INTERNATIONAL COMPARATIVE MGMT
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Chapter5.pptxChapter 5
Managing Across Culture
Learning Objectives
Examine the strategic dispositions that characterize responses to different cultures
Discuss cross-cultural differences and similarities
Review cultural differences in select countries and regions, and note some of the important strategic guidelines for doing business in each
Strategic Predispositions
Ethnocentric
Firm allows values and interests of the parent company to guide strategic decisions
Polycentric
Company makes strategic decisions tailored to suit the cultures of the countries where the MNC operates
Regiocentric
Firm blends its own interests with those of its subsidiaries on a regional basis
Geocentric
Company integrates a global systems approach to decision making
Table 5.1 - Orientation of an MNC under Different Profiles
Table 5.1 - Orientation of an MNC under Different Profiles
Table 5.1 - Orientation of an MNC under Different Profiles
Source: From Balaji S. Chakravarthy and Howard V. Perlmutter, “Strategic Planning for a Global Business,” Columbia Journal of World Business, Summer 1985, pp. 5–6.
Globalization Imperative
Belief that one worldwide approach to doing business is key to efficiency and effectiveness
Effective multinational companies (MNCs) should make efforts to address local needs
Regional strategies can be used effectively to capture and maintain worldwide market niches
Need for Unique Strategies for Different Cultures
Diversity of worldwide industry standards
Continual demand by local customers for differentiated and locally-sourced products
Difficulty of managing global organizations
Local units should be allowed to use their own abilities and talents unconstrained by headquarters
Delivery of Marketing Message
Challenges Faced by MNCs
Staying abreast of local market conditions and not assuming that all markets are same
Knowing the strengths and weaknesses of its subsidiaries and assisting them in addressing local demands
Giving more autonomy to the subsidiary
Barriers to Cross-Cultural Management
Parochialism
Tendency to view the world through one’s own eyes and perspectives
Simplification
Process of exhibiting the same orientation toward different cultural groups
Table 5.2 - Six Basic Cultural Variations
Table 5.2 - Six Basic Cultural Variations
Note: *Indicates the dominant U.S. orientation.
Source: Adapted from the work of Florence Rockwood Kluckhohn and Fred L. Stodtbeck.
Cross-Cultural Similarities
Russia and U.S.
Traditional management, communication, human resources, and networking activities
Organizational behavior modification interventions
Korea and U.S.
Organizational commitment relates to employees' position in the hierarchy, tenure in their current position, and age
Commitment increases with positive perceptions of organizational climate
Cross-Cultural Differences
Approaches for Formulating Effective Compensation Strategies in Different Clusters
GLOBE Project
Provides an extensive breakdown of:
How managers behave
How different cultures can affect the perspectives of managers
Business in China
Primary criterion - Technical competence
Value is placed on punctuality, patience, guanxi networking, and reciprocity
Guanxi: Good connections
Business in Russia
Building personal relationships with partners is important
Working with local consultants can be valuable
Gift-giving is considered ethical when engaging in business transactions
Business in India
India has become a desirable market because of unsaturated consumer markets with cheap labor and production locations
Bureaucratic restrictions have been lifted to attract foreign investment and raise economic growth rate
Business in France
Social interactions are affected by class stereotypes
French organizations tend to be highly centralized and have rigid structures
Management is autocratic in nature
Business in Brazil
Brazilian businesspeople tend to have a relaxed work ethic
Face-to-face interaction is preferred
Patience is key when managing business
Business in Arab Countries
Arab businesspeople:
Follow a fatalistic approach to time
Tend to attach a great deal of importance to status and rank
Business-related discussions may not occur until the third or fourth meeting
