You are on page 1of 45



© 2006 Prentice Hall


   

Culture and its effects on organizations Cultural variables Cultural value dimensions Developing cultural profiles

© 2006 Prentice Hall


Culture and international management
Culture is very important to the practice of international business. Culture impacts the way strategic moves are presented. Culture influences decisions. Culture is the lens through which motivation occurs. Management, decision making, and negotiations are all influenced through culture. Culture influences nearly all business functions from accounting to finance to production to service.
© 2006 Prentice Hall 3-3

Culture and international management

Marketing: Variation in attitudes and values requires firms to use different marketing mixes, Indian coke‟s advertise Human Resource Management: Evaluation of managers Production and Finance
 

Attitudes toward authority Attitudes toward change

Culture does not explain everything
While culture is very important to our understanding of international business, it does not explain everything that is different from one place to another. While culture explains some, other things like corporate strategy, structure, rivalry, governmental policy, and economics also help to explain success or failure in international business. Shenkar indicates that culture is not a residual variable; it is useful to know that it is not a primary variable either. It is one of many.
© 2006 Prentice Hall 3-5

Rules of Thumb for Cross Culture Business
     

Be prepared Slow down Establish trust Understand the importance of language Respect the culture Understand the components of culture

Culture and Its Effects on Organizations

Once upon a time there was a great flood, and involved in this flood were two creatures, a monkey and a fish. The monkey, being agile and experienced, was lucky enough to scramble up a tree and escape the raging waters. As he looked down from his safe perch, he saw the poor fish struggling against the swift current. With the best of intentions, he reached down and lifted the fish from the water. The result was inevitable.


Manifestations of Cross-Cultural Risk
Ethnocentric orientation: using our own culture as the standard for judging other cultures  Polycentric orientation: a host country mindset where the manager develops a greater affinity with the country in which she/he conducts business  Geocentric orientation: a global mindset where the manager is able to understand a business or market without regard to country boundaries Managers should strive to adopt a …???????


National culture

Culture relates to a system of shared assumptions, ideas, beliefs, and values that guide human behavior Appears in statements, actions, material items Culture is acquired Culture is transmitted from generation to generation; with embellishment and adaptation over time


Symbols Rituals and heroes

Seen, Explicit

Unseen, Implicit Values and Underlying Assumptions

Ways of perceiving, thinking and evaluating the world around us

Culture and Its Effects on Organizations


Cultural Variables

Never assume that a manager can transplant American, or Japanese, or any other country‟s styles, practices, expectations, and processes Managers need to develop a cultural profile that identifies the specific differences found in each country



Residents of the country only conform to the national character to a certain degree Could be from ethnic, geographic, or other variables Good managers treat people as individuals and they avoid any form of stereotyping


Influences on National Culture

Kinship – guides family relationships; Extended family Education – formal or informal education of workers affects workplace expectations Aesthetics- Arts and Music Economy – means of production and distribution in a society influences all aspects of the resource allocation Politics – system of government imposes varying constraints on an organization


Influences on National Culture

Attitude & Beliefs:

Time  Problem for Americans  Americans always prompt  Siestas Directness and drive  Perceived to be rudeness Deadlines  Liability in Asian cultures

Achievement and Work  “American live to work, Germans and Mexicans work to live.”  Recreation – the use, attitude, and choice of how to use leisure time  Attitude Toward Change

The American firm is accustomed to the rapid acceptance by Americans of something new.

Influences on National Culture
 

Language Religion – spiritual beliefs of a society are so powerful that they overpower all other cultural aspects Associations – the formal and informal groups that make up a society/ Social units based on age, gender, or common interest, not on kinship. Health – system of health care affects employee productivity

National Culture Classifications
Culture and Nation are not synonymous. National and cultural boundaries overlap partially, and there will be cultural differences in almost all nations. To make things simpler, however, scholars have created cultural typologies that try to describe cultural differences and ascribe them to national boundaries.


Cultural Value Dimensions

Values are a society‟s ideas about what is good or bad, right or wrong


Hofstede’s Classifications of National Culture

2. 3.


Individualism versus collectivism refers to whether a person primarily functions as an individual or within a group. Power distance describes how a society deals with inequalities in power that exist among people. Uncertainty avoidance refers to the extent to which people can tolerate risk and uncertainty in their lives. Masculinity versus femininity refers to a society‟s orientation based on traditional male and female values.


Individualistic vs. Collective Societies

Individualistic societies: ties among people are relatively loose; each person tends to focus on his or her own self-interest; competition for resources is the norm; those who compete best are rewarded financially.  Examples- Australia, Canada, the UK, and the U.S. tend to be strongly individualistic societies. Collectivist societies: ties among individuals are more important than individualism; business is conducted in the context of a group where everyone‟s views are strongly considered; group is all-important, as life is fundamentally a cooperative experience; conformity and compromise help maintain group harmony.  Examples-China, Panama, and South Korea tend to be strongly collectivist societies.

