IB Term Paper Gp 6

8/2/2019 IB Term Paper Gp 6

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Indian Institute of Technology, Delhi

INTERNATIONAL BUSINESS

Course Coordinator : Prof. S Yadav

TERM PAPERCourse No. : SML 822

Learning from Case Study

Cultural Aspects of International Business

Submitted By:- Group 6, MBA (Part-Time) 3rd Year

2009SMN 6720 Mathew P Varghese

2009SMN 6722 Balvinder Singh Chhabra

2009SMN 6723 Ranu Srivastava

2009SMN 6734 Kaushal Kishore Verma


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LAY-OUT

Theory

Cultural Aspects of International Business ....................................................... 3

Three key phases of an international expansion project: .................................... 4

Planning for expansion...................................................................................... 4

Cross-cultural competence in international business .......................................... 8

The Iceberg Model ......................................................................................................................................10

Low vs. High Context...................................................................................................................................11

Tips for communicating with people ........................................................................................................ 11-11

Case StudyAngola: Making Decisions .......................................................................................................................13

Reading the Body Language in International Negotiations......................................................... 13-15

Inferences

Global advice on International Cultural Aspects & Training .............................16-18

Managers and National Culture ...................................................................... 19

Cultural Values,Managerial Implications & Organization structure ..................... 22

Employee Categorization & Prototype in Chinese Culture .................................. 24

Understanding

The Indian Context ...................................................................................... 25

Management Styles in Various Cultures .......................................................... 28

Learning .....................................................................................................30

References ...................................................................................................31


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Cultural Aspects of International Business

Introduction

In August 2010, China overtook Japan as the second largest economy in the world, and it is

closing the gap on the United States. The world is changing at a fast pace, driven by

globalisation. Throughout the global financial crisis, agile organisations continued their quest to

participate in and prosper from the tremendous growth in the emerging markets.

The Globalization Index supports many market indicators that the trend towards ambitious

international expansion will continue. This research depicts a global landscape where

organisations execute their international expansion strategies at a rapid pace. This speed of

expansion may indicate the strong desire by companies to be the first-to-market and/or the

imperative to capitalise on new market developments.

A survey was conducted in August 2009, with 520 senior executives worldwide. 38% of

respondents indicated that they currently derive over half of their revenue from overseas

operations. As indicated in the chart below, by 2012 more than half of the respondents expect

this to be the case, with one in four respondents expecting to derive more than three quarters

of their revenue from overseas. Only one in 50 executives surveyed believes containing their

operations within their home country or earning less than 10% of their revenue from overseas

markets by 2012, to be a viable option.


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Key phases of an international expansion project:

1. Planning for Expansion

2. Choosing your Location

3. Conducting business Overseas

Planning for Expansion

1. Strategy

Clearly define and stress test your strategy

What are the implications of international expansion

for your existing business operations?

2. Global Trends

Is your organisation exposed to new and emerging markets?

Has the composition of your major competitors changed?

Is foreign direct investment in your industry sector clustered in locations where you do not

have a presence?

3 Market Research

What research is available to provide you with information on market and industry conditions?

Is this information up-to-date and what is the future outlook?

Create a short list of new and emerging markets, Tap into existing networks, talk to your

advisors and visit your short listed locations.

Choosing the location

4. Political and Social Climate

Is the political system stable? How do youassess sovereign risk?

Does the country suffer under high levels of sovereign debt?

Is there likely to be social unrest or are workers organised in powerful unions?

5. Local Tax and Regulatory EnvironmentIs the tax regime business friendly and/orcompetitive?

Does the country have free trade agreementsor double tax treaties?

Does the regulatory regime set the scene for a sound corporate governance framework?


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6. Legal System

Is it a common law system? If not, are yousure you understand the outcomes?

Do the laws and the legal and judicialsystem provide support for and protectionof commercia

activities?

7. Innovation and Incentives

Should you develop your products in emergingor fast growth markets?

Should you have a presence at globalinnovation clusters?

Are generous grants and incentives availablefor innovative organisations?

8. Location and Infrastructure

Is economic infrastructure secure and reliable?

How would you deal with power outages, telecommunication down time or traffic congestion?

