cross cultural managment 04 2011

7/21/2019 Cross Cultural Managment 04 2011

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Cross CulturalCross Cultural

managementmanagement

Seyla Tith, Mba From France

Angkor Khemra University,

Chhba Morn City, KSP April 2!!

G o a l s a n d C o r p o r a t e M i s s i o n s



IntroductionIntroduction

Brief course description:

Emphasis on the main core elements of culture

in general.

Basic strategy for managing cultural differences.Case studies in doing business in different

cultures and doing business in Cambodia.

2




Learning outcomes

On a successful completion of this course,

students will be able to:

Understand the importance of culture inbusiness and general management.

Use basic strategy to manage businesses in

different countries.

Be able to wor effecti!ely in a multi"cultural

woring en!ironment.

#dentify Cambodian business culture.

$




%ssessment

%ttendance and participations &'()*

+id"term eam &2()*

-ui and group assignment &'( to '/ pages*&2()*

0inal eam &/()*

1




Lecture schedule

unday ': 3he meanings and 4imensions of

Culture

unday 2: 3he meanings and 4imensions ofCulture &2*

unday $: +anaging %cross Cultures

unday 1: +anaging %cross Cultures &2*

unday /: Case studies and Cambodian

contetualiation

unday 5: 6roup presentation

/




3et and supporting materials

4oh 7. 8onathan and Luthans 0red,

International Management: Culture, Strategy,

and Behavior , +c6raw"9ill, e!enth edition,2((, U%.

+ead ;ichard and %ndrews 6. 3im,

International Management: Culture and Beyond ,

<iley, 2((, England.carborough 8ac, The Origins of Cultural

Differences and their Impact on Management ,

-uorum Boos, '=, U%.

5



Chapter 1: The Meanings andChapter 1: The Meanings and

Dimensions of CultureDimensions of Culture

3he nature of culture:

Cultural di!ersity

>alues in Culture

9ofstede?s cultural dimensions:7ower distance

Uncertainty a!oidance

#ndi!idualism

+asculinity

#ntergrating the dimensions

@



Chapter 1: The Meanings andChapter 1: The Meanings and

Dimensions of CultureDimensions of Culture

3rompenaars?s cultural dimensions

Uni!ersalism !s. 7articularism

#ndi!idualism !s. Communitarianism

Aeutral !s. Emotionalpecific !s. 4iffuse

%chie!ement !s. %scription

3imeEn!ironment

Cultural patterns or clusters

=



1.1. The Nature of Culture1.1. The Nature of Culture

3he word culture comes from Latin

cultura , which refers to cult or worship.

#n management aspect, culture means

acDuired nowledge that people use tointerpret eperience and generate social

beha!ior.

3his nowledge forms !alues, creates

attitudes, and influences beha!ior.




Caracteristics of culture:'. Learned

2. hared

$. 3ransgenerational1. ymbolic

/. 7atterned

5. %dapti!e

#f international managers do not nowsomething about cultures of the countriesthey deal with, the results can be Duitedisastrous. 0or eample: %sians? name.

'(




'.'.'. Cultural di!ersity

+ost importantly, culture affects how people

thin and beha!e.

3herefore, cultural differences ha!e impacts oninternational mamangement.

%n eample of handshae:

%merican &firm*, %sian &gentle*, British &soft*,

0rench &light and Duic*, Latin %merican &moderategrasp*

7riorities of cultural !alues are not the same in

different countries or groups of countries.

''





Basic belie!es and beha!iors that can directly

affect management approaches:

Centralied !s. 4ecentralied decision maingafety !s. ;is

#ndi!idual !s. 6roup rewards

#nformal !s. 0ormal procedures

9igh !s. Low organiational loyaltyCooperation !s. Competition

hort"term !s. Long"term horions

tability !s. inno!ation'2




'.'.'. Cultural di!ersityCase: business customs in outh %frica

%rrange a meeting before discussing business

o!er the phone. %ppointments should be made as far in ad!anceas possible.

<hen introduced, maintain eye contact, shaehands, and pro!ide business cards to e!eryone.

<omen are highly respected.

+ae business plans clear.

7atience between proposition and answer.

eep presentation short and concise.'$





Using graphics to depict cultural di!ersity:

Concentric circles

'1





Using graphics to depict cultural di!ersity:

Aormal distribution: comparing cultures as

o!erlapping normal distribution and stereotypingfrom the cultural etremes

'/




'.'.'. Cultural di!ersityUsing graphics to depict cultural di!ersity:

3he cultural differences are depicted in the firstgraphic. 3he two cur!es ha!e only limited o!erlap.

