1. 1 PowerPoint slides by R. Dennis Middlemist, Professor of Management, Colorado State University

2. 2 Additional Internet Sites: http://dir.yahoo.com/regional/countries/ http://globaledge.msu.edu/ibrd/ibrd.asp http://www.ciesin.org/IC/wbank/wtables.html http://lcweb2.loc.gov/frd/cs/cshome.html http://www.atlapedia.com/index.html http://www.nationmaster.com/ http://www.census.gov/foreign-trade/faq/sb/sb0008.html http://www.usitc.gov/tata/index.htm http://www.trade.gov/td/tic/tariff/resources.htm http://unstats.un.org/unsd/cr/registry/ http://www.census.gov/foreign- trade/statistics/product/enduse/exports/index.html http://www.census.gov/foreign- trade/statistics/product/enduse/exports/index.html http://library.uncg.edu/depts/docs/international/intermkt.html

3. 3 Understanding Culture MannersRitualsSymbolsArtifactsCustomsBehaviorRightsTraditions Individual Group PersonalityCulture NormsValuesExpectations

4. 4 Perspectives on Culture Interaction with our surroundings (and organizational systems) Hofstede Work values and roles (interaction with the organization) Ronen, Kraut and Shenkar Interpersonal relationships Trompenaar

5. 5 The Nature of Culture (cont.) Values in Culture Values Basic convictions that people have regarding what is right and wrong, good and bad, important and unimportant Research has identified both differences and similarities in values of different cultural groups Values in transition Changes taking place in managerial values as a result of both culture and technology  Research on Japanese managers  Individualism on the rise in Japan

6. 6 Management Approaches Affected by Cultural Diversity Cultural Diversity Sort-term vs. long-term horizons Stability vs. innovation Individual vs. group rewards Cooperation vs. competition Centralized vs. Decentralized decision making Informal vs. formal procedures Safety vs. risk High vs. low organizational loyalty

7. 7 Nature of Culture Learned Culture is acquired by learning and experience Shared People as a member of a group, organization,or society share culture Transgenerational Culture is cumulative, passed down from generation to generation Symbolic Culture is based on the human capacity to symbolize Patterned Culture has structure and is integrated Adaptive Culture is based on the human capacity to change or adapt

8. 8 Value Priorities United States Japan Arab Countries 1. Freedom 1. Belonging 1. Family Security 2. Independence 2. Group Harmony 2. Family Harmony 3. Self-Reliance 3. Collectiveness 3. Paternalism 4. Equality 4. Age/Seniority 4. Age 5. Individualism 5. Group Consensus 5. Authority 6. Competition 6. Cooperation 6. Compromise 7. Efficiency 7. Quality 7. Devotion 8. Time 8. Patience 8. Patience 9. Directness 9. Indirectness 9. Indirectness 10. Openness10. Go-between10. Hospitality Values- basic convictions that people have regarding what is right and wrong, good and bad, important or unimportant

9. 9 The Nature of Culture Culture Acquired knowledge that people use to interpret experience and generate social behavior forms values creates attitudes influences behavior.

10. 10 Characteristics of Culture Culture Learned Shared Transgenerational Symbolic Patterned Adaptive

11. 11 United StatesJapanArab Countries Priorities of Cultural Values Table 4-1 Priorities of Cultural Values: United States, Japan, and Arab Countries 1.Freedom 2.Independence 3.Self-reliance 4.Equality 5.Individualism 6.Competition 7.Efficiency 8.Time 9.Directness 10.Openness 1.Belonging 2.Group harmony 3.Collectiveness 4.Age/seniority 5.Group consensus 6.Cooperation 7.Quality 8.Patience 9.Indirectness 10.Go-between 1.Family security 2.Family harmony 3.Parental guidance 4.Age 5.Authority 6.Compromise 7.Devotion 8.Patience 9.Indirectness 10.Hospitality Note: “1” represents the most important cultural value, “10” the least. Adapted from Table 4-1: Priorities of Cultural Values: United States, Japan, and Arab Countries

