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MANAGINGACROSS CULTURES
C O N C E P T S , P O L I C I E S A N D P R A C T I C E S
Contents
List of Tables and Figures xxviList of Mini Case Studies xxixAuthor Biography xxxiGuided Tour xxxiiAcknowledgements xxxiv
Part I Introduction 1
1 Why Study Managing Across Cultures? 3Why study the subject of managing across cultures? 3This book: rationale, aims and structure 5
Rationale , 5Aims 6Structure 6
How to use the book 7Learning outcomes 8Chapter review 8
References / 9
2 The Meaning and Importance of Managing Across Cultures 11Emergence of managing across cultures 11
The triggers 11Expatriates' failure to complete assignments abroad 12Recession in the 1980s 12Economic development of Japan and South-east Asia 13Economic development of China and India 13'Westernization' of Central and Eastern Europe 14
The drivers 14Multinational companies 14International competition 15Regional economic integration 15Technical changes and flow of information 16Trade and financial services 16Political and cultural influences 17
VII
viii I Contents
Western management education and the use ofEnglish in business 17
Reforms in developing countries 18The meaning of managing across cultures 18
Managing local employees globally 21Building a global corporate culture 21Forward diffusion of knowledge and skills 22
Managing global employees locally 23National norms and values 24National economic trends and organizational characteristics 25National institutions and legal systems 26Assessing and avoiding risks 27Reverse diffusion of knowledge and skills 28
Summary 29Revision questions 30References 30
3 Contexts and the Cultural Dilemma of Managing Across Cultures 35Introduction 35The contexts of managing across cultures 36
The global-international context 37Economic challenges 38Political challenges 38Legal challenges 39Technological challenges 39
The local-national country context 40The political environment 40The legal environment 41The economic environment 41
The organizational context 42The ethnocentric approach 43The polycentric approach 44The geocentric approach 44The regiocentric approach 45
Organizational culture 46Is management a universal phenomenon? 47
Convergence theory 47Divergence theory 49
The cultural dilemma of managing across cultures 50Definitions of culture 51Dimensions of culture 52
Kluckhohn and Strodtbeck (1961): cultural valueorientations 53
Contents I ix
Geert Hofstede: cultural dimensions of societies 53Fons Trompenaars' (1993) Cultural Framework 60The Project GLOBE cultural framework (House et al., 2004) 62
Summary 65Revision questions 65References 65
Part I Case Study Bob Over the Globe - Chevron and Saudi Aramco 71Introduction 71The birth and growth of Saudi Aramco 72Chevron-Saudi Aramco interface 72The globalizing power of business versus the localizing powerof culture in managing people internationally 73Questions 76References 76
Part II Managing in Anglo-Saxon Countries 77
4 The US and Canada 79Introduction 79Contexts: economics, politics and culture 80
Economics 80Politics 81Culture 81
Labour market trends 82The services sector '' 83Unemployment 83Flexible working practices 83Job insecurity and high turnover 84Diversity . 85Ageing working population 85
Management and organization 86Strategic awareness 87Avoidance of trade unions 87Employee-employer agreements 89Managing diversity 90
Managing human resources 91Recruitment and Selection 91
Equal opportunities 91Graduate recruitment 92
Selection 93Education, training and development 94
Organizational training 94
Contents
Business and management education 95Vocational education 96
Rewards and remuneration 96Performance appraisal 96Performance-related pay and negotiated pay 97Minimum wage 97
Employee relations 98Trade unions 98Collective bargaining 100Industrial action 101Settlement of industrial disputes 102
Summary 102Revision questions 104References 104
The UK and Ireland 107Introduction 107Socio-economic and political context 108
Economics 108Politics 109Culture 110
Labour market trends 111Shortages of skilled labour 112Employment of women 112The older workforce 113Employment of migrant workers 114Flexible working practices 114The unemployment rate 115
Management and organization 115Strategic integration 116Outsourcing 117Collective bargaining 117Pragmatism 118Flexibility and cost reductions 118Commitment to quality improvement 119International management orientation 120
Managing human resources 120Recruitment and selection 120
Recruitment 121Graduate recruitment 121Selection 123
Training and development 123Apprenticeship training 124
Contents I xi
Employee training and development 124Management education, training and development 125Vocational training 126Lifelong learning 127Investors in People (IP) 127
Rewards and Remuneration 128Performance appraisal 129Performance-related pay 129Statutory minimum wage 130Wage inequalities 131
Employee relations 131Trade unions 133Collective bargaining 135Strikes and industrial action 135Settlement of industrial disputes 136Employee involvement and participation 136
Summary 137Revision questions 138References 138
6 Australia and New Zealand 145Introduction 145Contexts: economics, politics and culture 146
