Multinational Management: Chapter 2

What is culture?
Pervasive and shared beliefs, norms, and values that guide the everyday life of a group.

-Provides solutions to adaptation problems (tight vs loose)
-Tells us who we are and to what group we belong
-Provides mechanisms that enable continuation of a group

Norms
Prescribe and proscribe behaviors, telling us what we can and cannot do
Values
Tell us what is good, admirable, beautiful, holy, legitimate life goals (i.e. when giving feedback)
Beliefs
Capture our understandings of what is true. It is pervasive and shared
Cultural Symbols, Stories, and Rituals
Communicate the norms, values, and beliefs of a society or group to its members
National Culture
Dominant culture within political boundaries.

Formal education and business conducted in the language of dominant culture

Influences law of the land

Business Culture
Norms, values, and beliefs that pertain to all aspects of doing business in a culture

Business culture informs the acceptable way of conducting business in a society

i.e. expectations of women, relationship between superiors and subordinates

Levels of Culture
National Culture > Business Culture > Organizational & Occupational Culture >
Multinational Management
Occupational Culture
Expected ways of behaving for people in the same occupational group regardless of their organizational employer (i.e. Lawyers, Physicians, Accountants)
Organizational Culture
Set of important understandings (often unstated) that members of a community share in common
Hofstede’s Model of National Culture
1. Power Distance
2. Uncertainty Avoidance
3. Individualism
4. Masculinity
5. Long-term Orientation
Power Distance
Expectations about equality among people.

It is the norm that tells superiors how to “handle” subordinates, and maintains that they two groups are fundamentally different people.

Uncertainty Avoidance (UA)
Typical reactions to situations considered different & dangerous.

Relates to norms, values, and beliefs regarding a tolerance for ambiguity. High UA societies seek structure, order and predictability in social systems. They avoid conflict.

Individualism/Collectivisim
Relationship between the individual and the group in society.

Individualistic: People are unique and values in terms of their own achievements and status

Collective: People are viewed in terms of the group that they belong, social groups (family, class) take precedence over the individual

Masculinity/Femininity
Expectations regarding gender roles

Tendency to emphasize on gender roles. Business cultures take on traditional male values, such as emphasis on advancement, earnings, work over family. Men are assertive, dominant, macho, and decisive.

Long-term/Short-term Orientation
Basic orientation toward time

LTO is an orientation toward time that values patience. LT oriented countries are a more sensitive to social relationships.

GLOBE National Culture Framework
Extension form Hofstede with two new dimensions:
1.Performance Orientation
2.Humane Orientation
Performance Orientation
degree to which a society encourages its members to innovate, improve their performance, and strive for excellence. Similar to Weber’s Protestant work ethic.

High: US, Singapore
Low: Russia, Greece

Humane Orientation
measure of the extent to which individuals are expected to be fair, altruistic, caring, and generous. The higher the it is, belonging and affiliation is emphasize more than needs such as material possessions

High: Malaysia, Egypt
Low: France, Germany

7d Model of Culture
Five dimensions deal with the challenges of how people relate to each other. One deals with perspective on time, and the last deals with relationship with the environment.
Universalism vs Particularism
Universal: RULES, contrasts difficult to break, deals are obligations (US, UK, Czech)

Particular: RELATIONSHIPS (South Korea, Mexico, Nigeria)

Universalism vs Particularism Management
Universal: Procedures apply to all, formalize biz practices, treat all cases similarly

Particular: Informal networks, make changes subtly & privately, treat each case individually, keep only insiders informed

Individualism vs Collectivism
Individual: INDIVIDUAL achievement, responsibility, decision making (Czech, UK)

Collective: GROUP (Japan, Egypt)

Individualism vs Collectivism Management
Individual: individual incentives, plan for turnover, provide for individual initiative

Collective: group morale & cohesiveness, expect low turnover, set group goals

Specific vs Diffuse
Specific: Direct, blunt, precise, principled moral reasoning (Sweden, Czech, UK)

Diffuse: Indirect, subtle, ambiguous, situation-based moral decision making (China, Mexico, Norway)

Specific vs Diffuse Management
Specific: use of objectives & standards, separate work & life, give clear & precise directions

Diffuse: continuous improvement, ambiguous directions to give employees latitude

Neutral vs Affective
Neutral: INWARD emotions, Do not reveal thoughts or feelings, control over emotions admired, avoid physical contact & expressive gestures (Sweden, Czech, UK)

Affective: OUTWARD emotions, Emotional expression uninhibited, animated, touching is common (China, Mexico, Norway)

Neutral vs Affective Management
Neutral: Act under control to show status, keep dialogue to the point

Affective: Avoid appearing detached, expect strong commitment to positions, tolerate emotional outburst

Achievement vs Ascription
Achievement: PERFORMANCE, Use titles only when relevant, earn respect through performance, mixture of age and gender in management (Norway, Ireland, Austria)

Ascription: HERITAGE, Use of titles expected, background and age main qualification for management (Argentina, Hong Kong, Japan)

Achievement vs Ascription Management
Achievement: Rewards/respect based on accomplishment

Ascription: emphasize seniority, emphasize chain of command, use personal power of superior for rewards

Past/Present vs Future
Past/Present: enjoy the moment, respect for past, little plan, immediate impact most important (Egypt, Israel)

Future: Potential, planning important (Hong Kong, Korea)

Past/Present vs Future Management
Past/Present: Emphasize and be sensitive to history & tradition, avoid strict deadlines, flexible

Future: motivate based on opportunities, set deadlines, be punctual & focus on one project

Internal vs External Control
Internal: CONTROL, Dominate the environment, show convictions, focus on self or own group (Poland, Brazil)

External: ACCOMMODATION, Compromise, harmony & adjustment, adaptation to cycles (China, Ethiopia)

Internal vs External Management
Internal: Emphasize authority, dominate subordinate

External: Emphasize patience, build & maintain relationships with all, win-win relationships

Cultural Paradoxes
When individual situations seem to contradict cultural presciptions
Ethnocentriscism
When people from one culture believe that theirs are the only correct, norms, and beliefs
Cultural Relativism
Philosophical position arguing that all cultures, no matter how different, are correct and moral for the people of those cultures
Cultural Intelligence
Ability to interact effectively in multiple cultures