
Failure to do so will minimize or negated the goals of the firm in that
location
Cultural Value Dimensions
A. Cultural variables result from unique sets of shared values among
different groups of people. Values are a society’s ideas about what is
good or bad, right or wrong. Values will influence people to likely
behave differently under similar circumstances.
B- GLOBE Research Project Dimensions
1. The GLOBE Project team is comprised of 170 researchers who have
collected data over 7 years on cultural values and practices and
leadership attributes from 18,000 managers in 62 countries. The team
identified nine cultural dimensions, which distinguish one society from
another:
Cultural Value Dimensions
Society’s idea
what is
good/bad,
right/wrong Determines
Varies
how
across
individuals
subcultures
will respond
Values
Communicate
Allow for
d and passed
contingency
through
management Help
generations
managers
anticipate
likely cultural
effects
Cultural Value Dimensions
B. GLOBE Research Project Dimensions

a. Assertiveness e. Gender differentiation

b. Future orientation f. Uncertainty avoidance

c. Performance orientation h. Institutional collectivism versus

individualism
d. Humane orientation g. Power distance
i. In-group collectivism
Cultural Value Dimensions
The first four are distinctive from values identified in Hofstede’s
research and are presented here. The remaining five are discussed in
conjunction with the material on Hofstede.
a. Assertiveness refers to how much people in a society are expected to
be tough, confrontational, and competitive, versus modest and tender.
b. Future orientation refers to the level of importance a society attaches
to future-oriented behaviors such as planning and investing in the
future.
c. Performance orientation measures how important performance
improvement and excellence are in society and whether people are
encouraged to strive for continuous improvement.
d. Humane orientation is the extent to which a society encourages and
rewards people for being fair, altruistic, generous, caring, and kind.
Project GLOBE Cultural Dimensions
Assertiveness
Low: Sweden, Japan, Switzerland
High: Greece, Austria, the United States
Performance Orientation
Low: Venezuela, Argentina, Italy
High: the United States, Hong Kong, Netherlands
Project GLOBE Cultural Dimensions (2 of
2)
Future Orientation
Low: Russia, Argentina, Italy
High: Netherlands, Canada, Singapore
Humane Orientation
Low: Germany, Brazil, France
High: Malaysia, Ireland, Philippines
Cultural Value Dimensions
C. Cultural Clusters
1. Gupta, et al. have developed a cultural typology that places cultures
into clusters. Exhibit 3-3 shows the countries and their cluster.
D. Hofstede’s Value Dimensions
1. One useful framework for understanding how basic values underlie
organizational behavior was proposed by Hofstede, the result of
research on over 116,000 people in 50 countries. Hofstede proposes
four value dimensions: power distance, uncertainty avoidance,
individualism, and masculinity.
a. Power distance is the level of acceptance by a society of unequal
distribution of power in institutions. The extent to which subordinates
accept unequal power is socially determined.
Cultural Value Dimensions
b. Uncertainty avoidance refers to the extent to which people in a
society feel threatened by ambiguous situations. In a business context,
this value results in formal rules and procedures designed to provide
more security and more career stability.
c. Individualism refers to the tendency of people to look after
themselves and their immediate family only and neglect the needs of
society. Hofstede’s findings indicate that most countries scoring high on
individualism have both a higher gross national product and a freer
political system than those scoring low on individualism.
d. Masculinity refers to the degree of typical “masculine” values, such as
assertiveness, materialism, and lack of concern for others. Femininity in
a society emphasizes concern for others relationships with others, and
quality of life.
Hofstede’s Value Dimensions (1 of 5)
Power Distance
The level of acceptance by a society of the unequal distribution of power in
institutions
Hofstede’s Value Dimensions (2 of 5)
Uncertainty Avoidance
The extent to which people in a society feel threatened by ambiguous
situations
Hofstede’s Value Dimensions (3 of 5)
Individualism
The tendency of people to look after themselves and their immediate
families only and to neglect the needs of society

Collectivism
The desire for tight social frameworks, emotional dependence on belonging
to “the organization,” and a strong belief in group decisions
Hofstede’s Value Dimensions (4 of 5)
Masculinity
The degree to which traditionally masculine values—
assertiveness, materialism, and lack of concern for others—
prevail
 Influences on National Culture

