Cultural Issues in International Management

Lisa Smirnova

Lisa Consulting

Understanding Culture

Culture

Definition

The collective programming of the mind which distinguishes the members of one human group from another....Culture, in this sense, includes systems of values; and values are among the building blocks of culture

(Hofstede 1984)

Culture at 3 Levels of Explicitness

Value Priorities

United States Japan Arab Countries
1. Freedom 1. Belonging 1. Family Security
2. Independence 2. Group Harmony 2. Family Harmony
3. Self-Reliance 3. Collectiveness 3. Paternalism
4. Equality 4. Age/Seniority 4. Age
5. Individualism 5. Group Consensus 5. Authority
6. Competition 6. Cooperation 6. Compromise
7. Efficiency 7. Quality 7. Devotion
8. Time 8. Patience 8. Patience
9. Directness 9. Indirectness 9. Indirectness
10. Openness 10. Go-between 10. Hospitality

Values- basic convictions that people have regarding what is right and wrong, good and bad, important or unimportant

Value Differences and Similarities Across Cultures

Differences

Value Differences and Similarities Across Cultures

Similarities

Culture at Three Levels of Organization

National Culture

Culture & Behavior

How does culture arise, and how is it manifested?

Nature of Culture

Assessing Cultural Factors

CAVEATS AND CAUTIONS

Approaching Cultural Differences

- Culture and the Workplace

Hofstede (1991)

Sondergaard (1994)

- The Business Consultant’s Perspective

Trompenaars (1993)

Cultural Orientations (Kluckhohn and Stodtbeck, 1961)

Six basic orientations -

High and Low Context (Hall, 1976)

Defining Feature:

Extent to which behavioral cues are made explicit (through conversation, written documents), or are inherent in the situation.

Implications for…

Relationships, work settings

Culture, Status and Function

1. perceptions of the organization as political systems

2. authority systems

3. role formulation systems

4. hierarchical systems

Laurent - By-passing the hierarchy

In order to have efficient work relationships, it is often necessary to by-pass the hierarchical line

Disagree

The manager as expert or the manager as facilitator

It is important for a manager to have at hand precise answers to most of the questions that subordinates may raise about their work.

Agree

Hofstede

Hofstede’s four dimensions

Hofstede’s Dimensions of Culture

Power Distance (Large or Small)

The extent to which less powerful members of institutions accept that power is distributed unequally

HIGH POWER DISTANCE -- NORMS, VALUES, AND BELIEFS

Individualism (vs. Collectivism)

Individualism (vs. Collectivism)

Individualism-Collectivism

Individualism-Collectivism

Masculinity (Vs. Femininity)

Masculinity (Vs. Femininity)

MASCULINITY - NORMS, VALUES, AND BELIEFS

Uncertainty Avoidance (High or Low)

UNCERTAINTY AVOIDANCE - NORMS, VALUES, AND BELIEFS

Confucian Dynamism

1. Integration

Noncompetitiveness, trustworthiness, filial piety (e.g., obeying parents, honoring ancestors), patriotism

2. Work Dynamism

Thrift, persistence, sense of shame, respect for tradition, protecting your “face”

Confucian Dynamism

3. Human-Heartedness

Kindness, patience, courtesy, sense of righteousness

4. Moral Discipline

Moderation, being disinterested & pure, having few desires

VALUE DIMENSIONS BY COUNTRIES

MANAGEMENT PROCESSES
MANAGEMENT PROCESSES LOW POWER DISTANCE HIGH POWER DISTANCE
Human Resources Management
Management Selection Educational achievement Social class; elite education
Training For autonomy For conformity/obedience
Evaluations/Promotion Performance Compliance; trustworthiness
Remuneration Small wage difference between management and worker Large wage differences between management and workers
Leadership Styles Participative; theory Y Authoritarian; close supervision/td>
Motivational Assumptions People like work; extrinsic and intrinsic rewards Assume people dislike work; Coercion
Decision Making/Organizational Design Decentralized; flat pyramids; Small proportion of supervisors Tall pyramids; large proportion of supervisors
Strategy Issues Varied Crafted to support the power elite or government

MANAGEMENT PROCESSES - High and Low UNCERTAINTY AVOIDANCE

MANAGEMENT PROCESSES HIGH UNCERTAINTY AVOIDANCE LOW UNCERTAINTY AVOIDANCE
Human Resource Management Seniority; expected loyalty Past job performance; education
Management Selection
Training Specialized Training to adapt
Evaluation/Promotion Seniority; expertise; loyalty Objective individual performance data; job switching for promotions
Remuneration Based on seniority or expertise Based on performance
Leadership Styles Task oriented Nondirective; person-oriented; flexible
Motivational Assumptions People seek security; avoid competition People self motivated; competitive
Decision Making/Organizational Design Larger organization; tall hierarchy; formalized; many standardized procedures Smaller organizations; flat hierarchy; less formalized with fewer written rules/standardized procedures
Strategy Issues Risk adverse Risk taking