#n the second graphic, the tail ends of the twocur!es identify the stereotypical !iews held bymembers of one culture about the other.

3his stereotype is often eaggerated and helping

reinforce the differences between the two cultures,thus reducing the lielihood of achie!ingcooperation and communication.

3his is one reason why an understanding of nationalculture is so important in the study of cross"cultural

management. '5




'.'.2. >alues in culture

>alues are basic con!ictions that people ha!e

regarding what is right and wrong, good and

bad, important and unimportant.3hese !alues are learned from the culture in

which the indi!idual is reared, and they help

direct the person?s beha!ior.

4ifferences in cultural !alues often result in!arying management practices.

'@





>alue differences and similarities across

cultures

3here are both differences and similaritiesbetween the wor !alues and managerial !alues

of different cultural groups.

7ersonal"!alue Duestionnaire &7>-*: 55

concepts related to business goals, personalgoals, ideas associated with people and groups

of people, and ideas about general topics, such

as ideology and philosophy.

'=






cultures

3he result of the sur!ey found out that8apanese managers placed high !alue on

respect to superiors and company commitment.

orean managers placed high !alue on

personal forcefulness and low !alue onrecognition of others. #ndian managers place

high !alue on the nonaggressi!e pursuit of

obFecti!es.

'






cultures

9owe!er, when they eamined the managerial!alues among the U.., 8apanese, %ustralian,

and #ndian managers, they found that more

successful managers appear to fa!or pragmatic,

dynamic, achie!ement"oriented !alues, whileless successful managers prefer more static

and passi!e !alues.

2(





>alues in transition

4o !alue change o!er timeG

Aormally, personal !alue systems are relati!elystable and do not change rapidly.

9owe!er, changes are taing place in

managerial !alues as a result of both culture

and technology.Eample of 8apanese managers who wor in

8apanese firms based in the United tates.

2'





>alues in transition &Eample of stateside 8ap*

Lifetime employment

0ormal authority6roup orientation, cooperation, conformity, and

compromise

eniority

7aternalism

Era of personal responsibility at home &in

8apan*: dynamism and revitalization of the

society22





>alues in transition: <hat bout CambodiaG #s

our !alue changingG #f yes, to which directionG

% recall on e!olutionary theory of Charles4arwin, a biological theory which is highly

applicable to human society.

Eample of your real life problems and

solutions.

2$



1.2. Hofstede’s Cultural Dimensions1.2. Hofstede’s Cultural Dimensions

6eert 9ofstede is a 4utch researcher who

tried to indentify why people from !arious

cultures beha!e as they do.

9e introduced 1 main dimensions of anyculture into his research.

''5 ((( respondents from o!er @( different

countries around the world. &3he largest

organiationally based study e!er

conducted.*

21




a* 7ower distance:

3he etent to which less powerful

members of institutions and organiations

accept that power is distributed uneDually. Countries in which people blindly obey

the orders of their superiors ha!e high

power distance. 3his should be obser!ed at

lower le!els or e!en upper le!els.

2/




b* Uncertainty a!oidance

3he etent to which people feel threatened

by ambiguous situations and ha!e created

beliefs and institutions that try to a!oidthese.

Countries populated with people who do

not lie uncertainty tend to ha!e a high

need for security and a strong belief in

eperts and their nowledgeH eamples

include 6ermany, 8apan, and pain.

25




c* #ndi!idualism

3he tendency of people to loo after

themsel!es and their immediate family only.

Collecti!ism &in contrast to indi!idualism* isthe tendency of people to belong to groups

or collecti!es and to loo after each other in

echange for loyalty.

9oftstede?s findings show that the wealthy

countries ha!e higher indi!idualism scores

and poorer countries higher collecti!ism

scores. &6A7 based wealth* 2@




d* +asculinity

% cultural characteristic in which the

dominant !alues in society are success,

money, and things. #n contrast, femininity is the term used by

9ofstede to describe a situation in which

the dominant !alues in society are caring

for others and the Duality of life.

2=




e* #ntegrating the dimensions

% description of the four dimensions of

culture is useful in helping to eplain the

differences between !arious countries. 9ofstede?s research has etended beyond

this focus and shown how countries can be

described in terms of pairs of dimensions.

7airings and clusters can pro!ide useful

summaries for international en!ironment.

