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Chapter

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2

Culture and

Multinational Management

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Learning Objectives (1 of 2)

• Define culture and understand the basic components of culture.
• Identify instances of cultural stereotyping and ethnocentrism.
• Understand how various levels of culture influence multinational operations.

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Learning Objectives (2 of 2)

• Apply the Hofstede, GLOBE, and 7d models to diagnose and understand the impact of cultural differences on management processes.
• Appreciate the complex differences among cultures and use these differences to build better organizations.
• Recognize the complexity of understanding new cultures and the dangers of stereotyping and cultural paradoxes.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

What is Culture? (1 of 2)

• Pervasive and shared beliefs, norms, values, and symbols that guide the everyday life of a group.
• Cultural norms: both prescribe and proscribe behaviors
• What we can and cannot do.
• Cultural values: what is good, what is beautiful, what is holy, and what are legitimate goals for life.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

What is Culture? (2 of 2)

• Cultural beliefs: represent our understandings about what is true.
• Cultural symbols, stories, and rituals: communicate the norms, values, and beliefs of a society or a group to its members.
• Culture is pervasive in society: affects all aspects of life.
• Culture is shared: similarity in values, beliefs, norms.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Levels of Culture (1 of 2)

National culture: the dominant culture within the political boundaries of the nation-state.

• There may be subcultures within the national culture.

Business culture: norms, values, and beliefs that pertain to all aspects of doing business in a culture.

• Tells people the correct, acceptable ways to conduct business in a society.

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Levels of Culture (2 of 2)

3. Occupational and organizational culture

• Occupational culture: the norms, values, beliefs, and expected ways of behaving for people in the same occupational group, regardless of employer.
• Organizational culture: the set of important understandings (often unstated) that members of an organization share.

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Exhibit 2.1:
Three Levels of Culture

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Cultural Differences and
Basic Values

• Three diagnostic models to aid the multinational manager:
• Hofstede model of national culture
• Global Leadership and Organizational Behavior Effectiveness (GLOBE) project
• 7d culture model

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Hofstede’s Model of
National Culture

• A model mainly based on differences in values and beliefs regarding work goals
• Five dimensions of basic cultural values:
• Power distance
• Uncertainty avoidance
• Individualism
• Masculinity
• Long-term orientation

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Hofstede’s Model Applied to Organizations and Management
(1 of 2)

• Five management practices considered in the discussion of Hofstede’s model include:

Human resources management

• Management selection
• Training
• Evaluation and promotion
• Remuneration

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Hofstede’s Model Applied to Organizations and Management
(2 of 2)

Leadership styles

• How leaders behave

Motivational assumptions

• Beliefs about how people respond to work

Decision making and organizational design

• How managers make decisions and organize

Strategy

• Effects of culture on selecting strategies

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Exhibit 2.2:
Subject Matter Considered in Hofstede’s National Culture Studies

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Power Distance (1 of 2)

• Power distance concerns how cultures deal with inequality and focuses on:
• Norms that tell superiors (e.g., bosses) how much they can determine the behavior of their subordinates
• The belief that superiors and subordinates are fundamentally different kinds of people

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Power Distance (2 of 2)

• High power distance countries have norms, values, and beliefs such as:
• Inequality is fundamentally good.
• Everyone has a place: some are high, some are low.
• Most people should be dependent on a leader.
• The powerful are entitled to privileges.
• The powerful should not hide their power.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Exhibit 2.3:
Managerial Implications:
Power Distance

Sources: Adapted from Hofstede, Geert. 1980 Culture’s Consequences: International Differences in Work-Related Values. London: Sage; Hofstede, Geert. 1991. Cultures and Organizations: Software of the Mind. London: McGraw-Hill; Hofstede, Geert. 1993. “Cultural Dimensions in people management.” In Vladimir Pucik, Noel M. Tichy, and Carole K. Barnette, Globalizing Management. Hoboken, NJ: Wiley, 129-158.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Uncertainty Avoidance

