Mgt. & Cultural Issue

7/28/2019 Mgt. & Cultural Issue

1/22

Amity Business School

1


Management Practice & Cultural issues

Credit Units: 06

Module V: Economic & Social issues in management

Rohit S. Tomar


2/22


THE THREE SOURCES OF CULTURAL DIFFERENCES

CORPORATECOMPANYCULTURE

PROFESSIONALINDUSTRYCULTURE

NATIONALETHNIC

CULTURE

History of the company

( accumulated experiences:good and bad)

Leadership and dominantcoalition

Ownership Stage of development Business diversity

Functional orientation:

MarketingFinanceEngineering`R and D

Industry norms:Technology

ChangeKey success factorsTypes of customers

Country history

Education Social organisation Religion, philosophy


3/22


ANTHROPOLIGICAL AND SOCIOLOGICAL RESEARCHES AND BEHAVIORALOBSERVATIONS HAVE SHOWN THAT THERE ARE SIGNIFICANT

DIFFERENCES IN BASIC ASUMPTIONS VALUES AND BEHAVIOUR ACROSSNATIONAL CULTURES THOSE DIFFERENCES HAVE AN IMPACT ONMANAGEMENT BEHAVIOUR

HOFSTEDEs STUDY:Four Dimensions: POWER DISTANCE / INDIVIDUALISMUNCERTAINTY AVOIDANCE / MASCULINITY-FEMINITY

ANDR LAURENTs STUDIES:

Management and organisational principlesTROMPENAARS STUDIES:

Value Orientation

RONEN and SHENKARS STUDIES:

Country Clusters

HALL and HALLs STUDY:The Silent Language


4/22

Amity Business SchoolSilent Language

Perception of Time

Perception of Space

Language ofMaterial Goods

Friendship

Agreement /Disagreement

Context

SequentialScarce

PunctualityDeadlineEx: German

DelaysPostponment

Ex: Arabic

CircularFluid

Abundant

HighDistance

Avoid PhysicalemotionalProximityEx: British

LowDistance

Physical contactsShowing emotionEx: Latin

FinancialWealthGivesstatus

Ex: USA

Materialistic Non-materialistic

Education

FamilySeniority

Gives statusEx: Malaysia

OperationalFactual

RelationshipEx: USA

LongAnd Deep Ex: Japan

WesternLegalisticCountries

ImplicitVerbal

Asiancountries

The PersonMatters more

Than the Content

The ContentMatters more

Than the Person

Anglo-SaxonGermanic

Nordic

African,AsianLatin Americancountries

Source: Adapted from Hall(1960)

QuickAnd Superficial

ExplicitDocumented


5/22


INDIVIDUALISM

100806040200

POWERDISTANCE

100

80

60

40

20

0

Arab CountriesMexico

Brazil

Singapore

Taiwan

Hong KongThailand

IndiaIndonesia

JapanSpain

Italy

France

Denmark

Sweden

CanadaAustraliaGermany

UK

USA

Malaysia

Anglo-Saxon/ScandinavianEqalitarian/Individualists

Latin EuropeanHierarchical/Individualists

Asian/Latin AmericanHierarchical/Collectivists

Hofstede Mapping of Cultures on Power Distance and Individualism

Source:Hofstede, 1980


6/22

Amity Business SchoolCountry Clusters

Source: Ronen and Shenkar, 1985


7/22


VALUE ORIENTATION EXAMPLE

1 UNIVERSALISM :vs.

PARTICULARISM :

Rules-based behaviour

Relationship-based behaviour

Germanic countries

Asian countries

2. INDIVIDUALISM :vs.

COLLECTIVISM :

Individual's rights are supreme

Group's rights are supreme

Western countries

Asian countries

3. NEUTRAL :vs.

AFFECTIVE :

Emotions are subdued and expressed indirectly

Emotions are expressed freely and directly

Asian countries

Western countries

4. DIFFUSE :

vs.SPECIFIC :

Focus is on context of situation

Focus is on specific issues

Asian countries

Germanic countries

5. ACHIEVEMENT :vs.

ASCRIPTION :

Status and respect are achieved by 'doing'

Status and respect are ascribed by 'being'

Western countries

Asian countries

TROMPENAAR'S FIVE VALUE ORIENTATIONS


8/22


RATIONALITY

Howobjectives aresetImportance ofsystems andprocedures

DemocraticprocessSystem, Rulesled

DemocraticConsensus led DemocraticNegotiationledConflictresolution

DemocraticConsensus led Autocratic Autocratic

AUTHORITYThe ground

rules forVertical order.Origin ofpower

ConstitutionThe Law

Decentarilsation

The LawDecentralisation

The StateThe Law

Centralisation

The StateThe

CorporationsDecentralisation

The StateThe

CorporationsCentralisation

The Families

Centralisation

IDENTITYThe groundrules forHorizontal

order.(What makessociety stick)