Is the location central to your regional markets,suppliers of goods and services?

9. Cultural Compatibility

Are there significant cultural differences that may

impact the way you conduct your business?

Are there likely to be language barriers?

Entrepreneurial organisations through their very

nature can achieve growth and develop a global

footprint relatively quickly.

However, it can take a long time tocreate a diverse

workforce that reflects the variety of markets in

which the organisation operates, and cultural

customs can impact significantly on business

practicesin the chosen location.

Without early attention to these issues, your

management team may be left behind in terms of

cultural awareness and diversity.

This can generate a competitive disadvantage as

the management team willbe required to make rapid


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decisions, while at the same time ensuring that they have a clear understanding of the loca

customs and operating conditions. In this respect, the importance of language cannot be

overstated, as it will underpin everything the business does in the target location. Effective

communication(or the lack thereof) has the ability to make or break thebusiness. It is a key

foundation upon which the successof the business may be built. Your management teamwil

need the language skills to communicate effectively with those who will interact with you

business includinggovernment, regulators, financiers, suppliers, staff andcustomers. Even in

countries where English is commonlyspoken or is the language of business, regional nuances

can be a source of misunderstanding and can lead to more serious problems.

10. Local Workforce

What is the availability, skill-set and cost structure of the local work force?

When expanding into a global market, your human resources can mean the difference

between success and failure. As your organisation grows off-shore, getting the right people in

the right location can provide a vital competitive advantage. The quality of the local workforcemay often be the deciding factor in determining whether to expand your business to that

location and also in determining how successful such an expansion will be. When setting up a

local workforce in your target location, there are numerous practical issues to consider. You

will need to think about the education level and experience of your prospective workers and

how much you will need to invest in training. You will need to determine the terms and

conditions of employment and you may need to negotiate with individuals, labour unions or

other bargaining agents. There may be local legislation or regulations concerning working

hours,weekends and public holidays and there may also be local customs or practices that wil

impact on the operation and activities of your workforce. In addition you will need to consider

your global remunerationapproach and whether short term and long term incentive programswill be offered to your overseas employees, as well as the tax and regulatory implications

associated with this.

11. Global Management Team

Who will negotiate with government, customers, suppliers and business partners?

How should you manage risks such as bribery and corruption?

Who will be responsible for the recruitment of staff?

Do you have an international management team or do you need to build one?

Commencing business operations in a new market can involve significant risks, and therefore

it is important to have a strong management team that understands the challenges ahead.


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Having established the business in anew country, a variety of issues may present themselves such as:

How to ensure that your business operations run smoothly?

How much hands-on involvement is required by your management team?

How much time and resources will it consume in setting up your operations?

Will some members of your management team be required to spend a lot of personal time in the new

location?

12. Global Human Resources Considerations

What benefits will you provide to expatriates and what are the tax consequences?

Do your employees require security protection?

Do you have a team that can deal with assignment management, immigration and tax compliance?

Should these functions be outsourced?

13. Financing

What are the cash flow needs of your business?

What is your projected revenue growth?

Are your financial models sound or overly optimistic?

Do you need strong partners to finance your expansion?

Have you considered Islamic finance as a source of funds?

What is the debt equity mix of funding?

What are the tax consequences?

14. Choosing the Operating Structure

Are you looking for slow organic growth?

Will you start out with a sales office or are you looking for a green field development?

Are you looking to establish an immediate local presence? If so, will you set up a joint venture

or will you acquire an existing local business?

15. Supply Chain, Transfer Pricing and Intellectual Property

Have you identified all possible supply chain efficiencies?

Have you considered potential Australian tax issues as you move functions, intellectual property and

risk offshore?

Is your intellectual property and data protected?

16. Foreign exchange management and currency risk/controls

Is the local currency stable or volatile?

Is currency hedging available at a reasonable cost?

Could currency restrictions inhibit or even prohibit

the flow of international funds?


