The Nature of Culture

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The Nature of Culture

• Culture defined Acquired knowledge that people
  use to interpret experience and generate social
  behavior. This knowledge forms values, creates
  attitudes, and influences behavior.

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Characteristics of Culture

• Learned
• Shared
• Trans-generational
• Symbolic
• Patterned
• Adaptive

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Priorities of Cultural Values
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A Model of Culture
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Business Customs in South Africa

• Arrange meeting before discussing business over
  phone.
• Make appointments as far in advance as possible.
• Maintain eye contact, shake hands, provide
  business card
• Maintain a win-win situation
• Keep presentations short

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Values in Culture

• Values
• Learned from culture in which individual is
  reared
• Differences in cultural values may result in
  varying management practices
• Basic convictions that people have about
• Right and wrong
• Good and bad
• Important and unimportant

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Value Similarities and Differences Across Cultures

• Strong relationship between level of managerial
  success and personal values
• Value patterns predict managerial success and can
  be used in selection/placement decisions
• Country differences in relationship between
  values and success however, findings across
  U.S., Japan, Australia, India are similar
• Values of more successful managers favor
  pragmatic, dynamic, achievement-oriented and
  active role in interaction with others
• Values of less successful managers tend toward
  static and passive values relatively passive
  roles in interacting with others

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Hofstedes Cultural Dimensions

• Power distance
• Uncertainty avoidance
• Individualism/collectivism
• Masculinity/femininity

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Hofstedes Cultural Dimensions

• Power distance Less powerful members accept that
  power is distributed unequally
• High power distance countries people blindly
  obey superiors centralized, tall structures
  (e.g., Mexico, South Korea, India)
• Low power distance countries flatter,
  decentralized structures, smaller ratio of
  supervisor to employee (e.g., Austria, Finland,
  Ireland)

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Hofstedes Cultural Dimensions

• Uncertainty avoidance people feel threatened by
  ambiguous situations create beliefs/institutions
  to avoid such situations
• High uncertainty avoidance countries high need
  for security, strong belief in experts and their
  knowledge structure organizational activities,
  more written rules, less managerial risk taking
  (e.g., Germany, Japan, Spain)
• Low uncertainty avoidance countries people more
  willing to accept risks of the unknown, less
  structured organizational activities, fewer
  written rules, more managerial risk taking,
  higher employee turnover, more ambitious
  employees (e.g., Denmark and Great Britain)

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Hofstedes Cultural Dimensions

• Individualism People look after selves and
  immediate family only
• High individualism countries wealthier,
  protestant work ethic, greater individual
  initiative, promotions based on market value
  (e.g., U.S., Canada, Sweden)
• High collectivism countries poorer, less support
  of Protestant work ethic, less individual
  initiative, promotions based on seniority (e.g.,
  Indonesia, Pakistan)

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Hofstedes Cultural Dimensions

• Masculinity dominant social values are success,
  money, and things
• High masculine countries stress earnings,
  recognition, advancement, challenge, wealth high
  job stress (e.g., Germanic countries)
• High feminine countries emphasize caring for
  others and quality of life cooperation, friendly
  atmosphere., employment security, group decision
  making low job stress (e.g., Norway)

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Strategic Predispositions

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

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Strategic Predispositions

• Polycentric predisposition
• A philosophy of management whereby strategic
  decisions are tailored to suit the cultures of
  the countries where the MNC operates.

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Strategic Predispositions

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

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Strategic Predispositions

• Geocentric predisposition
• A philosophy of management whereby the company
  tries to integrate a global systems approach to
  decision making.

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Meeting the Challenge

• The Globalization Imperative
• Belief that one worldwide approach to doing
  business is key to efficiency and effectiveness.
• Many factors facilitate the need to develop
  unique strategies for different cultures
• Diversity of worldwide industry standards
• Continual demand by local customers for
  differentiated products
• Importance of being insider as in case of
  customer who prefers to buy local
• Difficulty of managing global organizations
• Need to allow subsidiaries to use own abilities
  and talents unconstrained by headquarters

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Globalization vs. National Responsiveness

• Advertising (for example)
• French
• Avoid reasoning or logic
• Advertising predominantly emotional, dramatic,
  symbolic
• Spots viewed as cultural events art for sake of
  money and reviewed as if they were literatures
  or films
• British
• Value laughter above all else
• Typical broad, self-deprecating British
  commercial amuses by mocking both advertiser and
  consumer
• Germans
• Want factual and rational advertising
• Typical German spot features standard family of 2
  parents, two children, and grandmother

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Globalization vs. National Responsiveness

