INTERNATIONAL MANAGEMENTChapter 2: Culture and International Management

Chapter 2

CULTURE AND INTERNATIONAL MANAGEMENT

Learning Objectives

After studying this chapter, you should be able to:

  1. Explain about different cultures that exist around the world.
  2. Explain conceptual models for better understanding the world’s cultures.
  3. Understandthe impact of environmental factors on culture.
  4. Identify distinctive management styles that exist in differentcountries.

General Teaching Suggestions

Provide an overview of the current scenario of global trade. Encourage discussion on the cultural challenges an international marketer could face in such a scenario. Citing relevant examples from global trade, encourage students to discuss the various strategies one should adopt in a multicultural environment. Suggested activities: Divide the class into groups and have them identify the major cultural challenges in different parts of the world.

Opening Case Discussion Guide

The case “Cultural Confusion: An Accenture Manager in India”describes how the cultural orientation of the Indian support staff at Accenture's office in India worked against the service expectations of customers from the UK and U.S.The manager's cultural expectations led him to assume that the Indian workforce would take initiative in such situations while the Indian cultural orientation toward hierarchy works against going beyond explicit instructions. A successful short training that encourages employees to probe beyond the customer’s stated problem helped overcome this challenge.

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Chapter Outline: Key Concepts and Terms

Sections I through V of Chapter 1

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  1. CULTURE DEFINED
  1. Key Concepts

The knowledge within a culture translates into values that guide behaviors. Culture is not genetically-based or encoded but is learned by people and encouraged by societies and governments.

  1. Key Terms
  • Culture - Acquired knowledge people use to interpret experience and actions. This knowledge then influences values, attitudes, and behaviors.
  1. HOW CULTURE IS TRANSMITTED
  1. Key Concepts

Culture is transmitted through its people in a variety of ways—both formal and informal.Informal transmission happens every day as individuals interact with each other, watch television, or read books. Formal transmission can occur through efforts to socialize an individual, such as in schools and government.

  1. CULTURE’S IMPACT
  1. Key Concepts

Culture can affect all aspects of the management of a firm including, but not limited to, strategy, hiring, pay/promotion, organization, and evaluation of performance.

  • Communication: A wide range of cultural issues affects communication in an international firm.Culture has an impact on not only how communication takes place in an organization but also what is actually communicated.
  • Problems in Dealing with Culture: Few of the problems in dealing with culture are parochialism, ethnocentrism, and polycentrism.

Common Culture Mistakes: Some firms have evolved protocols to avoid problems arising out of common cultural mistakes.

  • Avoiding Cultural Problems: Executives should be trained in cultural sensitivity to avoid cultural problems in a multicultural business setting.
  1. Key Terms
  • Face - Respect of a person’s peers; avoiding embarrassment.
  • Parochialism - Belief that there is no other way of doing things except what is done in one’s own culture.
  • Ethnocentrism - The ethnocentric view of culture holds that an individual or a firm will believe that their own way of doing things is the best, and will not seek to adapt to local cultural practices.
  • Polycentric - The polycentric view of culture holds that multinational enterprises (MNE) should treat each international subsidiary largely as a separate national entity. This means that the subsidiary should do things in a local manner; and MNE subsidiaries may come to differ from each other.
  • Protocol - Rules for how individuals in a business setting are to interact with each other.
  • Cultural sensitivity - Heightened awareness for the values and frames-of-reference of the host culture.
  1. ANALYZING CULTURE
  1. Key Concepts:
  • Sociology Framework: Kluckhohn and Strodtbeck developed a framework called dimensions of value orientation. This framework examines six dimensions, four of which are especially helpful to international managers in understanding important values of different cultures.
  1. Time orientation
  2. Space orientation
  3. Activity orientation
  4. Relationships among people
  5. Relations to nature
  6. Basic human nature
  • Psychological Framework: Another valuable cultural framework was created by organizational psychologist Geert Hofstede who identified four dimensions along which cultures can be distinguished:
  1. power distance
  2. individualism-collectivism
  3. uncertainty avoidance, and
  4. masculinity–femininity.
  • Integrating Hofstede’s Dimensions: The clustering of Hosfstede's cultural factors into various two-dimensional graphs helps to show how nations can share similar cultural traits. Businesspersons who are aware of the general cultural orientation of a nation in which they are working can more easily understand how to approach business in that nation.
  • Expansive Framework: Another cultural framework developed by Fons Trompenaars included seven dimensions:
  1. individualism versus collectivism,
  2. time orientation,
  3. universalism versus particularism,
  4. neutral versus affective,
  5. specific versus diffuse,
  6. achievement versus ascription, and
  7. relationship to nature.
  • The GLOBE Study:The GLOBE study is a recent, large scale research effort that involved over 150 researchers from 61 different countries.This research sought to examine the interrelationships between societal culture, organizational culture, and organizational leadership.
  • Culture Framework Integration: Each cultural framework has some overlap with each other, but they all also have characteristics that make them unique. It cannot be said that one framework is right and another is wrong. Frameworks should be employed as guidelines to help the manager, not as laws written in stone.

