CHAPTER 5MANAGING ACROSS

CULTURES

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Strategic Predispositionso Ethnocentric Predisposition

A nationalistic philosophy of management whereby the values and interests of the parent company guide strategic decisions.

Philosophies of Management

Ethnocentric predisposition

o Polycentric predisposition

A philosophy of management whereby strategic decisions are tailoredto suit the cultures of the countries where the MNC operates.

Polycentric predisposition

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Strategic Predispositionso Regiocentric Predisposition

A philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis.

Philosophies of Management

Ethnocentric predisposition

o Geocentric predisposition

A philosophy of managementwhereby the company tries to integrate a global systemsapproach to decision making.

Polycentric predisposition

Regiocentric predisposition

Geocentric predisposition

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Strategies for Managing Across Cultures

Globalization – The production and distribution of products and services of a

homogeneous type and quality on a worldwide basis

National responsiveness- The need to understand the different consumer tastes in

segmented regional markets and respond to different national standards and regulations imposed by autonomous governments and agencies

� Need to adapt tools and techniques for managing the local workforce

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Advertising– Germans

Want advertising that is factual and rational Typical German spot features the standard family of two

parents, two children, and grandmother

– French Avoid reasoning or logic Advertising is predominantly emotional, dramatic, and

symbolic Spots are viewed as cultural events—art for the sake of

money—and are reviewed as if they were literature or films

– British Value laughter above all else Typical broad, self-deprecating British commercial amuses

by mocking both the advertiser and consumer

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Cultural Differences and Similarities

Parochialism- The tendency to view the world through one’s eyes and

perspectives

Problem for managers from advanced economies who believe that their knowledge is sufficient for doing business in less developed countries

Simplification- The process of exhibiting the same orientation toward different

cultural groups

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Cultural Similarities and DifferencesWhat is the nature of people? Good(changeable/unchangeable)

A mixture of good and evil*Evil (changeable/unchangeable)

What is person’s relationship to nature? Dominant*In harmony with natureSubjugation

What is person’s relationship to others? Lineal (hierarchic)Collateral (collectivist)Individualist*

What is the modality of human activity? Doing*Being and becomingBeing

What is the temporal focus of activity? Future*PresentPast

What is the conception of space? Private*Mixed

* Indicates dominant U.S. orientation Public

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Similarities of US firms with foreign companies:

�As size of company increases, commitment decreases

�As structure of company becomes more employee focused, commitment increases

�A positive organizational climate increases employee commitment

Behavior Management NOT Culturally Bound!

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Human Resource Management Activities� Wages

� Compensation� Vacations

� Maternity Leave� Evaluative criteria

Differences of US Firms with Foreign Companies

Netherlands France Germany BritainRealityAnalysisLeadershipImagination

ImaginationAnalysisLeadershipReality

LeadershipAnalysisRealityImagination

ImaginationRealityAnalysisLeadership

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Cultural Clusters

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International Human Resource Management

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Doing Business in China Values and Principles above

money and expediency Emphasis on trust and mutual

connections Meetings start with small talk

and tea Host indicates when meetings

begin and end Slow in forming decisions, but

stick with decisions once made Reciprocity is important Negotiations are often carried

out through intermediaries to reduce the risk of losing face

Guanxi - Good connections that result in lower costs, increased business, greater prospecting opportunities, and facilitation of future transactions

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Doing Business in Russia Build personal relationships with partners Use local consultants Consider business ethics Be patient

Stress exclusivity Use face to face communication Keep financial information personal Research the company Stress mutual gain, focus on a win-win relationship Clarify terminology

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Doing Business in India Punctuality is important No personal questions Titles are important No public displays of affection When eating or accepting things,

use the right hand The namaste gesture can be

used to greet people Bargaining is common Tolerant of outsiders Wife and children eat at separate

table

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Doing Business in France Use a quick hand shake with some pressure in the

grip Punctuality is extremely important Precise and logical Great importance is placed on neatness

and taste; social class and status important In negotiations, the French try to out what all of the

other side’s aims and demands are but they reveal their own hand only late in the negotiations

Quality of work life and enjoyment of life important; less motivated by compensation

Suspicion of early friendliness, dislike first names, taking off jackets or personal questions

Work in small independent businesses, pride on craftsmanship

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Doing Business in Arab Countries Status and rank important

Fatalistic - all occurs according to Allah’s will

Do not take credit for joint efforts Decisions based on emotion Efforts to sidestep red tape can be regarded

as disrespect for legal and government institutions

Important decisions made in person No feelings of superiority Patience and connections critical to

business transactions