12. 12 How Culture Affects Managerial Approaches In some societies, top managers make all important organizational decisions. In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions. VS. Centralized Decision Making Decentralized Decision Making

13. 13 How Culture Affects Managerial Approaches In some societies, organizational decision makers are risk averse and have great difficulty with conditions of uncertainty. In others, risk taking is encouraged, and decision making under uncertainty is common. VS. SafetyRisk

14. 14 How Culture Affects Managerial Approaches In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions. In others, cultural norms require group rewards, and individual rewards are frowned on. VS. Individual Rewards Group Rewards

15. 15 How Culture Affects Managerial Approaches In some societies, much is accomplished through informal means. In others, formal procedures are set forth and followed rigidly. VS. Informal Procedures Formal Procedures

16. 16 How Culture Affects Managerial Approaches In some societies, people identify very strongly with their organization or employer. In others, people identify with their occupational group, such as engineer or mechanic. VS. High Organizational Loyalty Low Organizational Loyalty

17. 17 How Culture Affects Managerial Approaches Some societies encourage cooperation between their people. Others encourage competition between their people. VS. CooperationCompetition

18. 18 How Culture Affects Managerial Approaches Some cultures focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Others are more interested in long-range goals, such as market share and technologic development. VS. Short-term Horizons Long-term horizons

19. 19 How Culture Affects Managerial Approaches The culture of some countries encourages stability and resistance to change. The culture of others puts high value on innovation and change. VS. StabilityInnovation

20. 20 A Model of Culture The explicit artifacts and products of the society The norms and values that guide the society The implicit, basic assumptions that guide people’s behavior Adapted from Figure 4–1: A Model of Culture

21. 21 Values in Culture Values Basic convictions that people have right and wrong good and bad important and unimportant Learned from the culture in which the individual is reared Influence one’s behavior Differences in cultural values may result in varying management practices

22. 22 Values in Culture Adapted from Figure 4–2: Comparing Cultures as Overlapping Normal Distributions French cultureU.S. culture

23. 23 Values in Culture Adapted from Figure 4–3: Stereotyping from the Cultural Extremes French cultureU.S. culture How the Americans see the French: arrogant flamboyant hierarchical emotional How the French see the Americans: naïve aggressive unprincipled workaholic

24. 24 Values in Culture U.S. Cultural ValuesAlternative ValuesExamples of Management Function Affected Table 4-2 U.S.Values and Possible Alternatives Individuals can influence the future (when there is a will there is a way). Adapted from Table 4-2: U.S. Values and Possible Alternatives Life follows a preordained course, and, human action is determined by the will of God. Planning and scheduling Individuals should be realistic in their aspirations. Ideals are to be pursued regardless of what is “reasonable.” Goal setting and career development We must work hard to accomplish our objectives (Puritan ethic). Hard work is not the only prerequisite for success. Wisdom luck, and time also are required. Motivation and reward system

25. 25 Values in Culture U.S. Cultural ValuesAlternative ValuesExamples of Management Function Affected Table 4-2 U.S.Values and Possible Alternatives A primary obligation of an employee is to the organization. Adapted from Table 4-2: U.S. Values and Possible Alternatives Individual employees have a primary obligation to their family and friends. Loyalty, commitment, and motivation Employees can be removed if they do not perform well. The removal of an employee from a position involves a great loss of prestige and will rarely be done. Promotion Company information should be available to anyone who needs it within the organization. Withholding information to gain or maintain power is acceptable. Organization, communication, and managerial style

26. 26 Values in Culture U.S. Cultural ValuesAlternative ValuesExamples of Management Function Affected Table 4-2 U.S.Values and Possible Alternatives Competition stimulates high performance. Adapted from Table 4-2: U.S. Values and Possible Alternatives Competition leads to unbalances and disharmony. Career development and marketing What works is important..Symbols and the process are more important than the end point. Communication, planning, and quality control.

