MANAGING CULTURE DIFFERENCES4880229 Pakorn K.

4980362 Piti R.

4980412 Sutatip T.

4980418 Pornwalai Ph

MANAGING CULTURAL DIFFERENCES It is one of the Major Issues during the

implementation phase of business alliance. Culture is not something you can see

directly We must understand the culture before

making cultural intervention Three questions before we get into details.

Have you ever been trained to manage culture? What corporate resources can you call

on to help you integrate cultures? How much time did you spend managing

culture in your organization last week?

If the answers to these questions are “none” or “never,” then how could you cope with culture issues in an alliance?

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

Culture is share knowledge embedded in the values, beliefs, and norms used by members in the organization to perform their daily task.

Cultures provides meaning and predictability in daily affairs based on the knowledge of “how we do things here.”

Culture also provides powerful unspoken directions on what is important and how things get done.

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

Culture norms are spread and shared among people in the organization. It helps to explain the behavior of people.

Developing a sense of culture means that you put on an anthropologist's hat and look around.

Observing the natives in their natural habitat is an important form of cultural learning.

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

Managers working on alliances often describe culture slightly different.

One manager described culture as the 800-pound visible gorilla quietly tears away at the fabric of alliance.

Another manager described his firm’s culture as “We’re like the Klingons around here.” Once we don’t need you, we shoot you and put you out of the spaceship.

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

Absent an alliance mean managers do not spend much time worrying about cultures.

Working on internal projects and interacting with people in the same organization share the same organizational culture and facilitates the same goal.

They know what to expect from one another and what are reactions to common situation.

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

Alliance bring culture out of the shadows and highlight the differences between firms.

Actions and meanings that are taken for granted in your firm can surprise another partner.

Example of the cultural problems between the two firm.

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

To deal with cultural differences while maintaining their focus on accomplish the goals of the alliance, there are two extremes. Ignore the culture and hope for the bestCharacterize the partner firm’s cultures,

evaluate characteristics for compatibility, and find resolution of cultural differences.

However, mostly firms do not either of the extreme, but they preferred to use an ad hoc approach.

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

The ad hoc approach relies heavily on top management and stem from the belief that executives lead the culture creation process by actively and regularly communicative their values, beliefs, and expected behaviors to the implementation teams.

Operating alliance operating managers from both firms get together and agree on set of behaviors that they will encourage in the alliance.

WHAT IS CULTURE IN AN ORGANIZATION CONTEXT?

Given the complexity of culture and its interdependence with other organizational the best path forward is for firms to deal with culture by applying the management techniques that are more powerful than culture, and that are under management’s control. To understand how these techniques are more powerful than corporate culture, we must examine the three types of culture.

THREE TYPES OF CULTURE Departments in the firm will have many

similarities rooted in the firm’s values but some differences in their norms and collective behaviors.

Cultural Differences come in three forms.1. National Culture (Japan vs. United States)2. Corporate Culture (IBM vs. Merck)3. Subunit Culture (marketing vs. R&D)

THREE TYPES OF CULTURE Some forms of culture are strong, meaning

that they exert their influence on people’s actions in obvious ways.

Other forms are relatively weak in a way that they are less important in influencing behavior.

THREE TYPES OF CULTURE National and subunit cultures are stronger

and corporate culture is relatively weaker. For example, IBM and Merck deal with all

three types of culture simultaneously. Each firm has employees from many countries. Each firm has a corporate culture Each firm has a variety of subunits with their

own definition of “how we do things here”

THREE TYPES OF CULTURE More example, both IBM and Merck have an

R&D Department and Sales/Marketing Department.

Although R&D Department and Sales/Marketing Department are in the same firm, culture of R&D in IBM is more similar to R&D in Merck than the Sales/Marketing in IBM because of the cultural barriers.

These cultural barriers are formed from the idea of “the way we do things here” which emerged from all three types of culture.

THREE TYPES OF CULTURE The value of understanding

the three types of culture is that alliance operating managers can make a rough prediction of whether culture will be a problem in the alliance.

For example, comparing IBM and Merck, it is less likely that culture will interfere with the performance of U.S./U.S. alliance because firm share the same national and subunit cultures which is considered as strong culture.

THREE TYPES OF CULTURE Unlike, U.S./Japanese

alliance where all of the types of culture are different, so there would be more likely hood of cultural distress.

In most cases, emphasis should be on sensitivity training around the stronger national and subunit cultures while paying less attention to the weaker corporate culture.

Alliance #1

Alliance #2

Type of Culture

Collaborative R&D between

U.S. firms

Product developme

nt, manufactur

ing, and marketing between a U.S. and Japanese

firm

National Same Different

Corporate Different Different

Subunit Same Different

THE IMPACT OF PERSONALITY AND LANGUAGE ON CULTURE

Two factors affect culture and can be mistaken for it Individual’s personality Language barriers

PERSONALITY AND STEREOTYPE TRAPS

Stereotypical behavior of each national culture “United State manager are cowboys. They shoot from

the hip and ask question later.” “The Japanese are consensus driven.” “The Germans are exceptionally well organized.”

While stereotypical behaviors attempt to describe people as a group, their daily interactions were with a counterpart who was very much individual.

Since individuals can show radically different behaviors from those displayed by the group, the stereotypes were meaningless.

PERSONALITY AND STEREOTYPE TRAPS

Stereotypes are created in people’s mind from family biases, the media, and the person’s casual contacts with a few individual who fit the stereotypical behavior.

Managers quickly moved past their preconceived stereotypes of people in other cultures when they began to work with their individual counterparts.

Trying to manage cultural integration as a group phenomenon is a mistake.