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Cross-cultural competence in International Business

http://www.worldbiz.com/ice.htmlhttps://www.aperianglobal.com
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Question : When George Bush gave Chinese Premier Li Peng a gift of cowboy boots embroidered with

the American and Chinese flags, was it an appropriate gift?

a. Yes, a thoughtful sentiment and a keepsake appropriate to the occasion

b. No, a significant miss on the part of administration protocol experts

c. Yes, a good choice, if only he had known the Premiers correct shoe size

Answer: b. Unfortunately, in China, the soles of the feet are considered to be the lowliest part of the body and

gifts of footwear, no less embossed with the nations respective flag, was a significant miss on the part of

administration protocol experts

Question : In sending an email to a Japanese colleague with whom may wish to collaborate on a

potential business deal, you would be most successful if you

a. Begin the email by addressing the individual warmly and openly, by his first name, immediately

closing the cultural gap

b. Always use Mr. , Miss or Mrs. followed by the last name of the individual, followed by an

embracing and forthright interaction

c. Use the last name, followed by the term sama to address your email, followed by clear text

set forth with the utmost formality.

Answer: c. The risk of email is that it lacks certain social contextual cues such as body language, eye contacand intonation and can therefore create misunderstandings. There is also no way to see the demeanor o

reaction of your counterpart and adjust your communication strategy to compensate for a misunderstanding onceit is created. When in doubt, it is always safer to err on the side of greater formality and deference. The

Japanese have become accustomed to making allowances for informal communication from other countries, bu

you will proceed with more credibility if you make a sincere effort to adapt to their customs. The use of the term

san and, for those in a position of high authority, sama is honorific. Use the last name, followed by the

honorific term, followed by extreme clarity and formality in the text, with as few assumptions for context as

possible.


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The Iceberg Model

Iceberg Model is used as an analogy to understand the impact of cultural differences on

behavior and interaction. Culture is like an iceberg in that only a small part is visible, while the

majority of the mass lies, invisible (and often unconscious), below the surface. The visible andaudible aspects of culture are things like dress, rituals and communication behavior wha

people wear, do and say.

These aspects of culture derive from hidden values, expectations, assumptions, and beliefs

the "unwritten rules" that dictate what is considered "appropriate" or "inappropriate" in that

culture. Buried deep within each culture's "iceberg," for example, is its orientation toward time

its attitude toward hierarchy, its fundamental beliefs and sense of values.

Intercultural misunderstandings occur when we observe the behavior of people from othercultures and misinterpret them based on our own set of assumptions and values, and viceversa. Learning to interpret our own and others' behavior from the other culture's perspective is

therefore an important skill in being an effective intercultural communicator.

Communication may therefore seem much more implicit, indirect, and attuned to feelings thanin low-context cultures, and business decisions may be based on information gathered throughextensive networks and close personal relationships.


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Low vs. High Context

Low-context communication. One of the ways in which cultural anthropologist Edward THall analyzed cultures is by the extent to which they utilize contextual information to send anddecode messages. In low-context cultures such as Germany, the United States, and much ofScandinavia, there is a great reliance on explicit verbal or written messages to transmitmeaning, with less attention paid to contextual cues such as physical setting, relative status ofthe parties involved, nonverbal signals, and length or strength of the relationshipCommunication tends to be direct and content-focused.

High-context communication. In high-context cultures such as most Asian, Latin Americanand Arab countries on the other hand, meaning is derived not only from explicit verbal orwritten messages, but also from contextual factors such as the setting in which thecommunication is taking place, the relative status of the individuals involved, nonverbasignals, and the strength of the relationship.

Tips for communicating with people from low-context cultures

Get to the point fairly quickly, and limit the amount of background information presented. Ifothers need more information, they will ask.

If you imply your conclusions without stating them explicitly, low-context listeners may missor misunderstand what you are getting at it is better to state your points very concretely.

Use data and facts to support your points.

Do not take a refusal or a criticism of your idea personally. Low-context communicatorstend to separate criticism of issues from criticism of the people presenting the issues.

Do not become frustrated if you have to ask many questions to get the information youwant. Low-context communicators tend to assume that you will ask a question if you wantto know something, and they may hesitate to offer information that is not directly solicitedfor fear of appearing condescending.

Conversely, don't assume that someone who asks you a lot of questions is challenging orattacking you; they may simply be trying to get the specific information they need at themoment to make a decision.

