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Nature of Environment
• In its narrow sense, culture is understood to refer to
such activities as dance, drama, music, & festivals
• In its true sense, culture is understood as that
complex whole which includes knowledge, belief, art,
morals, laws, customs , & other capabilities & habits
acquired by an individual as a member of a society
• “Culture consists of”, writer Elbert W Steward &
James A Glynn, “the thought & behavioural
patterns that members of a society learn through
language & other forms of symbolic interaction
• Cultures change gradually, picking up new ideas &
dropping old ones, but many of the cultures of the
past have been persistent & self-contained

Most scholars of culture would agree on its following

characteristics :-
• Learned – Culture is not inherited or biological
based, it is acquired by learning & experience
• Shared – People as members of a group,
organisation, or society share culture; it is not
specific to specific individuals
• Trans-generational – Culture is trans-
generational, passed from one generation to the next
• Symbolic – Culture is based on the human capacity
to symbolise or use one thing to represent another
• Patterned – Culture has structure & is integrated;
a change in one part will bring changer in another
• Adaptive – Culture is based on the human capacity
to changer or adapt, as opposed to the more
genetically driven adaptive process of animals

• Culture is understood as human means of adapting

to circumstances & transmitting this coping skill &
knowledge to subsequent generations
• Culture gives people a sense of who they are, of
belonging of, of how they should behave, & of what
they should be doing
• Culture impacts behaviour, morale & productivity
at work, & includes patterns that influence company
attitudes & actors.
Levels of Culture
• The inter-national manager needs to be aware of the
three levels of culture that influence overseas
• These include national culture, & the occupational
& organisadtional cultures (see Fig. below)
A. National Culture
B. Business Culture
C. Occupational & Organisational
National Culture

Business Culture

Organisational Culture Occupational Culture

Multinational Management

Levels of Culture in Multinational Management

A. National Culture

• National culture is the dominant culture within the

political boundaries of a country
• Formal education is usually taught & business is
generally conducted in the language of the dominant
• Political boundaries, however, do not necessarily
reflect cultural boundaries
• Many countries, such as India, Canada, & Singapore
have more than one major cultural group within
their political boundaries
• States with relatively homogeneous cultures have
various sub-cultures representing regional & rural/
urban cultural differences that effect business
• Most inter-national businesses take place within the
constraints of political boundaries of the nation-state
• As such, the dominate culture of the nation-state
probably has the greatest impact on inter-national
• It usually influences not only the language of
business transactions but also the nature & types of
law that govern business.
B. Business Culture

• For an inter-national manager, business

culture – the way Indians, Germans, Koreans
& others do business – is more important
• Business culture represents norms, values, &
beliefs that pertain to all aspects of doing
business in a particular environment
• Business cultures tell the correct, acceptable
way to conduct business in a society
• Business culture also provides the guides for
everyday business interactions
• What to wear to a meeting, when & how to use
business cards, whether to shake hands or
embrace – are all examples of business
etiquette taught by business culture
• Each national culture has its own business
• The more pervasive national cultures
constrain & guide the development of business
culture in a society
• Business closely interweaves with the broader
cultural values, norms, & beliefs
• Examples include the priorities given to age
& seniority, the role expectations of women, &
expectations concerning of sub-ordinates by
C. Occupational & Organisational Culture

• Organisation-specific & occupation-specific

cultures tend to develop within national &
business cultures
• Organisational culture (or its sister-term
corporate culture) refers to the philosophies,
ideologies, values, assumptions, beliefs,
expectations, attitudes, & norms that knit an
organisation together & are shared by its
• Members of organisations tend to internalise
cultural nuances & like to initiate newcomers
into such mores
• Some of the practices are so thoroughly internalised
that no one questions them – they are taken for
granted, that is, they get institutionalised
• Besides institutionalisation, glorification tends to
occur in organisation cultures, heroes emerge,
especially among the founding fathers of the firm,
whose sacrifices, valorous deeds, & ingenuity are
embellished into stories & sagas
• The firm itself may come to be regarded as a source
of pride in some sense unique & employees begin to
feel a strong bond with it, & they begin to identify
with it
• The organisation turns into a source of clan & the
organisational members become ethnocentric
• Clannish organisations often pose problems to inter-
national managers
• Most Indian companies had developed the clan
culture which led to the collapse of several joint
ventures between Indian companies & overseas
• Mention may be made of the breaking up the
marriage between Tatas & IBM & Daimler Benz, of
Godrej with P&G & GE, of DCM with Toyota, of
LML with Piaggio & of Mahindra with Ford
• Different occupational groups, such as physicians,
professors, lawyers, accountants, & crafts-people
have distinct cultures, called occupational cultures
• Occupational cultures are the norms, beliefs &
expected ways of behaving of people in the same
occupational groups, regardless of which
organisations they work for
• The occupational cultures cannot be ignored by the
inter-national manager, notwithstanding the
dominance of national & business cultures
• People with similar jobs often had very similar
culture norms
• Moreover, people from different occupational
groups were often more similar to one another than
to people from their own national cultures.
Elements of Culture
• Culture is a very complex & multifaceted concepts
comprising many elements
• All these elements have evolved over time.