• How to add value to marketing
• Tailor advertising message to particular culture
• Stay abreast of local market conditions dont
  assume all markets basically same
• Know strengths and weaknesses of MNC
  subsidiaries provide them assistance in
  addressing local demands
• Give subsidiary more autonomy let it respond to
  changes in local demand

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Cross-Cultural Differences and Similarities

• Parochialism and Simplification
• Parochialism view world through own eyes and
  perspectives
• Simplification exhibit same orientation toward
  different cultural groups

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Cross-Cultural Differences and Similarities

• Similarities across cultures
• Not possible to do business same way in every
  global location
• Procedures and strategies that work well at home
  cant be adopted overseas without modifications
• Some similarities have been found
• Russia and U.S. (for example)
• Traditional management
• Communication
• Human resources
• Networking activities
• OB Mod

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Cross-Cultural Differences and Similarities

• Differences across cultures
• Far more differences than similarities found in
  cross-cultural research
• Wages, compensation, pay equity, maternity leave
• Importance of criteria used in evaluation of
  employees

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Cultural Differences in SelectedCountries and
Regions

• Doing Business in Russia
• Build personal relationships with partners. When
  there are contract disputes, there is little
  protection for the aggrieved party because of the
  time and effort needed to legally enforce the
  agreement.
• Use local consultants. Because the rules of
  business have changed so much in recent years, it
  pays to have a local Russian consultant working
  with the company.
• Ethical behavior in the United States is not
  always the same as in Russia. For example, it is
  traditional in Russia to give gifts to those with
  whom one wants to transact business.
• Be patient. In order to get something done in
  Russia, it often takes months of waiting.

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Cultural Differences in SelectedCountries and
Regions Russia

• Russians like exclusive arrangements and often
  negotiate with just one firm at a time.
• Russians like to do business face-to-face. So
  when they receive letters or faxes, they often
  put them on their desk but do not respond to
  them.
• Keep financial information personal. Russians
  wait until they know their partner well enough to
  feel comfortable before sharing financial data.
• Research the company. In dealing effectively with
  Russian partners, it is helpful to get
  information about this company, its management
  hierarchy, and how it typically does business.

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Cultural Differences in SelectedCountries and
Regions Russia

• Stress mutual gain. The Western idea of winwin
  in negotiations also works well in Russia.
• Clarify terminology. The language of business is
  just getting transplanted in Russia so
  double-check and make sure that the other party
  clearly understands the proposal, knows what is
  expected and when, and is agreeable to the deal.
• Be careful about compromising or settling things
  too quickly because this is often seen as a sign
  of weakness.
• Russians view contracts as binding only if they
  continue to be mutually beneficial, so
  continually show them the benefits associated
  with sticking to the deal.

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• Organizational Cultures and Diversity

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The Nature of Organizational Culture

• Organizational culture shared values and beliefs
  enabling members to understand their roles and
  the norms of the organization, including
• Observed behavioral regularities, typified by
  common language, terminology, rituals
• Norms, reflected by things such as amount of work
  to do and degree of cooperation between
  management and employees
• Dominant values organization advocates and
  expected participants to share (e.g., low
  absenteeism, high efficiency)

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Organizational Culture (continued)

• Other values and beliefs
• Philosophy set forth regarding how to treat
  employees and customers
• Rules dictating dos and donts of employee
  behavior pertaining to productivity intergroup
  cooperation
• Organizational climate as reflected by way
  participants interact with each other, treat
  customers, and feel about how treated by senior
  level management

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Interaction between National and Organizational
Culture

• National cultural values of employees may
  significantly impact their organizational
  performance
• Cultural values employees bring to workplace are
  not easily changed by organization

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Organizational Cultures in MNCs

• Shaped by numerous factors including cultural
  preferences of leaders and employees
• Some MNCs have subsidiaries that (aside from logo
  and reporting procedures) wouldnt be easily
  recognizable as belonging to same MNC

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Organizational Culture in MNCs

• Four steps in integration of organizational
  cultures resulting from international expansion
  via mergers/acquisitions
• Two groups establish purpose, goals, and focus of
  merger
• Develop mechanisms to identify most important
  structures and manager roles
• Determine who has authority over resources
• Identify expectations of all involved
  participates and facilitate communication between
  departments and individuals

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Overall Communication Process

• Communication The process of transferring
  meanings from sender to receiver.
• On surface appears straightforward
• However, a great many problems can result in
  failure to transfer meanings correctly

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Verbal Communication Styles

• Context is information that surrounds a
  communication and helps convey the message
• Context plays a key role in explaining many
  communication differences
• Messages often highly coded and implicit in
  high-context society (e.g., Japan, many Arab
  countries)
• Messages often explicit and speaker says
  precisely what s/he means in low context society
  (e.g., U.S. and Canada)

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Verbal Communication Styles

• Indirect and Direct Styles
• High-context cultures messages implicit and
  indirect voice intonation, timing, facial
  expressions play important roles in conveying
  information
• Low-context cultures people often meet only to
  accomplish objectives tend to be direct and
  focused in communications

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Communication Barriers

• Language barriers
• Cultural barriers
• Be careful not to use generalized statements
  about benefits, compensation, pay cycles,
  holidays, policies in worldwide communication
• Most of world uses metric system so include
  converted weights and measures in all
  communications
• Even in English-speaking countries, words may
  have different meanings.