Subcultures Stereotyping
• Many countries comprise • A cultural profile that tends to
diverse subcultures whose develop some tentative
constituents conform only in expectations—some cultural
varying degrees to the context—as a backdrop to
national character. Example: managing in a specific
Canada international setting
Learning Objective 3.3
TO UNDERSTAND THE INTERACTION BETWEEN
CULTURE AND THE USE OF THE INTERNET
The Internet and Culture
Over 92.6 percent of Korean homes have high-speed Internet service
Sweden requires all databases of personal information to be registered
with the Data Inspection Board, their federal regulatory agency
About 75 percent of the world’s Internet market lives outside the United
States: websites must reflect local markets, customs, languages, and
currencies
Under the Lens: Seoul Fights Back against
Workaholic Culture: Labour Law
Under the Lens: Seoul Fights Back against Workaholic Culture: Labour
Law
Overworked South Koreans have a new labour law imposing a cap on
working hours in an effort to improve employees’ work-life balance.
South Korea is one of the most overworked nations in Asia, as
companies with more than 300 employees and public institutions are
forced to cut the maximum weekly work hours from 68 to 52.
South Korea is notorious for its workaholic culture, which has
contributed to its rapid industrialisation over the past half a century and
transformed the once war-torn country into the world’s 11th-largest
economy. The country is home to the longest working hours and highest
suicide rate in the developed world.
Under the Lens: Seoul Fights Back against
Workaholic Culture: Labour Law
South Korea is one of the most overworked nations in Asia
South Korea—notorious for its workaholic culture
Maximum weekly work hours cut from 68 to 52
New labor law puts a cap on working hours
Management in Action: A Cultural Revolution is
Changing India, One Open-Plan Office at a Time:
Office Life Modernization
Management in Action: A Cultural Revolution Is Changing India, One
Open-Plan Office at a Time: Office Life Modernisation
The business day used to be a formal affair, with late starts and early
finishes for senior staff. When Gaurav Chopra set up his new financial
services business in India, he was determined to import some of the
relatively informal work culture he had encountered during the eight years
he spent in the UK. Out went office cubicles and in came open-plan seating
arrangements. Out went communicating with bosses only via their
assistants and in came regular face-to-face meetings. That was three years
ago. But no matter how hard he has tried to encourage colleagues to adopt
a more relaxed, western-style of working, he has found some habits
impossible to change. The lunch hour, for example, is still an hour. Even in
the most dynamic start-ups, workers decamp en masse for their meal.
Another common feature of the Indian workplace is that there is little, if
any, respect for the separation between work and family life.
Management in Action: A Cultural Revolution
is Changing India, One Open-Plan Office at a
Time: Office Life Modernization
The business day used to be a formal affair—late starts early finishes
The decision was made to import an informal work culture
Out went office cubicles and in came open-plan seating
Some habits were impossible to change
Learning Objective 3.4
TO BE ABLE TO DEVELOP A WORKING CULTURAL
PROFILE TYPICAL OF MANY PEOPLE WITHIN A CERTAIN
SOCIETY AS AN AID TO ANTICIPATING AT TITUDES
TOWARD WORK, NEGOTIATIONS, AND SO ON
Developing Cultural Profiles
Managers can gather considerable information on cultural variables
from current research, personal observation, and discussion with
people.
Managers can develop cultural profiles of various countries.
Managers can use these profiles to anticipate drastic differences that
may be encountered in a given country.
It is difficult to pull together descriptive cultural profiles in other
countries unless one has lived there and been intricately involved with
those people.
 Comparative Management in Focus (1 of 2)
Japan
• “Wa”-peace and harmony
• A mix of authoritarian and
humanism in the workplace
• Emphasis on participative
management, consensus, and
duty
• Open expression and conflict
discouraged
Germany
• Preference for rules and order,
privacy
• Dislike of inefficiency and
tardiness
• Assertive, but not aggressive
• Organizations are centralized but
still favor consensus decision
making
Comparative Management in Focus

