2 Chapter ObjectivesThe specific objectives of this chapter are:EXAMINE the strategic dispositions that characterize responses to different cultures.DISCUSS cross-cultural differences and similarities.REVIEW cultural differences in select countries and regions, and note some of the important strategic guidelines for doing business in each.
11 Meeting the ChallengeThe Globalization Imperative:Belief that one worldwide approach to doing business is key to efficiency and effectiveness.Many factors facilitate the need to develop unique strategies for different cultures
12 The Globalization Imperative: Many factors facilitate the need to develop unique strategies for different cultures:The Globalization Imperative:Diversity of worldwide industry standardsContinual demand by local customers for differentiated productsImportance of being insider as in case of customer who prefers to “buy local”Difficulty of managing global organizationsNeed to allow subsidiaries to use own abilities and talents unconstrained by headquarters
13 Globalization vs. National Responsiveness Advertising (for example)FrenchAvoid reasoning or logicAdvertising predominantly emotional, dramatic, symbolicSpots viewed as cultural events – art for sake of money – and reviewed as if they were literatures or films
14 Globalization vs. National Responsiveness Advertising (for example)BritishValue laughter above all elseTypical broad, self-deprecating British commercial amuses by mocking both advertiser and consumer
15 Globalization vs. National Responsiveness Advertising (for example)GermansWant factual and rational advertisingTypical German spot features standard family of 2 parents, two children, and grandmother
16 Globalization vs. National Responsiveness How to add value to marketing:you must be aware that your international audience will frequently have different tastes, needs and customsTailor advertising message to particular cultureStay abreast of local market conditions; don’t assume all markets basically same
17 Globalization vs. National Responsiveness How to add value to marketing:Your plan will need to address many other factors, such as:payment (international transactions and currency exchanges)paperwork (increased documentation),practices (different cultural, social and business styles)partnerships (strategic alliances to strengthen your market presence)protection (increased risks relating to payment, intellectual property or travel)
18 Globalization vs. National Responsiveness How to add value to marketing:Know strengths and weaknesses of MNC subsidiaries; provide them assistance in addressing local demandsGive subsidiary more autonomy; let it respond to changes in local demand
20 Cultural Differences and Similarities Parochialism-The tendency to view the world through one’s eyes and perspectivesProblem for managers from advanced economies who believe that their knowledge is sufficient for doing business in less developed countriesSimplification-The process of exhibiting the same orientation toward different cultural groups
21 Cross-Cultural Differences and Similarities Similarities across cultures:Not possible to do business same way in every global locationProcedures and strategies that work well at home can’t be adopted overseas without modifications
22 Similarities of US firms with foreign companies: As size of company increases, commitment decreasesAs structure of company becomes more employee focused, commitment increasesA positive organizational climate increases employee commitmentBehavior Management NOTCulturally Bound!
23 Similarities Across Cultures Managers in US and Russian firmsManagers performed similar functionsDevoting effort to communication and networking increased performance and promotion opportunitiesSimilar types of interventions improved performance (Hawthorne effect?)
24 Similarities Across Cultures US and Korean employeesSimilar antecedents influenced organizational commitment (position in hierarchy, tenure, age)Other factors that increased commitmentSize of firm (larger firms = less commitment)Employee focus (greater focus = more commitment)Perceptions of organization (positive view = more commitment)
25 Differences Across Cultures In criteria used to evaluate personnelNetherlands France Germany BritainRealityAnalysisHelicopterLeadershipImaginationImaginationAnalysisLeadershipHelicopterRealityLeadershipAnalysisRealityImaginationHelicopterHelicopterImaginationRealityAnalysisLeadershipIn the norms and rules regulatingIncentive plans, pay equity, and severanceHoliday and maternity leaveOther HR functionsIn labor relations and role of labor unionsIn job design and employee training programs
26 Cross-Cultural Differences and Similarities Differences across culturesFar more differences than similarities found in cross-cultural researchWages, compensation, pay equity, maternity leaveImportance of criteria used in evaluation of employees
29 Cultural Differences in Selected Countries and Regions Doing Business in ChinaThe Chinese place values and principles above money and expediency.Business meetings typically start with pleasantries such as tea and general conversation about the guest’s trip to the country, local accommodations, and family.The Chinese host will give the appropriate indication for when a meeting is to begin and when the meeting is over.Once the Chinese decide who and what is best, they tend to stick with these decisions. Although slow in formulating a plan of action, once they get started, they make fairly good progress.