27. 27 Values in Culture There is a reasonably strong relationship between the level of success achieved by managers and their personal values. Value patterns predict managerial success and could be used in selection and placement decisions. Although there are country differences in the relationships between values and success, findings across four countries (U.S., Japan, Australia, India) are quite similar. Values of more successful managers appear to favor Pragmatic, dynamic, achievement-oriented Active role in interaction with others Values of less successful managers tend toward Static and passive values Relatively passive roles in interacting with others

28. 28 Hofstede’s Cultural Dimensions Extent to which less powerful members of institutions and organizations accept that power is distributed unequally High power distance countries: people blindly obey the orders of their superiors, centralized and tall organization structures Low power distance countries: flatter and decentralized organization structures, smaller ratio of supervisors Power Distance

29. 29 Hofstede’s Cultural Dimensions Extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid such situations High uncertainty avoidance countries: people have high need for security, strong belief in experts and their knowledge, structured organizational activities, more written rules, less risk taking by managers Low uncertainty avoidance countries: people are more willing to accept risks associated with the unknown, less structured organizational activities, fewer written rules, more risk taking by managers, higher employee turnover, more ambitious employees Power Distance Uncertainty Avoidance

30. 30 Hofstede’s Cultural Dimensions Individualism: Tendency of people to look after themselves and their immediate family only Countries high in individualism: tend to be wealthier, support protestant work ethic, greater individual initiative, promotions based on market value Collectivism: Tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty Countries high in collectivism: tend to be poorer, less support for protestant work ethic, less individual initiative, promotions based on seniority Power Distance Uncertainty Avoidance Individualism/ Collectivism

31. 31 Hofstede’s Cultural Dimensions Masculinity: a culture in which the dominant social values are success, money and things Countries high in masculinity: great importance on earnings, recognition, advancement, challenge, and wealth. High job stress. Femininity: a culture in which the dominate social values are caring for others and the quality of life Countries high in femininity: great importance on cooperation, friendly atmosphere, employment security, group decision making, and living environment. Low stress and more employee freedom. Power Distance Uncertainty Avoidance Individualism/ Collectivism Masculinity/ Femininity Masculinity/ Femininity

32. 32 Attitudinal Dimensions of Culture Work value and attitude similarities Smallest space analysis (SSA) yields clusters of countries similar to each other 1. Anglo-American (U.S., U.K., Australia) 2. Nordic (Norway, Finland, Denmark) 3. South American (Venezuela, Mexico, Chile) 4. Latin European (France, Belgium) 5. Germanic (Germany, Austria, Switzerland) Other researchers have found other clusters, depending on variables used

33. 33 Synthesis of Country Clusters Adapted from Figure 4–8: A Synthesis of Country Clusters

34. 34 Trompenaars’ Cultural Dimensions Universalism: belief that ideas and practices can be applied everywhere in the world without modification In countries with high universalism, focus is more on formal rules, business contracts are adhered to closely, people believe “a deal is a deal” Includes Canada, U.S., Germany, U.K., Netherlands, France, Japan, Singapore, Thailand, and Hong Kong. VS. UniversalismParticularism

35. 35 Trompenaars’ Cultural Dimensions Particularism: belief that circumstances dictate how ideas and practices should be applied and something cannot be done the same everywhere In countries with high particularism, legal contracts often modified, well-acquainted people often change the way in which deals are executed Includes China and South Korea VS. UniversalismParticularism

36. 36 Trompenaars’ Cultural Dimensions Individualism: people regard themselves as individuals In countries high on individualism, people stress personal and individual matters, and are more likely to make negotiated decisions on the spot by a representative, achieve things alone and assume great personal responsibility Includes Canada, Thailand, U.K., U.S., Netherlands, France, Japan, China, Singapore, and Hong Kong VS. IndividualismCommunitarianism