Latin America
Not homogenous, but common similarities
“Being-oriented” compared with “doing-oriented”
Work and private lives are more closely integrated
Very important to maintain harmony and save face
Learning Objective 3.5
TO GAIN SOME INSIGHT INTO DIFFERENT
MANAGEMENT STYLES AROUND THE WORLD
Under the Lens: Doing Business in Brazil—
Language, Culture, Customs, and Etiquette
Language: Portuguese; the Portuguese spoken in Brazil is as different
from that spoken in Portugal as American English is from British English.
Diversity: Unlike many other Latin American countries where there is a
distinct Indian population, Brazilians have intermarried to the point that
it sometimes seems that almost everyone has a combination of
European, African, and indigenous ancestry.
Class system: Class is determined by economic status and the
upper/middle classes have little interaction with the lower classes.
Etiquette and Customs: Men shake hands; women generally kiss each
other; if invited to a Brazilian house it is customary to bring the hostess
flowers or a small gift; arrive 30 minutes late for dinner at a Brazilian
house.
Under the Lens: Doing Business in Brazil—
Language, Culture, Customs, and Etiquette
Business Etiquette and Negotiations: Individual relationships are
important; Brazilians take time when negotiating; Brazilian business is
hierarchical, and meetings are required – showing up late in Rio de
Janeiro is acceptable but not in Sao Paulo. Avoid confrontations. Dress
well and conservatively. Business cards are exchanged; having your
business card printed in Portuguese on the obverse side is a good idea.
As an international manager, it is useful then to apply information to
develop an
understanding of the expected management styles and ways of doing
business that predominate in that region, or with that type of business
setting. Two examples are presented—that for Saudi Arabia, and that
for Chinese small family businesses.
Under the Lens: Doing Business in Brazil—
Language, Culture, Customs, and Etiquette
Almost everyone has a combination of European, African, and
indigenous ancestry
Individual relationships are important
Brazilians take time when negotiating
Brazilian business is hierarchical, and meetings are required
Brazilians avoid confrontations
They dress well and conservatively
Business cards are exchanged
◦ Having your business card printed in Portuguese on the opposite side
is a good idea
Saudi Arabia
The Arab culture is intertwined with the pervasive influence of Islam.
Even though not all Middle Easterners are Arab, the Arab culture and
management style predominates in the Gulf region. Islam “permeates
Saudi life—Allah is always present, controls everything, and is
frequently referred to in conversation.” Exhibit 3-6 gives some social
actions and nonverbal behaviors that may offend Arabs. The
relationship between cultural values and norms in Saudi Arabia and
managerial behaviors
Developing Management Styles and Ways of
Doing Business: Saudi Arabia - See Exhibits 3-6
and 3-7
Tribal and family • Paternal sociability
loyalty • Nepotism

Close and warm • People orientation

friendships • Theory Y management
Islam and Arabic • Sensitivity to Islamic virtues
language • Access to employees and peers
• Conflict avoidance
Honor and shame
• Positive reinforcement

Polychronic use of • Right- and left-brain facility

time • Action oriented
• Separation of sexes
Male domination
• Open work life; closed family life
Chinese Family Small Business
1. According to Lee, Chinese management styles are comprised of human-
centeredness, family-centeredness, centralization of power, and small size.
2. Guanxi means connections—the network of relationships the Chinese
cultivate through friendship and affection. It entails the exchange of favors
and gifts to provide an obligation to reciprocate favors. This is a critical
aspect of business transactions in China. Those who share a guanxi network
share an unwritten code.
3. As Chinese firms in many modern regions in the Pacific Rim seek to
modernize and compete locally and globally, there is a tug of war between
the traditional Chinese management practices and the increasingly
“imported” Western management styles. This struggle is encapsulated in
the different management perspectives of the old and young generations.
4. The new generation holding on to their Confucian values, concluding
that the new generation may be viewed as “crossverging their Eastern and
Western influences, while on the road of modernization.”
Developing Management Styles and Ways of
Doing Business: Chinese Family Small
Businesses
Small, family businesses predominate
“Guanxi” connections
People are put ahead of business—human-centered management style
Globalization has resulted in more competitive management styles: the new
generation manager is more individualistic, more independent and takes more
risks
Conclusion
Each society has its own unique culture
Managers must develop cultural sensitivity
Researchers such as Hofstede and Trompenaar have created studies which
help describe cultural profiles; GLOBE study created a body of data on cultural
dimensions
Managers can use research results and personal observations to develop
cultural profiles of countries
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