30 Cultural Differences in Selected Countries and Regions: China In negotiations, reciprocity is important. If the Chinese give concessions, they expect some in return.Because negotiating can involve a loss of face, it is common to find Chinese carrying out the whole process through intermediaries.During negotiations, it is important not to show excessive emotion of any kind. Anger or frustration is viewed as antisocial and unseemly.Negotiations should be viewed with a long-term perspective. Those who will do best are the ones who realize they are investing in a long-term relationship.
31 Cultural Differences in Selected Countries and Regions Doing Business in RussiaBuild personal relationships with partners. When there are contract disputes, there is little protection for the aggrieved party because of the time and effort needed to legally enforce the agreement.Use local consultants. Because the rules of business have changed so much in recent years, it pays to have a local Russian consultant working with the company.Ethical behavior in the United States is not always the same as in Russia. For example, it is traditional in Russia to give gifts to those with whom one wants to transact business.Be patient. In order to get something done in Russia, it often takes months of waiting.
32 Cultural Differences in Selected Countries and Regions: Russia Russians like exclusive arrangements and often negotiate with just one firm at a time.Russians like to do business face-to-face. So when they receive letters or faxes, they often put them on their desk but do not respond to them.Keep financial information personal. Russians wait until they know their partner well enough to feel comfortable before sharing financial data.Research the company. In dealing effectively with Russian partners, it is helpful to get information about this company, its management hierarchy, and how it typically does business.
33 Cultural Differences in Selected Countries and Regions: Russia Stress mutual gain. The Western idea of “win–win” in negotiations also works well in Russia.Clarify terminology. The language of business is just getting transplanted in Russia so double-check and make sure that the other party clearly understands the proposal, knows what is expected and when, and is agreeable to the deal.Be careful about compromising or settling things too quickly because this is often seen as a sign of weakness.Russians view contracts as binding only if they continue to be mutually beneficial, so continually show them the benefits associated with sticking to the deal.
34 Cultural Differences in Selected Countries and Regions Doing business in IndiaIt is important to be on time for meetings.Personal questions should not be asked unless the other individual is a friend or close associate.Titles are important, so people who are doctors or professors should be addressed accordingly.Public displays of affection are considered to be inappropriate, so one should refrain from backslapping or touching others.
35 Cultural Differences in Selected Countries and Regions: India Beckoning is done with the palm turned down; pointing often is done with the chin.When eating or accepting things, use the right hand because the left is considered to be unclean.The namaste gesture can be used to greet people; it also is used to convey other messages, including a signal that one has had enough food.Bargaining for goods and services is common; this contrasts with Western traditions, where bargaining might be considered rude or abrasive.
36 Cultural Differences in Selected Countries and Regions Doing business in FranceWhen shaking hands with a French person, use a quick shake with some pressure in the grip.It is extremely important to be on time for meetings and social occasions. Being “fashionably late” is frowned on.During a meal, it is acceptable to engage in pleasant conversation, but personal questions and the subject of money are never brought up.Visiting businesspeople should try very hard to be cultured and sophisticated.
37 Cultural Differences in Selected Countries and Regions: France The French tend to be suspicious of early friendliness in the discussion and dislike first names, taking off jackets, or disclosure of personal or family details.In negotiations the French try to find out what all of the other side’s aims and demands are at the beginning, but they reveal their own hand only late in the negotiations.The French do not like being rushed into making a decision, and they rarely make important decisions inside the meeting.The French tend to be very precise and logical in their approach to things, and will often not make concessions in negotiations unless their logic has been defeated.
38 Cultural Differences in Selected Countries and Regions Doing business in Arab countriesIt is important never to display feelings of superiority, because this makes the other party feel inferior. Let one’s action speak for itself and not brag or put on a show of self-importance.One should not take credit for joint efforts. A great deal of what is accomplished is a result of group work, and to indicate that one accomplished something alone is a mistake.Much of what gets done is a result of going through administrative channels in the country. It often is difficult to sidestep a lot of this red tape, and efforts to do so can be regarded as disrespect for legal and governmental institutions.
39 Cultural Differences in Selected Countries and Regions: Arab Countries Connections are extremely important in conducting business.Patience is critical to the success of business transactions. This time consideration should be built into all negotiations.Important decisions usually are made in person, not by correspondence or telephone. This is why an MNC’s personal presence often is a prerequisite for success in the Arab world. Additionally, while there may be many people who provide input on the final decision, the ultimate power rests with the person at the top, and this individual will rely heavily on personal impressions, trust, and rapport.