LANGUAGE TRAPS

Language barriers create a variety of traps that interfere with accurate communication.

Partners agree that English will be primary language in alliance. Allowing to use English with people whose English ability is limited, native English assume that language issues are under control.

LANGUAGE TRAPS

The assumption creates two traps for the wary.The use of a foreign language shapes a

person’s behavior. In negotiation in English, the American negotiator

found Spanish negotiators difficult to work with. After negotiation, American firm send a native Spanish speaking executive to Spain to work. He can work very good because of Spanish.

Nominal fluency can mask subtle but vital differences in the meaning of English words and those same words in another language. Native English speaker and person who learned

English as a foreign may not realize that they have different understanding of an issue based on their different interpretation of the same word.

TRANSMITTING INFORMATION, LISTENING, AND DISPLAYING

PATIENCE Poor speaking, writing, and listening skills create

communication errors. Some errors stem from simply not knowing the other person and from language gaps and cultural differences.

These errors are particularly troublesome during alliance negotiations and in the early days of implementation when people are still getting to know one another. As two people know each other well, they exchange a great deal of information through their tone of voice, body language, and facial expression.

When a close personal relationship does not exist, a familiarity gap, that can be found in both international alliances and alliances between firms from the same nation, is created that affects communications.

Transmitting information, listening, and displaying patience

Patience : the solution involves recognizing the problem on both sides.

• When delivering information, both sides must be aware of the pitfalls of using verbal shorthand in describing alliance ideas.

• Charts, pictures, and carefully written text should be exchanged and thoroughly discussed to be sure that both sides understand each other. Both sides must pay attention to body language and the tone of the communication as well as the translated words.

• A common mistake among executives is not devoting the time and energy needed to develop an interpersonal bridge across the familiarity gap.

Transmitting information, listening, and displaying patience

Face-to-Face VS E-Mail • E-mail and videoconferencing, it is easy to over-rely on technology

to communicate. While these communication tools add value, they also introduce an increased risk of communication in alliances, especially in early stages of implementation when people do not know each other.• General rules:

1) Communication team should be face-to-face during the early days of an alliance.

2) Personal contact allows implementation team members to build the interpersonal relationships important to the smooth function of the alliance.

3) Once the relationships are established, tools such as videoconferencing and alliance-specific web sites can be used to supplement ongoing face-to-face meetings.

Transmitting information, listening, and displaying patience

Face-to-Face VS E-Mail

• Quarterly meetings are natural face-to-face meeting points and include recreational as well as formal events.

• Alliance operating managers and implementation team members must be careful not to deliver bad news or discuss difficult issues over the phone or by e-mail.

• The larger the gap between the intended and received communication, the larger the possibility that the communication will worsen the problem, not solve it.

Workable Strategies for Dealing with Culture

Those cultural interventions may be done by Planning and Negotiating Teams during negotiations or with Implementation Team members and other alliance participants.

Several ways to overcome cultural barriers while simultaneously focusing team members’ attention on the goal and objectives of the alliance.

1) Knowledge

2) Trust and Respect

Knowledge

• The first step in dealing with cultural barriers is to identify the dominant behaviors people are likely to observe in their counterparts. In international relationships, firms use cultural training courses to learn about the cultural norms of the partner.

• The training programs can overcome many misleading prior

assumptions about national stereotypes and provide insights into both the diversity and unifying threads of the national culture.

• More important, well-planned training programs help participants understand the specific cultural differences that affect alliance information and implementation.

• The behaviors that emerge from corporate and subunit culture are best learned through a pen-and-paper cultural inventory, and a standard tool in organizational development.

Workable Strategies for Dealing with Culture

Trust and Respect

• The development of interpersonal trust and respect is a powerful force in organizations.

• Activities that foster personal bonding help bridge cultural gaps. Both firms must be conscious of the positive effects of bridging cultural gaps using activities designed to encourage people to develop a closer personal understanding of each other.

• Working-level people had the opportunity to get to know one another at an interpersonal level. They got to know, trust, and like each other.

“Cultural differences cannot stand up under a relentless assault of trust and respect”

Workable Strategies for Dealing with Culture

TEAM BUILDING IN ALLIANCES Team Building is the critical result of

allowing people to create interpersonal relationships.

With this article, it provides a few simple team-building tools which are fun and inexpensive.

Go bowling: it is one of the best sports for team building. to arrange the bowling team between two

companies, it should be done by the functional pairs, such marketing or financing.

By doing this way, people will have fun and also build interpersonal relationships

TEAM BUILDING IN ALLIANCES The Culturally Correct Dinner:

It is another way to break down cultural barriers. Example of the alliance between US and Japan.

The U.S Implementation Team invited Japanese counterparts for dinner

the U.S Team prepares a traditional Japanese dinner for their counterparts.

In addition, they also have karaoke bar. During the period, they discuss about food, culture and tradition;

as a result, they build stronger interpersonal relationships.

TEAM BUILDING IN ALLIANCES Secret Weapon People:

another way to break culture barriers is the simple attraction of one person to the goodwill of another.

It is because people who have an unusual curiosity about other’s culture will gleefully immerse themselves in the culture of the host countries.

They are interested in walking around the marketplace, eating the local foods, and talking to people whom they meet.

they enjoy singing the native songs and dance the traditional dance.

As a result, these activates are the most powerful weapon in which glue the firms together with smiles and warm feelings.

TIPS ON MANAGING CULTURE There are three factors which are important

for forming interpersonal relationship. Understand the dominant behavior in each firm’s

culture Develop trust and respect between counterparts Have fun together

However, to be more powerful, the managers should encourage team members to have these factors.