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Cross-Cultural Management

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1 Cross-Cultural Management

2 Chapter 1 Meanings and Dimensions of Culture
Outline Chap1-1 Cross-cultural management Chap1-2 Globalization Chap1-3 Definitions of culture Chap1-4 Nature of culture Chap1-5 Cultural values Chap1-6 Dimensions of culture Chap1-7 Attitudinal Dimensions of Culture Chap1-8 Trompenaars’ s Cultural Dimensions

3 Chap1-1 Cross-cultural management : Managing different culture
Issues of diversity(Gender, Generational, cultural Religion, caste, Income group)

4 What is Cross-Cultural Management?
CCM is a fairly new field that is based on theories and research from: Cross Cultural Psychology Cross-cultural psychology is the scientific study of human behavior and mental processes, including both their variability and invariance, under diverse cultural conditions.

5 International Business
International Business comprises all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their political boundaries.

6 Organizational Behaviour
Organizational behavior (OB) is "the study of human behavior in organizational settings, the interface between human behavior and the organization, and the organization itself." (p.4) [1] OB can be divided into three levels: the study of (a) individuals in organizations (micro-level), (b) work groups (meso-level), and (c) how organizations behave (macro-level)

7 Human Resources Human resources is the set of individuals who make up the workforce of an organization, business sector, or economy. "Human capital" is sometimes used synonymously with human resources, although human capital typically refers to a more narrow view (i.e., the knowledge the individuals embody and can contribute to an organization). Likewise, other terms sometimes used include "manpower", "talent", "labour", or simply "people".

8 Anthropology Anthropology /ænθrɵˈpɒlədʒi/ is the study of humans, past and present, that draws and builds upon knowledge from the social sciences and biological sciences, as well as the humanities and the natural sciences.

9 Goals for Cross-Cultural Management
Cross Cultural Management seeks to understand how national cultures affect management practices identify the similarities and differences across cultures in various management practices and organizational contexts increase effectiveness in global management

10 Chap1-2 Globalization and cross cultural issues

11 Globalization Like it or not, globalization is here…to stay.
Most large companies have some kind of business relations with customers, companies, employees or various stake-holders in other countries…and cultures. (Global corporations) Many employees and managers deal with people from other cultures on a constant basis Most of us have a close experience with only one or two cultures…=>

12 Globalization We do not understand people from other cultures as readily and intuitively as people from our own culture => Cross cultural management helps organization members to gain better understanding of other cultures, of their culture and of the consequences of people from different cultures working together

13 Chap1-3 Definitions of culture

14 Culture Definition: acquired knowledge that people use to interpret experience and generate social behavior. Culture forms values, creates attitude, influences behavior.

15 Chap1-4 Nature of culture

16 Culture Characteristics of culture include:

17 Culture is learned. It is not biological; we do not inherit it
Culture is learned. It is not biological; we do not inherit it. Much of learning culture is unconscious. We learn culture from families, peers, institutions, and media. The process of learning culture is known as enculturation. While all humans have basic biological needs such as food, sleep, and sex, the way we fulfill those needs varies cross-culturally. ·      

18 Culture is shared. Because we share culture with other members of our group, we are able to act in socially appropriate ways as well as predict how others will act. Despite the shared nature of culture, that doesn’t mean that culture is homogenous (the same). The multiple cultural worlds that exist in any society are discussed in detail below. ·      

19 Culture is based on symbols
Culture is based on symbols. A symbol is something that stands for something else. Symbols vary cross-culturally and are arbitrary. They only have meaning when people in a culture agree on their use. Language, money and art are all symbols. Language is the most important symbolic component of culture. ·       ·      

20 Culture is dynamic. This simply means that cultures interact and change. Because most cultures are in contact with other cultures, they exchange ideas and symbols. All cultures change, otherwise, they would have problems adapting to changing environments. And because cultures are integrated, if one component in the system changes, it is likely that the entire system must adjust.

21 Culture is integrated. This is known as holism, or the various parts of a culture being interconnected. All aspects of a culture are related to one another and to truly understand a culture, one must learn about all of its parts, not only a few.

22 Cultural diversity (P4: Culture and types of handshake)
Cultural values (P5: Priorities of cultural values: US, Japan) (P5: examples where culture can affect management approaches) Depict cultural diversity through concentric circles.