2.Key Terms

  • Confucius - Chinese philosopher who lived from 551 to 479 BCE. He was from eastern China and was a well-known and well-traveled teacher and philosopher.
  1. SUMMARY

1.Key Concepts:

  • Four major frameworks can be used to help one understand cultural settings.
  • These frameworks (Kluckhohn and Strodtbeck, Hofstede, Trompenaars, and GLOBE) each approach the domain of culture slightly differently, but they all have the potential to help a businessperson clearly understand the environment in which they are operating.
  • The related concept of values is also important to the international operation of a business.
  • Values concern individual predispositions, while culture is concerned with entire societies. Both can and do change as society changes.

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End-of-Chapter Guide

* MANAGERIAL GUIDELINES

* OPENING VIGNETTE DISCUSSION QUESTIONS

*DISCUSSION QUESTIONS

*IN-CLASS EXERCISES

*TAKE-HOME EXERCISES

* SHORT CASE QUESTIONS

MANAGERIAL GUIDELINES

A number of managerial guidelines should be used to direct the actions of managers, based on culture and its role in the organization.

  1. It is important to recognize that culture is pervasive in business. Businesses that operate in different countries must evaluate their actions in light of cultural differences.
  2. Managers must evaluate the cultural differences that exist between themselves and others as they begin to conduct business across national borders.
  3. The greater the cultural difference, the more crucial it is for the manager to understand that key cultural dimensions can influence how their communication and actions are perceived.
  4. Sensitivity training is useful for preparing managers to address the cultural differences that can exist as they conduct business across national borders.
  5. Do not project your own culture and value system onto others. Projection means that you assume other people think the way you do.
  6. Managers, on the whole, must be prepared to overcome the bias of believing their culture or way of doing business is best.
  7. Communication is affected by culture; so not only what you say but how you say it is important.
  8. Almost all businesspeople understand that you may not know all the intricacies of their culture. As a result, it is typically acceptable to ask them what is appropriate in a given situation.
  9. One way to learn about a culture is to carefully observe how the locals behave, particularly the leaders of a society.

Table 2-1 summarizes some of the issues on which a manager should focus as she or he considers culture in different settings.

OPENING VIGNETTE Discussion Questions

  1. How could the problems that arose in the opening vignette have been avoided?

A cultural sensitivity training for the manager could have reduced his frustration at the variance in expectations and performance. A similar training for the support executives could have better prepared them to handle customer expectations more effectively.

  1. If you were in charge of sensitivity training for Accenture, what do you think should be included in the training prior to sending someone to India?

Student answers may vary. Some may suggest that organizational culture in India should be provided as an essential learning before sending someone to India. Attitude towards work and hierarchy are other aspects of culture one should consider in the sensitivity training.

  1. Based on the vignette, discuss what the cultural characteristics of India, using the Hofstede model to describe these characteristics.

Student responses may vary. Hofstede’s dimensions of power distance, individualism-collectivism, uncertainty avoidance, and masculinity– femininity provide one approach to understanding the cultural characteristics of India. Some may feel that based on the vignette, Indians tend to have a high degree of uncertainty avoidance while also tending towards collectivism.

DISCUSSION QuestionS

  1. Compare and contrast the differences and similarities in the various culture frameworks discussed in the chapter.

The four major frameworks, Kluckhohn and Strodtbeck, Hofstede, Trompenaars, and GLOBE should be discussed. It should be remembered that no framework is final but each act as a tool to understanding the cultures.

  1. Is cultural convergence occurring in the world? That is, do you think that the various world cultures are coming closer together, or are they getting more different and prone to conflict? Why or why not?