40 Review and DiscussDefine the four basic predispositions MNCs have toward their international operations.In what way are parochialism and simplification barriers to effective cross-cultural management? In each case, give an example.Many MNCs would like to do business overseas in the same way that they do business domestically. Do research findings show that any approaches that work well in the U.S. also work well in other cultures?
42 Chapter ObjectivesDEFINE what is meant by organizational culture; discuss interaction of national and MNC cultureIDENTIFY four most common categories of organizational culture and discuss characteristics of eachPROVIDE overview of nature and degree of multi-culturalism and diversity in today’s MNCs.DISCUSS common guidelines and principles used in building team and organizational multicultural effectiveness.
43 The Nature of Organizational Culture Organizational culture: shared values and beliefs enabling members to understand their roles and the norms of the organization, including:Observed behavioral regularities, typified by common language, terminology, ritualsNorms, reflected by things such as amount of work to do and degree of cooperation between management and employeesDominant values organization advocates and expected participants to share (e.g., low absenteeism, high efficiency)
44 Organizational Culture (continued) Other values and beliefs:Philosophy set forth regarding how to treat employees and customersRules dictating do’s and don’ts of employee behavior pertaining to productivity intergroup cooperation…Organizational climate as reflected by way participants interact with each other, treat customers, and feel about how treated by senior level management
45 Interaction between National and Organizational Culture National cultural values of employees may significantly impact their organizational performanceCultural values employees bring to workplace are not easily changed by organization
49 Organizational Cultures in MNCs Shaped by numerous factors including cultural preferences of leaders and employeesSome MNCs have subsidiaries that (aside from logo and reporting procedures) wouldn’t be easily recognizable as belonging to same MNC
50 Organizational Culture in MNCs Four steps in integration of organizational cultures resulting from international expansion via mergers/acquisitions:Two groups establish purpose, goals, and focus of mergerDevelop mechanisms to identify most important structures and manager rolesDetermine who has authority over resourcesIdentify expectations of all involved participates and facilitate communication between departments and individuals
52 Four Cultural TypesFamily Culture: Strong emphasis on hierarchy and orientation to personsPower oriented, headed by leader regarded as caring parentManagement takes care of employees, ensures they’re treated well, and have continued employmentCatalyze and multiply energies of personnel or end up supporting leader who is ineffective and drains energy and loyalties
53 Four Cultural Types 2. Eiffel Tower: Strong emphasis on hierarchy and orientation to taskJobs well defined; coordination from topCulture narrow at top; broad at baseRelationships specific and status remains with jobFew off-the-job relationships between manager and employeeFormal hierarchy is impersonal and efficient
54 Four Cultural Types 3. Guided Missile: Strong emphasis on equality in workplaceand in taskCulture oriented to workWork undertaken by teams or projectgroupsAll team members equalTreat each other with respectEgalitarian and task-driven organizationalculture
55 Four Cultural Types Incubator Culture: Strong emphasis on equality and personalorientationOrganization as incubator for self-expression and self-fulfillmentLittle formal structureParticipants confirm, criticize, develop, findresources for, or help completedevelopment of innovative product orservice
57 Managing Multiculturalism and Diversity Both domestically and internationally, organizations lead workforces with a variety of cultures consisting of largely diverse populations:Women and MenYoung and OldBlack, White, Latin, Asian, Arab, IndianMany others.
60 Types of Multiculturalism Domestic MulticulturalismMulticultural and diverse workforce operating in MNC home countryGroup MulticulturalismHomogenous groupsToken groupsBicultural groupsMulticultural groups
61 Potential Problems Associated with Diversity Perceptual problemsWhen cultural diverse groups come together, often bring preconceived, erroneous stereotypes with themInaccurate biasesInaccurate communicationAttitudinal problemsMay cause lack of cohesion resulting in unit’s inability to take concerted action or be productive
62 Advantages of Diversity Enhance creativityLead to better decisionsMore effective/productive resultsPrevent groupthinkCan facilitate highly effective teams under right conditions
63 Managing Multicultural Teams Select team members for task-related abilities, not solely based on ethnicityTeam members must recognize and prepare to deal with their differencesTeam leader must help identify/define overall goalMutual respect among members is criticalManagers must give team positive feedback on process and output
64 Review and DiscussIn which of the four types of organizational cultures – family, Eiffel Tower, guided missile, incubator – would most people in U.S. feel comfortable?Most MNCs need not enter foreign markets to face challenges of dealing with multiculturalism. Do you agree or disagree?What are some problems to be overcome when using multiculturally diverse teams?What are some basic guidelines for helping make diverse teams more effective?