Managing Diversity within and

Across Culture
 2
Acquire ability to understand,
Communicate effectively interact with people
across cultures,
and work with varying cultural beliefs and
schedules.
 3
How do we manage a culturally diverse team?
Select the team members/ leader who is
competent and understands the culture of
diverse society in the organization.
Take time to establish relationships and trust
with all section of the diverse society
members.
Learn about differences and expectations:
Communicate, communicate, communicate.
 4.
How Diversity can be managed Effectively in
the workplace
Connect.
Creative Collaboration. Set your team up for
success by clearly identifying company and
department goals.
Constant Communication. Give frequent
coaching and feedback on how they are doing.
Culture Adoption Theory
 2
Cultural adaptation is the process in which
person takes time to integrate into a
new culture and feel comfortable within it
A person in this position encounters a wide
range of emotions that the theory describes in
four different stages.
 3
1. Facilitation Comfortable Stage : Person is very
positive, curious, and anticipate new exciting
experiences. ...
2. Culture shock Stage :- Unacceptability,
Unwelcomeness, biasness, disparity, strange
behavior etc.
3. Recovery Stage:- gradually develop belief, trust
their culture and religion, respect to the law
etc.
4. Adjustment stages – become part of them.
 4.
According to Milton Bennett's Developmental Model of
Inter- cultural Sensitivity there are six stages that a
person must go through to become culturally sensitive
1. Denial,
2. Defense,
3. Commonality
4. Cultural awareness,
5. Culturally sensitive,
6. Adaptation, and
7. Integration.
Hofstede Study, Edward T Hall Study,

Book International Business by

Rakesh Mohan Joshi
Page-274 onward
 2
You tube link
https://www.youtube.com/watch?v=Fwa1tkH7L
EI
https://www.youtube.com/watch?v=3Aadf3XvS
Xo
 Hofstede Study, Edward T Hall Study,

It is the most powerful tool to study the cross

culture behavior. Hofstead did the research on
116000 respondents from 70 countries
working in IBM.
 Hofstede Study, Edward T Hall Study,

There are two key methods used to describe and

analyze cultures.
The first was developed by Geert Hofstede and
focuses on five key dimensions that interpret
behaviors, values, and attitudes:
1. Power distance,
2. Individualism,
3. Masculinity,
4. Uncertainty avoidance, and
5. Long-term orientation.
 Hofstede Study, Edward T Hall Study,

The second description to analyze the culture was

developed by Edward .T.Hall.
Hall's concept of proxemics considers human uses
of space within the context of culture.
Implications relate to cross-cultural
communication processes and to the design of
built environments.
( Proxemics – The study of spatial distance between
individual in different culture and situation)
 Hofstede Study, Edward T Hall Study,

Power Distance (PDI) Power distance refers to the

way in which power is distributed and the extent
to which the less powerful accept that power is
distributed unequally. Put simply, people in some
cultures accept a higher degree of unequally
distributed power than do people in other
cultures.
Japanese are always conscious of their hierarchical
position in any social setting and act accordingly.
However, it is not as hierarchical as most of the
other Asian cultures.
 Hofstede Study, Edward T Hall Study,

Individualism versus Collectivism (IDV) -- What is

difference between individualism and
collectivism?
The first way is individualism, which states that
each individual is acting on his or her own,
making their own choices, and to the extent they
interact with the rest of the group, it's as
individuals.
Collectivism is the second way, and it views the
group as the primary entity, with the individuals
lost along the way.
 Hofstede Study, Edward T Hall Study,

Masculinity
A masculine culture is made up of male gender
roles that focus on values such as money, success,
and competition. These cultures consist of a need
for power, assertiveness, dominance, and wealth
and material success.
Traditionally, masculinity and femininity have been
conceptualized as opposite ends of a single
dimension, with masculinity at one extreme
and femininity at the other
 Hofstede Study, Edward T Hall Study,

Uncertainty Avoidance (UAI)

In China, a country with high uncertainty avoidance,

managers are more controlling, less approachable, and less
likely to delegate to subordinates than theirl ow-
avoidance counterparts. In other words, managers in
China do not place as much trust in their employees as
managers in other countries, such as the United ..
countries with low uncertainty avoidance scores include the
United States, England, India, China, and Singapore.
Examples of countries with high uncertainty avoidance scores
include Italy, Korea, Mexico, Belgium, and Russia.
 Hofstede Study, Edward T Hall Study,