Economics 146Politics 147Culture ' 147
Labour market trends 148Employment of women 149Flexible working practices 149Employment of older people 150Employment of ethnic minorities 151Unemployment 151
Management and organization 152HR and corporate strategy 152Reliance on legal experts 153
Managing human resources 153Recruitment and selection 153
Recruitment 154Graduate recruitment 154Selection 154
Training and development 155On-the-job training and apprenticeships 156Off-the-job training and education 156
xii I Contents
Organizational training 157Rewards and remuneration 157
Centralized rewards system (rewards set by collectiveagreement) 158
Decentralized rewards system (rewards set by individualarrangements) 158
The minimum wage 159Employee relations 160
Trade union organization, membership and density 162Collective bargaining 163Industrial conflicts and strikes 165Settlement of industrial disputes 165Employee involvement and participation 166
Summary 167Revision questions 167References 168
Part II Case Study 9/11 - The Effects and Organizational Response 171Introduction 171The impact of 9/11 on travelling and tourism 171Dealing with and responding to the crisis 172
Redundancies - the common response to a crisis 173Recruiting and retaining key employees 174Training for possible attacks 175Communication and crisis management plans 175
Conclusion .••' 176Questions 177References 177
Part III Managing in South-East Asian Countries 179
7 Japan and South Korea 181Introduction 181Contexts: economics, politics and culture 182
Economics 182Politics 183Culture 184
Labour market trends 184Low unemployment rates 185Chaebol and zaibatsu 186A hard-working, committed and loyal workforce 187Female employment 187Older working population 188
Contents
From full-time employment to flexible employmentManagement and organization
Quality improvementConsultation, communication and decision-making: the
ringi systemPaternalistic leadershipJob security: from lifetime employment to employment
adjustmentManaging human resources
Recruitment and selectionRecruitmentGraduate recruitmentSelection
Training and developmentCompany induction trainingOn-the-job training and job rotationEnterprise-specific skills trainingContinuous trainingSelf-developmentManagement training and development
Rewards and remunerationMinimum wageSeniority-based rewardsRewards and organizational size and sectorBonus systemsPerformance-related payPromotion
Employee relationsTrade unionsEnterprise unionsCollective bargainingIndustrial actionThe settlement of industrial disputes
SummaryRevision questionsReferences
China and Hong KongIntroductionContexts: economics, politics and culture
EconomicsPoliticsCulture
xiii
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xiv Contents
Labour market trends 219Skills shortages 220Rural-urban migration 221Joint ventures and foreign-owned companies 221Stratification and exploitation of the labour force 222
Management and organization 223State- and party-orientated management 224Heavily regulated management 225Culturally determined management 226Western management 227
Managing human resources 228Recruitment and selection 228
From lifetime employment to labour contract assignments 229From centralized to decentralized recruitment 229From non-existent to more formalized recruitment and
selection methods 230Training and development 232
Education and learning process 232Vocational training and education 234Organizational training 235Management education, training and development 235Management education on a wider scale 236Training as many managers as possible at home and abroad 236Supporting Chinese managers in learning from joint
ventures and foreign-owned companies 236Rewards and remuneration 237
Minimum wage 238Performance appraisal and performance-related pay 239
Employee relations 240Trade union composition and membership 240The role of trade unions 241The workers' congress 242Industrial action 243Settlement of industrial disputes 244
Summary 244Revision questions 245References 245
Indonesia and Malaysia 249Introduction 249Contexts: economics, politics and culture 250
Economics 250Politics 252'
Contents
CultureLabour market trends
Unemployment rateEmployee turnoverDemand for skilled and professional labourEmployment of women and ethnic groupsEmployment of immigrant workers
Management and organizationRegulated managementPaternalistic managementIntegrated managementQuality-based managementAdopted management
Managing human resourcesRecruitment and selection
Affirmative actionWord of mouthKinship recruitmentNeed-based recruitment
Training and developmentEducationTraining
Rewards and remunerationMinimum wagePerformance appraisal and performance-related pay
Employee relationsTrade unionsFrom state unions to company unionsCollective bargainingIndustrial actionThe settlement of industrial disputes
SummaryRevision questionsReferences
Part III Case Study The 1997 Asian Financial CrisisIntroductionCausesThe effectsResponses and recovery measuresConclusionQuestionsReferences
XV
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279279279280281283284284
xvi I Contents
Part IV Managing in Western European Countries 285
10 Belgium and France 287Introduction 287Contexts: economics, politics and culture 288
