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Culture, Management Style, and Business Systems

Chapter 5

McGraw-Hill/Irwin 2005 The McGraw-Hill Companies, Inc. All rights reserved.

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Required Adaptation

Adaptation is a key concept in international marketing.

To successfully deal with individuals, firms, or authorities inforeign 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.

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Cultural Imperatives, Electives

and Exclusives

Cultural imperatives are the business customs and expectations

that must be met, conformed, recognized and accommodated ifrelationships are to be successful.

Cultural electives relate to areas of

behavior or to customs that culturalaliens may wish to conform to or

participate in but that are notrequired.

Cultural exclusives are those customs or behavior patternsreserved exclusively for the locals and from which the foreigneris barred and must not participate.

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The Impact of American Culture

Ways in which U.S. culture has influenced management style

include, but are not limited to, the following:

1. Master of destiny viewpoint;

2. Independent enterprise as the instrument of

social action;3. Personnel selection and reward based on

merit;

4. Decisions based on objective analysis;

5. Wide sharing in decision making;6. Never-ending quest for improvement;

7. Competition yielding efficiency.

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Management Styles Around the World

Management values, and behaviors vary around the world.

Differences in the contact level,communications emphasis, tempo,

and formality of foreign businessesare encountered from culture toculture.

Ethical standards and sales interactions and negotiation stylesdiffer substantially.

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Management Styles Around the World

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.

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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 inlow-PDI countries they often do.

2. Differences in Management Objectives and Aspirations towards:

Three typical patternsexist:

top-level management decisions;

decentralized decisions, and;

committee or group decisions

Securityespecially of lifetime employment;

Affiliation and Social Acceptanceby neighbors and fellowworkers;

Power and Achievement Orientationsought by managers

Importance of personal/familylife over work and profit.

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Differences in Management Styles

Around the World

3. 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 ofthe information. In other cultures ... less information is containedin the verbal part of the message since more is in the context.

Communication in a high-context culture depends heavily on thecontextual (who says it, when it is said, how it is said) ornonverbal aspects of communication.

Communication in a low-context culture depends more onexplicit, verbally expressed communications.

Hall places eleven cultures along a high-context/low-contextcontinuum .

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Contextual Background of Various Countries

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Differences in Management Styles

Around the World

4. 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 Emphasis

Differences with respect to the product, its price and terms,

services associated with the product, and finally, friendshipbetween vendors and customers.

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Differences in Management Styles

Around the World

6. 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 onone thing at a time

P-time, or polychronic time, is more dominant in high-contextcultures.

P-time is characterized by multi-tasking and by a greatinvolvement with people.

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Gender Bias in International Business

Gender bias against women managers exists in some countries

Foreign women executives may be treated different than localwomen.

Women are not accepted in upper levelmanagement roles in Asia, the Middle East,and Latin America.

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Cultural Differences Between

Japanese and American Business

Game concept: Business is a game in

pursuit of profits under the rules of laws

and contracts

Efficiency-oriented and approximateaccuracy, simplicity, clarity, and quickness

Quantity-oriented

Short-term performance evaluation

Easy layoffs, dismissals of employees, and

selling of businesses

Japanese BusinessAmerican Business

Mutual trust-oriented business:

business is based on trusting relationship

among people rather than

the rules of game

Highly precision-oriented andperfectionism-high dependency on human

awareness

Quality-oriented

Mid-to-long term evaluations

Job security

SOURCE: Norihiko Shimizu, Todays Taboos may be gone tomorrow, Tokyo

Business, February 1995, p.51.

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Cultural Differences Between

Japanese and American Business

Top down management

Low mutual dependence between

employers and employees

Control of business by stockholders andthe management

Management by "force"

Heavy dependence on machinery and

technology, vs. Light dependence on

human resources

Limited loyalty and incentive-oriented work

ethics

Excellent software-based technology

development

Heavy dependence on human resources,

bottom-up management and teamwork

High mutual dependence between

employers and employees

Joint management of business byemployers and employees

Management by "motivation"

Heavy dependence on human resources

Strong loyalty and fewer incentives

Inadequate software development ability

Japanese BusinessAmerican Business

SOURCE: Norihiko Shimizu, Todays Taboos may be gone tomorrow, Tokyo

Business, February 1995, p.51

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Business Ethics

Business ethics address the moral question of what is right orappropriate.

The Foreign Corrupt Practices Act 1997.

Different levels of corruption, bribery, and fraudexist.

Value judgments differ widely among culturally

diverse groups.

Bribery creates a major conflict between ethics and profitability.

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Corruption Perception Index

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Bribe Payers Index

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Bribery: Variations on a Theme

Bribery

Voluntarily offered payment by someone seeking unlawfuladvantage.

Extortion

Payments are extracted under duress by someone in authorityfrom a person seeking only what they are lawfully entitled.

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Bribery: Variations on a Theme

Lubrication

Involves a relatively small sum of cash, a gift, or a service givento a low-ranking official in a country where such offerings arenot prohibited by law.

Subornation

Involves giving large sums of moneyfrequently not properlyaccounted fordesigned to entice an official to commit anillegal act on behalf of the one offering the bribe; involves

breaking the law.

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Ethical and Socially Responsible Decisions

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 fundamentalfreedoms.

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A Framework for Ethical Precepts

Three ethical principles that provide a framework fordistinguishing between right and wrong:

(1) Utilitarian ethics

(2) Rights of the parties

(3) Justice or fairness

Does the action optimize the common goodor benefits of all constituencies? And, who arethe pertinent constituencies?

Does the action respect the rights of theindividuals involved?

Does the action respect the canons of justice orfairness to all parties involved?