Long-Term Orientation (LTO) -----

Long-term orientation is when you are focused
on the future.
Short-term orientation is when you are focused
on the present or past and consider them
more important than the future.
If you have a short-term orientation, you value
tradition, the current social hierarchy and
fulfilling your social obligations
Porter’s Value Chain Analysis

https://www.youtube.com/watch?v=
a9LWp9y2fMw
 Value Chain Analysis
Definition.
Value chain analysis (VCA) is a process where a
firm identifies –
A. Its primary and support activities
B. that add value to its final product and
C. then analyze these activities to reduce costs
or increase differentiation.
 Value Chain Analysis
• The term value chain describes a way of
looking at a business as a chain of activities
that transform inputs into outputs that
customers value
• Value chain analysis (VCA) attempts to
understand how a business creates customer
value by examining the contributions of
different activities within the business to
that value
• VCA takes a process point of view
Value Chain Analysis
 Value Chain Analysis
How Porter’s Value Chain can be used
By following these basic steps the organization can
be analyzed using the Value Chain.
Step 1: identify sub activities for each primary
activity.
Step 2: identify sub activities for each support
activity.
Step 3: identify links. ...
Step 4: look for opportunities/ solutions to optimize
and create value.
 Value Chain Analysis
Benefits
The overall goal of every organization is
1. To deliver maximum value for the least
possible total cost.
2. There are many advantages of value chain
analysis, which all result in a company's
ability to understand and optimize the
activities that lead to its competitive
advantage and high profit levels.
 Organization Structure

Strategic Management – John A Pearce

II – pp 360,
http://youtube.com/watch?v=xcTtQ0hi
HbE
 Organization Structure
An organizational structure is a system that
outlines how certain activities are directed in
order to achieve the goals of an organization.
These activities can include rules, roles, and
responsibilities. Theorganizational
structure also determines how information
flows between levels within the company.
 Organizational Structure
Board of Directors
I
CEO/Chairman/ MD
I
HR Finance Procurement R&D Production Marketing
I
Subordinate Departments .

(http://youtube.com/watch?v=zUd0UNHyy60)
 Organizational Structure
Horizontal Boundaries – Between Different
departments or functions in a firm. Sales
people are different from administration
people. One division is separate from another
one.
Vertical Boundaries – Between operation and
management, between corporate and
divisions.
 Organizational Structure
Geographic Boundaries Between different
physical locations, between different countries
and different culture.
External Interface Boundaries Between a
company and its customers, suppliers,
partners, etc.
 Competitive Advantage

International Business – Rakesh Mohan Joshi

Pp62/ 419/684 etc.
https://www.youtube.com/watch?v=qxmc
wScY1ls
 Competitive Advantage
What is a Competitive Advantage?
 A competitive advantage is an attribute that
allows a company to outperform its competitors.
Competitive advantages allow a company to
achieve superior margins compared to its
competition and generates value for the company
and its shareholders.
 A competitive advantage must be difficult, if not
impossible, to duplicate. If it is easily copied or
imitated, it is not considered a competitive
advantage.
 Competitive Advantage
Access to natural resources that are restricted
to competitors
Highly skilled labor
A unique geographic location
Access to new or proprietary technology
Ability to manufacture products at the lowest
cost
Brand image recognition
 Competitive Advantage
 Benefit: A company must be clear what benefit(s)
their product or service provides. It must offer real
value and generate interest.
 Target Market: A company must establish who is
purchasing from the company and how it can cater
to their target market.
 Competitors: It is important for a company to
understand other competitors in the competitive
landscape.
 To construct a competitive advantage, a company
must be able to detail the benefit that they provide
to their target market in ways that
other competitors can not.
 Competitive advantage
Cost Leadership
Focus
Differentiation.
Adopting Global Strategies.
International Business – Rakesh Mohan Joshi pp
471/501 John A Pearce pp 141.
Strategic Management b
https://www.youtube.com/watch?v=axonFO5Vb2I
 Adopting Global Strategies.
Multi Domestic Industries - In which
competition is segmented from country to
country.
1. Customized to meet the taste or preferences
of local customers.
2. Proper distribution channel,
3. Proper R&D
 International Merger and Acquisition
A merger occurs when two separate entities
combine forces to create a new, joint
organization.
An acquisition refers to the takeover of one
entity by another.
Mergers and acquisitions may be completed to
expand a company's reach or gain market
share in an attempt to create shareholder
value
 Reasons of Global Mergers and
Acquisition
Reasons of Merger and Acquisition
 Increased operational efficiencies
 Program/service expansion
 Fortified barriers to entry
 Enhanced capacity and avoidance of capital
expenditures.
 Improved financial and credit position
 Access advantages
 Enhanced competitive position
 Enhanced relationships with service providers
 Global Mergers and Acquisition
 Enhanced capacity and avoidance of capital
expenditures :providing operational capacity for
services at a lower cost and/or in a better
timeframe than would be required to create such
capacity without an acquisition or merger.
 Improved financial and credit position :enhancing
the organization’s financial performance and
credit rating, thereby improving access to capital
and lowering the cost of capital.
 Global Mergers and Acquisition
Access advantages : improving accessibility to
clients in new attractive markets and/or
enhancing access in existing markets.
Enhanced competitive position :
fundamentally changing the market position,
for example, by moving the organization from
a subordinate position to a more dominant
position.
 Merger and Acquisition

