Urgent 5 questions- answers needed

rqp

GLOBAL4_Peng_Ch03.pptx

Home >Business & Finance homework help >Operations Management homework help >Urgent 5 questions- answers needed

Chapter 3 - Emphasizing Cultures, Ethics, and Norms

Emphasizing Cultures, Ethics, and Norms

Learning Objectives

Explain where informal institutions come from

Define culture and articulate its two main manifestations

Articulate three ways to understand cultural differences

Explain why understanding cultural differences is crucial for global business

LEARNING OUTCOMES

‹#›

GLOBAL4 | CH3

Learning Outcomes (Continued)

Explain why ethics is important

Identify ways to combat corruption

Identify norms associated with strategic responses when firms deal with ethical challenges

Explain how you can acquire cross-cultural literacy

LEARNING OUTCOMES (continued)

‹#›

GLOBAL4 | CH3

Informal Institutions

Originate from socially transmitted information

Part of the heritage that is considered cultures, ethics, and norms

Ethnocentrism: Mentality held by a group of people who perceive their own culture, ethics, and norms as natural, rational, and morally right

LO 1

‹#›

GLOBAL4 | CH3

Culture

Collective programming of the mind

Distinguishes the members of one group or category of people from another

Strict one-to-one correspondence between cultures and nations does not exist

Subcultures exist in multiethnic countries

Consists of regional, ethnic, and religious layers

LO 2

‹#›

GLOBAL4 | CH3

Components of Culture

Language

Lingua franca: A global business language

Dominated by English

Disadvantage of English dominance

Expatriate managers miss cultural subtleties

Religion

LO 2

‹#›

GLOBAL4 | CH3

Of approximately 6,000 languages spoken in the world, English is a distant second to Chinese in terms of the number of native speakers. Yet, its status as the lingua franca, or the global business language, is unmistakable. This is due to two factors:

English-speaking countries contribute the largest share of global economic output.

Recent globalization has called for the use of one language.

Because religious differences have led to numerous challenges, knowledge about religions is crucial even for non-religious managers. For example, half of annual toy sales in the U.S. occur during the month before Christmas.

Classifying Cultural Differences: Context Approach

Focuses on context

Context: Background against which interaction takes place

Low-context cultures

Communication is usually taken at face value without much reliance on unspoken conditions or assumptions

High-context cultures

Communication relies on the underlying unspoken conditions or assumptions

LO 3

‹#›

GLOBAL4 | CH3

In low-context cultures, such as North American and Western European countries, communication is usually taken at face value without much reliance on unspoken conditions or assumptions, which are features of context. “No” means “no.”

In high-context cultures, such as Arab and Asian countries, communication relies heavily upon unspoken conditions or assumptions, which are as important as the words used. “No” does not necessarily mean “no.”

3.1 - High-Context versus Low-Context Cultures

LO 3

‹#›

Exhibit

GLOBAL4 | CH3

Classifying Cultural Differences: Cluster Approach

Groups countries that share similar cultures as one cluster

Underlying idea

People and firms are more comfortable doing business with other countries within the same cluster or civilization

LO 3

‹#›

GLOBAL4 | CH3

Having a common language, history, religion, or culture reduces the liability of foreignness when operating in another country.

Civilization: Highest cultural grouping of people and the broadest level of cultural identity people have

3.2 - Cultural Clusters

LO 3

‹#›

Exhibit

GLOBAL4 | CH3

Classifying Cultural Differences: Dimension Approach

Power distance

Individualism versus collectivism

Masculinity versus femininity

Uncertainty avoidance

Long-term orientation

LO 4

‹#›

GLOBAL4 | CH3

Dimension approach is more influential than the context or cluster approach for two reasons:

The context approach represents only one dimension.

The cluster approach has relatively little to offer regarding differences of countries within a single cluster.

There are five dimensions to the dimension approach.

Power distance: Extent to which less powerful members within a culture expect and accept that power is distributed unequally

Individualism versus collectivism

Idea that an individual’s identity is fundamentally his or her own versus the idea that an individual’s identity is fundamentally tied to the identity of his or her collective group

Masculinity versus femininity

Sex role differentiations

Uncertainty avoidance: Extent to which members in a culture accept or avoid ambiguous situations and uncertainty

Long-term orientation: Perspective that emphasizes perseverance and savings for future betterment

Classifying Cultural Differences: Dimension Approach (continued)

Societal-level sex-role differentiation

Masculinity: Strong form

Men tend to have occupations that reward assertiveness

Women tend to work in caring professions

Femininity: Relatively weak form

Women occupy positions that reward assertiveness

More men work in caring professions

LO 4

‹#›

GLOBAL4 | CH3

Understanding Cultural Differences to Do Global Business

Global business activity is consistent with the context, cluster, and dimension approaches

Average length of contracts is longer in low-context countries than in high-context countries

Many agreements are unspoken in high-context countries

Preparation

Firms are cautious when dealing with countries from other clusters

LO 4

‹#›

GLOBAL4 | CH3

Understanding Cultural Differences to Do Global Business (continued 1)

Individualistic societies foster higher level of entrepreneurship

Individualist firms aim to differentiate themselves

Collectivist firms

Follow each other

Managers in high masculinity societies

Assertive, decisive, and aggressive

LO 4

‹#›

GLOBAL4 | CH3

Understanding Cultural Differences to Do Global Business (continued 2)