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Communication Barriers

• Cultural barriers (continued)
• Letterhead and paper sizes differ worldwide
• Dollars arent unique to U.S. Also Australian,
  Bermudian, Canadian, Hong Kong, Taiwanese, and
  New Zealand dollars. Clarify which dollar.

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Perceptual Barriers

• Perception a persons view of reality
• Advertising Messages countless advertising
  blunders when words are misinterpreted by others
• How others see us May be different than we think

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Common Forms of Nonverbal Communication
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Nonverbal Communication

• Nonverbal communication
• Transfer of meaning through means such as body
  language and use of physical space
• Chromatics
• Use of color to communicate messages
• Kinesics
• Study of communication through body movement and
  facial expression
• Eye contact
• Posture
• Gestures

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Nonverbal Communication

• Proxemics
• Study of way people use physical space to convey
  messages
• Intimate distance used for very confidential
  communications
• Personal distance used for talking with
  family/close friends
• Social distance used to handle most business
  transactions
• Public distance used when calling across room or
  giving talk to group

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Personal Space in U.S.
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Communication Effectiveness

• Improve feedback systems
• Language training
• Cultural training
• Flexibility and cooperation

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Negotiating Styles
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Managing Cross Cultural Negotiations

• Negotiation Process of bargaining with one more
  parties at arrive at solution acceptable to all
• Two types of negotiation
• Distributive when two parties with opposing goals
  compete over set value
• Integrative when two groups integrate interests,
  create value, invest in the agreement (win-win
  scenario)

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Negotiation Types and Characteristics
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Steps of the Negotiation Process

• Planning
• Interpersonal relationship building
• Exchange of task related information
• Persuasion
• Agreement

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Cultural Differences Affecting Negotiations

• Dont identify counterparts home culture too
  quickly common cues such as accent may be
  unreliable.
• Beware of Western bias toward doing. Ways of
  being, feeling, thinking, talking can shape
  relationships more powerfully than doing.
• Counteract tendency to formulate simple,
  consistent, stable images.
• Dont assume all aspects of culture are equally
  significant.
• Recognize norms for interactions involving
  outsiders may differ from those for interactions
  between compatriots.
• Dont overestimate familiarity with counterparts
  culture.

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Negotiation Tactics

• Location
• Time limits
• Buyer-seller relationship
• Bargaining behaviors
• Use of extreme behaviors
• Promises, threats and other behaviors
• Nonverbal behaviors

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Supermarket Lab Exercise
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Project is about..

• Shanghai Disneyland
• The most recent Disneyland in the world
• Planning to expand rapidly
• The goal of the project is
• to propose ONE attraction for Shanghai
  Disneylands future expansion, the one that your
  team will bring the most success to Shanghai
  Disneyland (the killer attraction).

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Exercise Process

• Step 1 Each person needs to figure out what is
  your killer attraction. (a one-page description
  is due on Nov 23)
• Step 2 Exchange your idea with your partners
• Set up at least TWO meetings for all team
  members, each for about 30-45 minutes
• First meeting to know each other and to exchange
  ideas
• Second meeting to continue discussion to reach an
  agreement
• Step 3 Class presentation (Nov 23)
• Report and present the communication process
  between you and your partner.
• At the end of the presentation, use 3 key words
  to describe your partner.

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Some expectations

• For the collaboration/negotiation process
• Be Creative
• Be collaborative, but it doesnt mean to be
  compromised
• Be aware of communication/technology/cultural
  barriers
• Have fun in the process, but also think about the
  5 steps of negotiation
• For presentation
• Use the concepts we have learnt as a guideline
  when explaining what has happened in the exercise
  (e.g., What kind of communication barriers you
  have encountered, and how you have overcome them)
• A picture is worth a thousand words.
• Report the funny details in your
  negotiation/collaboration

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Project description

• Each team will be responsible for giving a 10
  minutes presentation to report the final result
  of collaboration and communication/negotiation
  process.
• The evaluation of this exercise is based on the
  quality of both your oral presentation and your
  slides.