Eample of pairing between 74# and U%#2



1.3. Trompenaars’s Cultural1.3. Trompenaars’s Cultural

DimensionsDimensions

%nother 4utch researcher who also gains alot of attention on his research is 0ons3rompenaars.

9e has conducted a research o!er a '("year period. O!er '/ ((( Duestionnaireswere administered with managers from 2=countries.

3rompenaars deri!ed fi!e relationshiporientations that address the ways in whichpeople deal with each other. 9e alsoinclude attitudes towards time and

en!ironment. $(





a* Uni!ersalism !s. 7articularism

Uni!ersalism is the belief that ideas and

practices can be applied e!erywhere in the

world without modification. 7articularism is the belief that

circumstances dictate how ideas and

practices should be applied and that

something cannot be done the same

e!erywhere.

$'





b* #ndi!idualism !s. Communitarianism

Communitarianism refers to people

regarding themsel!es as part of a group. #ndi!idualism refers to people regarding

themsel!es as indi!iduals.

$2





c* Aeutral !s. Emotional

Aeutral culture is a culture in which

emotions are held in chec. Emotional culture is a culture in which

emotions are epressed openly and

naturally.

$$





d* pecific !s. 4iffuse

% specific culture is a culture in which

indi!iduals ha!e a large public space they

readily share with others and a smallpri!ate space they guard closely and share

with only close friends and associates.

% diffuse culture is one in which public

space and pri!ate space are similar in sie

and indi!iduals guard their public space

carefully, because entry into public space

affords entry into pri!ate space as well. $1





e* %chie!ement !s. %scription

%chie!ement culture is a culture in which

people are accorded status based on how

well they perform their functions. %scription culture is a culture in which

status is attributed based on who or what a

person is.

$/





f* 3ime

eDuential: people tend to do only one

acti!ity at a time, eep appointments

strictly, and show a strong preference forfollowing plans as they are laid out and not

de!iating from them.

ynchronous: people tend to do more than

one acti!ity at a time, appointments are

approimate and may be changed at a

moment?s notice, and schedules generally

are subordinate to relationships. $5





g* En!ironment

#nner"directed: what"happens"to"me"is"my"

own"doing attitude.

Outer"directed: ometimes"#"feel"that"#"do"not"ha!e"enough"control"o!er"the"

directions"my"life"is"taing attitude.

h* Cultural clusters: %nglo cluster, %siancluster, Latin %merican cluster, Latin

European cluster, 6ermanic cluster.

$@



Chapter 2: Managing cross CulturesChapter 2: Managing cross Cultures

3he main obFecti!es of the chapter is to:

Eamine the strategic dispositions that

characterie responses to different cultures.

4iscuss cross"cultural differences andsimilarities.

$=



Chapter 2: Managing cross CulturesChapter 2: Managing cross Cultures

3he strategy for +anaging %cross Culgture

trategic predispositions

+eeting the challenge

Cross"cultural differences and similarities7arochialism and simplification

imilarities across cultures

$



2.1. The strateg! for managing2.1. The strateg! for managing

across culturesacross cultures

%s +ACs become more transnational, their

strategies must address the cultural

similarities and differences in their !aried

marets. % good eample of ;enault, a 0rench auto

giant.

1(





trategic predispositions

+ost +ACs ha!e a cultural strategic

predisposition toward doing things in a

particular way. 0our distinct predispositions ha!e been

identified: ethnocentric, polycentric,

regiocentric and geocentric.

1'





Ethnocentric

Ethnocentric predisposition is a nationalistic

philosophy of management whereby the!alues and interests of the parent company

guide strategic decisions.

12





7olycentric

7olycentric predisposition is a philosophy of

management whereby strategic decisionsare tailored to suit the cultures of the

countries where the +AC operates.

1$





6eocentric

6eocentric predisposition is a philosophy of

management whereby the company tries tointegrate a global systems approach to

decision maing.