Be careful not to "read between the lines" too much. Don't assume that what someone saystoday is related to what he or she said yesterday. Always clarify when in doubt.

Try to be more direct in your communication style, but be careful that you dont overdo itand express yourself too bluntly or aggressively.


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Tips for communicating with people from high-context cultures

Pay more attention to the context in which a communication is taking place: who is speaking, who isnot speaking, what is not being said, where you are, who else is present and what their relativestatus is, etc. An awareness of contextual factors can help you to more accurately interpret verba

messages.

Pay close attention to nonverbal cues such as eye contact, pauses, posture, and facial expression.However, it's important not to assume that these cues mean the same thing they might in your ownculture.

People in high-context cultures often value relationships and may express themselves indirectly inorder to preserve harmony. It is therefore important, for example, not to assume that people agreewith you simply because they don't come right out and say "No." Learn how disagreement isexpressed in that culture, and develop alternative strategies for uncovering negative feelings thatmay not be directly communicated.

Because high-context communicators are less apt to separate feelings from fact, be extremely

careful about how you give feedback or disagree with someone's idea. Try to do so in private sothat the other person does not lose face, and choose an appropriate setting for the interaction aswell. Sometimes it can be more effective to utilize a third party to convey your message.

A high-context communicator may ask a question as a starting point for an in-depth exchange ofinformation. His or her expectation may be that the person who responds will go into a great deal ofdetail, beyond what was explicitly asked. If someone from a low-context culture gives a conciseanswer that only addresses the specific question asked, the high-context communicator may feel heor she is being unhelpful.

Be prepared to use a variety of approaches to establish credibility and persuade not just verbapersuasion, facts, and data. Other factors may carry even more weight in high-context cultures, foexample, who you know, how well you listen, how willing you are to invest in a relationship andspend time socializing, even how you dress.

Some General tips on how to be Effective in inter-cultural interactions

Check your assumptions about the intentions behind other people's words or actions. Avoidmaking quick judgments.

Consider alternative interpretations that are based on the other culture's attitudes, perceptions andvalues.

Check your conclusions, either with the other person, or with a third party who is familiar with both

cultures. Examine your own cultural assumptions and values and be aware that you may be making

judgments that may fit situations in your own culture, but not in others.

Be willing to carefully explain your intentions when it seems that others are misunderstanding them.

Identify ways that you can adapt your behavior, communication style, etc., to make others morecomfortable.


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Case Study 1

Angola: Making Decisions

THE SITUATION

Elliot Melos has just been promoted to Manager of the Angolan office of his Australian firm. This is hisfirst time working outside Australia, and he has recently become aware of a serious conflict betweentwo of his most valuable employees, Eduardo Spinola from the northeast, and Jonas Ndongo, fromHuambo, in the central part of Angola: the tensions between the two are almost palpable, they avoidspeaking directly to each other even in meetings, etc. Elliot even hears reports of a shouting matchbetween them, though he did not witness this himself.

Elliot suspects that one of the factors in the conflict, is the tribal differences between the two, but he isunclear about what these might be, and is afraid to make any assumptions for fear of making a badsituation worse by possible tactlessness. He has learned to avoid using his own brand of selfdeprecating Australian humor to defuse situations: in the past, they have either drawn blank stares ormade his Angolan counterparts react in ways that suggested he had lost some ground in their eyes,especially after he (a lifetime member of Australias Labour Party) suggested, with tongue very much incheek, putting the socialists on the barbie at the next Angolan election. This did not go over favorably.

He needs, however, to resolve this issue as speedily as possible. What is the first thingElliot should do at this point?

POTENTIAL ANSWERS:

ALTERNATIVE I : It may be advisable for Elliot to bring the two parties together and discuss

the issue in a private conference with both of them present. This will allow them to speak freely in thepresence of an authority figure.

This is not the best first step for Elliot to take, though it might be helpful later on, after other action hasbeen taken. Try another answer.

ALTERNATIVE II : It may be a good idea for Elliot to call in a neutral intermediary to discussthe issue with the two disputants. This intermediary should be someone without commitments to eithersides tribe or social group.

This is a possible answer and might help resolve the conflict. But it is not necessarily Elliots best firstoption. Try a better answer.