Though the elements of culture are many, we focus here

on language, religion, education, aesthetics, attitudes,
customs, & manners & supernatural beliefs.
(See Fig. below)

Language Education

Customs & Culture Religion


Attitudes Aesthetics

Elements of Culture
Language & Culture

I) The Influence of Language on Culture

ii) The Influence of Culture on Language
iii) High & Low-context Languages
i) The Influence of Language on Culture

• Language refers to an abstract system of word

meanings & symbols of all aspects of culture
• Language includes speech, written characters,
numerals, symbols & gestures of non-verbal
• How does language influence culture?
• Language establishes the categories on which
our perceptions of the world are organised
• It establishes categories in our minds that
force us to distinguish those things that we
consider as similar from those that are not
• Speakers of any two languages will not perceive
reality in exactly the same way
• Besides reflecting its world view, a language reveals
a culture’s basic value structures
• For the Americans, it is the individual, not the
group, that is important
• Many anthropologists argue that the language fails
to capture nuances of human thoughts &
• For example, humans possess the ability to make
millions of colour distinctions, yet languages differ in
the number of colours that are represented by their
respective vocabularies
• The English language distinguishes between yellow
& orange, but some other languages cannot
ii) The Influence of Culture on Language

• The impact of culture seems to be more significant

than vice versa
• The vocabularies of all languages reflect cultural
nuances of the societies
• If a society is endowed with highly advanced tech-
nology (as it happens in rich countries), the language
of the society contains such technical jargons as
computers, laptops, BPO, call centres, e-mails,
internet, iPods, software, websites, & the like
iii) High & Low-context Languages

• Languages in which people state things directly &

explicitly are called low context
• The words provide the meaning
• There is no need to interpret the situation to under-
stand the import of the words
• Languages in which people state things indirectly &
implicitly are called high context
• In the high context language, communications have
multiple meanings that can be interpreted only by
reading the situation in which they occur
• So important are the ideas of high & low context
that many people refer to the whole cultures as being
high & low context
• Most northern European languages, including
German, English & the Scandinavian languages, are
low context
• In contrast, Asian & Arabic languages are high
Religion & Culture
• Religion refers to a specific & institutionalised set of
beliefs & practices generally agreed upon by a
number of persons or sects
• There are nearly 1,00,00 religions across the globe,
but the major ones among them are :-
1. Hinduism
2. Christianity
3. Islam
4. Buddhism
5. Confucianism
• Religion has considerable impact on one’s life,
irrespective of the country to which he or she
• People go to any extent & practise abnormal
activities in the name of religion.
1. Hinduism

• Critics argue that by emphasising moksha, dharma,

renunciation, & asceticism, Hinduism negates enter-
prenurialism & the wealth acquisitive nature of its
• From the time of the Rig Veda, which contains many
prayers for riches, worldly wealth was looked upon
as morally desirable for the ordinary man, & indeed
essential to lead a full & civilised life
• India had not only a class of luxury-loving &
pleasure-seeking dilettante but also one of wealth-
seeking merchants & prosperous craftsmen, who if
less respected than the Brahmins & warriors, had an
honourable place in society.
2. Christianity
• Is the most widely practised religion in the world
• About one billion people, approximately 20 %
of the world’s population identify themselves as
• The vast majority of Christians live in Europe &
America, although their numbers are growing in
• Protestantism (one branch of Christianity, the
other being Catholicism) has considerable
implications for business
• Capitalism, which is the most dominant economic
philosophy to-day, has grown out of
Protestantism which advocates hard-work &
encourages wealth acquisition.
3. Islam

