Culture & Its Impact Supplement to Chapter 14

Culture Culture influences how we adapt and learn, language, habits, customs, expectations and roles—it shapes thinking, acting, and communicating according to group expectations Reasons why culture influences communication: –Culture teaches significant rules, rituals and procedures –Culture reinforces values –Culture teaches relationship with others

Culture Manifestation of a culture may be likened to peeling an onion. Upon removing a layer a different aspect is revealed until the final layer of “core cultural values” are revealed The differences in practices from one country to another are rooted in differences in national culture Human resources, compensation practices differ from country to country, often significantly

Culture Sometimes what you see is far different from what you get What is below the surface? –Tangibles: Art Eating Greetings Dress Manners Rituals Outward Behavior

Culture What is below the surface? –Intangibles Time Actions Communications Space Power Self-competitiveness Structure Thinking Environment

Culture Problems Encountered Across Cultures –Ethnocentric judgments (we think this is the way to operate—we know best –Culture Shock –Difficulty of exporting “ordinary” organization practices –Levels and availability of technology vary

Implications for Cross-Cultural Management The meaning of time, precision, punctuality Recognizing differences in ideas and behavior Competitiveness (U.S.) vs. Solidarity (Japan) in personal organization and inter-company behavior Achievement motivation vs. relationship motivation—quality of work; live to work or work to live Career expectations and gender roles The personal need for recognition differs little between cultures and nations

Culture If we could shrink the earth’s population to a village of precisely 100 people, and all the existing human ratios remained the same, the citizenry would look like this: –57 Asians, 21 Europeans, 14 from North and South America, and 8 Africans –51 would be female, 49 male –70 would be non-Caucasian and 30 Caucasian –A breakdown according to religion would find 30 practicing a Christian-based faith and 70 non- Christian

Culture If we could shrink the earth’s population to a village of precisely 100 people, and all the existing human ratios remained the same, the citizenry would look like this: –50 percent of the entire villages’ wealth would be in the hands of just six people, all six would be U.S. citizens –80 would live in substandard housing –70 would not be able to read –50 would be malnourished –One would have a college education –Few would own a computer

Remuneration Remuneration mix will differ by country, industry type, job type, job level, etc. For example, a typical remuneration mix for a midlevel manager varies as illustrated on the board based on the following components: –Benefits/Perks –Long-Term Incentives –Short-Term Incentives –Base

Evolution of Overseas Operations The number of expatriates is high when the operation starts, grows slightly during the start- up phase, and then declines as local nationals are trained and replace expatriates. Usually a few expatriates remain indefinitely in key jobs The number of locals continues to grow When the operation matures, skilled locals are available for assignments outside of their home country and they become Third Country Nationals (employee from one country working temporarily in a second country for an employee with a headquarters in a third country

Evolution of Overseas Operations The selection of locals for transfer to other countries and the replacement of expatriates (particularly from headquarters) by locals is good for local morale and facilitates local recruiting. It demonstrates movement away from ethnocentricity

Influences on Reward Systems Legislation (taxation) Government politics and trends Economic history and trends Trade union and works council influences Religious differences Regional impact Culture

Remuneration Characteristics Driven by: –Market demand –Legally mandated requirements –Tax considerations –Culture and traditions