ALTERNATIVE III : At this point it would be best for Elliot to call aside each of the parties inturn and discuss the issue with them, letting each one give his story of the dispute.

This is the best answer. Elliot can learn great deal by being a sympathetic listener to each side; he isalso likely to learn something about the less apparent tensions in Angolan life between subgroups.


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Case Study 2

Reading the Body Language in International Negotiations

Non-verbal Cues Associated with Negotiation Styles across Cultures

Non-verbal cues can be misunderstood, to a deal makers detriment.

In international negotiations, what you say is sometimes less important than your bodylanguage or facial expressions. Previous studies have explored how people from differentcultures react differently to idioms and language-specific business jargon. This study examineshow non-verbal communication differs across cultures, and how easy it is to misinterpret.

A 2008 study found that as much as 65 percent of social meaning is conveyed through nonverbal means, and other research has shown that these signals and cues which are

assumed by many people to be automatic and representative of true feelings are oftentrusted over spoken words. The problem is that such signals can mean different things indifferent cultures and thus can be incorrectly understood, with unintended and sometimesdisastrous results. This paper says that executives who learn how to read what the other sideis really saying with body signals and who are sensitive to how their own signals might beperceived will be a step ahead in negotiating international deals.

This study involved 48 Chinese students (all Mandarin-speaking and born in mainland China)and 57 Canadian students (all born in Canada), the two groups serving as proxiesrespectively, for Eastern and Western cultures. The students were asked to play roles in ascenario that cast a baker and a liquor store owner in negotiations over sharing space in a new

market. The two parties had to agree on such issues as hiring policies, employee trainingcosts, and an advertising budget.

The roles of the baker and liquor store owner were randomly assigned to the Chinese andCanadian participants. The participants didnt negotiate with each other but rather with aresearch assistant who was trained to act in a neutral manner betraying no emotionshaving a normal posture, and remaining non-committal about the issues under discussion. Theparticipants were always paired with research assistants from their culture who spoke theirlanguage.

Before the 15-minute negotiating sessions began, the participants were primed by the

researchers to adopt a certain stance and attitude. They were prepped to have a dominant orsubmissive negotiating style and a positive or negative view of their counterpart. For examplewhen participants were instructed to approach the meeting in a dominant way, they were givendescriptions of their roles that included key words such as determined, authoritative,

controlling, and assertive. To shape their view of the person across the table, they weregiven detailed information about that partys financial status and standing in the community.


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The participants were also instructed to reflect on their role and negotiation style for 20minutes before the meeting started.

The researchers video-taped the negotiations to examine six categories of behavior: posturehead movement, hand movement, eye gaze, facial expression, and how often the participantfell silent or kept talking. The videotapes were studied by behavioral analysts to distinguish allthe body movements from leaning back to avoiding the other persons gaze.

The results indicated that some non-verbal cues were used by both groups to convey thesame meaning. Smiling, leaning forward, and gesturing while talking were employed by boththe Chinese and Canadians when trying to convey a positive and more submissive approach,and shaking the head and frowning were displayed by both to show the opposite. In attemptingto project dominance, both groups were more likely to try to control the room through negativesignals than positive ones.

But the researchers also noted some profound differences. For instance, when projectingnegativity, Chinese participants usually leaned back and made eye contact frequently

whereas Canadians averted their gaze. And to communicate dominance, Canadians weremore likely to sit straight up; the Chinese used that posture to show submissiveness.

The researchers noted that prior studies associated eye contact exclusively with positiveemotions and affectionate engagement. Leaning back has traditionally been linked to a

relaxed approach. But those studies, the authors say, were based on the behavior of WesternEuropeans and didnt take into account the differences in East Asian cultures.

We can easily see a possible misinterpretation in inter-cultural negotiation, where if a Chinesenegotiator displays a high level of eye contact and leans back, this may be interpreted as likingand positive affect by a Canadian negotiator, when it actually signals dislike, the authors write.

Similarly, North American negotiators could misinterpret the erect back posture of an Easterncounterpart as unfriendly or control-seeking when it is meant to convey submissiveness.

Important: Non-verbal cues are seen as key indicators of a persons true feelings.

