Chapter 2 Understanding Cross-Cultural Management Dimensions

Managing Organizations in a Global Economy: An Intercultural Perspective

You just are classified on 1.Your look The way you are dressed Your ethnic look Your gender, Your age, 2 Your linguistic expression, 3.Your religious expression, 4.Your hierarchic situation(s) 5.Your educational behaviour, 6.Your attractiveness, But differences exist and depend on time and place

Global Strategy and Culture

y To succeed, corporations must develop global strategies. Recent decades saw the growing importance of global strategies, at least among leading firms and management scholars; however, the new millenium made it imperative (Adler 1997).

CrossCultural Management
y The growing importance of world business has created a demand for managers sophisticated in global management skills and working with people from other countries.

Crosscultural management describes organizational behavior within countries and cultures; compares organizational behavior across countries and cultures; and seeks to understand how to improve the interaction of coworkers, managers, executives, clients, suppliers, and alliance partners from around the world.

Global versus Domestic Organizations

y Two fundamental differences between global and domestic organization are geographic dispersion and multiculturalism.

Multiculturalism means that people from many cultures interact regularly.

What Is Culture?
To understand the differences between domestic and global management, it is necessary to understand the primary ways in which cultures around the world vary.

Culture is:
y Something that is shared by all or almost all members of some social group. y Something that the older members of the group try to pass on to the younger members. y Something that shapes behavior or structures ones perceptions of the world.

Cultural Orientations
yThe cultural orientation of the society reflects the complex interaction of values, attitudes, and behaviors displayed by its members. yIndividuals express culture and its normative qualities through the values that they hold about life and the world around them (Adler 1997)

How Do Cultures Vary

As shown in Table 1, six basic dimensions describe the cultural orientation of societies: peoples qualities as individuals, their relationship to nature and the world, their relationship to other people, their primary type of activity, and their orientation in space and time.

Table 1. Values Orientation Dimensions Perception of Dimensions Individual ood ood and Evil Evil orld Dominant armony Subjugation uman Individual Laterally ierarchical Relations Extended roups roups Activity Doing Controlling Being Time Future Present Past Space Private Mixed Public

The six dimensions answer the questions y Who am I? y How do I see the world? y How do I relate to other people? y What do I do? y How do I use space and time?

How People See Themselves Peoples Relationship to the World

yWhat is a persons relationship to the world? Are people dominant over their environment, in harmony with it, or subjugated by it?

Personal Relationships: Individualism or Collectivism Activity: Doing or Being

yNorth Americans generally see themselves as dominant over nature. yOther societies, such as Chinese and Navaho, attempt to live in harmony with nature. They see no real separation between people and their natural environment.

Work Behavior Varies Across Cultures Worldwide Differences in Managerial Style

Andre Laurent (INSEAD, France) studied the philosophies and behavior of managers in nine Western European countries, the U.S., and three Asian countries (Indonesia, Japan, and the Peoples Republic of China). He found distinct patterns for managers in each of the countries.

Task and Relationship The main reasons for a hierarchical structure is so that everybody knows who has authority over whom.

In order to have efficient work relationships, it is often necessary to bypass the hierarchical line.

Managers: Experts or Problem Solvers?

y Laurent found little agreement across national borders on the nature of the managerial role.

Another related study by England (1986) found that employees work goals/motivation varied across cultures.

Table 3: Comparative Work Goals: German, Japanese, and American Respondents Rankings
Work goals

Interesting work 2 Good pay 5 Good interpersonal relations 6 Good job security A good match between you and your job 1 A lot of autonomy 3 Opportunity to learn 7 A lot variety 9 Convenient work hours 8 Good physical working conditions 11

Germany Japan 3 1 1 2

USA

4 7 2 3 5 4 8 8 9 5 6 6 6 9 11

10

In another international study of management performance appraisals in the U.S.A., Saudi Arabia, and Japan conducted by Harris and Moran (1991), it was found that performance appraisal differed significantly across cultures.

A seminal research by Hofstede (1980) went further in showing how the underlying values of the cultures across the world permeate through to affect relationships, work, and social values.