MANAGEMENT PROCESSES - LOW Iand HIGH INDIVIDUALISM

MANAGEMENT PROCESSES LOW INDIVIDUALISM HIGH INDIVIDUALISM
Human Resources Management
Management Selection Group membership; school or university Universalistic based on individual traits
Training Focus on company based skills General skills for individual achievement
Evaluation/Promotion Slow with group; seniority Based on individual performance
Remuneration Based on group membership/organizational paternalism Extrinsic rewards (money, promotion) based on market value
Leadership Styles Appeals to duty and commitment Individual rewards and punishments based on performance
Motivational Assumptions Moral involvement Calculative; Individual cost/benefit
Decision Making/Organizational Design Group; slow; preference for larger organizations Individual responsibility; preference for smaller organizations

MANAGEMENT PROCESSES - LOW and HIGH MASCULINITY

MANAGEMENT PROCESSES LOW MASCULINITY HIGH MASCULINITY
Human Resources Management
Management Selection Independent of gender, school ties less important; androgyny Jobs gender identified; school performance and ties important
Training Job-Oriented Career oriented
Evaluation/Promotion Job performance with less gender role assignments Continues gender tracking
Remuneration Less salary differences between levels; more time off More salary preferred to less hours
Leadership Styles More theory Y; More theory X;
Motivational Assumptions Emphasis on quality of life, time off, vacations; work not central Emphasis on performance and growth; excelling to be best; work central to life; job recognition important
Decision Making/Organizational Design Intuitive/group; smaller organizations Decisive/individual; larger organization preferred

MANAGEMENT PROCESSES - SHORT and LONG TERM ORIENTATION

MANAGEMENT PROCESSES SHORT TERM ORIENTATION LONG TERM ORIENTATION
Human Resources Management
Management Selection Objective skill assessment for immediate use to company Fit of personal and background characteristics
Training Limited to immediate company needs Investment in long term employment skills
Evaluation/Promotion Fast; based on skill contributions Slow; develop skills and loyalty
Remuneration Pay; promotions Security
Leadership Styles Use incentives for economic advancement Build social obligations
Motivational Assumptions Immediate rewards necessary Subordinate immediate gratification for long term individual and company goals
Decision Making/Organizational Design Logical analyses of problems; design for logic of company situation Synthesis to reach consensus; design for social relationships
Strategy Issues Fast; measurable payback Long term profits and growth; Incrementalism

Hofstede’s work Assessment

Problems - assumptions about cultural territory
and cultural homogeneity

- single industry

- one organization IBM - effect of organization culture?

Strengths - control of populations

- sample size 115,000 people in 50 countries

- consistent use of dimensions

- support from other studies

‘The Practical Guide to Culture in the Workplace’, Fons Trompenaars (1993)

Trompenaars’ dimensions

Cultural Dimensions by Trompenaars

Universalism vs. Particularism

Individualism Vs. Collectivism

Neutral Vs. Affective

Achievement Vs. Ascription

Time

Past or Present-Oriented Vs. Future-Oriented

Sequential Vs. Synchronous Time

Environment

Inner Directed

Outer Directed

Trompenaars's Work Assessment

summarizes the content of previous studies, particularly Kluckhohn and Strodtbeck, Laurent and Hofstede

provides numerous applications of findings


little regard paid to population and spread of responses

problems with scoring of parameters

lack of correspondence between responses

How Cultures Differ

Groups and Synergy

A mixed culture group is most likely to be synergistic when members -

Groups and Synergy

Control

Organizational Structure

Budgets

Production Processes

Inventory and Distribution

Marketing and Sales

Implications for International Management: Differences in Negotiation Approaches

American Approach

Deals with strangers

A deal’s a deal

Shares lots of information

Quick

Implications for International Management: Differences in Negotiation Approaches

Japanese/Chinese

Deal through connections

Deals can be changed

Share minimal information

Slow

How Cultures Affect Management Approaches

Centralized Decision Making - Decentralized Decision Making

Risk Averse - Risk Seeking

Individual Rewards - Group Rewards


Informal Procedures

High Organizational Loyalty - Low Organizational Loyalty

Co-operation Encouraged - Competition Encouraged

Organizational Culture: Hofstede Framework

Do Cultures Change?

Evidence from Individualism/Collectivism Research

Assumptions about the Nature of Change

Western:

Assumptions about the Nature of Change

Eastern:

CONCLUSIONS