• Uncertainty Avoidance: Norms, values, and beliefs regarding tolerance for ambiguity:
• Conflict should be avoided.
• Deviant people and ideas should not be tolerated.
• Laws are very important and should be followed.
• Experts and authorities are usually correct.
• Consensus is important.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Exhibit 2.4:
Managerial Implications:
Uncertainty Avoidance

Sources: Adapted from Hofstede, Geert. 1980 Culture’s Consequences: International Differences in Work-Related Values. London: Sage; Hofstede, Geert. 1991. Cultures and Organizations: Software of the Mind. London: McGraw-Hill; Hofstede, Geert. 1993. “Cultural Dimensions in people management.” In Vladimir Pucik, Noel M. Tichy, and Carole K. Barnette, Globalizing Management. Hoboken, NJ: Wiley, 129-158.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Individualism/Collectivism (1 of 2)

• Individualism: Focus is on the relationship between the individual and the group.
• Countries high on individualism have norms, values, and beliefs such as:
• People are responsible for themselves.
• Individual achievement is ideal.
• People need not be emotionally dependent on organizations or groups.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Individualism/Collectivism (1 of 2)

• Collectivism: Collectivist countries have norms, values, and beliefs such as:
• One’s identity is based on group membership.
• Group decision making is best.
• Groups protect individuals in exchange for their loyalty to the group.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Exhibit 2.5:
Managerial Implications:
Individualism/Collectivism

Sources: Adapted from Hofstede, Geert. 1980 Culture’s Consequences: International Differences in Work-Related Values. London: Sage; Hofstede, Geert. 1991. Cultures and Organizations: Software of the Mind. London: McGraw-Hill; Hofstede, Geert. 1993. “Cultural Dimensions in people management.” In Vladimir Pucik, Noel M. Tichy, and Carole K. Barnette, Globalizing Management. Hoboken, NJ: Wiley, 129-158.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Masculinity

• Masculinity: Tendency of a culture to support traditional masculine orientation.
• High masculinity countries have beliefs such as:
• Gender roles should be clearly distinguished.
• Men are assertive and dominant.
• Machismo or exaggerated maleness in men is good.
• People – especially men - should be decisive.
• Work takes priority over other duties, such as family.
• Advancement, success, and money are important.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Long-Term Orientation (1 of 3)

• Long-Term (Confucian) Orientation: Orientation towards time that values patience.
• Managers are selected based on the fit of their personal and educational characteristics.
• A prospective employee’s particular skills have less importance in the hiring decision.
• Training and socialization for a long-term commitment to the organization compensate for any initial weaknesses in work-related skills.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Long-Term Orientation (2 of 3)

• Eastern cultures rank highest on long-term orientation.
• Value synthesis in organizational decisions rather than search for correct answer.
• Designed to manage internal social relationships.
• Investment in long-term employment skills.
• Focus on long-term individual and company goals.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Long-Term Orientation (3 of 3)

• Short-Term Orientation: focus is on immediately usable skills
• Western cultures, which tend to have short-term orientations, value logical analysis in their approach to organizational decisions.
• Designed and managed purposefully to respond to immediate pressures from the environment.
• Want immediate financial returns.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Restraint versus Indulgence

• A sixth dimension of cultural values that refers to the degree to which societies enjoy life based on control or gratification of basic human desires
• Indulgent societies tend to favor free satisfaction of human needs related to "enjoying life and having fun.
• Restraint societies are much more restrictive and places strict norms on gratification of needs.
• Multinational managers can shape work environments to take advantage of such preferences.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

GLOBE National Culture Framework

• GLOBE (Global Leadership and Organizational Behavior Studies) involves 170 researchers who collected data from 17,000 managers in 62 countries
• 7 of 9 dimensions of GLOBE are similar to Hofstede
• GLOBE’s 2 Unique dimensions:
• Performance orientation
• Humane orientation

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Performance Orientation

• Performance Orientation refers to the degree to which the society encourages societal members to innovate, to improve their performance, and to strive for excellence.
• E.g., the United States and Singapore have high scores while Russia and Greece have low scores on the dimension.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Humane Orientation