> Enhanced relationships with service

providers :gaining access to or improving
relationships with important referral sources,
including specific service providers.
International Resource Base
View of the Firms
Emerging Modules of Strategic
Management
Resource Base View of the Firms-2
1. RBV is a method of
 Analyzing and Identifying a firm’s strategic
advantages based on its distinct
 Assets, infrastructure, plant & Machineries
etc.
 Skills,
 Capabilities of utilizing the skills and assets,
Each firm develops competencies from these
resources, and these become the source of
the firm’s competitive advantages.
Resource Base View of the Firms-3
1. Tangible assets are the easiest “resources” to
identify and are often found on a firm’s balance
sheet
2. Intangible assets are “resources” such as brand
names, company reputation, organizational
morale, technical knowledge, patents and
trademarks, and accumulated experience
3. Organizational capabilities are not specific
“inputs.” They are the skills that a company
uses to transform inputs into outputs
Resource Base View of the Firms-4
Guidelines:
1. Is the resource or skill critical than that of
the firm’s competitors?
2. Is the resource scarce?
3. Is it in short supply or not easily substituted
for or imitated?
4. How rapidly will the resource depreciate?
 RBV
The resource-based view suggests that a firm's
unique resources and capabilities provide the
basis for a strategy.
The business strategy chosen should allow the
firm to best exploit its core competencies
relative to opportunities in the external
environment."1
 RBV
Resources are inputs into a firm's production
process, such as capital, equipment, the skills of
individual employees, patents, finance, and
talented managers.
Resources are either tangible or intangible in
nature.
Individual resources may not yield to a competitive
advantage.
It is through the synergistic combination ( team)
and integration of sets of resources that
competitive advantages are formed.
BALANCE SCORE CARD
 Balance Score Card -2
The Balanced Scorecard is a performance measuring
method that focuses on to a set of broad performance
areas such as –
1. Internal Process,
2. Financial performance,
3. Customers Satisfaction.
It is a tool that allows a business to translate its vision
and strategy into action.
It was developed by Robert S Kaplan and David P Norton
who wrote about it in 1996: Balanced Scorecard:
Translating Strategy into Action.
 Balance Score Card -3
The key input for the Balanced Scorecard is the
strategic analysis such as SWOT Analysis,
which represents the fruits of the strategic
analysis of internal and external factors.
The business strengths and market
opportunities are the the main inputs to the
Balanced Scorecard framework.
 Balance Score Card -4
The Balanced Scorecard framework operates in four areas,

 Financial – financial measures as profitability, sales growth,

productivity or return on investment,
 Customer - customer measures such as improved customer
service, better customer satisfaction or higher loyalty,
 Internal – internal measures such as develop value added
services, improve order processing, improve delivery cycle,
 Learning and Development – learning measures such as re-
skill workforce, link rewards and performance, develop
information assets
 Balance Score Card -5
Financial Example
(A)Financial: Increase sales growth
(a)Measure: Increased Year-on-Year sales
growth of product X
(b)Target: Gross volume increase of over
previous year
( c) Initiative: Market product to local
businesses & institutional by local sales staff
 Balance Score Card -6
Customer Example
(B) Customer: Improve customer service
(a) Measure: Customer satisfaction survey
(b)Target: Customer satisfaction for services.

( c)Initiative: Train customer service staff

in how to deal with
customers.
 BALANCE SCORE CARD -7
Internal Example
( C) Internal: Improve order processing,
(a) Measure: Time to process order,
(b) Target: Reduce time to process order by
20%,
( c) Initiative: Use new system that
simplifies order handling,
 Balance Score Card -8
Learning and Development Example
(D) Learning: link reward to performance
(a)Measure: employee satisfaction survey
(b)Target: All staff on reward for
performance by end of year
( c) Initiative: Define reward structure and
pilot in first half of year
 BALANCE SCORE CARD -9
Four perspectives:
1. The learning and growth perspective: How well are
we continuously improving and creating value?
2. The business process perspective: What are our core
competencies and areas of operational excellence?
3. The customer perspective: How satisfied are our
customers?
4. The financial perspective:
How are we doing for our
shareholders?
 Balance Score Card -10
Benefits
(A) The balanced results has many benefits to the
business through both the process to develop it and as
a communication tool to publicize the vision and
strategy in action:
(B) Clarify and gain consensus about strategy
( C) Align consequent strategic initiatives and plans
(D) Communicate strategy throughout business
(E) Align business and personal goals to strategy
(F) Link strategic objectives to vision and budgets
(G) Perform periodic review and gain feedback
 Vimlesh Industries-11
Business Strengths :-
1. Sound Financial Resources.
2. Loyal force of Employees.
3. Satisfied Customer Base.
4. Sound reputation in the market.
5. Producing quality products.
6. Satisfied suppliers base.
7. Sufficient scope of increased production,
8. Sound R&D practices,
 Vimlesh Industries- 12
Market Opportunities :-
1. Inflow of MNCs in the country.
2. Opening up of new markets in OEM sectors.
3. Exponential increase in power generation
sector.
4. Favorable market conditions.
5. High competitive market,
 Vimlesh Inds. 13
Area of Improvement
Establishment of independent departments,
Improvement in aesthetical appearance,
Control on procurement to manage funds,
Install effective ERP,
 Establishment of Quality Lab.