But some cues mean different things in different cultures and misunderstandings canundermine international business negotiations. Executives who bring an awareness of thesedifferences to the table have a better chance of achieving their goals.


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Inferences: Global advice on International Cultural Aspects & Training


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Training

For each statement below, click the button that best expresses the extent to which you agree ordisagree with the statement.Your responses should reflect YOUR OWN VIEWS when you are IN YOUR OWN CULTURE.

1.

When other team members express a set ofpriorities that are different from mine, I shouldcompromise my own wishes and act in unison withthem.

2.

I believe that seniority should be taken intoaccount along with achievement when distributingawards, benefits, or recognition.

3.

I believe that the entire team should share theblame even if one individual is responsible for theteam not meeting its goals.

4.

As a manager, I should be able to give advice tosubordinates about their personal lives even if theydo not ask for it.

5. It would be appropriate for me to raise my voice ifangered by the actions of a junior employee.

6.When I am speaking with a junior employee, it isnatural that I should control the conversation.

7.If I am frustrated with a subordinate, I should notreveal my feelings to him/her.

8.It often seems to me that the colleagues I workwith understand things in general better than I do.

0.I am very concerned about how my performance isevaluated compared with others in my group.

1.When my work does not compare favorably toothers I am reluctant to share this information withanyone else.

2.If I have made a mistake or done somethingwrong, I let my subordinates know about it.

3.I am uncomfortable when my manager follows theprogress of my work very closely.


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4.I usually try to avoid disagreeing openly with otherpeople.

5.

When communicating a message to a colleaguethat he/she may not want to hear, what I say mayhave one meaning on the surface and another

meaning below the surface.

6.When someone says something I try and figure outwhat they really mean.

7.

In an informal group discussion, if a colleagueemphatically makes a point that I know isinaccurate, I will tend to just let it go.

8.How something is said is often more importantthan what has been said.

9.

When my manager says something I don'tunderstand I will usually ask a peer rather thanask my manager to clear things up.

0.It is very important to me that my colleaguesrecognize my abilities and achievements.

1.I think that personal ambition is a key ingredientto being successful on the job.

2.The most satisfying part of my work is to do adifficult job well.

3.I prefer to give detailed instructions rather thanleaving details up to others.

4.

I am uncomfortable changing plans made by mysuperiors when they are absent and unable to saywhat they would want me to do.

5. I make most decisions quickly.

6.If talking about an issue is embarrassing for me, Iam still willing to discuss it at work.

7. I tend to be indirect in offering criticism.


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Managers and National Culture

Cultural Links to American Managerial Behavior

Cultural Characteristics Managerial Behavior

Individualism Focus on individual contribution and benefit to self or dept.

Self-reliance (responsibility) Willingness to take on personal responsibility

EfficiencyStress on bottom-line cost consideration.

Favorable view of future (optimism)

Favorable outlook toward success of future projects and greaterlikelihood of reaching them

PragmaticTendency to make fairly simple judgments of whether a particulaproject worked.

Rationality Emphasis on logic and rationality in reaching decisions

Contractual relationshipsEmphasis on impersonality in work behavior

Puritanism

In some cases, overemphasis on work, but also strong moralcommitment

Humanitarianism

Sympathy for subordinates and peers, but usually directed towanon-work situation

MaterialismHeavy reliance on economic motivation to spur work force-equavalue of project with profitability

Time consciousness Equality Short-term perspective on output

Competitive

Rewards based more on what one does rather than who one is.Worth in organization predicated on ability to deliver

Pressure to strive to do betterOpenness and direct behavior

Moralism Telegraphing clearly where one stands

Loyalty Commitment bordering on ideologyMore often directed toward self, section, department than entireenterprise

If we see how a typical American manager saw his/her life/job in general we would usefollowing values: Legitimacy of achievement and success; belief in hard work; optimism

Puritanism; commitment to a scientific & rational orientation; impersonality in work settings

belief in equality of opportunity; acceptance of competition as fact of life, individualism.

Perhaps no other country holds all these values as strongly as do American workers.


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Two major Factors affect Managerial Behavior in Britain

1. Tradition as a Dominant and Positive social value,

2. An unchallenged Class System.

British society values tradition: the sense that behavioral codes that have worked well in thepast should be preserved and that change should only be introduced when unavoidable.