• Is the second largest religion with followers spread

over more than 35 countries & inhabiting an almost
continguous stretch of land from the north west
coast of Africa through the Middle East, to China &
Malaysia in the Far East
• Islam prohibits receipt of payment of interest which
is considered usury
• Some critics argue that Islam discourages profit.
This is not true
• The Quran speaks approvingly of free enterprise &
of earning legitimate profit through trade &
• Islam also advocates market based systems
• Given this proclivity, Muslim countries tend to
attract inter-national businesses so long as they
behave in a manner that is consistent with Islamic
4. Buddhism

• Has 250 million followers in Central & South East

Asia, China, Korea, & Japan
• Buddhists stress spiritual achievement & obviously
wealth creation is not encouraged
• In Buddhist societies, we do not see the same kind of
cultural stress on entrepreneurial behaviour that we
see in the Protestant West
5. Confucianism

• Numbering over 150 million are found in China,

Korea, & Japan
• The religion teaches the importance of attaining
personal salvation through right action
• Confucianism is built around a comprehensive
ethical code that sets down guidelines for relation-
ship with others
• The need for high moral & ethical conduct & loyalty
to others are central to Confucianism
• Confucianism has economic tenets too
• It teaches the followers to lower the costs of doing
business & this has largely contributed to the eco-
nomic success of Japan, South Korea, & Taiwan
• Three principles are central to Confucianism –
loyalty, reciprocal obligations, & honesty.
Education & Culture
• In its broad sense, education is the lifelong process of
learning through which members of a society
acquire knowledge & develop skills, ideas, values,
norms, & attitudes which they share with other
members of the society
• Economic progress of a country depends on the
education of its citizens
• This being a broad statement, specific economic
implications are as follows :-
1. Countries rich in educational facilities attract
high-wage industries. By investing in
education, a country can attract (nay, create)
the kind of high-wage industries that are often
called “brain power” industries
2. The market potential of a country depends on
education. Educationally advanced countries,
such as England, France, & Germany are
more likely to be markets for computers &
high-tech equipment than are less educated
countries, such as Poland, the Czech
Republic, & Romania. It is also likely that
MNCs doing business in these countries will
find it easier to hire & train local managers in
Western Europe than in Eastern Europe
3. The level of literacy & educational attainment
determines the nature of advertising,
packaging, quality of market research, &
distribution systems available or prevalent in
a country.
Aesthetics & Culture
• Aesthetics relates to the artistic tastes of a culture
• Aesthetic values of Indians, for example, are
different from those of Canadians as reflected by
the art, literature, music, & artistic tastes
• One important manifestation of aesthetics is the
behaviour of people
• International managers should understand
aesthetic local values if he or she has to appreciate
another culture & the way in which business must
address these values in the international arena
• Another aesthetically related area is colour
• In many Western countries, the colour black is
associated with mourning, while white is with joy &
• In many Asian countries, white is the colour for
• Green is the favoured colour in Islam but it is
associated with sickness across much of Asia
• Music is deeply embedded in culture & should be
considered while promoting goods & services
• It can be used in clever & creative ways or in ways
that are offensive to the local population
• The architecture of buildings & other structures
should also be researched to avoid making cultural
blunders due to the symbolism of certain shapes &
Attitudes & Culture
• Attitudes are positive or negative evaluations,
feelings, & tendencies which make an individual
behave in a particular way towards people or
• Attitudes include opinion about individual freedom,
democracy, truth & honesty, the role of sexes,
justice, love, marriage, & sex
• Of particular interest to us in this context are the
attitudes towards work, business, & time & the
Culture vis-a-vis Customs &
• Customs are common & established practices
• Manners are behaviours that are regarded as
appropriate in a particular society
• Customs dictate how things are to be done; manners
are used in carrying them out
• Further, manners are pointers of an individual’s
character whereas customs are what society
collectively expects its members to do
• The inter-national manager should understand the
manners & customs of host country citizens
• Failure to understand & respect local customs &
manners may land the manager in trouble, besides
losing business
• In Arab countries, for example, it is considered bad
manners to attempt to shake hands with a person of
higher authority unless this individual makes the
first gesture to do so, unlike in the US where a
person would not hesitate to offer his or her hand
regardless of the person’s rank
• Similarly, shaking hands with the opposite sex is not
appreciated in India, though the practice is
prevalent in some other countries
Supernatural Beliefs
• All societies have a certain degree of control over
their physical & social environments
• People in all societies can understand & predict a
number of things
• Things like car cannot run without petrol, Sun
always rises in the east & sets in the west & apple
falls on the earth are predictable
• But, there are certain other things which are not
predictable :why a person dies on the spot in an
accident when the person sitting next to him/her is
• Societies must develop supernatural belief systems
for explaining these unexplainable happenings
• The people explain the unexplainable by relying on
various types of supernatural explanations, such as
magic, religion, witchcraft, sorcery, & astrology
• Supernatural belief systems affect the conduct of
business by shaping attitudes about work, savings,
consumption, efficiency, individual responsibility &
decision making
• Followers of Hinduism believe in Vastu
• Vastu decides the direction of the factory gate, main
entrance of the premises, place where CEO should
sit, & whether or not the company should diversify/
acquire another business
Implications for Inter-national
• Global businesses are the repositories of
• Multi-culturalism means that people from many
cultures (& frequently many countries) interact
• The scenario is highly complex with several national
cultures & sub-cultures interacting regularly
• Managing multi-culturalism is essential for every
inter-national firm
• Four tasks are crucial :--
a) spreading cross-cultural literacy, b) culture &
competitive advantage, c) managing diversity
& d) strategy culture fit
a) Spreading Cross-Culture Literacy

