Cross cultural management 5e by cullen CH02

Business culture: norms, values, and beliefs that pertain to all aspects of doing business in a culture.. Business culture: norms, values, and beliefs that pertain to all aspects of do

Chapter 2

Culture and Multinational

Management

Learning Objectives

• Understand the Hofstede, GLOBE, and 7d models

• Appreciate the complex differences among cultures

and use these differences for building better

organizations.

• Recognize the complexity of understanding new

cultures and the dangers of stereotyping and cultural

paradoxes.

• Understand the Hofstede, GLOBE, and 7d models

• Appreciate the complex differences among cultures

and use these differences for building better

organizations.

• Recognize the complexity of understanding new

cultures and the dangers of stereotyping and cultural

paradoxes.

What is Culture?

• Pervasive and shared beliefs, norms, values, and

symbols that guide everyday life.

• Cultural norms: both prescribe and proscribe behaviors

• What we should do and what we cannot do.

• Cultural values: what is good/beautiful/holy and what

are legitimate goals for life.

• Pervasive and shared beliefs, norms, values, and

symbols that guide everyday life.

• Cultural norms: both prescribe and proscribe behaviors

• What we should do and what we cannot do.

• Cultural values: what is good/beautiful/holy and what

are legitimate goals for life.

• Culture is pervasive in society: affects all aspects of

• Culture is pervasive in society: affects all aspects of

life.

Culture: Front Stage & Back Stage

• Front stage of culture: easily observable aspect of

• E.g., Japanese saying “it’s difficult” and twisting

• Front stage of culture: easily observable aspect of

Three Levels of Culture

1 National culture: the dominant culture within the

political boundaries of the nation-state.

2 Business culture: norms, values, and beliefs that

pertain to all aspects of doing business in a culture.

– Tells people the correct, acceptable ways to

conduct business in a society.

1 National culture: the dominant culture within the

political boundaries of the nation-state.

2 Business culture: norms, values, and beliefs that

pertain to all aspects of doing business in a culture.

– Tells people the correct, acceptable ways to

conduct business in a society.

Three Levels of Culture (cont.)

3 Occupational and organizational culture

• Occupational culture: the norms, values, beliefs, and expected ways of behaving for people in the same occupational group.

• Organizational culture: the set of important

understandings that members of an organization

3 Occupational and organizational culture

• Occupational culture: the norms, values, beliefs, and expected ways of behaving for people in the same

occupational group.

• Organizational culture: the set of important

understandings that members of an organization

Exhibit 2.1: Three Levels of

Culture

Cultural Differences and Basic Values

• Three diagnostic models to aid the multinational

manager:

• Hofstede model of national culture

• Global Leadership and Organizational Behavior

Effectiveness (GLOBE) project

• 7d culture model

• Three diagnostic models to aid the multinational

manager:

• Hofstede model of national culture

• Global Leadership and Organizational Behavior

Effectiveness (GLOBE) project

• 7d culture model

Hofstede’s Model Applied to Organizations and

• Evaluation and promotion

• Management practices considered in the discussion of Hofstede’s model include:

• 1 Human resources management

• Management selection

• Training

• Evaluation and promotion

• Remuneration

Hofstede’s Model Applied to Organizations

Power Distance

• Power distance concerns how cultures deal with

inequality and focuses on

• Norms that tell superiors (e.g., bosses) how much

they can determine the behavior of their

subordinates

• Values and beliefs that superiors and subordinates are fundamentally different kinds of people

• Power distance concerns how cultures deal with

inequality and focuses on

• Norms that tell superiors (e.g., bosses) how much

they can determine the behavior of their

subordinates

• Values and beliefs that superiors and subordinates

are fundamentally different kinds of people

Power Distance (cont.)

• High power distance countries have norms, values,

and beliefs such as:

• Inequality is fundamentally good.

• Everyone has a place: some are high, some are low.

• Most people should be dependent on a leader.

• The powerful are entitled to privileges.

• The powerful should not hide their power.

• High power distance countries have norms, values,

and beliefs such as:

• Inequality is fundamentally good.

• Everyone has a place: some are high, some are low.

• Most people should be dependent on a leader.

• The powerful are entitled to privileges.

• The powerful should not hide their power.

Exhibit 2.2: Managerial

Implications for Power

Distance

Uncertainty Avoidance

• Norms, values, and beliefs regarding tolerance for

ambiguity:

• Conflict should be avoided.

• Deviant people and ideas should not be tolerated.