Economics 288Politics 289Culture 289
Labour market trends 290Unemployment 291Flexible working practices 292Female participation 293Migrant labour 294Older working population 295
Management and organization 296Formality and bureaucracy 296Elitism and intellect 297
• ~ Strategic awareness 298Internal partnership and empowerment of line managers 298
Managing human resources 298Recruitment and selection 299
Recruitment 299Graduate recruitment 299Selection 300
Training and development 300Education / 301Vocational and employer-provided training 302Vocational training for young people 302Employer-provided training 303
Rewards and remuneration 304Minimum wage 305Performance-related pay 305
Employee relations 306Trade unions 306Trade union membership and density 307Collective bargaining 307Worker participation 308Industrial action 310Settlement of industrial disputes 310
Summary 311Revision questions 312References 312
Contents I xvii
11 Germany and the Netherlands 315Introduction 315Contexts: economics, politics and culture 316
Economics 316Politics 316Culture 317
Labour market trends 318Unemployment 319Equal opportunities and diversity 320Older versus younger workers 321Immigrant workers 323
Management and organization 323Integrated management 323Strategic management 324Participative management (co-determination) 324
Managing human resources 325Recruitment and selection 325
Recruitment 326Selection 327
Training and development 327Education 328Vocational training 329
Rewards and remuneration 331The minimum wage 332Allowances and benefits 333Performance-related pay 333
Employee relations 334Trade unions 334Works councils 335Collective bargaining 338Industrial action 339Settlement of industrial disputes 340
Summary 341Revision questions 342References 342
12 Denmark, Norway and Sweden 345Introduction 345Contexts: economics, politics and culture 346
Economics 346Politics 347Culture 347
xviii Contents
Labour market trends 348Unemployment 349Female participation 350Flexible working 351Migrant labour 352
Management and organization 353Social partnership 353Egalitarianism and consensus 354Empowerment of line managers 354Industrial democracy 354
Managing human resources 355Recruitment and selection 356
Recruitment 356Selection 356
Training and development 357Education 357Vocational training 357Organizational training 358Life-long learning 358
Rewards and remuneration 359Performance-related pay 360
Employee relations 360Trade unions 361Trade union membership 363Collective bargaining 363Industrial action .' 364Settlement of industrial disputes 365
Summary 366Revision questions 366References 367
s
13 Greece, Italy and Spain 369Introduction 369Contexts: economics, politics and culture 370
Economics 370Politics 370Culture 372
Labour market trends 372Unemployment 373Temporary employment 374Flexible working practices 375Immigrant labour 376
Management and organization 377
Contents
Ownership and management practiceInternationalized management
Managing human resourcesRecruitment and selection
RecruitmentGraduate recruitmentSelection
Training and developmentEducationVocational trainingOrganizational training
Rewards and remunerationThe minimum wagePerformance appraisal and performance-related pay
Employee relationsTrade unionsTrade union membership and densityCollective bargainingIndustrial actionSettlement of industrial disputes
SummaryRevision questionsReferences
Part IV Case Study EU Enlargement and its Implications forWork and Employment
IntroductionThe transitional clauseDrivers of immigrationImplications and responsesQuestionsReferences
XIX
377377378379379380380381381383383384384385385386387388390391392392393
395395396397398400400
Part V Managing in Developing Countries 403
; 14 African Countries 405Introduction 405
i: Contexts: economics, politics, and culture 406I Economics 406I; Politics 408I Culture 409I Labour market trends 410
High unemployment 410
xx I Contents
Declining public sector employment 411Growth of informal sector employment 412Low participation of women in formal employment 412Child labour and illegal employment practices 412Effects of HIV and AIDS on employment 413Migration of skilled and professional labour 414Shortages of skilled and educated labour 415
Management and organization 416Centralization of decision-making 416Public sector management and bureaucracy 417Politicization of management practices 418Ubuntu management 418
Managing human resources 420Recruitment and selection 420Training and development 422
Inadequate education systems 422Inappropriate education and training programmes 422Inefficient management of education and training bodies
and institutions 423Insufficient organizational training 423The influence of culture on training 424
Rewards and remuneration 425Minimum wage 425From seniority to merit-based pay 426Performance appraisal 426Supplementary pay . 427Promotion by decree 427Informal welfare system 427
Employee relations 428Trade unions 429Collective bargaining 430Industrial action 431Settlement of industrial disputes 431
Summary 432Revision questions 433References 434
15 Arab Countries 437Introduction 437Contexts: economics, politics and culture 438
Economics 438Politics 442Culture 442'
