team 4 chp 4 & 5

The Meanings and Dimensions of Culture and Managing Across

CulturesChapter 4 & 5Dylan Parks,Tara Kern,

Ashley Sanders

Cultureo Culture has a large impact on

business1. Learned2. Shared3. Transgenerational4. Symbolic5. Patterned6. Adaptive

Culture cont.o Common practices in one culture

may not be the same in otherso The practice of handshaking is a

good example

Different Cultural Values

o Centralized vs. Decentralized Decision Making

o Safety vs. Risko Individual vs. Group Rewardo Informal vs. Formal Procedureso High vs. Low Organizational Loyaltyo Cooperation vs. Competitiono Short-term vs. Long-term horizonso Stability vs. Innovation

Valueso Value – Basic conviction people have

regarding right and wrong, good and bad, etco Different cultures have different valueso There is a strong relationship between

management values and success; more successful managers tend to favor pragmatic, dynamic, achievement orientated values, while less successful managers tend to have more static and passive values

o Values are changing over time

Hofstede’s Cultural Dimensions

o Power Distanceo Uncertainty Avoidanceo Individualism/Collectivismo Masculinity/Femininity

Power Distanceo The extent to which less powerful

members of institutions and organizations accept that power is distributed unequally

o Higher power distance – strict obedienceo Organizations in high power distance

countries tend to centralized with tall organization structures

o Lower power distance organizations tend to be decentralized and have flatter organizational structures

Uncertainty Avoidanceo The extent to which people feel threatened

by ambiguous situations and have created institutions to try and avoid these

o Low Uncertainty Avoidance – Less formal rules, more risks taken, more ambitious employees, less structure, more employee responsibility

o High Uncertainty Avoidance – Very structured, more formal rules, less risks taken, less ambitious employees

Individualism/Collectivism

o Individualism - The tendency of people to look after themselves and their immediate family only

o Collectivism – The tendency of people to belong to groups and look after each other in exchange for loyalty

o Wealthy countries tend to be more individualistic, poorer countries tend to be more collectivistic

o Individualistic countries value Protestant work ethic, more individual initiative, promotions based on market value

o Collectivistic countries (opposite)… promotions based on seniority

Masculinity/Femininityo Masculinity – Situation in which dominant

values in society are success, money, and things

o Great importance is placed on earnings, recognition, advancement, and challenge

o Femininity – Situation in which the dominant values in society are caring for others and the quality of life

o Importance is placed on cooperation, a friendly atmosphere, and employment security

Trompenaar’s Dimensions

o Universalism vs. Particularismo Individualism vs.

Communitarianismo Neutral vs. Emotionalo Specific vs. Diffuseo Achievement vs. Ascription

Universalism vs. Particularism

o Universalism – The belief that ideas and practices can be applied everywhere with no modification

o Universalism – More emphasis on formal rules than on relationships and trust

o Particularism – The belief that circumstances dictate how ideas and practices should be applied

o Particularism – More emphasis on trust and relationships than formal rules; relationships affect how business deals are done

Individualism vs. Communitarianism

o Communitarianism – Refers to people regarding themselves as part of a group

o Similar to the Individualism/Collectivism comparison of Hofstede

o The two studies found different results; this could possibly be from changing cultural values

Neutral vs. Emotionalo Neutral Culture – Culture in which

emotions should be kept in check and not shown

o Emotional Culture – Culture in which emotions are shown freely

Specific vs. Diffuseo Specific Culture – Large, shared

public space and small private space shared only with close friends/associates

o Diffuse culture – Public and private space are similar and both are guarded equally

Achievement vs. Ascription

O Achievement culture: status based on performanceO Sales, promotions, experience

O Ascription culture: status based on who/what person isO Age, gender, social connections

TimeO Perception of time = major cultural

differenceO Sequential

O one task at a time, strictly abide by deadlines and show preference for following rules

O SynchronousO multitasking, appointments are

approximate (likely to change) and schedules are subordinate to relationships

Strategic Predispositions

O EthnocentricO values and interests of parent co guide strategic

decisionsO Polycentric

O decisions tailored to suit culture of country MNC is operating from

O RegiocentricO tries to blend own interests w/ those of its

subsidiaries on regional basisO Geocentric

O tries to integrate global systems approach to decision making

Globalization Imperative

O belief one worldwide approach to doing business is the key to both effectiveness and efficiencyO Study: most MNCs use same business

strategy abroad as at home; effective MNCs take step further to address local needs as well

Adjusting Global Strategies for Regional Markets

O ChallengesO MNCs must be aware of local market

conditions & not assume all markets the same

O MNCs must know strengths & weaknesses of its subsidiaries

O MNCs must give subsidiaries more independence

ParochialismO Tendency to view the world through

one’s own eyes and perspectives

O Problems?

SimplificationO Process of exhibiting the same

orientation toward different cultural groupsO Reflects one’s basic culture

O Due to misunderstanding/not knowing the culture

Similarities O How is it useful for businesses to

know about cultural similarities?O Think about: individual employees;

customers; business partners

DifferencesO Why is it important for businesses to

know about cultural differences?O Think about: individual employees;

customers; business partners

Name that CountryO Labor laws in this country requires

that employees receive full pay 365 days a year.

O Some parts of this country have legislated pay equity (comparable worth).

O In this country, compensation levels are determined by using age, length of service, and educational background (rather than skill, ability, and performance).

Name that Country (cont.)

O In this country, employees are allowed up to 40 weeks of maternity leave and employers must provide a government-mandated amount of pay for 18 of those weeks.

O In about 87% of large companies in this country, the head of human resources is on the board of directors.