culture, management style, and business systems chapter 5 mcgraw-hill/irwin© 2005 the mcgraw-hill...
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Culture, Management Style, and Business Systems
Chapter 5
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Learning Objectives
1. The necessity for adapting to cultural differences
1. The necessity for adapting to cultural differences
2. How and why management styles vary around the world
2. How and why management styles vary around the world
3. The extent and implications of gender bias in other countries
3. The extent and implications of gender bias in other countries
4. The importance of cultural differences in business ethics
4. The importance of cultural differences in business ethics
5. The differences between relationship-oriented and information-oriented cultures
5. The differences between relationship-oriented and information-oriented cultures
Introduction
Recognize business culture, management values, and business methods and behaviors as important for success in international market
Recognize business culture, management values, and business methods and behaviors as important for success in international market
Thus, management style has to be adapted in international marketingThus, management style has to be adapted in international marketing
Importance of developing friendship, human relations, and attaining a level of trust before beginning business negotiations
Importance of developing friendship, human relations, and attaining a level of trust before beginning business negotiations
Knowledge of foreign business practices and successful business relationsKnowledge of foreign business practices and successful business relations
Need to recognize that patterns of thinking, local business tempo, religious practices, political structure, and family loyalty, are different and impact business transactions
Need to recognize that patterns of thinking, local business tempo, religious practices, political structure, and family loyalty, are different and impact business transactions
Required Adaptation
• Adaptation is a key concept in international marketing • To successfully deal with individuals, firms, or authorities in
foreign countries, managers should exhibit:
• Adaptation is a key concept in international marketing • To successfully deal with individuals, firms, or authorities in
foreign countries, managers should exhibit:
1. open tolerance, 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 environment
Cultural Imperatives, Electives and Exclusives
• 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 or to customs that cultural aliens may wish to conform to or participate in but that are not required
• Cultural electives relate to areas of behavior or to 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, but are not limited to, the following:
• Ways in which U.S. culture has influenced management style include, but are not limited to, the following:
1. “Master of destiny” viewpoint2. Independent enterprise as the instrument of
social action3. Personnel selection and reward based on
merit4. Decisions based on objective analysis5. Wide sharing in decision making6. Never-ending quest for improvement7. Competition yielding efficiency
Management Styles Around the World
• Management values, and behaviors vary around the world.• Management values, and behaviors vary 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
• Cross-cultural differences influence management styles in the following areas:
• Cross-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
Differences in Management Styles Around the World
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
2. Differences in Management Objectives and Aspirations towards:2. Differences in Management Objectives and Aspirations towards:
Three typical patterns exist: • top-level management decisions, • decentralized decisions, and • committee or group decisions
• Security especially of lifetime employment • Affiliation and Social Acceptance by neighbors and fellow
workers• Power and Achievement Orientation sought by managers• Importance of personal/family life over work and profit
Differences in Management Styles Around the World
3. Differences in Communication Styles3. Differences in Communication Styles
• According to Edward T. Hall, the symbolic meanings of time, space, things, friendships, and agreements, vary across cultures
• “In some cultures, messages are explicit; the words carry most of the information. In other cultures ... less information is contained in the verbal part of the message since more is in the context”
• Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or nonverbal aspects of communication
• Communication in a low-context culture depends more on explicit, verbally expressed communications
• Hall places eleven cultures along a high-context/low-context continuum
Differences in Management Styles Around the World
4. Differences in Communication Styles4. Differences in Communication Styles
• Level of formality in addressing business clients by first name • Level of formality in addressing your boss by first name • Tempo or speed in getting “down to business” • Perception of time varies in many cultures
5. Differences in Negotiations Emphasis5. Differences in Negotiations Emphasis
• Differences with respect to the product, its price and terms, services associated with the product, and finally, friendship between vendors and customers
• Differences with respect to the product, its price and terms, services associated with the product, and finally, friendship between vendors and customers
Differences in Management Styles Around the World
6. P-Time versus M-Time6. P-Time versus M-Time
• M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians
• Most low-context cultures operate on M-time concentrating on one thing at a time
• P-time, or polychronic time, is more dominant in high-context cultures
• P-time is characterized by multi-tasking and by “a great involvement with people”
Gender Bias in International Business
• The gender bias against women managers exists in some countries
• The gender bias against women managers exists in some countries
• Gender bias poses significant challenges in cross-cultural negotiations
• Gender bias poses significant challenges in cross-cultural negotiations
• Women are not accepted in upper level management roles in Asian, Middle Eastern, and Latin American
• Women are not accepted in upper level management roles in Asian, Middle Eastern, and Latin American
Business Ethics
Business ethics is complex in the international marketplace because value judgments differ widely among culturally diverse groups
Business ethics is complex in the international marketplace because value judgments differ widely among culturally diverse groups
The Foreign Corrupt Practices Act 1997: Imprisonment for bribery The Foreign Corrupt Practices Act 1997: Imprisonment for bribery
Existence of different levels of corruption, bribery, and fraudExistence of different levels of corruption, bribery, and fraud
Corruption varyingly defined from culture to culture Corruption varyingly defined from culture to culture
Bribery creates a major conflict between ethics and profitability Bribery creates a major conflict between ethics and profitability
Bribery: Variations on a Theme
Bribery:Bribery:
• Voluntarily offered payment by someone seeking unlawful advantage
Extortion:Extortion:
• Payments are extracted under duress by someone in authority from a person seeking only what they are lawfully entitled
Bribery: Variations on a Theme
Lubrication:Lubrication:
• Involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law
Subornation:Subornation:
• Involves giving large sums of money— frequently not properly accounted for—designed to entice an official to commit an illegal act on behalf of the one offering the bribe; involves breaking the law
Ethical and Socially Responsible Decisions
• Areas of decision making where ethical issues arise: • Areas of decision making where ethical issues arise:
1. employment practices and policies, 2. consumer protection, 3. environmental protection, 4. political payments and involvement
in political affairs of the country, and
5. basic human rights and fundamental freedoms
A Framework for Ethical Precepts
• Three ethical principles that provide a framework for distinguishing between right and wrong:
• Three ethical principles that provide a framework for distinguishing between right and wrong:
(1) Utilitarian ethics(1) Utilitarian ethics
(2) Rights of the parties(2) Rights of the parties
(3) Justice or fairness(3) Justice or fairness
Does the action optimize the “common good” or benefits of all constituencies? And, who are the pertinent constituencies?
Does the action optimize the “common good” or benefits of all constituencies? And, who are the pertinent constituencies?
Does the action respect the rights of the individuals involved?Does the action respect the rights of the individuals involved?
Does the action respect the canons of justice or fairness to all parties involved?Does the action respect the canons of justice or fairness to all parties involved?
Culture’s Influence on Strategic Thinking
• Culture influences managers’ thinking about business strategy• Culture influences managers’ thinking about business strategy
• The British-American “individualistic” view of capitalism typifies adversarial relationships among labor, management, and government
• The British-American “individualistic” view of capitalism typifies adversarial relationships among labor, management, and government
• The “communitarian” form of capitalism in Japan and Germany are typified by cooperation among government, management, and labor, particularly in Japan
• The “communitarian” form of capitalism in Japan and Germany are typified by cooperation among government, management, and labor, particularly in Japan
• The Chinese emphasis on guanxi (one’s network of personal connections) is a kind of capitalism manifested by culture
• The Chinese emphasis on guanxi (one’s network of personal connections) is a kind of capitalism manifested by culture