23 Chap1-5 Cultural values

24 Priorities of Cultural Values
United States 1. Freedom 2. Independence 3. Self-reliance 4. Equality 5. Individualism 6. Competition 7. Efficiency 8. Time 9. Directness 10. Openness Japan 1. Belonging 2. Group harmony 3. Collectiveness 4. Age/seniority 5. Group consensus 6. Cooperation 7. Quality 8. Patience 9. Indirectness 10. Go-between Arab Countries 1. Family security 2. Family harmony 3. Parental guidance 4. Age 5. Authority 6. Compromise 7. Devotion 8. Patience 9. Indirectness 10. Hospitality

25 Management Approaches Affected by Cultural Diversity
Centralized vs. Decentralized decision making Cultural Diversity Informal vs. formal procedures Safety vs. risk High vs. low organizational loyalty Individual vs. group rewards Cooperation vs. competition Sort-term vs. long-term horizons Stability vs. innovation

26 Summary of what we learned last week
Introduction to the course of cross-cultural management and our international teaching team Goals for Cross-cultural management Nature of culture

27 We will learn today A model of culture: concentric circles
Comparing culture as a normal distribution Values in culture Hofstede’s cultural dimensions

28 A model of culture: concentric circles
Outer layer: observable, e.g. language, food, buildings, art. Middle layer: helps people understand how they should behave. Inner layer: intangible, helpful for problem-solving and well interactions with other people. Explicit artifacts and products of the society Implicit, basic assumptions that guide people’s behavior Norms and values that guide the society

29 Comparing Cultures as Overlapping Normal Distribution
Chinese Culture U.S. Culture ? ? Chinese culture and American culture have quite different norms and values. The normal distribution curves for the two cultures have only limited overlap. When looking at the tail ends of the two curves, it is possible to identify stereotypical views held by Chinese about Americans and Americans about Chinese. Give some examples.

30 Stereotyping from the Cultural Extremes: Brugha and Du’s research
How Americans see the Chinese in community avoid confrontation (keep in harmony) respect for authorities and seniors How Chinese see Americans individualism face confrontation (arguments and debates) respect for achievements Chinese Culture U.S. Culture

31 Values in Culture Values: basic convictions that people have regarding what is right and wrong, good and bad, important and unimportant. Value differences and similarities across cultures: P 10: “common personal values” U.S. Values and possible alternatives Values in transition: work values change over time.

32 Dominant Western Values in Workforce
Career Stage Entered the Workforce Approximate Current Age Dominant Work Values 1. Protestant Work Ethic 2. Existential 3. Pragmatic 4. Generation X Mid-1940s to Late 1950s 1960s to Mid-1970s Mid-1970s to Mid-1980s through 1990s 50 to 65 35 to 50 35 to 35 Under 25 Hard working; loyal to firm; conservative Nonconforming; seeks autonomy; loyal to self Ambitious, hard worker; loyal to career Flexible, values leisure; loyal to relationships Workers who grew up influenced by the Great Depression, World War II, U.S. leadership in world manufacturing, the Andrews sisters, and the Berlin blockade entered the workforce from the mid-1940s to the late 1950s. They believed in the Protestant work ethic. Once hired, they tend to be loyal to an employer. They are likely to value family security and a comfortable life. Employees who entered the workforce from the 1960s to the mid-1970s were influenced by John F. Kennedy, the civil rights movement, the Beatles, and the war in Vietnam. They brought with them a large measure of the “hippie ethic” and existential philosophy. Quality of life is more important to them than money and possessions. They value autonomy, freedom, and equality. Those who entered the workforce from the mid-1970s through the mid-1980s reflect society’s return to more traditional values but with a greater emphasis on achievement and material success. They were influenced by Ronal Reagan, the defense build-up, dual-career households, and $150,000 starter homes. They are pragmatists who believe that ends can justify means. A sense of accomplishment and social recognition rank high for them. The lives of the members of Generation X have been shaped by globalization, the fall of Communism, MTV, AIDS, and computers. They value flexibility, life options, job satisfaction, family, and relationships. Money is important as an indicator of career performance, but they are willing to trade off leisure time for increases in salary, titles, security, and promotions.

33 Chap1-6 Dimensions of culture

34 Hofstede’s Cultural Dimensions
Dutch researcher Geert Hofstede found there are four dimensions of culture. Hofstede’s initial data: questionnaire surveys with over respondents from over 70 different countries who worked in the local subsidiaries of IBM. The fifth dimension was added later. Criticized because of its focus on just one company. Popular in the research field of cross-cultural management.