1/





Orientation of an +AC under different

profiles

+ission:

Ethnocentric: 7rofitability

7olycentric: 7ublic acceptance

;egiocentric: Both profitability and public

acceptance

6eocentric: Both profitability and public

acceptance

15






profiles

6o!ernance:

Ethnocentric: 3op"down

7olycentric: Bottom"up

;egiocentric: +utually negociated between

region and its subsidiaries

6eocentric: +utually negociated at all le!els of

the corporation

1@






profiles

trategy:

Ethnocentric: 6lobal integration

7olycentric: Aational responsi!eness

;egiocentric: ;egional integration and

national responsi!eness

6eocentric: 6logal integration and national

responsi!eness

1=

f






profiles

tructure:

Ethnocentric: 9ierarchical product di!isions

7olycentric: 9ierarchical area di!isions, with

autonomous national units

;egiocentric: 7roduct and regional

organiation tied through a matri

6eocentric: % networ of organiations

1

2 1 Th f i






profiles

Culture:

Ethnocentric: 9ome country

7olycentric: 9ost country

;egiocentric: ;egional

6eocentric: 6lobal

/(

f2 1 Th t t f i






profiles

3echnology:

Ethnocentric: +ass production

7olycentric: Batch production

;egiocentric: 0leible manufacturing

6eocentric: 0leible manufacturing

/'

2 1 Th f i2 1 Th t t f i





Orientation of an +AC under differentprofiles

+areting:

Ethnocentric: 7roduct de!elopmentdetermined primarily by the needs of homecountry customers

7olycentric: Local product de!elopment basedon local needs

;egiocentric: tandardie within region, butnot across regions

6eocentric: 6lobal products with local!ariations

/2

2 1 Th t t f i2 1 Th t t f i






profiles

0inance:

Ethnocentric: ;epatriation of profits to homecountry

7olycentric: ;etention of profits in host country

;egiocentric: ;edistribution with region

6eocentric: ;edistribution globally

/$






Orientation of an +AC under differentprofiles

7ersonnel practices:

Ethnocentric: 7eople of home countryde!eloped for ey positions e!erywhere in theworld

7olycentric: 7eople of local nationalityde!eloped for ey positions in their own country

;egiocentric: ;egional people de!eloped forey positions anywhere in the region

6eocentric: Best people e!erywhere in theworld de!eloped for ey positions e!erywhere

in the world /1







4espite the need for and tendency of +ACs

to address regional differentiation issues,

many +ACs are committed to aglobalization imperative.

6lobaliation imperati!e is a belief that one

worldwide approach to doing business is the

ey to both efficiency and effecti!eness.

//







One study, in!ol!ing etensi!e eamination

of ''/ medium and large +ACs and '($

affiliated subsidiaries in the United tates,Canada, 0rance, 6ermany, 8apan, and the

United ingdom, found an o!erwhelming

maFority used the same strategies abroad as

at home.

/5







4espite these tendencies to use home

strategies, effecti!e +ACs are continuing

their efforts to address local needs. % number of factors are helping facilitate this

need to de!elop uniDue strategies for

different cultures, including:

3he di!ersity of worldwide industry standards

such as those in broadcasting, where tele!ision

sets must be manufactured on a country"by"

country basis./@






% number of factors are helping facilitate thisneed to de!elop uniDue strategies fordifferent cultures, including:

% continual demand by local customers fordifferentiated products, as in the case ofconsumer goods that must meet local tastes.

3he importance of being an insider, as in thecase of customers who prefer to buy Ilocal

product.J 3he difficulty of managing global organiations,

as in the case of some local subsidiaries thatwant more decentraliation and others that

want less. /=






% number of factors are helping facilitate this

need to de!elop uniDue strategies for

different cultures, including:

3he need to allow subsidiaries to use their ownabilities and talents and not be restrained by

headDuarters, as in the case of local units that

now how to customie products for their

maret and generate high returns onin!estment with limited production output.

/

2 1 Th t t f i2 1 The strateg! for managing





By responding to cultural needs of local

operations and customers, +ACs find that

regional strategies can be used effecti!ely in

capturing and maintaining worldwide maretniches.

5(

2 1 Th t t f i2 1 The strateg! for managing





Eample of the cosmetics mareting which

!aries greatly in consumer use.

6ermans want ad!ertising that is factual and

rationalH they fear being manipulated by Ithehidden persuader.J 3he typical 6erman spot

features the standard family of two parents, two

children, and grandmother.

3he 0rench a!oid reasoning or logic. 3heirad!ertising is predominantly emotional,

dramatic, and symbolic. pots are !iewed as

cultural e!ents or art for the sae of money and

are re!iewed as if they were literature or films. 5'

2 1 The strateg for managing2 1 The strateg! for managing





Eample of the cosmetics mareting which

!aries greatly in consumer use.

3he British !alue laughter abo!e all else. 3he

typical broad, self"depreciating Britishcommercial amuses by mocing both the

ad!ertiser and consumer.

52

2 1 The strateg! for managing2 1 The strateg! for managing





#n some cases, howe!er, both the product and

the mareting message are similar worldwide.