Contents
Labour market trendsUneven composition and distribution of labourUnemployment and youth unemploymentFrom foreign to national labour employment: localizationPublic versus private sector employmentForeign investmentFemale employmentChild labour and illegal employment practicesImmigration of skilled and professional labour
Management and organizationInherited management policies and practices
AuthoritarianismPaternalismCentralization of decision-makingPolitically oriented managementBureaucracy
Adopted management policies and practicesAdopted'socialist management systemsAdopted capitalist management systems
Factors conditioning management and organizationin Arab countriesTraditional norms and valuesIslamic values and principles
Managing human resourcesRecruitment and selection
RecruitmentSelection
Training and developmentVocational trainingOrganizational trainingManagement development
Rewards and remunerationSeniority-based payNationality-based payPay for goodwillPerformance appraisalPerformance-related pay
Employee relationsTrade unionsCollective bargainingIndustrial actionSettlement of industrial disputes
XXI
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: 452
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xxii I Contents
SummaryRevision questionsReferences
16 IndiaIntroductionContexts: economics, politics and culture
EconomicsPoliticsCulture
Labour Market TrendsUnemploymentAgricultural employmentIncreasing employment in ITEmployment and foreign direct investmentInformal sector employmentFemale participation in the labour market
" * Child labour and illegal employment practicesSkill shortages
Management and organizationAuthoritative and paternalistic managementIntegrated and international management
Managing human resourcesRecruitment and selection
RecruitmentSelectionGraduate recruitment
Training and developmentEducation and learningVocational education and training
, Organizational trainingRewards and remuneration
Basic pay, benefits and allowancesPerformance appraisal and performance-related pay
Employee relationsTrade unions
Collective bargainingIndustrial actionSettlement of industrial disputes
SummaryRevision questionsReferences
Contents
17 Central and Eastern EuropeIntroductionContexts: economics, politics and culture
EconomicsPoliticsCulture
Labour market trendsFrom state-owned large companies to privately
owned small and medium size enterprisesCompany closures, downsizing and mass redundanciesA well-qualified and skilled workforceFemale employmentFlexible working
Management and organizationAuthoritarian managementExperimental managementInitiative management
Managing human resourcesRecruitment and selection
Too many applicants to choose fromApplicants in high demandApplicants by recommendation
Training and developmentOrganizational training
Rewards and remunerationLimited use of performance-related payRewards based on managerial judgementsRising wage inequalities
Employee relationsTrade unionsCollective bargainingIndustrial actionThe settlement of industrial disputes
SummaryRevision questionsReferences
18 South AmericaIntroductionContexts: economics, politics and culture
EconomicsPoliticsCulture
XXIII
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xxiv I Contents
Labour market trends 533Unemployment 534Agricultural employment 535Declining public sector employment 536Informal sector employment 536Self-employment 537Temporary, seasonal and short-term employment 537Multinationals and employment 538Increasing employment of women 539Child labour 539Labour migration 540
Management and organization 540Person-centred approach 540Authoritarian management 541Centralized approach 541Procedural formality and formal behaviour 542Paternalism 542Face-to-face communication 543
Managing human resources 543Recruitment and selection 543
Recruitment 544Selection 544
Training and development 545Organizational training 545Apprenticeships 546Vocational training 546Management education and training 547
Rewards and remuneration 548Minimum wage 548Rewards and the family 549Pay inequalities 549Limited employment benefits 550Performance appraisal 550
Employee relations 550Trade unions 551Collective bargaining 552Industrial action 552Settlement of industrial disputes 553
Summary 553Revision questions 554References 554
Contents I xxv
Part V Case Study Making Poverty History 557Introduction 557Aid, trade and security 558
The need for sustainable and developmental aid programmes 559The need for fair international trade and more
foreign direct investment 559The need for peace, equality and justice 560
Management and organization 561Conclusion 562Questions 562References 562
Part VI Conclusion 563
19 Emerging Issues and Future Challenges in ManagingAcross CulturesIntroductionManaging diversityManaging equality
Employment of womenEmployment of ethnic minoritiesEmployment of older peopleThe need for international equal opportunities policies
Managing flexibilityFlexible working practicesFamily-friendly policies
Ethics in managing across cultures.Vlanaging information technologiesManaging environmental awareness and employee well-beingSummaryRevision questionsReferences
Glossary
Index
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