Hofstede (1980) undertook a comprehensive study on worldwide sociocultural factors influencing management. Hofstedes research compared work related attitudes across a range of cultures. From his survey of 116,000 employees in 40 countries, Hofstede isolated 4 major dimensions which were congruent with different cultural values of specific countries. These socio cultural factors were:

1.Collectivism vs. Individualism 2.Small vs. Large Power Distance 3.Weak vs. Strong Uncertainty Avoidance 4.Femininity vs. Masculinity

Fifth Cultural Dimension Hofstede, in collaboration with Bond (1984), identified an additional cultural dimension by which nations can be classified: Confucian Dynamism. Confucian Dynamism is also referred to as Long Term Orientation vs. Short Term Orientation.

Confucianism is not a religion, but a system of practical ethics prevalent in China. The five basic relationships are:
y Rulersubject y Fatherson y Older brotheryounger brother y Husbandwife y Older friendyounger friend.

The junior owes the senior respect, and the senior owes the junior protection and consideration. The prototype for all social institutions is the family. A person is mainly a member of a family, as opposed to being just an individual.

Harmony in the family must be preserved, and harmony is the maintenance of ones face, that is, ones dignity, self respect, and prestige. Treating others as one would like to be treated oneself is virtuous behavior.

Skills for Effective Cross-Cultural Management

Respect. Tolerating ambiguity.

Skills for Effective Cross-Cultural Management

Relating to people.

Skills for Effective Cross-Cultural Management

Being nonjudgmental.

Skills for Effective Cross-Cultural Management

Personalizing ones observations.

Skills for Effective Cross-Cultural Management

Empathythe ability to put yourself in anothers shoes.

Skills for Effective Cross-Cultural Management

Persistence.

How are decisions taken ? 6 Decisions 5 Choosing the way to use them 4 Choosing available means & tools 3 Choosing objectives and their ways 2 Determining orientations 1 Psychological basis ? How ??
Tactics Logistics Strategy Politics Weltanschauung

What is Weltanschauung? Die Welt = the world Die Anschauung = the way you look at this includes personal and family history, ethnic, national, religious, linguistic, social, educational, leisure-related, etc. belonging ands its ideological consequence.

Some specific risks and opportunities in companies Image and postures Trusts and multinationals vs. human-sized companies The importance of status and postures and the subsequent difficult versatility. How to keep a balanced image when disrupted environment The relations with the powerful people company owners, top managers, Their secretaries, Trade-unionists The specific network members (associations, clubs)

Cross-cultural management studies the behavior of people in organizations around the world and trains people to work in organizations with employee and client populations. It describes organizational behavior within countries and cultures; Compares organizational behavior across cultures and countries: and perhaps, most importantly, seeks to understand and improve the interaction of co-workers, clients, suppliers, and alliance partners from different countries and cultures. Cross-cultural management thus expands the scope of domestic management to encompass the international and multicultural spheres.

Culture as a:

opportunity/resource
problem/threat

culture gets in the way

culture as a source of competitive advantage

Example:
Indian Global Sales Manager for a Danish company from his office in Shanghai. Model of core problems & core solutions (Holden 2002) Core problems Ethnocentrism in the face of Cultural diversity experienced as Cultural shock which varies with exerience and may be lesser or greater in impact

Core solutions Adaptation as first reaction to cultural shock Adjustment as a more permanent & positive reaction Development of intercultural skills: creating the crosscultural manager

Critical Cultural Variables

Urgency

Power
Extent to which power is distributed

Authority, responsibility & accountability

Time
The view of and way time is used

Culture

Structure
Extent to which uncertainty creates discomfort

Communication
The way and style information is shared

Individual/group
Whether individual or group takes precedence

Commitment Agreements & contracts Risk-taking Konflikt

Source: Interlink

The central operating mode for a global enterprises is the creation, organization and management of multi-cultural teams groups that represent diversity in functional capability, experience levels and cultural backgrounds. Rheinsmith, The Managers Guide to Globalization (1993)

Guidelines for diagnosing the effectiveness of multicultural teams 1. Begin as one would with mono-cultural teams until there is a problem that appears to have a cultural basis. 2. Differences in national culture, while important, are usually secondary 3.The mistake made by many managers is not that they leap to cultural solutions from personal differences, but that they do not know enough about cultural differences to determine whether or not they are a factor.

Diagnosing difficulties in team

A manager or facilitator should use the following order in examining potential team difficulties: - personal styles - stage of team development - effective team functioning - stages of professional development - national culture - corporate culture - functional culture

Group task What are the evidences of paradigm shift in the Vicks case?