High vs. Low Power Distance

High power distance societies have substantial gaps between the powerful and the weak; are relatively indifferent to inequalities and allow them to grow.

Examples- Guatemala, Malaysia, the Philippines and several Middle East countries

Low-power distance societies have minimal gaps between the powerful and weak.

Examples- Denmark and Sweden, governments instituted tax and social welfare systems that ensure their nationals are relatively equal in terms of income and power. The United States scores relatively low on power distance.

Social stratification affects power distance- in Japan almost everybody belongs to the middle class, while in India the upper stratum controls decision-making and buying power. In high-distance firms, autocratic management styles focus power at the top and grant little autonomy to lower-level employees.

High vs. Low Uncertainty Avoidance Societies

High uncertainty avoidance societies create institutions that minimize risk and ensure financial security; companies emphasize stable careers and produce many rules to regulate worker actions and minimize ambiguity; decisions are made slowly because alternatives are examined for potential outcomes.  Belgium, France, and Japan Low uncertainty avoidance societies socialize their members to accept and become accustomed to uncertainty; managers are entrepreneurial and comfortable with taking risks; decisions are made quickly; people accept each day as it comes and take their jobs in stride; they tend to tolerate behavior and opinions different from their own because they do not feel threatened by them.  India, Ireland, Jamaica, and the U.S.

© 2006 Prentice Hall


Masculine vs. Feminine Cultures

 

Masculine cultures value competitiveness, assertiveness, ambition, and the accumulation of wealth; both men and women are assertive, focused on career and earning money, and may care little for others. Examples- Australia, Japan. The U.S. is a moderately masculine society; as are Hispanic cultures that display a zest for action, daring, and competitiveness. In business, the masculinity dimension manifests as selfconfidence, proactiveness and leadership. Feminine cultures emphasize nurturing roles, interdependence among people, and caring for less fortunate people- for both men and women. Examples-Scandinavian countries- welfare systems are highly developed, and education is subsidized.


The Fifth Dimension: Long-Term versus Short-Term Orientation
Hofstede added a fifth dimension -- long-term vs. short-term orientation -- which was not identified in his earlier study. This dimension describes the degree to which people and organizations defer gratification to achieve long-term success.

orientation tends to take the long view to planning and living, focusing on years and decades. Examplestraditional Asian cultures-China, Japan, and Singapore, which partly base these values on the teachings of the Chinese philosopher Confucius (K‟ung-fu-tzu) (500 B.C.), who espoused: long-term orientation, discipline, loyalty, hard work, regard for education, esteem for the family, focus on group harmony, and control over one‟s desires. Short-term orientation - the U.S. and most other Western countries.


(Over) simplifying matters:

 

Hofstede chooses to focus on culture at the national level as a means to help us understand/predict individuals‟ behavior. Problems/limitations with this unit of analysis Why did Hofstede choose national level? What arguments can support its use?


Hofstede: Criticisms
Hofstede has been subject to broad criticism. Among the criticisms:  Single company‟s data, with a large Multinational Enterprise having a strong corporate culture.  Time dependent results, which are an artifact of the time of data collection and analysis.  Business culture, not values culture, representing a reflection of business culture at IBM and not national culture of the countries IBM operates within.

Hofstede: Criticisms
  

Non-exhaustive, doesn’t identify all the cultural dimensions possible, but just a few. Partial geographic coverage; cover only a portion of the world’s cultures and countries.

Western bias, which values western business ideals.
Ecological fallacy, national level data generalized into individual behavior.

KEY UNDERLYING CULTURAL ASSUMPTIONS At the unconscious level of social programming

Relationship with Nature


Harmony ……………......Control/Mastery

Relationship with people

2. 3. 4. 5. 6. 7.

Relationships .................Task Hierarchy ……………......Equality Shame…………………....Guilt High Context Comm. ….Low Context Polychronic time…….....Monochronic Collectivism ………….....Individualism Secular.............……......Spirituality, Religious

Relationship with God


Live in harmony with nature and coexist with the non-physical aspects of the unseen world Less likely to challenge existing boundaries Difficult to be friends with those we disagree with Status quo Flexible Accommodating Conflict avoidance Cooperation

Take control over environment and harness forces of nature to meet one’s needs Challenge existing boundaries Can be friends with those we disagree with Firm Demanding Assertive Confrontational Competitive

Having good relationships and trust are important in doing business with your partner. Emphasis on social competencies (being
friendly, accommodating)

Build rapport and understanding before the task gets down

Personable Tolerant Friendliness Accommodating Compromising

Having a written contract is key to doing business with your partner Focus on cognitive competencies
(problem solving, critical thinking)

Impersonal Objective Task driven Critical thinking Non-negotiable

The task is the boss; relationships are not so important

Work, duties and responsibilities are distributed according to seniority

Superiors addressed and respected
Tolerance of differences in status and wealth Subordinates accept directions from superiors without questions