• Laws are very important and should be followed.

• Experts and authorities are usually correct.

• Consensus is important.

• Norms, values, and beliefs regarding tolerance for

ambiguity:

• Conflict should be avoided.

• Deviant people and ideas should not be tolerated.

• Laws are very important and should be followed.

• Experts and authorities are usually correct.

• Consensus is important.

Exhibit 2.3: Managerial

Implications of Uncertainty

Avoidance

• Focus is on the relationship between the individual and the group.

• Countries high on individualism have norms, values,

and beliefs such as:

• People are responsible for themselves.

• Individual achievement is ideal.

• People need not be emotionally dependent on

• Focus is on the relationship between the individual and the group.

• Countries high on individualism have norms, values,

and beliefs such as:

• People are responsible for themselves.

• Individual achievement is ideal.

• People need not be emotionally dependent on

• Collectivist countries have norms, values, and beliefs such as:

• One’s identity is based on group membership.

• Group decision making is best.

• Groups protect individuals in exchange for their

loyalty to the group.

• Collectivist countries have norms, values, and beliefs

such as:

• One’s identity is based on group membership.

• Group decision making is best.

• Groups protect individuals in exchange for their

loyalty to the group.

Exhibit 2.4: Managerial

Implications of

Individualism/Collectivism

• Tendency of a culture to support traditional masculine

orientation.

• High masculinity countries have beliefs such as:

• Gender roles should be clearly distinguished.

• Men are assertive and dominant.

• Machismo/exaggerated maleness in men is good.

• Men should be decisive.

• Tendency of a culture to support traditional masculine

orientation.

• High masculinity countries have beliefs such as:

• Gender roles should be clearly distinguished.

• Men are assertive and dominant.

• Machismo/exaggerated maleness in men is good.

• Men should be decisive.

Exhibit 2.5: Managerial

Implications of Masculinity

Long-Term (Confucian) Orientation

• Orientation towards time that values patience.

• Managers are selected based on the fit of their

personal and educational characteristics.

• A prospective employee’s particular skills have less importance in the hiring decision.

• Training and socialization for a long-term

commitment to the organization compensate for any

• Orientation towards time that values patience.

• Managers are selected based on the fit of their

personal and educational characteristics.

• A prospective employee’s particular skills have less importance in the hiring decision.

• Training and socialization for a long-term

commitment to the organization compensate for any

Long-Term (Confucian) Orientation

• Eastern cultures rank highest on long-term orientation.

• Value synthesis in organizational decisions.

• Belief in substantial savings.

• Willingness to invest.

• Acceptance of slow results.

• Persistence to achieve goals.

• Sensitivity to social relationships.

• Eastern cultures rank highest on long-term orientation.

• Value synthesis in organizational decisions.

• Belief in substantial savings.

• Willingness to invest.

• Acceptance of slow results.

• Persistence to achieve goals.

• Sensitivity to social relationships.

Short-term Orientation

• Western cultures, which tend to have short-term

orientations, value logical analysis in their approach to organizational decisions.

• Designed and managed purposefully to respond to

immediate pressures from the environment.

• Often use quick layoffs of “excess” employees to adjust

to shrinking demand for products.

• Western cultures, which tend to have short-term

orientations, value logical analysis in their approach to organizational decisions.

• Designed and managed purposefully to respond to

immediate pressures from the environment.

• Often use quick layoffs of “excess” employees to adjust

to shrinking demand for products.

Long-Term Orientation vs

Short-Term Orientation

• The difference is apparent in the goals companies set in strategic decision making.

• Managers in countries (short-term) want immediate

financial returns, and fast, measurable success (e.g.,

U.S.).

• Managers in countries (long-term) prioritize growth and long-term paybacks.

• Long time horizons allow managers to experiment, seek

• The difference is apparent in the goals companies set in strategic decision making.

• Managers in countries (short-term) want immediate

financial returns, and fast, measurable success (e.g.,

Exhibit 2.6: Managerial

Implications of Long-term

(Confucian) Orientation

GLOBE National Culture Framework

• GLOBE (Global Leadership and Organizational

Behavior Studies) involves 170 researchers who

collected data from 17,000 managers in 62 countries

• Seven dimensions of GLOBE are similar to Hofstede

• Unique dimensions

• Performance orientation

• Humane orientation

• GLOBE (Global Leadership and Organizational

Behavior Studies) involves 170 researchers who

collected data from 17,000 managers in 62 countries

• Seven dimensions of GLOBE are similar to Hofstede

• Unique dimensions

• Performance orientation

• Humane orientation

Performance Orientation

• Performance Orientation – refers to the degree to

which the society encourages societal members to

innovate, to improve their performance, and to strive

for excellence

• E.g., the United States and Singapore have high

scores while Russia and Greece have low scores on the dimension.

