Professional Documents
Culture Documents
Dr. Kavita Chauhan Centre for Management Studies, Jamia Millia Islamia University, New Delhi
Why do firms differ? How do firms behave? What determines the scope of the firm? What determines the international success or failure of firms?
Acquiring
and
leveraging
competitive advantage
q
The Key: Sustaining such an advantage across through over time and and countries (regions)
replication
Do You Know?
In what ways do cultural differences, language and religion influence international investment and trade? How does corporate culture interact with local and national culture? Is corporate culture primarily homogeneous throughout an MNE? What are the major models for comparison of
What is Culture?
The
knowledge,
beliefs,
art
law,
morals, customs and other capabilities of one group distinguishing it from other groups. Culture is therefore shared, intangible and confirmed by others
Influences decisions. The lens through which motivation occurs. Management, decision making, and
Culture influences nearly all business functions from accounting to finance to production to
Culture is what makes international business practice difficult or easy, depending on how similar or different cultures are.
While
culture
is
very
important
to
our
understanding of international business, it does not explain everything that is different from one place to another. Corporate strategy, structure, rivalry, governmental policy, and economics
q
Culture is not a residual variable; it is useful to know that it is not a primary variable either. It
that like to
vary language
crossand that
It
is
useful
remember cuts
culture
often
across
Language
Language is the means by which we communicate verbally. It is used for socialization and communicating how values and norms are expressed and understood. There are approximately 20 different language families that cut across national borders. Not only are words different, but also
Language
English has become the business worlds lingua franca, and the number one foreign language taught in other countries
Language
Language
Language
Religion
Religion contains key values and norms that are reflected in adherents way of life.
People
try
to
adopt
business
Religion
Religion
Religion
Adherents to major world religions, geographic region, 1996 (in millions) by
Culture
and
Nation
are
not
synonymous.
q
and
cultural in
To
make
things
simpler,
however,
Hofstede Study
Uncertainty Avoidance is the extent to which uncertainty and ambiguity are tolerated. Artifacts of high UA:
Standardization Structured activities Written rules Specialists No risk tolerance Ritualistic behavior
Individualism/Collectivism (I/C)
I/C is the extent to which the self or the group constitutes the center point of identification for the individual. Individual self interest is pursued individually, or as a part of a group. Artifacts of I/C
Firm as family Utilitarian decision making Group performance
Individualism/Collectivism (I/C)
Masculinity-Femininity (M/F)
Refers to the extent to which traditional masculine values, like aggressiveness and assertiveness, are valued. Artifacts of M/F
Sex Roles Minimized More Women In Jobs Interpersonal Skills Rewarded Intuitive Skills Rewarded Social Rewards Valued
Masculinity-Femininity (M/F)
Originally called Confucian Dynamism because of anchoring in the Confucian value system. q Represents such values as thrift, persistence, and traditional respect of social obligations. q Organizations likely to adopt longer planning horizon, with individuals ready to delay
q
Criticism of Hofstede
Hofstede has been subject to broad criticism. Among the criticisms: q Single companys data, with a large Multinational Enterprise having a strong corporate culture. q Time dependent results, which are an artifact of the time of data collection and analysis. q Business culture, not values culture, representing a reflection of business
Criticism of Hofstede
q q
Non-exhaustive, doesnt identify all the cultural dimensions possible, but just a few. Partial geographic coverages, cover only a portion of the worlds cultures and countries. Western bias, which values western business ideals. Attitudinal rather than behavioral measures, with no connection between employee attitudes and employee
Strong people bonds with affiliation to family and community High commitment to longterm relationships. Relationship more important than task. Time is open and flexible. Process is more important than product
Fragile bonds between people with little sense of loyalty. Low commitment to relationship. Task more important than relationships. Time is highly organized. Product is more important than process
Factor Actions Focus Attention to time Priority Respect for property Timeliness
Monochronic action do one thing at a time Concentrate on the job at hand Think about when things must be achieved Put the job first Seldom borrow or lend things Emphasize promptness
Polychronic action do many things at once Are easily distracted Think about what will be achieved Put relationships first Borrow and lend things often and easily base promptness relationship factors
Schwartzs Classification
Schwartzs Classification
Huntington
Based on historical and political observations Distinguishes seven civilizations: Sinic, Japanese, Hindu, Islamic, Western, Latin American, and African
Corporate Culture
Corporate Culture is the culture
Corporate
culture
can
deviate
from
national norms, but that depends upon the strength of culture and the values
Hofstede et al:
Value dimensions (factors)
Need for security Work centrality Need for authority
Practices
Process-oriented vs. results-oriented Employee-oriented vs. job-oriented Parochial vs. professional Open system vs. closed system Loose control vs. tight control Normative vs. pragmatic
Trompenaars Turner
and
Hampden-
The Family personal, hierarchical, power-oriented The Eiffel Tower specific relations, ascribed status, rational authority The Guided Missile egalitarian, impersonal, and task oriented The Incubator individual selffulfillment, personal and egalitarian relations
Ethnicity significant ethnic communities exist in many countries; likely to affect a myriad of issues q Industry important layer of culture q Demographics education, age, seniority and hierarchical level affect difference in values q Ideology not always consistent
q
Cultural Etiquette the manners and behavior that are expected in a given situation Cultural Stereotypes our beliefs about others, their attitudes and behavior Ethnocentric looking at the world from a perspective shaped by our own culture Auto-stereotypes how we see ourselves as a group distinguished from others Hetero-stereotypes how we are seen by others.
Cultural Distance
The extent to which cultures differ from each other Hofstede stated that uncertainty avoidance was the most important dimension of FDI
Political:
Governments Ideology Stability Civil Strife
Economic:
Trade Agreements Trading Blocs GNP/Wages Inflation
Cultural:
MNC
Legal:
Infrastructure/Tech
Communications Internet Transportation Technology