• Humane Orientation is an indication of the extent to which individuals are expected to be fair, altruistic, caring, and generous.
• Need for belongingness and affiliation is emphasized more than material possessions, self-fulfillment, and pleasure.
• Less humane-oriented societies are more likely to value self-interest and self-gratification.
• Malaysia and Egypt have high humane orientation scores, while France and Germany have low scores.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

7d Cultural Dimensions Model
(1 of 3)

• Builds on traditional anthropological approaches to understanding culture.
• Culture exists because people need to solve basic problems of survival.
• Challenges include:
• How people relate to others
• How people relate to time
• How people relate to their environment

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

7d Cultural Dimensions Model
(2 of 3)

• 5 of the 7 dimensions of this model deal with relationships among people:
• Universalism vs. Particularism
• Collectivism vs. Individualism
• Neutral vs. Affective
• Diffuse vs. Specific
• Achievement vs. Ascription

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7d Cultural Dimensions Model
(3 of 3)

• The 2 remaining dimensions deal with how a culture manages time and how it deals with nature:
• Time: Past, Present, Future, or Mixture
• Nature: Control of vs. Accommodation with Nature

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Universalism vs. Particularism

• These concepts pertain to how people treat each other:
• Universalism:
• Based on abstract principles such as rules of law, religion, or cultural principles.
• Particularism:
• Rules are only a rough guide. Each judgment represents a unique situation, which must take into account who the person is, and his relationship to the one making the judgment.

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Exhibit 2.14:
Managerial Implications: Universalism/Particularism

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Individualism vs. Collectivism

• Similar distinctions to Hofstede’s view
• Collectivist societies:
• Focus on relationships.
• “Deals” are flexible, based on situation and person.
• Contracts are easy to modify.
• Individualist societies:
• Focus on rules.
• “Deals” are obligations.
• Contracts are difficult to break.

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Exhibit 2.15:
Managerial Implications:
Individualism/Collectivism

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Neutral vs. Affective

• Concerns the acceptability of expressing emotions.
• Neutral:
• Interactions should be objective and detached.
• Focus is more on tasks rather than emotional nature of interaction.
• Affective:
• Emotions are appropriate in almost all situations.
• Preferred to find immediate outlet for emotions.

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Specific vs. Diffuse

• Addresses the extent to which an individual’s life is involved in work relationships
• Specific:
• Business is segregated from other parts of life
• Contracts often prescribe and delineate relationships
• Diffuse:
• Business relationships encompassing and inclusive
• Prefer to involve multiple life areas simultaneously.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Achievement vs. Ascription

• Addresses the manner in which society accords status
• Achievement:
• People earn status based on performance and accomplishments
• Ascription:
• Characteristics or associations define status
• E.g., status based on schools or universities

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Time Orientation

Time Horizon: How cultures deal with the past, present and future

• Future-oriented societies, such as the U.S., consider organizational change as necessary and beneficial.

Believe a static organization is a dying organization.

• Past-oriented societies assume that life is predetermined based on traditions or will of God.

Revere stability and are suspicious of change.

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Exhibit 2.19:
Managerial Implications:
Time Horizon

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Internal vs. External Control

• Concerned with beliefs regarding control of one’s fate
• Best reflected with how people interact with the environment
• Does nature dominate us or do we dominate nature?
• In societies where people dominate nature, managers are more proactive and believe situations can be changed.

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Caveats and Cautions (1 of 2)

• Cultural paradoxes: when individual situations seem to contradict cultural prescriptions
• Stereotyping: assumes that all people within one culture behave, believe, feel, and act the same.
• Ethnocentrism: people from one culture believe that theirs are the only correct norms, values, and beliefs.

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Caveats and Cautions (2 of 2)

• Cultural relativism: 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, composed of three components
• A mental component
• A motivational component
• A behavior component

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Summary

• There are an immense variety of cultures in the world.
• This chapter provides one approach to understanding national cultures.
• Goal is to make one aware of complex and subtle influences of culture on multinational management.
• Astute managers realize that understanding cultures is a never-ending learning process.