Individual rightsContractsHeterogeneity

(micro cultures)

Social Welfare

Homogeneity

SocialWelfareCultural

IdentityHeterogeneity(microcultures)

NationalbelongingCultural Identity

Homogeneity

NationalismCulturalIdentity

Homogeneity

ClansEthnicbinding

CAPITALHow FinancialCapital isfound andchannelled

FinancialmarketsLow gearing

BanksMedium gearing

State andmarketMediumgearing

BanksHigh Gearing

StateHigh Gearing

FamilyHigh Gearing

Anglo-American

GermanNordic

French& Latin

Japanese Korean OverseasChinese

Business Systems

Sources: Redding, Whitley, Albert, Berger and Dore,

Hampden-Turner, Trompenaars.


9/22


HUMANCAPITALHow humanskills aredeveloped

AcademicPerformanceLed

Academic andApprenticeshipled

Academic Elitist Academic pluson the job

Academic Elitist Academic onthe job.

SOCIALCAPITAL

How trust iscreated

High trustContracts.LegalInstitutions

High TrustContracts

Low trustnegotiation

High Trustwithin groups

High Trustwithin groups.Low outside

High trustwithin Family.Low outside

OWNERSHIPWho ownenterprises

Shareholders Banks,Employees,Shareholders

State,Shareholders

Banks, Cross-Shareholding

Businessgroups, Cross-shareholding

Family Groups

NETWORKINGHow economicagents relate to

each other. (Therules of businesstransactions)

Contracts Contracts..Some Elitist

relationships

ElitistRelationships.

StateInterventionism

ElitistRelationships

PersonalRelationships.

StateIntervention

PersonalRelationships

MANAGINGHow employeesare induced tocooperation inthe firm

System ledMotivationPerforamncemeasures

HierarchicalTechnicalCompetence

Hierarchicalbureaucracy.Negotiation

Corporateidentity.CorporateLoyalty

HirarchicalCorporateLoyalty

HierarchicalFamily Loyalty

Anglo-American

GermanNordic

French& Latin

Japanese Korean OverseasChines

Business Systems

Sources: Redding, Whitley, Albert, Berger and Dore, Hampden-Turner, Trompenaars.


10/22

Amity Business SchoolTHE IMPACT OF INTERNATIONAL CULTURALDIFFERENCES FOR MANAGEMENT

Communication Etiquette Decoding attitudes and behaviour Understanding silent language

Expatriates vs Locals Group

building/working/Relationships/` Conflict resolutions

Feedback

Control Reward/Punishments Personal space Motivations

Contracts negotiations Joint Ventures/Partnerships Official meetings Community events/Social events

HIERARCHICAL /MANAGERIALINTERACTIONS BOSS/COLLEAGUES/SUBORDINATES)

INTERPERSONAL RELATIONSHIPS

PARNERSHIPS/TRANSACTIONS

MULTICULTURAL TEAMS


11/22


MULTICULTURAL vs. MONO-CULTURAL TEAMS

MULTICULTURAL TEAMS

PERFORMANCE

MONO-CULTURAL TEAMS

LOW HIGH

DISASTER SYNERGY

Andr Laurent/INSEAD


12/22


MAJOR OBSTACLES TO PERFORMANCE INMULTI-CULTURAL SITUATIONS (1)

Discussion of differences perceived asuncomfortable,inappropriate, threatening or illegitimate.

Assumption of similarity/homogeneity.

Cultural diversity is denied, lost as a potentialresource

and transformed into a significant handicap.

Richness of diversity lost on the way.

Andr Laurent/INSEAD


13/22


The gap between pretended similarity and inner conviction

of actual difference widens and creates uncomfortable

situation.

Cautious behavior and unproductive costly politeness emerge

as coping mechanisms to handle the situation.

This leads to low risk taking, avoidance of confrontationand achievement of the smallest common denominator.


Andr Laurent/INSEAD


14/22



Western individualism.

Fear of stereotyping

Parochial mindset (only one way ofthinking/acting).

Ethnocentric mindset (the best way ofthinking/acting).

Blindness to ones own cultural conditioning.

Andr Laurent/INSEAD


15/22


MAJOR OBSTACLES TO PERFORMANCE INMULTI-CULTURAL SITUATIONS(4)

Perception of the other culture as unfortunate deviationfrom the norm.

If diversity is neither recognized, understood,acknowledged nor discussable, how could it possibly beappreciated, valued and utilized?

Cultural diversity then re-enters as a handicap likely to

lead to failure. Any synergy between culturesbecomes inaccessible.