35 Hofstede’s Five Cultural Dimensions Power Distance
Uncertainty Avoidance Individualism Masculinity Long-Term Orientation Hofstede’s Five Cultural Dimensions According to Hofstede, culture can be classified according to five dimensions. Power distance is the extent to which people accept unequal distributions of power. In higher power distance cultures, there is a wider gap between the powerful and the powerless. Uncertainty avoidance is the extent to which the culture tolerates ambiguity and uncertainty. High uncertainty avoidance leads to low tolerance for uncertainty and a search for absolute truths. Individualism is the extent to which either individuals or closely-knit social structures are the basis for social systems. Individualism leads to self-reliance and individual achievement. Masculinity is the extent to which assertiveness and independence are valued. High masculinity fosters high sex-role differentiation and focuses on ambition, independence, and material goods. Long-term orientation is the extent to which people focus of the past, the present, or the future. Present orientation focuses on short-term performance. Hofstede’s five dimensions can help managers classify cultures and predict organizational and managerial styles. But while his model provides a general ranking for a country, there may be many differences among the groups within a country. 10

36 Low: people treated as equals despite social status
Power Distance: the extent to which less powerful members of organizations accept that power is distributed unequally. Low: people treated as equals despite social status High: people accept authority relations Uncertainty avoidance: the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these. Low: prefer few formal rules High: want clear behavioral guides

37 A bipolar continuum Low: group behavior important
Individualism/collectivism: the tendency of people to look after themselves and their immediate family only (belong to groups or collectives and to look after each other in exchange for loyalty). Low: group behavior important High: individual behavior important A bipolar continuum Hofstede measured this cultural difference on a bipolar continuum with individualism at one end and collectivism at the other. Individualism Individualism Individualism Collectivism Collectivism

38 Masculinity/femininity: a situation in which the dominant values in society are success, money, and things (caring for others and the quality of life). Low: cooperation; friendly atmosphere; employment security; low stress; warm interpersonal relationships. High: competition; challenge; recognition; wealth; advancement; high stress; tight control. A continuum Hofstede measured this dimension on a continuum ranging from masculinity to femininity. Masculinity Femininity

39 Low: respect for tradition, personal stability, focused on the past
Long–term orientation: value placed on persistence, status, thrift Low: respect for tradition, personal stability, focused on the past High: perseverance, thrift, focused on the future This dimension was added to depict the influence of Confucianism in Asia. This dimension is similar to “Adjusting” proposed by Brugha and Du.

40 Examples of Cultural Dimensions
Country Power Distance Individualism* Masculinity** Uncertainty Avoidance Long-term Orientation*** India High Low Moderate France Germany Hong Kong Indonesia Japan Netherlands Russia United States West Africa Different countries have different scores in terms of Hofstede’s cultural dimensions. * A low score is synonymous with collectivism ** A low score is synonymous with masculinity *** A low score is synonymous with a short-term orientation

41 Additional Frameworks
Two additional perspectives, of social/cross-cultural psychologists merit attention: Markus & Kitayama: Independent & Interdependent Construals Triandis: Individualism-Collectivism

42 Vertical & Horizontal Individualism & Collectivism
Harry Triandis: Combination of Individualism vs. collectivism and power & achievement vs. benevolence & universalism VI: achievement + individualism (USA) HI: universalism + individualism (Sweden) VC: power + collectivism (India) HC: benevolence + collectivism (Israel; rare)

43 Schwartz’s Values Universalism Benevolence Conformity & tradition
Security Power Achievement Hedonism Stimulation Self Direction

44 Schwartz’s Value Map

45 Empirical test of the Theory
75,000 + respondents, varied samples in 68 countries Instrument lists 57 abstract value items “How important is each item as a guiding principle in your life?”

46 Tasks in the next session:
Students’ talks and presentations Discussion in groups: how to learn Cross-cultural management? Assignment after class: Read a paper on Hofstede’s cultural dimensions.

47 Preview Integrating Hofstede’s cultural dimensions
Attitudinal dimensions of culture Trompenaars’s cultural dimensions Integrating culture and management

48 Chap1-7 Attitudinal Dimensions of Culture
Work Value and Attitude Similarities Research has revealed many similarities in both work values and attitudes Ronen and Kraut Smallest space analysis (SSA) - maps the relationship among countries by showing the distance between each on various cultural dimensions Can identify country clusters Ronen and Shenkar Examined variables in four categories Importance of work goals Need deficiency, fulfillment, and job satisfaction Managerial and organizational variables Work role and interpersonal orientation

49 A Synthesis of Country Cultures

50 GLOBE Project Multi-country study and evaluation of cultural attributes and leadership behavior Are transformational characteristics of leadership universally endorsed? 170 country co-investigators 65 different cultures 17,500 middle managers 800 organisations

51 GLOBE Project What traits are universally viewed as impediments to leadership effectiveness? Based on beliefs that Certain attributes that distinguish one culture from others can be used to predict the most suitable, effective and acceptable organizational and leader practices within that culture Societal culture has direct impact on organizational culture Leader acceptance stems from tying leader attributes and behaviors to subordinate norms

