Culture, Management Style, and Business Systems Chapter 5 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. PowerPoint presentation prepared by: Alfred Lowey-Ball Associate Professor of Marketing UBI-United Business Institutes Brussels, Belgium Chapter Outline • Required Adaptation • Degree • Imperatives, electives, exclusives • Impact of American culture on management styles • Management styles around the world • Authority & decision-making • Management objectives & aspirations • Communication styles etc • Gender Bias in International Business • Business Ethics • Culture’s influence on Strategic thinking • Relationship-oriented vs Information-oriented cultures • Required Adaptation • Degree • Imperatives, electives, exclusives • Impact of American culture on management styles • Management styles around the world • Authority & decision-making • Management objectives & aspirations • Communication styles etc • Gender Bias in International Business • Business Ethics • Culture’s influence on Strategic thinking • Relationship-oriented vs Information-oriented cultures McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Do Blondes have more fun in Japan? • A high-level woman executive leads negotiations for Ford Motor company with Japanese partners • Tall (5’ 8“, 175 cm), Blonde • She was not directly addressed • No questions were asked of her • When she asked questions, she was met by embarassed laughter Wise to conform to the customs of the country Wise to conform to the customs of the country Introduction Recognize that there are profound differences in culture, management values, and business methods and behaviours Recognize that there are profound differences in culture, management values, and business methods and behaviours In doing business abroad, your management style must be adapted to local mores in each country to have a chance of success. In doing business abroad, your management style must be adapted to local mores in each country to have a chance of success. In many countries, great importance of developing friendship, and attaining a level of trust before beginning business negotiations In many countries, great importance of developing friendship, and attaining a level of trust before beginning business negotiations Patterns of thinking (“Asian” vs “Western”), local business tempo, religious practices, political structures and attitudes toward family loyalty are different and impact business transactions Patterns of thinking (“Asian” vs “Western”), local business tempo, religious practices, political structures and attitudes toward family loyalty are different and impact business transactions Required Adaptation • Adaptation is a key concept in international marketing and willingness to adapt is crucial • To successfully deal with individuals, firms, or authorities in foreign countries, managers should exhibit: • Adaptation is a key concept in international marketing and willingness to adapt is crucial • To successfully deal with individuals, firms, or authorities in foreign countries, managers should exhibit: 1. open tolerance “Different but equal” 2. flexibility, 3. humility, 4. justice/fairness, 5. ability to adjust to varying tempos, 6. curiosity/interest, 7. knowledge of the country, 8. liking for others, 9. ability to command respect, and 10. ability to integrate oneself into the local environment Required Adaptation to business cultures • Cultural imperatives are the business customs and expectations that must be met, conformed, recognized and accommodated if relationships are to be successful • Cultural imperatives are the business customs and expectations that must be met, conformed, recognized and accommodated if relationships are to be successful • Cultural electives relate to areas of behavior and customs that cultural aliens may wish to conform to or participate in but that are not required • Cultural electives relate to areas of behavior and customs that cultural aliens may wish to conform to or participate in but that are not required • Cultural exclusives are those customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred and must not participate • Cultural exclusives are those customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred and must not participate The Impact of American Culture • Ways in which U.S. culture has influenced management style include, the following: • Ways in which U.S. culture has influenced management style include, the following: 1. “Master of destiny” viewpoint 2. Independent enterprise as the instrument of social action 3. Personnel selection and reward based on merit 4. Decisions based on objective analysis 5. Wide sharing in decision making 6. Never-ending quest for improvement 7. Competition yielding efficiency Management Styles Around the World • Management values and behaviors vary widely around the world. • Management values and behaviors vary widely around the world. • Differences in the contact level, communications emphasis, tempo, and formality of foreign businesses are encountered from culture to culture. • Differences in the contact level, communications emphasis, tempo, and formality of foreign businesses are encountered from culture to culture. • Ethical standards and sales interactions and negotiation styles differ substantially. • Ethical standards and sales interactions and negotiation styles differ substantially. Management Styles Around the World • Cultural differences influence management styles in the following areas: • Cultural differences influence management styles in the following areas: 1. Authority and Decision Making 2. Management Objectives and Aspirations 3. Communication Styles 4. Formality and Tempo 5. P-Time versus M-Time 6. Negotiations Emphasis Authority & Decision-making 1. Differences in Authority and Decision Making • In high-PDI countries subordinates are not likely to contradict bosses, but in low-PDI countries they often do 1. Differences in Authority and Decision Making • In high-PDI countries subordinates are not likely to contradict bosses, but in low-PDI countries they often do Three typical patterns exist: • top-level decision-making often in Latin countries, depends on ownership structure of company • decentralized decision-making US or Northern Europe (but control is held by BoD) • committee or group decisions prevails in many parts of Asia, eg. Japan & China [...]... and fellow workers • Power and Achievement Orientation sought by managers • Importance of money & high rank in USA • Importance of social recognition Communication Styles 3 Differences in Communication Styles 3 Differences in Communication Styles • symbolic meanings of time, space, things, friendships, and agreements, vary across cultures • “In some cultures, messages are explicit; the words carry most... Tempo or speed in getting “down to business” – Need for friendship or understanding before doing business in Latin or Arab societies • Perception of time varies in many cultures Differences in Management Styles Around the World 5 P-Time versus M-Time 5 P-Time versus M-Time • M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians • Most low-context cultures operate . American culture on management styles • Management styles around the world • Authority & decision-making • Management objectives & aspirations • Communication styles etc • Gender Bias in. American culture on management styles • Management styles around the world • Authority & decision-making • Management objectives & aspirations • Communication styles etc • Gender Bias in. sales interactions and negotiation styles differ substantially. • Ethical standards and sales interactions and negotiation styles differ substantially. Management Styles Around the World • Cultural