Although such attitudes seem to restrain development and innovation, some advantages areapparent. First, to minimize experimentation is to limit the possibility of losses frominappropriate projects. The typical British manager waits for others to demonstrate themerits of a new venture. If a new system, such as a local area network, is introduced, sucha step will be taken only in order to minimize potential losses from competitors, who mightsucceed in generating benefits from the use of such systems.

Second, when implementing a new project, managers minimize risk by collaborating withothers, so that any associated losses are widely distributed.

Third, unsuccessful managers admit their mistakes and pay the consequences, therebyallowing their successors to reap the benefits of successful policy changes. As a corollary,unionization among managers has not been a significant factor in compensationarrangements, although some 40 percent of managers are formally affiliated with such unions,particularly in the public sector.

These attitudes contrast with those prevailing in the United States, where managersface strong pressures from shareholders to take risks in their decision making, so as tomaximize the possibility of short-term gains.

Consequently, mistakes are not freely admitted. When the admission of failure isinevitable, U.S. managers evade sole responsibility, as far as is possible. Such behavior

makes it difficult for the Board of Directors, or for shareholders, to identify errors at anearly stage. In addition, it may be difficult to alter erroneous decisions when managers makeobscure mistakes or relate their actions to external factors.

The conservative cast of typical British managers is one reason for the country'ssluggish economic growth.

Resistance to change .aids the class system, in that, Management becomes a status ratherthan a profession. Managers who were not born into the appropriate class face majorobstacles when seeking promotion.

Since management is a social class, there is limited emphasis on management education andtraining. Intuitive judgments based on experience and wisdom are preferred to scientific

assessment.

Whereas management is considered a profession in the United States and university degreesare usually required for advancement, social class is the most common "pass" required ofnew entrants in Britain.

Although this orientation is most evident within the public sector, it also significantly influencesmanagerial career development within the private sector as well.


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Saudi Arabia : Selected Cultural Values and Related Managerial Behavior

Cultural Values Managerial Behaviors

Tribal and family loyalty Work group loyalty

Paternal sociability Stable employment and a sense of a pleasant

Work-place

Careful selection of employees Nepotism

Arabic language Business as an intellectual activity

Access to employees and peers Management by walking around Conversation as

recreation

Close and warm friendships A person rather than task and money orientation

Theory Y management Avoidance of judgment

Islam Sensitivity to Islamic virtues

Observance of the Qur'an and Shaia Work as personal/spiritual growth

Majlis Consultative management

A full and fair heaing Adherence to norms

Honor and shame Clear guidelines and conflict avoidance

Positive reinforcement Training and defined job duties

Private correction of mistakes Avoidance of competition

An idealized self Centralized decision making

Empathy and respect for the self-image of others

Polychrome use of time Right and left brain facility

A bias for action Patience and flexibility

Independence Sensitivity to control, Interest in the individual

Male domination Separation of sexes


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Cultural Values, Managerial Implications & Organization structure


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Employee Categorization & Prototype in Chinese Culture


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The Indian Context


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Management Styles in Various Cultures : Pareek (1988)

Pareek (1988; 1997: 188-90) describes these twelve styles as follows:

1. Supportive (+NP): In this style, support is provided when needed. Managers with this

style are supportive coaches. They encourage their subordinates, cheer them up, and provide

the necessary conditions for their continuous improvement. They help them to help

themselves.

2. Rescuing (

NP): In this style, support is provided by almost imposing oneself onothers. The belief is that the subordinate is not Capable of taking care of himself. This style

inculcates dependency- proneness.

3. Normative (+CP): Managers with this style are interested in developing proper norms

of behaviour for their subordinates and helping them to understand how some norms are more

important than others. The manager is concerned with setting appropriate norms by involving

his subordinates in evolving these norms, and also in deciding how such norms will be

followed.

4. Prescriptive (CP): People with this style are critical of others' behavior. They impose

themselves and want others to do what they think is right or wrong. Managers with this style

prescribe solutions rather than helping subordinates to work out alternative solutions to the

problem.