Andr Laurent/INSEAD


16/22

Amity Business SchoolNegotiation Styles: American vs Japanese

Source : Sunshine, 1990

Negotiation Parameters Typical American Typical Japanese

Attitude toward silence duringnegotiations

Strongly averse;uncomfortable; fill the void

Essential: for decorum; andfor non-verbal communication

and empathy (haragei).Reaction to Cross-culturalsignals

Unaware; or consider itunimportant

Aware indifference

Attitude toward sequentialbargaining and negotiatingprogress

Strongly attracted to both Unimportant

Attitude toward sharinginformation

Open; willing Collect it avidly, but dont giveit out

Form of the Contract Long; detailed; covering allforeseeable contingencies

Prefer very short; and limitedto general principles andaffirmations.

Commitment to the Contract Total binding Weak; the relationship is whatcounts, not the document; andinevitable changing conditionswill necessitate lateramendments

S1 f 2


17/22




Basic approach to business in

general

Transactional; profit-oriented;

detail-conscious; legalistic

Structured; strategic; starting

from trustCentral purpose of thenegotiation

Reaching agreement on acontract

Launching a long-termrelationship

Selection Criteria fornegotiator(s)

Verbally articulategeneralists; technicalcompetence; rational

abilities

Rank; position; social

competence

Appropriate number ofnegotiators

Few Many: in order to demonstrateseriousness and for functionalcoverage, including learning.

Appropriate role(s) ofLawyers

Key participant: leader,contract advisor, and/or

draftsperson

None: seen as adversarialtroublemakers.

Attitude toward decision-making process, andappropriate degree ofdelegation of authority tonegotiators

Top-down decision-making;very high degree ofdelegation of authority

Consensual middle-updecision-making (ringi seido);little or no authority delegatedto negotiators.

1 of 2

N ti ti St l A i J2 f 2


18/22




Appropriate tone fornegotiation andcommunication

Direct; informal; familiar;egalitarian; candid

Highly indirect; highly formal;hierarchical; reserved

Negotiators interest in

personal feelings and valuesof counterparts

Little or none; irrelevant orimproper; logic moreimportant than emotions;issues more important thanpersonalities

Acute; personal rapportessential to establish trust(ningen kankei).

Appropriateness of socialisingwith counterparts

Inappropriate; unacceptable;risks conflict of interest andloss of personal control

Highly appropriate; andtraditional release; also,ritualised gift-giving.

Attitude toward time duringnegotiations

Acutely time-conscious; timeis money; impatient

Patience in the key.

2 of 2

Chi B i N ti ti St l


19/22


Source: Tony Fang, 1997

Chinese Business Negotiating Styles

Large team, vague authority,

presence of technical people, often

with incompetent interpreter

Exploit agreed principles

Play home court

Buy best technology but show no

appreciationfor monetary value of knowledge

Making interests

Price-sensitive

Stalling, delays and indecision

Hierarchical Non-legalistic vs. Legalistic approach

Play competitors off against each

other

Sweet and sour approach

Attrition

Shaming technique

Exploiting vulnerabilities

Taking surprising actions Showing anger

Friendship means obligation

Double standards

Richer bears heavier burden

Mixed feelings toward foreigners Re-negotiate old issues.


20/22


ETIQUETTE

Addressing How to name the otherperson

In Malaysia nobility titles are the proper way toaddress ( Encik, Tan, etc..

In France people are addressed by their title

(Monsieur le Directeur) In the USA first name is normal In Japan, the exchange of business cards is

critical

Gesturing How to position oneself andhow to use body language

Feet soles showing are offending Arabs Left hand shaking is not proper in Muslim

countries Finger pointing is considered as highly

threatening and impolite in Asia

Dressing Dress code Malaysian businessmen use jacket and tieswhile in Singapore long sleeves shirts arenormal business attires

Eating Importance of meals inbusiness dealing.Behaviour at the table

French business transactions usually take placeat a lunch or dinner table

Chinese banquets and sometime drinking

punctuate dealsTiming How to control time Signs of impatience are considered as improper

in many cultures Lengthy preliminaries are usual in the Middle

East

Talking Importance of verbalcommunication

Silent pauses are the norms in Chinese orJapanese

Differences in Business Practice Examples


21/22


RELATIONS

Engaging Importance given toestablishing personal

relationships in business

transactions

Most Asian countries privilege thepersonalisation of contacts before

engaging in business transactions

Contracting Importance given to

overall agreements on

principles versus details

Legal contracting is the norm in the

USA while broad agreements are

considered satisfactory in Japan

COMPETING

Advantages Products technologyversus Connexions as a

source of competitive

advantage

In China, connexions (Guanxi) are

still a very important factor of

competitive advantage

Supplying Preferences given to

friends and families insupplies contracts

In Asia the notion of extended

families implies that preferentialtreatment be given to families and

friends for supplies contracts.

Differences in Business Practice Examples


22/22


22

Documents

Mgt. & Cultural Issue