• One of the biggest dangers confronting a firm that

enters a foreign market for the first time is the
problem of being ill-informed
• Inter-national businesses that fail to understand
host-country cultures are likely to fail
• Doing business in different cultures requires
adaptation to conform with the nuances of that
• An inter-national manager has to bear in mind that
local people often expect higher standards of
behaviour & tolerate far less deviation from local
manners & customs from foreign companies than
from a native firm.
Removing Cross-Cultural Illiteracy

• One way to appoint local citizens to do business in a

particular culture
• Firms should also be ensure that home-country
executives are cosmopolitan enough to understand
how differences in culture affect the practice of
inter-national business
• Transferring executives overseas at regular intervals
to expose them to different cultures will help build a
cadre of cosmopolitan executives
• An inter-national business must also be constantly
on guard against the dangers of ethnocentric
• The ethnocentric person sees his or her own group
as the centre or defining point of culture & views of
all other cultures as deviations from what is normal
• Hand-in-hand with ethnocentrism goes a disregard
or contempt for the culture of other countries
• Unfortunately, ethnocentrism is all too prevalent;
many Indians are guilty of it, as are many
Americans, French, Japanese, Britishers, & so on
• Ugly as it is, ethnocentrism is a fact of life & the
inter-national businesses must be on continual guard
against it
• How do inter-national managers learn to live with
other cultures?
• The first step is to realise that there are
cultures different from their own
• They must then go on to learn the
characteristics of those cultures so that they
may adapt to them.
Spread Culture &
Cross-culture Competitive
literacy advantage

Multi culture

between Managing
Strategy & diversity
Multi Culture & Inter-national Business
b) Culture & Competitive Advantage

• Culture may sound abstract but the norms & values

prevalent in a society do influence the costs of doing
business in that country
• These costs influence the ability of enterprises to
establish a competitive advantage in the global
market place
• Japan presents us with an example of how culture
can influence competitive advantage
• The country’s emphasis on group affiliation, loyalty,
reciprocal obligations, honesty, & education -- all
boost the competitiveness of Japanese companies
• The emphasis of group affiliation & loyalty
encourages individuals to identify strongly with the
companies in which they work
• This tends to foster an ethic of hard work & co-
operation between workers & management for the
good of the company
• In addition, the availability of a pool of highly skilled
labour, particularly, engineers, has helped Japanese
companies develop cost reduction techniques
• A different picture is found in Britain
• Here, the class-based conflict between workers &
management has disrupted industrial relations,
raising the cost, of doing business
• For inter-national business, the connection between
culture & competitive advantage is important for
two reasons :-
• First, the conjunction suggest which countries are
likely to produce the most viable competitors
The Pacific Rim nations (South Korea, Taiwan,
Japan, & China), for example, are likely to produce
cost-effective competitors because of the
combination of free market economies, Confucian
ideology, group-oriented social structures, &
advanced education systems ;
• Secondly, the relationship between culture &
competitive advantage has important implications
for the choice of countries in which to locate
production facilities & do business
• Obviously, a country that has strong cultural
support attracts a vast inflow of FDI
c) Managing Diversity