• Performance Orientation – refers to the degree to

which the society encourages societal members to

innovate, to improve their performance, and to strive

for excellence

• E.g., the United States and Singapore have high

scores while Russia and Greece have low scores on the dimension.

Exhibit 2.8: Management

Implication of Performance

Orientation

Humane Orientation

• Humane Orientation – an indication of the extent to which

individuals are expected to be fair, altruistic, caring, and

generous

• Need for belongingness and affiliation is emphasized more than material possessions, self-fulfillment, and pleasure.

• Less humane-oriented societies are more likely to value

self-interest and self-gratification.

• E.g., Malaysia and Egypt score highly while France and

• Humane Orientation – an indication of the extent to which

individuals are expected to be fair, altruistic, caring, and

generous

• Need for belongingness and affiliation is emphasized more than material possessions, self-fulfillment, and pleasure.

• Less humane-oriented societies are more likely to value

self-interest and self-gratification.

• E.g., Malaysia and Egypt score highly while France and

Exhibit 2.9: Management

Implications of Humane

Orientation

7d Cultural Dimensions Model

• Builds on traditional anthropological approaches to

understanding culture.

• Culture exists because people need to solve basic

problems of survival.

• Challenges include:

• How people relate to others.

• How people relate to time.

• Builds on traditional anthropological approaches to

understanding culture.

• Culture exists because people need to solve basic

problems of survival.

• Challenges include:

• How people relate to others.

• How people relate to time.

7d Cultural Dimensions Model

• Dimensions that deal with relationships include:

7d Cultural Dimension Model (cont.)

• Dimensions dealing with how a culture manages time and how it deals with nature:

• Past, Present, Future, or Mixture

• Control of vs Accommodation with Nature

• Dimensions dealing with how a culture manages time

and how it deals with nature:

• Past, Present, Future, or Mixture

• Control of vs Accommodation with Nature

Exhibit 2.11: Summary of 7d

Model and Issues

Universalism vs Particularism

• Pertain to how people treat each other based on rules or personal relationships.

• Universalistic -

• Right way is based on abstract principles such as

rules, law, religion.

• Particularistic -

• Each judgment represents a unique situation, with

• Pertain to how people treat each other based on rules or personal relationships.

• Universalistic -

• Right way is based on abstract principles such as

rules, law, religion.

• Particularistic -

• Each judgment represents a unique situation, with

Exhibit 2.12: Managerial

Implications of

Universalism/Particularism

Individualism vs Collectivism

• Similar distinctions to Hofstede’s view

• Collectivist societies -

• People defined by group memberships such as family

• Responsibility, achievement, and rewards are group-based

• Individualist societies -

• People trained to be independent

• Assume individual responsibility for success or failure

• Similar distinctions to Hofstede’s view

• Collectivist societies -

• People defined by group memberships such as family

• Responsibility, achievement, and rewards are group-based

• Individualist societies -

• People trained to be independent

• Assume individual responsibility for success or failure

Exhibit 2.13: Managerial

Implications of

Individualism/Collectivism

Neutral vs Affective

• Concerns acceptability of expressing emotions

• Neutral -

• Interactions are objective and detached

• Focus is on tasks rather than emotional nature of

interaction

• Affective

-• Concerns acceptability of expressing emotions

• Neutral -

• Interactions are objective and detached

• Focus is on tasks rather than emotional nature of

interaction

• Affective

-• Emotions are appropriate in all situations

Exhibit 2.14: Managerial

Implications of Neutral vs

Affective

Specific vs Diffuse

• Extent to which an individual’s life is involved in work

relationships

• Specific

-• Business segregated from other parts of life

• Contracts often prescribe and delineate relationships

• Diffuse

-• Extent to which an individual’s life is involved in work

relationships

• Specific

-• Business segregated from other parts of life

• Contracts often prescribe and delineate relationships

• Diffuse

-Exhibit 2.15: Managerial

Implications of Specific vs

Diffuse

-• Characteristics or associations define status

• Manner in which society gives status

• Achievement

-• People earn status based on performance and

accomplishments

• Ascription

-• Characteristics or associations define status

• E.g., status based on schools or universities