52 GLOBE Cultural Variable Results
Variable Highest Medium Lowest Ranking Ranking Ranking Assertiveness Spain, U.S. Egypt, Ireland Sweden, New Zealand Future orientation Denmark, Canada Slovenia, Egypt Russia, Argentina Gender differentiation South Korea, Italy, Brazil Sweden Denmark Egypt Uncertainty avoidance Austria, Denmark Israel, U.S. Russia, Hungary Power distance Russia, Spain England, France Demark, Netherlands Collectivism/Societal Denmark, Hong Kong, U.S. Greece, Hungary Singapore In-group collectivism Egypt, China England, France Denmark, Netherlands Performance orientation U.S., Taiwan Sweden, Israel Russia, Argentina Humane orientation Indonesia, Egypt Hong Kong, Germany, Spain Sweden

53 Chap1-8 Trompenaars’ Cultural Dimensions
Research produced five cultural dimensions that are based on relationship orientations and attitudes toward both time and the environment Universalism vs. Particularism Universalism - belief that ideas and practices can be applied everywhere in the world without modification Focus on formal rules and rely on business contacts Particularism - belief that circumstances dictate how ideas and practices should be applied and something cannot be done the same everywhere Focus on relationships, working things out to suit the parties

54 Trompenaars’ Cultural Dimensions (cont.)
Individualism vs. Communitarianism Individualism - people regard themselves as individuals Rely on individuals to make decisions Communitarianism - people regard themselves as part of a group Seek consultation and mutual consent before making decisions Neutral vs. Emotional Neutral - culture in which emotions are held in check People try not to show their feelings Emotional - culture in which emotions are expressed openly and naturally People smile, talk loudly, greet each other with enthusiasm

55 Trompenaars’ Cultural Dimensions (cont.)
Specific vs. Diffuse Specific - culture in which individuals have a large public space they readily share with others and a small private space they guard closely and share with only close friends and associates People often are open and extroverted Work and private life are separate Diffuse - culture in which both public and private space are similar in size and individuals guard their public space carefully, because entry into public space affords entry into private space as well People often appear indirect and introverted, and work and private life often are closely linked

56 Trompenaars’ Cultural Dimensions (cont.)
Achievement vs. Ascription Achievement - culture in which people are accorded status based on how well they perform their functions Ascription - culture in which status is attributed based on who or what a person is For example, status may be accorded on the basis of age, gender, or social connections Time Sequential approach to time - people do one thing at a time, keep appointments strictly, follow plans to the letter Synchronous approach - people do more than one thing at a time, appointments are approximate

57 Trompenaars’ Cultural Dimensions (cont.)
Environment Inner-directed People believe in controlling environmental outcomes Outer-directed People believe in allowing things to take their natural course Cultural Patterns or Clusters Defined groups of countries that are similar to each other in terms of the five dimensions and the orientations toward time and the environment

58 Trompenaars’ Cultural Groups
Anglo cluster Relationship United States United Kingdom Individualism x x Communitarianism Specific relationship x x Diffuse relationship Universalism x x Particularism Neutral relationship x Emotional relationship x Achievement x x Ascription

59 Trompenaars’ Cultural Groups
Asian cluster Relationship Japan China Indonesia Hong Kong Singapore Individualism Communitarianism x x x x x Specific relationship Diffuse relationship x x x x x Universalism Particularism x x x x x Neutral relationship x x x x Emotional relationship x Achievement Ascription x x x x x

60 Trompenaars’ Cultural Groups
Latin American cluster Relationship Argentina Mexico Venezuela Brazil Individualism x x x Communitarianism Specific relationship Diffuse relationship x x x x Universalism Particularism x x x x Neutral relationship x x x Emotional relationship x Achievement x x Ascription x x

61 Trompenaars’ Cultural Groups
Latin-European cluster Relationship France Belgium Spain Italy Individualism x Communitarianism x x x Specific relationship x x Diffuse relationship x x Universalism x x x Particularism x Neutral relationship x Emotional relationship x x x Achievement x Ascription x x x

62 Trompenaars’ Cultural Groups
Germanic cluster Relationship Austria Germany Switzerland Czechoslovakia Individualism x Communitarianism x x x Specific relationship x x x Diffuse relationship x Universalism x x x x Particularism Neutral relationship x x Emotional relationship x x Achievement x x x Ascription x

63 Culture Maps - Frameworks
Edward T. Hall Geert Hofstede Kluckhohn & Strodbeck Trompenaars Value Patterns Variations in Value Orientations Culture Elements Value Patterns universalism– particularism collectivism– individualism affective–neutral relationships specificity–diffuseness achievement– ascription time orientation Internal–external control & Int’l. business practice relation to nature orientation to time belief about human nature mode of human activity relationships space & Int’l. business practice time space things friendships agreements & interpersonal behavior power risk individualism masculinity long term orientation & management theories - practice

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