• Managing diversity means establishing a hetero-

geneous work-force to perform to its potential in an
equitable work environment where no member (or
group of members) has an advantage or a
• Managing diversity is a challenge for an inter-
national manager
• The challenge is to create a work environment in
which each person can perform to his or her full
potential & therefore compete for promotions &
other rewards on merit alone
• Success in the inter-national arena is greatly deter-
mined by an MNCs ability to manage diversity
• Inter-action helps bring employees together, thus
leading to diversity
• Most companies encourage interaction & therefore
go in exchange programmes
• Wipro introduced exchange programmes so that
American Management System (AMS) employees
could come to Bangalore & vice versa
• HCL in its first three months sent 20 employees each
on both sides for an exchange programme so that the
two sides could work together as a team
• MphasiS encouraged its Chinese engineers to work
alongside MphasiS engineers on its US accounts
• Similarly, for a Japanese project, the development
is co-located in Shanghai & Mumbai, involving
travel, co-ordination & knowledge sharing across
both locations
• All this goes a long way in buildings a rapport
between teams
• WIPRO has come out with an interesting concept of
• This means that for every five employees of AMS,
there is one WIPRO employee as their buddy who
would guide them on WIPRO rules & regulations
• 40 per cent of Infoscions are non-Indians
• At HSBC, 30 per cent are Asian & nearly 70 per cent
are Latin American.
Diversity – Advantages & Disadvantages

• Diversity, though a challenging task to manage,

carries within it certain advantages
• One main benefit of diversity is the generation of
more & better ideas
• Because group member come from a host of
different cultures, they are often able to create
unique & creative solutions & recommendations
• A second major benefit is that culturally diverse
groups can prevent groupthink, which is social
conformity & pressures on individual members of a
group to conform & reach a consensus
• When this occurs, group participants believe that
their ideas & actions are correct & those who
disagree with them are either uninformed or are
deliberately trying to sabotage their efforts
• Multi-cultural diverse groups are able to avoid this
problem, because the members do not think
similarly or feel the pressure to conform
• As a result, they typically question each other, offer
opinions & suggestions that are contrary to those
held by others & must be persuaded to change their
• Therefore, unanimity is achieved only through a
careful process of deliberation
• Decision-making may be very slow, unlike in a
homogeneous group, but the decision reached tend
to be very effective
• There are problems associated with diversity, never-
• Diversity may cause a lack of cohesion that results
in the firm’s inability to take concerted action, be
productive, & create a work environment that is
conducive to both efficiency & effectiveness
• These problems are rooted in people’s attitudes
• There are perceptual problem too
• When culturally diverse groups come together, they
often bring pre-conceived stereotypes with them
• A related problem is inaccurate biases
• Japanese firms, for example, depend on groups to
make decisions
• Entrepreneurial behaviour, individualism, &
originality are down-played
• Yet another potential problem with diverse groups
is inaccurate communication, which could occur for
a number of reasons
• One is misunderstandings caused by words used by
one but not clear to others
• Another problem is the way in which situations are
• Many Japanese nod their heads when others talk,
but this does not necessarily imply their approval
• They are merely being polite & attentive
• Different uses of time may also lead to
communication problems
• For example, many Japanese will not agree to a
course of action on-the-spot
• They will not act until they have discussed the
matter with their own people because they do not
feel empowered to act alone
• Many Latin managers refuse to be held to strict
time-tables, because they do not have the same time-
urgency that US managers do.
Managing Diversity – Some Practical Measures

• Having discussed the diverse work-forces, & their

benefits & potential problems, it is appropriate to
list out some practical steps that managers can
take to manage diversity
• Here are some such steps :-
• Focus on bringing in the best talent, not on
meeting numerical goals. Geocentric policy
towards staffing should be the guiding
• Hold managers accountable for meeting goals
of diversity
• Establish monitoring programmes among
employees of same & different races
• Develop career plans for employees as part of
performance reviews
• Develop an age, gender, & race/ethnic profile
of the present work-force
• Promote minorities & other disadvantaged
sections to decision-making positions, not just
to staff jobs
• Diversify the company’s board of directors
• Provide extended leaves, flexible scheduling,
flexi-time, job sharing, & opportunities to
tele-communicate, particularly for
disadvantaged workers
d) Culture Strategy Compatability

• A culture & strategy fit is essential for the success of

an inter-national business (see exhibit below)
Strategy - Culture Fit
Name of Company Strategy - Culture Fit

