1. McGraw-Hill/Irwin International Management © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. International Management Phatak, Bhagat, and Kashlak

2. McGraw-Hill/Irwin International Management © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. CHAPTER 5 The Cultural Environment

3. 5-3 Learning Objectives Understand the concept of culture and cultural variations in international management. Explain the relationship of environmental factors on societal culture. Discuss the significance of various frameworks for understanding cultural differences around the world. Identify distinctive management styles that exist in different countries of the world.

4. 5-4 Chapter Topics What is Culture? The Dimensions of Culture Culture and Management Styles in Selected Countries

5. 5-5 What is Culture? Culture is a concept that has been used in several social science disciplines to understand variations in human thought processes in different parts of the world. Culture is to a society what memory is to an individual.

6. 5-6 Components of Culture Objective Component Consists of such things as infrastructure of roads, architecture, patterns of music, food, and dress habits Subjective Component Ways that people categorize experience, associations, beliefs, attitudes, self- definitions, role definitions, norms, and values

7. 5-7 Ex 5.1: Environmental Influences on International Management Functions Country Specific Influences Eco. system; Political system Tech. level Important historical events Customs and Traditions of the Country Religion; Dialects and languages Education Cultural Orientation and Value Pattern Attitudes Toward Work; Money; Time; Family; Authority; Change; Risk; Equality International Management Functions Organizing and controlling; Managing technological change; Motivating; Communicating; Decision-making; Negotiating; Ethical/ social respon. Influences

8. 5-8 Cultural Sensitivity … may be defined as a state of heightened awareness for the values and frames of reference of the host culture.

9. 5-9 Cultural Sensitivity (contd.) Parochialism is the belief that there is no other way of doing things except that found within one’s own culture, that is, that there is no better alternative. Ethnocentrism is similar to parochialism, and tends to reflect a sense of superiority, and ethnocentric individuals believe that their ways of doing things are the best, no matter which cultures are involved.

10. 5-10 Cultural Sensitivity (contd.) Geocentrism is very different to both parochialism and ethnocentrism, reflecting a belief that it is necessary to be responsive to local cultures and markets.

11. 5-11 Fig 5.3: Cultural Emphasis on Important Dimensions DIMENSIONSEMPHASIS IN CULTURE Relation to Nature Basic human nature Time orientation Space orientation Activity orientation Relationship among people Subjugation Harmony Mastery Evil Mixed Good Past Present Future Private Mixed Public Being Thinking Doing Hierarchical Group based Individualistic

12. 5-12 Hofstede’s Cultural Dimensions Individualism and collectivism Power distance Uncertainty avoidance Masculinity and femininity Time orientation

13. 5-13 Hofstede’s Cultural Dimensions (contd.) Individualism may be defined as a social pattern that consists of loosely-linked individuals who view themselves as independent of groups and who are motivated by their own preferences, needs, rights, and contracts. Collectivism may be defined as a social pattern that consists of closely linked individuals who see themselves as belonging to one or more groups and who are motivated by norms, duties, and obligations identified by these groups.

14. 5-14 Hofstede’s Cultural Dimensions (contd.) Power distance is the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally. Uncertainty avoidance is the extent to which the members of a culture feel threatened by uncertain or unknown situations or by ambiguity in a situation.

15. 5-15 Hofstede’s Cultural Dimensions (contd.) Masculinity pertains to societies in which social gender roles are clearly distinct (i.e., men are supposed to be assertive, tough, and focused on material success whereas women are supposed to be more modest, tender, and concerned with quality of life). Femininity pertains to societies in which social gender roles overlap (i.e., both men and women are supposed to be modest, tender, and concerned with the quality of life).

16. 5-16 Trompenaars’ Cultural Dimensions How people relate to each other Universalism vs. particularism Individualism vs. collectivism Neutral vs. affective relationship Specific vs. diffuse relationship Achievement vs. ascription Time Emphasis on past, present, or future Whether it is sequential or synchronic Relation to nature Internal or external orientation

17. 5-17 Ex. 5-14: Ronen and Shenkar’s Framework Nordic Finland Norway Denmark Sweden Germanic Austria Germany Switzerland Anglo U.S. Australia Canada New Zealand U.K. Ireland S.Africa Latin European France Belgium Italy Spain Portugal Latin American Argentina Venezuela Mexico Chile Peru Columbia Far Eastern Malaysia Singapore Hong Kong S. Vietnam Philippines Indonesia Taiwan Thailand Near Eastern Turkey Iran Greece Arab Bahrain Abu Dhabi U.A.E. Kuwait Oman S. Arabia Independent Brazil JapanIndia Israel

18. 5-18 Ex. 5.15: Schwartz’s Value Dimensions (selected) Hierarchy Conservatism Harmony Egalitarian Commitment Intellectual Autonomy Affective Autonomy Mastery Wealth Family security World of beauty World of peace Curious Enjoying life Successful

19. 5-19 Hall’s Framework Context refers to cues and other information that are present in a given situation. In high context cultures information is embedded in the social situation and is implicitly understood by those involved in the situation. In low context cultures information tends to be more explicitly stated.

20. 5-20 Triandis’ Framework Cultural syndrome is composed of Cultural complexity Tightness versus looseness, and Two aspects of individualism versus collectivism (horizontal and vertical)

21. 5-21 Key Terms and Concepts Culture Subjective culture Objective culture Convergence of culture Divergence of culture Cultural sensitivity Parochialism Ethnocentrism Geocentrism

22. 5-22 Key Terms and Concepts (contd.) Individualism versus collectivism Power distance Uncertainty avoidance Masculinity versus femininity Time orientation