37. 37 Trompenaars’ Cultural Dimensions Communitarianism: people regard themselves as part of a group In countries high on communitarianism, people value group-related issues, refer decisions to committees, achieve things in groups and jointly assume responsibility Includes Malaysia and Korea VS. IndividualismCommunitarianism

38. 38 Trompenaars’ Cultural Dimensions Neutral: culture in which emotions are held in In high neutral culture countries, people try not to show their feelings, act stoically and maintain their composure Includes Japan and the U.K. Emotional: culture in which emotions are expressed openly and naturally In high emotional culture countries, people smile a great deal, talk loudly when excited and greet each other with enthusiasm Includes Mexico, the Netherlands and Switzerland VS. NeutralEmotional

39. 39 Trompenaars’ Cultural Dimensions Specific culture: individuals have a large public space shared with others and a small private space they guard closely and share only with close friends and associates In high specific cultures, people are more open and extroverted, and there is a strong separation of work and private life Includes Austria, U.K., U.S. and Switzerland VS. SpecificDiffuse

40. 40 Trompenaars’ Cultural Dimensions Diffuse culture: public and private space are similar in size, individuals guard public space carefully because it is shared with private space In high diffuse cultures, people often appear to be indirect and introverted, and work and private life often are closely linked Includes Venezuela, China, and Spain VS. SpecificDiffuse

41. 41 Trompenaars’ Cultural Dimensions Achievement culture: status is accorded based on how well people perform their functions Includes Austria, U.S., Switzerland and the U.K. Ascription culture: status is based on who or what a person is Includes Venezuela, Indonesia, and China VS. AchievementAscription

42. 42 Trompenaars’ Cultural Dimensions Sequential approach People do only one activity at a time, keep appointments strictly, prefer to follow plans as laid out (United States) Synchronous approach People tend to multi-task, view appointments as approximate, schedules are seen as subordinate to relationships (France, and Mexico) Present oriented/future oriented Future is more important (U.S., Italy, and Germany Present is more important (Venezuela, Indonesia, and Spain All three time periods equally important (France and Belgium) Time

43. 43 Variations in Time Orientation

44. 44 Trompenaars’ Cultural Dimensions Inner-directed: people believe in controlling outcomes Includes U.S., Switzerland, Australia, Belgium, Indonesia, Hong Kong, Greece, Singapore, and Japan Outer-directed: people believe on letting things take their own course Includes China and many other Asian countries The Environment Related to psychological construct: L.O.C.

45. 45 GLOBE Project Multi-country study and evaluation of cultural attributes and leadership behavior 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

46. 46 GLOBE Project VariableHighestMediumLowest RankingRankingRanking Table 4-6 GLOBE Cultural Variable Results AssertivenessSpain, U.S.Egypt, IrelandSweden, New Zealand Adapted from Table 4-6: GLOBE Cultural Variable Results Future orientationDenmark, CanadaSlovenia, EgyptRussia, Argentina Gender differentiationSouth Korea, Italy, BrazilSweden Denmark Egypt Uncertainty avoidanceAustria, DenmarkIsrael, U.S.Russia, Hungary Power distanceRussia, SpainEngland, FranceDemark, Netherlands Collectivism/SocietalDenmark, Hong Kong, U.S.Greece, Hungary Singapore In-group collectivismEgypt, ChinaEngland, FranceDenmark, Netherlands Performance orientationU.S., TaiwanSweden, IsraelRussia, Argentina Humane orientationIndonesia, EgyptHong Kong, Germany, Spain Sweden

47. 47 Other Cultural Dimensions Institutional Collectivism In-group Collectivism Gender Egalitarianism Assertiveness Power Distance Performance Orientation Future Orientation Uncertainty Avoidance Humane Orientation

48. 48 Variations in Human Nature

49. 49

50. 50 Variations in Relations to Nature

51. 51 Variations in Activities

52. 52 Variations in Relationships

53. 53 Variations in Spacial Orientation