P&G During 1980s, modified its bulky

diapers in Japan to ‘trim-fit’
which helped regain 30 per cent
market share. Trim-fit became
best sellers in the US.
Asian Paints Became APCO in Australia, as
Australians are averse to the
terms Asia.
Coca-Cola Labels on bottles supplied to gulf
contain ‘no-alcohol’.
Nokia Introduced Hindi SMS for Indian
users of cell phones
McDonald’s ‘Meat prepared after halal’ is
printed on the label before
exporting meat to Saudi Arabia
• Cultural differences provide challenges to inter-
national managers in marketing products, managing
work-forces, & dealing with host-country govern-
• But fortunately, similarities do exist among many
cultures, thereby reducing some of the needs to
customise business practices to meet the demands of
local cultures
• Countries that share cultural similarities form a
cultural cluster or simply called the convergence
Several development account for convergence
• Customers’ needs across societies are similar.
In order to meet identical needs, companies
need to produce similar goods. Similar
production process are needed to produce such
• Growing industrialisation & economic
development enable organisations to have the
technical & financial capability to use similar
• Global competition & global trade contribute
to convergence. Inter-national competition
raises managerial awareness of what people in
other societies are doing. Japanese competition
with the other countries for example, enabled
companies elsewhere to initiate such
managerial practices as Just-in-Time (JIT)
inventory, Kaizen, open offices, & common
• Inter-national strategic alliances contribute to
clusters. With inter-national co-operative
arrangements among competitors, an
increasing number of firms from diverse
nationalities combine with one another to form
one organisation. These joint ventures or
alliances provide a wealth of information on
the organisational practices of other societies.
Later, parent organisations use this knowledge
to change & improve their own organisations.
• Business education also serves to harmonise
organisational practices. In particular, the
large number of inter-national students in US
& European MBA programmes helps spread
common business techniques. Many students
return to their home countries with the intent
of adopting management practices that best fit
their national cultures. For example, many of
the high-tech firms in India, Korea, & Taiwan
are staffed with top executives who were
educated in the US & stayed on to work for a
decade or more. Now, they are returning to
their homelands with technical & managerial
Tackling the Cultural Factor – Strategies

• Many inter-national businesses utilise the country-

clustering approach in formulating their inter-
national strategies
• Many firms from New Zealand focus their first
exporting efforts on Australia.
• Similarly, Hong Kong firms have been very
successful in exploiting China’s markets
Worldwide Integration Strategy

• Firms use either a world-wide integration strategy

or local (national) responsive strategy
• Standardised products are developed & are sold
throughout the world with few alternations.
National Responsive Strategy

• A national responsive strategy allows subsidiaries to

enjoy substantial latitude in adopting products &
services to suit the particular needs & cultural
realities of the countries in which they operate.
Types of National Responsiveness

There are three general categories of national

responsiveness :-

1. Product Adaptation
2. Individual Adjustment
3. Institutional Adaptation
1. Product Adaptation

• This refers to the differentiation of a firm’s product

to capture a particular niche in the market
• Product differentiation also means adapting the
product to suit cultural differences in the host-
culture by modifying its characteristics, as for
example, Coca-Cola changing the name of its Diet
Coke to Coke Light in Japan because the word ‘diet’
has a disagreeable connotation.
2. Individual Adjustment

• This is sought to be accomplished through training

• Training should be provided to all personnel & their
families going on inter-national assignments, as they
would be exposed to a cultural environment which
may be very different from their own
• The managers & their families will face daily
challenges, excitement, frustration, uncertainty, &
• The degree of success with which they respond to
these feelings & emotions & their ability to handle
them effectively will depend on the success of their
training & more importantly, on their skills,
stamina, linguistic & communicative competence,
intelligence, level of interest & knowledge of the host
-culture, & their ability to empathise with members
of the host-culture
• A successful manager is one who communicates in
the host’s language, behaves in an appropriate
manner, observing all the local manners & customs,
& relates to every one in a manner that enables the
local people to accept him or her as one of them.
3. Institutional Adaptation

• An inter-national firm seeks institutional adaptation

by adopting an appropriate organisational structure
& policies to fit into the host-culture
• An organisational design in one culture may be
totally inappropriate in another
• Human resources practices need to be modified to
take into account the differences in remuneration,
employment, promotion, & training methods
• In Islamic countries, for instance, work scheduling
would have to allow sufficient time & provide suit-
able facilities for employees to pray at certain times
of the day
• Recruitment policies would have to recognise class
& ethnic distinctions in order to avoid causing
offence to employees & customers from different
class & ethnic backgrounds