Some students may argue that cultural convergence is a reality in the globalized world. Technology and trade are aiding the transfer of culture across geographic boundaries. However, it could also be argued that the attempts at convergence are also facing stiff resistance from some cultures thus leading to conflicts. Examples from the corporate world could help clarify the viewpoints.

  1. If you were going to conduct cultural-sensitivity training for someone coming to your country, what do you think they would need to know to successfully navigate the culture?

Students could be divided into teams of at least two participants. Each student should be encouraged to discuss the cultural similarities and dissimilarities in relation to a partner’s culture. Focus on aspects of behavior that could lead to cultural mistakes or conflicts.

  1. What would be a common list of issues you should be taught about, if you were about to be sent to China to conduct business?

Chinese culture represents a mix of modernism backed by centuries-old traditions of lifestyle based on the Confucian thought system. Greeting people, concepts of space and distance, giving and receiving gifts, dealing with government, and so on are some of the aspects of culture one should consider important in generating the list.

IN-CLASS EXERCISES

  1. Your Mexican executive is upset at her Taiwanese colleague's refusal to accept her invitation for a dinner and a chance to go the annual festival in Mexico City. Your attempts to negotiate an understanding between the two do not produce any positive impact. How would you handle the situation to smooth things out within the team?
  2. You have been assigned to help prepare a key employee, Raymond, a chemical engineer from Mainland China, to relocate his whole family into a neighborhood with little or no Chinese presence. Raymond speaks English pretty well but his family barely understands the language. Exercise A and exercise B present group activities to check their cultural awareness and responsiveness.
  3. Compare your answers given in Exercise A with those in Exercise B (both i and ii). Did you prepare Raymond for the problems that came up in Exercise B? Knowing about these problems, how could you have better prepared Raymond, as asked in Exercise A?

TAKE-HOME EXERCISES

  1. Go to the Web site select two different nations. Contrast the impact of culture on negotiations in those nations. Report your findings to the class.

Student answers will vary based on the countries they choose to compare. The Web site is a good business culture guide for international businessmen.Discussion should focus on the dimensions of culture as described in the text.

  1. Form a team and summarize what you believe the primary cultural aspects of your home country to be. Report your findings to the class.

Analysis of the culture should use the frameworks discussed in the chapter. Student answers will vary.

  1. In your view, how do foreign nationals misunderstand your country? Make a list of the most important of these. Are they cultural in nature? Historical? Political? Other? What types of training could a firm pursue to overcome these misunderstandings?

Students are encouraged to form groups of two or more from differing cultural backgrounds. Views on each other’s culture could be used as a reference point to obtain a foreigner’s view of one’s culture. Other sources should also be used. A popular source for such views could be leading stereotypes and views presented in movies. Student responses will vary.

  1. In 2005, a number of Chinese firms sought to buy U.S. firms. This includes the China National Offshore Oil Corporation purchase of Chevron, the Lenovo purchase of IBM’s laptop business, and Haier’s purchase of Maytag. Research one of these proposed acquisitions. Which ones were completed? What would be the cultural implications of each of the proposed acquisitions? In other words, would some of the mergers be expected to be more difficult because the nature of the integration that would be required, or the business involved?

Student responses will vary based on the acquisition they choose to research. Cultural aspects of the two nations should be discussed using the frameworks provided in the text. Aspects of culture most relevant to a business setting should be identified to reveal the complexities arising out of the acquisitions.

SHORT CASE QUESTIONS

  1. What are some of the major differences you see in doing business in Germany if you are an American?

As given in the text, Germany is a fine example of monochronic societies which tend to do things in a linear way, valuing punctuality and strict schedules. Further differences include the perception toward authority and individual initiative. Students should be encouraged to research the differences from available sources. Student answers may vary.

  1. Renault Motors is a French firm that owns Nissan Automobile of Japan. Why do you think this merger worked when the Daimler Chrysler merger did not?

Use a search engine to find more information on these mergers. Students should identify the major dimensions of culture of the nations involved that could have aided or hindered the mergers.

  1. Think of ways that the Daimler Chrysler merger could have been encouraged to succeed.

Methods to avoid cultural conflicts and mistakes should be adopted by providing cultural sensitivity training for the staff. Discussion should be focused strategies on improving communication between the two parties in the merger.

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