NATIONAL DIFFERENCES IN CULTURE [Hill, pp ], [Head, pp , 23-31] and culture [R/H, Ch.5, ]] Economic forces and reasons generally drive IB However, cultural considerations may seriously affect the success of your IB operations Culture often characterized by: values, norms, social structure, religion, language, education IB IMPLICATIONS OF CULTURE: Which North American products can’t be marketed as is in some other countries because of cultural factors? EXAMPLES ---- WHY? Social structure may also influence your IB operation EXAMPLE: GROUP VS INDIVIDUAL BEHAVIOUR (GROUP ORIENTATION) How would you interpret the following picture?

Caution: Culture is important but what appears to be cultural practices may not be really entirely cultural. There may be economic reasons for such practices. Also, it’s essential to distinguish between management practices based on corporate culture and country-specific culture.

EXAMPLES. Culture and IB practices Many of the Japanese business practices have been adopted successfully by some North American firms. (E.g. teams and employee empowerment) This may mean that these J-practices are not necessarily due to country-specific culture, rather due to corporate culture based and/or economic calculations. Some argue that, between North American and Japanese firms, it is corporate culture, not country culture, that explains the performance difference For example, Japanese group orientation contributes to the development of shared goals for all employees.

It is, however, also the case that: Japanese firms do provide economic incentives that encourage their employees to remain with the firm for a long time, which leads to observed loyalty. Such incentives include: - heavy investment in human capital by on-the-job-training, etc.; - avoidance of layoffs by adjusting total wages (i.e. flexible wages and bonuses); - use of flexible wages to tie the fortune of individual workers with that of the company

CULTURAL AND ATTITUDINAL DIMENSIONS (Hofstede, a Dutch researcher, based on 116,000 questionnaires from 70 countries) (1) Power Distance less powerful accept power disparity (high p.d.) low p.d. -->flat organizations, supervision “Malaysia, the Philippines, Panama, Guatemala, Venezuela” “the U.S., Canada, Denmark, U.K., Austria” “Mexico?” (2) Uncertainty Avoidance High u.a. -->reduce risk, develop methods for dealing with ambiguity “Greece, Uruguay, Guatemala, Portugal, Japan, Korea” “Singapore, Sweden, U.K., U.S., Canada” “Mexico?”

(3) Individualism vs. Collectivism (4) Masculinity The degree to which the dominant values of a society are "success, money, and things." Femininity The degree to which the dominant values of a society are "caring for others and the quality of life." “Japan, Austria, Venezuela” “U.S., U.K., Anglo countries” “Norway, Sweden, Denmark, the Netherlands” “Mexico?” Implications for management?????