Cross Cultural Management

Describes organizational behavior within countries and cultures Compares organizational behavior across countries and cultures Seeks to understand and improve the interaction of customers, suppliers, employees, executives, and others from countries and cultures around the world

Culture defined
The collective programming of the mind which distinguishes the members of one human group from anotherthe interactive aggregate of common characteristics that influence a human groups response to its environment. Hofstede Socially derived, taken-for-granted assumptions that shape behavior, or structure ones perception of the world

What are Americans like?

Direct, dont talk around things. Competitive Independent and individualistic Questioners: Ask a lot of questions Dislike silence
Would rather talk about the weather than deal with silence

Punctual

Why Study International Organizational Behavior?

For managers who have to operate in an unfamiliar culture, training based on homecountry theories is of very limited use and may even do more harm than good
An American was sent to manage a bank in Venezuela. He asked the employees for their input and recommendations to solve a problem. How did the employees react?

Expectations of Mangers Across Cultures

It is important for managers to have at hand precise answers to most of the questions their subordinates may raise about their work. Percentage agreeing with the above:
Sweden: 10% Germany: 46% Spain & Japan: 78% USA: 18%

Average vacation days for employees with one year of service

USA: 10 days Spain: 22 days Germany: 18 Sweden: 30 Finland: 20 Japan:10

Maternity Leave
Sweden: Either parent, 90% pay for 12 months Denmark, 90% pay for 28 weeks Germany, 14 weeks, 100% pay Ireland, 14 weeks, 70% pay Italy, 20 weeks, 80% pay USA, 12 weeks, unpaid (FMLA)

Hofstedes Study
Study of IBM employees across the world
National culture explained more of the differences in work-related values and attitudes than did:
Position within the organization Profession Age Gender

Found four core dimensions of national culture

Hofstedes Dimensions of National Culture

Individualism versus collectivism
Individualism: (USA, Australia)
Emphasis on the individual: make primary contributions to oneself

Collectivism: (Japan)
Emphasis on the group: make primary contributions to group goals and objectives Members are expected to look after other members

Implications
Organizational loyalty, teamwork, social loafing

Hofstedes Dimensions (cont.)

Power distance:
measures the extent to which the less powerful members of an organization accept/expect an unequal distribution of power Large PD (Venezuela, Philippines) Wide differences in power are accepted and often preferred
Titles & hierarchy are very important

Small PD (Denmark, Ireland)

Power differences are played down Boss is not someone to fear

Implications
Organizational structure (pyramid vs. flat) Decision-making issues: Participative vs. authoritarian, decentralized vs. centralized

Hofstedes Dimensions (cont.)

Uncertainty Avoidance
The extent to which people feel threatened by ambiguity & uncertainty (risk) and therefore try to avoid such situations
Implications
Career stability (job security), formal rules

High in uncertainty avoidance (Portugal, Greece)

Concept of lifetime employment Formal rules help to reduce uncertainty Working hard is a way of reducing uncertainty (karoshi)

Low in uncertainty avoidance (Denmark, Singapore)

Risk taking is more accepted & encouraged

Hofstedes Dimensions (cont.)

Quantity vs. quality of life
Quantity: emphasizes acquisition of money and things (materialism) (USA) Quality: emphasizes relationships and overall quality of life (time for activities outside of work is important) (Sweden)
Implications for work hours, vacation time, pay issues

Gender roles:The extent to which career and family roles for men and women are distinct
Similar: Both men and women work outside the home and take care of family obligations (Sweden) Unique: Men work outside of the home, women take care of the family (Japan, Austria, Mexico)
Implications for paternity & maternity leave, on-site day care, flex-time

Expatriates
People from one national culture working in another for a fixed period of time
U.S. expatriates (3 years is the average assignment) Average 3 year assignment can cost firms up to $1 million per expat
Moving expenses, education, expat premiums, cost of living differences, inflation, etc.

Catskill Roads
What should they do? Why? In general, what factors should be considered in the decision to accept or reject an expatriate assignment?

Why U.S. managers would accept an international assignment

Cross-cultural experience (52%)
Gain a greater understanding of another way of life

Money (40%)
Higher salary, more fringe benefits

Career Advancement (21%)

Increased opportunities & exposure

Why U.S. managers would NOT accept an international assignment

Location
Political unrest, dangerous

Career
High risk of job failure, isolation from home company, forgotten

Family
Dual-careers, spouse unwilling to move

Repatriation Issues
Will I have a job at the same company when I return?
46% of U.S. firms do not guarantee a position at home upon completion of the assignment
Mergers, downsizing, layoffs
An international assignment may be a high-risk career strategy

Why type of job will I have upon return?

Less challenging, lower status, and less responsibility High rate of turnover for expats upon return (25% within a year)
Consider the cost of an expatriate assignment (about $1 million) and the potential loss of part of this investment

Reasons for Expatriate Failure

U.S. Expats (up to 45% failure rate)
1) Inability of spouse to adjust
Career disruption Social needs Personal & career identity

2) Managers inability to adjust 3) Other family reasons

Children at school & related adjustments Issues with family in the U.S. (elder care)

Expatriate Selection Issues

Personality issues
High tolerance for ambiguity High self-monitor Emotional stability Nonjudgmental, nonevaluative Flexibility & willingness to try new ways Initiative

Expatriate Selection Issues (cont.)

Family Issues
Would your spouse be interrupting a career to accompany you? If yes, how might this affect your spouse and your relationship with each other? Are you prepared to have less contact with your extended family?
AT&Ts self-assessment of cultural-adaptability