Respect for elders Status and power Protocol and ceremonies Politeness

Most competent will be rewarded

Superiors addressed on first name basis
Differences in status and wealth minimised Subordinates not afraid to question instructions of superiors

Meritocracy Egalitarian Less ceremonies

External locus of control: Rely on external sanctions (group, family, and team and authority) to get things done Concern with “ what will people say” if they do something wrong Face saving Group accountability

Truth depends on values, and religious teachings

Internal locus of control: Do things own volition and guided by inner conscience

Not concerned with “what others may say about me”
Has a code of ethics - absolute sense of right and wrong

Independent Autonomous Personal accountability

What you see is not what you get - need to consider the context Implicit and indirect Behaviour and person cannot be separated Guarded in stating views and opinions Indirect Not so specific Time waster Face saving Collective agreement

Say what you mean mean what you say
explicit meaning and direct

Behaviour is separated from the person Not afraid to speak up when they have something to say

Direct Specific Time saver Factual Data-oriented

Time as flexible and part of life Do many things at one time Circuitous, non-sequential Non-linear Punctuality and deadlines are not absolute

Diffused Analog Flexible Multi tasking

Time as a scarce and finite resource Do one thing at a time Sequential Linear oriented Punctual and adhere to schedules and meeting datelines Displaced Digital Focus on targets Timeliness Efficiency driven

Our way

Part of a group with common grounds - ethnicity, language, religion Group achievement more important than personal goals Value cooperation, interdependence and collaboration and communal responsibility

We: Related self Communitarianism Concern for welfare of others Obedience, Loyalty, Duty, Sacrifice

14. I- Individualism
Personal goals more important than group goals
Value competition, achievement, and independence

My way

Unique and independent individuals

I: Separated self Self-reliance Self-actualization Self-esteem Privacy Autonomy Competition

Important to combine both religious and material dimensions in one’s life Workplace ethics are guided by one’s religion Religious commitments be blended with productive work

Religious Work is a form of worship kerja sebagai ibadah

Religion is separated from work matters

Workplace ethics influenced by code of conduct and set of principles
Work targets more important than meeting religious commitments

Work and religion not to be mixed


. Cultural Dimensions

Country A

Country B

Country C

1. Harmony 2. Control/Mastery 3. Relationships 4. Task 5. Hierarchy 6. Equality 7. Shame 8. Guilt 9. High Context 10. Low Context 11. Polychronic time 12. Monochronic 13. We –Collectivism 14. Individualism 15. Religious 16. Secular
Not likely More likely Most likely








Are Cultures Converging?

Little consensus about globalization‟s effects on culture, however, it is a major influence in the emergence of common worldwide culture. Critics charge that globalization is harmful to local cultures, their artistic expressions and sensibilities, and their replacement by a homogeneous, often „Americanized‟, culture. Others argue that increased global communications is positive because it permits the flow of cultural ideas, beliefs, and values. The homogenization of culture is demonstrated by the growing tendency of people in much of the world to consume the same Big Macs and Coca-Colas, watch the same movies, listen to the same music, drive the same cars, and stay in the same hotels.

Convergence of Cultures

Cultural homogeneity and heterogeneity are not mutually exclusive alternatives or substitutes; they may exist simultaneously. Cross-cultural exchange promotes innovation and creativity. Cultural flows originate in many places; just as McDonald‟s hamburgers have become popular in Japan, so has Vietnamese food in the United States and Japanese sushi in Europe. While some past ways of life will be eclipsed in globalization, the process is also liberating people culturally by undermining the ideological conformity of nationalism.



Critical Incident Analysis

way to minimize cross-cultural bias and the selfreference criterion is to engage in critical incident analysis, a method that helps managers develop empathy for other points of view. An illustration: Engineers from Ford (United States) and Mazda (Japan) are collaborating on a joint project. The counterparts from the Ford team are baffled by the Japanese team‟s silence and in different reactions which could, in fact, be a function of : (1) the Japanese engineers could not explain themselves easily or understand the Ford team‟s briefings, which all took place in English; (2) Japanese usually refrain from speaking out before the entire team meets in private and reaches consensus.

Steps in the Critical Incident Analysis

Step One: Identify the situations where you need to be culturally aware to interact effectively with people from another culture. Step Two: When confronted with a “strange” or awkward behavior, discipline yourself not to make value judgments. Learn to suspend judgment. Step Three: Learn to make a variety of interpretations of the foreigner‟s behavior, to select the most likely interpretation, and then formulate your own response. Step Four: Learn from this process and continuously improve.



Cultural Stereotyping: What It Takes to Be a Global Manager (!)

Heaven is where the cooks are French, the police are British, the mechanics are German, the lovers are Italian and everything is organized by the Swiss.
Hell is where the cooks are British, the police are German, the mechanics are French, the lovers are Swiss, and everything is organized by the Italians.