Managers in high femininity societies

Less visible, intuitive, and seek consensus

Managers in low uncertainty avoidance countries

Rely more on experience and training

Managers in high uncertainty avoidance countries

Rely more on rules

LO 4

‹#›

GLOBAL4 | CH3

Ethics

Principles, standards, and norms of conduct that govern individual and firm behavior

Reflect in formal laws and regulations

Code of conduct: Set of guidelines for making ethical decisions

LO 5

‹#›

GLOBAL4 | CH3

Views on Ethical Motivation of Firms

Negative view

Positive view

Instrumental view

LO 5

‹#›

GLOBAL4 | CH3

The three views on firms’ ethical motivations are as follows:

Negative view - Firms may jump onto the ethics bandwagon under social pressure to appear more legitimate without necessarily becoming better.

Positive view - Some (though not all) firms may be self-motivated to do it right regardless of social pressure.

Instrumental view - Good ethics may simply be a useful instrument to help make money.

Schools of Thought for Managing Ethics Overseas

Ethical relativism

All ethical standards are relative

Ethical imperialism

Absolute belief that there is only one set of ethics, and one possesses it

LO 5

‹#›

GLOBAL4 | CH3

There are two schools of thought on how to manage ethics overseas:

Ethical relativism follows the line of thought “When in Rome, do as the Romans do.”

Ethical imperialism refers to the absolute belief that “There is only one set of Ethics, and we have it.” Americans are especially renowned for believing that their ethical values should be applied universally.

3.4 - Managing Ethics Overseas: Three Approaches

LO 5

‹#›

Exhibit

GLOBAL4 | CH3

Corruption

Abuse of public power for private benefits usually in the form of bribery

Causes misallocation of resources

Slows economic development

Discourages foreign direct investment (FDI)

LO 6

‹#›

GLOBAL4 | CH3

Fighting Corruption

Foreign Corrupt Practices Act (FCPA)

Bans bribery of foreign officials

Enacted by the US Congress in 1977

Makes exceptions for small grease payments to get through customs abroad

UN Convention against Corruption

Corruption can be eradicated if:

All countries criminalize bribery

All firms resist corruption

LO 6

‹#›

GLOBAL4 | CH3

FCPA can be regarded as an institutional weapon in the global fight against corruption.

UN Convention is an ambitious campaign that was signed by 106 countries in 2003 and came into force in 2005.

Norms

Prevailing practices of relevant players that affect the focal individuals and firms

Influence the way in which firms respond to ethical challenges

LO 7

‹#›

GLOBAL4 | CH3

3.6 - Strategic Responses to Ethical Challenges

LO 7

‹#›

Exhibit

GLOBAL4 | CH3

A reactive strategy is passive. Firms do not feel compelled to act when problems arise, and denial is the first line of defense.

A defensive strategy focuses on regulatory compliance.

An accommodative strategy features emerging organizational norms to accept responsibility and a set of increasingly internalized cognitive beliefs and values toward making certain changes.

A proactive strategy involves anticipating institutional changes and doing more than what is required.

Implications for Savvy Managers

Managers should:

Enhance their cultural intelligence

Cultural intelligence: Individual’s ability to understand and adjust to new cultures

Be aware of the prevailing norms and their transitions globally

LO 7

‹#›

GLOBAL4 | CH3

Phases in Acquisition of Cultural Intelligence

Recognition of pros and cons of one’s cultural mental software

Appreciation of people from other cultures

Awareness

Ability to identify symbols, rituals, and taboos in other cultures

Knowledge (cross-cultural literacy)

Good practices based on awareness and knowledge of other cultures

Skills

LO 8

‹#›

GLOBAL4 | CH3

3.7 - Implications for Action

LO 8

‹#›

Exhibit

GLOBAL4 | CH3

Key Terms

Ethnocentrism

Culture

Lingua franca

Context

Low-context culture

High-context culture

Cluster

Civilization

Power distance

Individualism

Collectivism

Masculinity

Femininity

Uncertainty avoidance

Long-term orientation

‹#›

GLOBAL4 | CH2

‹#›

GLOBAL4 | CH2

KEY TERMS

GLOBAL4 | CH3

Key Terms (Continued)

Ethics

Code of conduct

Ethical relativism

Ethical imperialism

Corruption

Norm

Reactive strategy

Defensive strategy

Accommodative strategy

Proactive strategy

Cultural intelligence

‹#›

GLOBAL4 | CH2

‹#›

GLOBAL4 | CH2

‹#›

GLOBAL4 | CH2

KEY TERMS (continued)

GLOBAL4 | CH3

Summary

Informal institutions come from socially transmitted information and heritage

Language and religion are the components of culture

Approaches to understand cultural differences

Context, cluster, and dimension

‹#›

GLOBAL4 | CH2

‹#›

GLOBAL4 | CH2

SUMMARY

GLOBAL4 | CH3

Summary (continued 2)

Managing ethics overseas is challenging

Strategic responses to ethical challenges

Reactive, defensive, accommodative, and proactive

Managers should enhance their cultural intelligence and be aware of prevailing norms

‹#›

GLOBAL4 | CH2

‹#›

GLOBAL4 | CH2

SUMMARY

GLOBAL4 | CH3

‹#›

GLOBAL4 | CH3