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5. Problem-solving (+A): In this style the concern of the person is to solve the problem by

himself working and involving others in it. He does not see the problem as being merely

conined to the tasks. For him the problems have various dimensions.

6. Task obsessive (A): The manager with this style is primarily concerned with tasks,

and is so obsessed with the work to be done that he overlooks various other things. They are

not concerned with feelings and, in fact, fail to recognize them, since they see them as not

related to the task. They function like computers.

7. Innovative (+FC): People with this style are enthusiastic about new approaches, and

take others along with them. They pay enough attention to mustering an idea so that it results

in concrete action, and is internalized in a system.

8. Bohemian (+FC): Such a manager does not stay with one idea and is obsessed with

new ideas all the time. He overwhelms his sub ordinates with new ideas. He is less

concerned about the working of these new ideas, and is mainly concerned with the ideas

them selves. He hardly allows an idea or a practice to stabilize. He goes from one idea to

another.

9. Confronting/Assertive (+RC): In this style the person is concerned with the exploration

of a problem. Perseverance is the main characteristic. Such managers confront the

organization in order to get things done for their subordinates. Even when something is.to be

explored with the person, the focus is always a particular issue or a problem and the person isnot the target.

10. Aggressive (RC): A person with this style is likely to show his aggressiveness by

in-fighting, making heavy demands, fighting or going back to issues and never allowing these

to be settled. Managers with this style will help achieve results. Their aggressiveness,

however, makes people ignore them and not take them seriously.

11. Resilient (+CC): This style is characterized by functional compliance. The person

respectfully accepts others' ideas which appeal to him, and changes his approach when

needed.

12. Sulking (CC): A manager with this style keeps negative feelings to himself, Finds

it difficult to share them and avoids meeting people if he has not been able to fulfill his part of

the contract. Instead of confronting problems, a person with this style avoids them, feels bad

about situations but does not express himself.


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LEARNING

Conflict management for smooth and efficient functioning of the business processes; andNegotiations for reduction in capital expenditure, operating costs, and better RoI are an import

part of any business activity.The key to effective cross-cultural communication is knowledge. It is essential tounderstand the potential problems of cross-cultural communication, and make a consciouseffort to overcome these problems.

In cross-cultural dealings, one should always be willing to be patient and forgiving, rathethan hostile and aggressive, if problems develop.

Understanding the mental make-up of the individuals involved, is the first step in successresolution of any differences that may arise in course of the business dealings.

The mental make-up of individual is a sum-factor of the culture he is born into and environment he is brought up in. The individual is groomed by the customs, traditions, econoenvironment, political intervention, technical advancements, and legal recourses available at place and region he has had associations with.

The beginning of the exercise in understanding the mental make-up should start from tculture of the parties concerned.

Hofstede defines culture as the collective programming of the mind which distinguishes members of one group or category of people from another.

Hofstede identifies four dimensions to classify the way people in different countries interpret th

cultural environment. The four dimensions are: -

(a) Power distance,(b) Individualism and Collectivism,(c) Masculinity, and(d) Uncertainty avoidance

Various cultures have different perceptions and methods of conflict resolution anegotiations. The interpretation of what constitutes a deal depends on the environment where theare discussed. To some, the deal is the contract that will be relied upon when new situations shoarise. Other culture groups view the contract as an instrument that outlines general principles vers

detailed rules.

One should respond slowly and carefully in cross-cultural exchanges, and should not jump tothe conclusions on what is being said or communicated.

Reading between the lines and Knowingwhich way the wind is blowingare very very important.


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References:

1. Management and Cultural Values , Indigenization of Organizations in Asia

Henery S R Kao , Durganand Sinha , Bernhard Wilpert

Sage Publications ISBN 0-7619-9318-5

2. Managers and National Culture , A Global Perspective

Edited by Rochard B Peterson

Quorum Books Wesport Connecticut

3. Indian Business Culture

Rajiv Desai

Viva Books Private Limited ISBN 81-7649-081-4

4. http://www.strategy-business.com/article/re00159?pg=all Zhaleh Semnani-Azad, Wendi L. Adair (University of Waterloo)

June 2011 International Association for Conflict Mgmt

Documents

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