3his is particularly true for high"end products,

where the lifestyles and epectations of themaret niche are similar regardless of the

country.

Eample of 9eineen beer, 9ummer car, and

the 0inancial 3imes. ;egardless of geographic

locale, these products appeal to all the

consumer niches that are homogeneous.

5$






3he same is true at the lower end of the

maret for goods that are impulse

purchases, no!el products, or fast food,

such as Coca"Cola?s soft drins, pop music,ice"cream bars, etc.

51






9owe!er, it is most necessary to modify

products as well as the maret approach for

the regional or local maret.

One analysis noted that the more maretersunderstand about the way in which a

particular culture tends to !iew emotion,

enFoyment, friendship, humor, rules, status,

and other culturally based beha!iors, themore control they ha!e o!er creating

mareting messages that will be interpreted

in the desired way.5/





0irst, the +ACs must stay abreast of local

maret conditions and sidestep the

temptation to assume that all marets are

basically the same. econd, the +ACs must now the strengths

and weanesses of its subsidiaries so that it

can pro!ide these units with the assistance

needed in addressing local demands.

3hird, the +ACs must gi!e the subsidiary

more autonomy so that it can respond to

changes in local demands. 5@






3hese are the o!erall findings of a report

that looed into the de!elopment of

customied eecuti!e education programs.

pecifically, there are '( factors orguidelines that successful global firms seem

to employ.

5=






'. ee themsel!es as multinational enterprisesand are led by a management team that iscomfortable in the world arena.

2. 4e!elop integrated and inno!ati!e strategiesthat mae it difficult and costly for other firmsto compete.

$. %ggressi!ely and effecti!ely implement their

worldwide strategy and bac it with largein!estments.

1. Understand that inno!ation no longer isconfined in the U and de!elop systems for

tapping inno!ation abroad. 5






/. Operate as if the world were one large

maret rather than a series of indi!idual,

small marets.

5. 9a!e organiation structures that aredesigned to handle their uniDue problems

and challenges and thus pro!ide them the

greatest efficiency.

@. 4e!elop a system that eeps them informed

about political changes around the world and

the implications of these changes on the

firm. @(






=. 9a!e management teams that are

international in composition and thus better

able to respond to the !arious demands of

their respecti!e marets.. %llow their outside directors to play an acti!e

role in the operation of the enterprise.

'(. %re well managed and tend to follow such

important guidelines as sticing close to the

customer, ha!e lean organiation structures,

and encouraging autonomy and

entrepreneurial acti!ity among the personnel. @'

2 2 Cross Cultural Differences and2 2 Cross"Cultural Differences and



2.2. Cross"Cultural Differences and2.2. Cross"Cultural Differences and

#imilarities#imilarities

3he way in which +ACs manage their home

businesses often should be different from

the way they manage their o!erseas

operations. Because of this cultural difference, +ACs are

endangered for drifting toward parochialism

and simplification, the two things that

MNCs must avoid.

@2

2 2 Cross"Cultural Differences and2 2 Cross"Cultural Differences and





7arochialism is the tendency to !iew the

world through one?s own eyes and

perspecti!es.

implification is the process of ehibiting thesame orientation toward different cultural

groups.

Eample of a member of the purchasing

department of a large European oil companywho was negotiating an order with a orean

supplier.

@$






3o a!oid the simplification, we must

understand the range of !ariations in cultural

orientations.

@1






<hat is the nature of peopleG

6ood &changeableKunchangeable*

% miture of good and e!il

E!il &changeableKunchangeable* <hat is the person?s relationship to natureG

4ominant

#n harmony with nature ubFugation

@/






<hat is the person?s relationship to other

peopleG

Lineal &hierarchic*

Collateral &collecti!ist* #ndi!idualist

<hat is the modality of human acti!ityG

4oing

Being and becoming

Being

@5



2.2. Cross"Cultural Differences and2.2. Cross Cultural Differences and


imilarities across cultures

;ussians and %mericans

oreans and %mericans

@=




2.2. Cross"Cultural Differences and2.2. Cross Cultural Differences and


+any differences across cultures

Aetherlands

0rance

6ermany

Britain

@

2 2 Cross"Cultural Differences and2.2. Cross"Cultural Differences and



2.2. Cross Cultural Differences and2.2. Cross Cultural Differences and


9; management aspect

% partially completed contingency +atri for

#nternational 9uman ;esource +anagement:

6ermany +eico

8apan

China

cross cultural managment 04 2011

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