Unit IV Case Study

DBA 8710, International Business and Global Strategy 1

Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to:

4. Distinguish between the formal planning approach to change and the power-behavior approach to change. 4.1 Determine challenges in culture and business values as needed in a diverse workforce.

Course/Unit Learning Outcomes

Learning Activity

4.1 Unit Lesson Chapter 4, pp. 92–123 Unit IV Case Study

Required Unit Resources Chapter 4: Differences in Culture, pp. 92–123

Unit Lesson Thus far, we have examined the different approaches to global strategies. We have also explored the advantages and disadvantages of multicultural and global strategies. For this unit, we shall examine the formal planning approach to change and the power behavior approach to change. To be knowledgeable of the change process begins with understanding culture. Review the following strategic planning activity model represented in Figure 1 below.

What does this have to do with culture? Regardless of whether you are specifying objectives, creating strategies, evaluating strategies, or monitoring results, how you communicate in cross-cultural environments has a significant impact in the world today. Culture has many different definitions, yet for this course, we will accept a simple view that culture is defined as a group of people who accept a system of ideas and share assumptions on how life should be lived. Whether it is an individual or a group using a formal planning approach or power behavior, how words are used can be crucial in affecting international business.

UNIT IV STUDY GUIDE

Differences in Culture

Figure 1: Strategic planning activity model

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Language There is a close relationship between language and culture. Language mirrors values. For instance, be careful on how to address people (e.g., using formal titles). Every language has linguistic preferences that provide clues about manners. When dealing with people from different cultures, look for these clues to avoid confrontation. For instance, Spaniards and Italians like to be flowery with their language and prefer eloquence, while Germans are logical in words and manner. Chinese and Japanese cultures consider harmony as an important virtue. For that reason, they will often say “yes” to many things with the understanding of “yes, I hear you” or “yes, I understand,” but this does not necessarily mean “yes, I agree.” In communication, it is important to consider how the following actions are interpreted by others: translations, opening or closing conversations; taking turns, interrupting, silence, injecting humor, and knowing appropriate conversational taboos.

Diplomacy and Language

Definition of Diplomacy

Ease of starting a conversation with a stranger

Ability to integrate diverse perspectives

Ability to listen to what others have to say

Willingness to collaborate

Questions to Ask Yourself

How good do you think you are at integrating diverse perspectives?

How good are you at listening to what others have to say?

What is the most effective way to start a conversation with someone you do not know?

Are these good questions to ask based on all different languages and culture? That is a bit more difficult to answer. Our perception of the world is based on the words we use, language we speak, religion we believe, and culture we share, yet all societies share one language in common: nonverbal communication. While there are many forms of nonverbal communication, each culture can have different acceptance levels on things such as touch, gestures, physical space, facial expressions, posture, and context. There are many different examples that demonstrate the differences in acceptable and unacceptable nonverbal communication across cultures (e.g., crossing your legs in Japan, showing the bottom of your shoes in Turkey). As we explore changes between formal planning and power behavior, business communication and the processing of business transactions are also areas of importance in international commerce. There is significant information in the textbook about Geert Hofstede. Learning about his research and what he has accomplished is vital for any international business course. Hofstede suggests that attitudes, thoughts, roles, language, time, and nonverbal communication all play crucial roles in how a message is understood. Hofstede (2001) explains how culture affects nations as well as groups of people, organizations, professions, sexes, religious groups, and others. Therefore, culture affects all people, and within his research, some important points have become universally accepted and validated. According to Hofstede (2001), there are five dimensions, which are discussed below.

 Power distance ensures that weaker individuals have a level of equality.

 Uncertainty avoidance is the degree to which people are structured and placed within integrated

groups in unstructured situations.

 Individualism vs. collectivism is defined as how individuals behave in comparison to the collective.

 Masculinity vs. femininity relates to the overall distribution between gender roles.

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 Long-term orientation vs. short-term orientation relates to the time in which people view obligations,

traditions, and rewards. In other words, this determines whether cultures view certain rewards as a

long-term or short-term in regard to social obligations.

Hofstede’s (2001) model can explain the differences in cultures and stereotypes. As you would already expect, societies within the United States are more individualistic than most nations, but would you have known that Japan scores higher on masculinity than almost any other nation? Hofstede’s work on culture is the vital starting point for businesses conducting business globally (Hill, 2021). While we know that the United States is strong in individualism and power distance, we also know that cultures change over time. Recently, the Pew Research Center website showed changes in the United States over time. According to Gramlich (2019), the percentage of adults who identify as Christian in the United States declined from 78% in 2007 to 65% in 2019. Is this 13% point drop significant? Absolutely! The U.S. population is composed of 200 million individuals who are over the age of 18; 13% accounts for 26 million Americans (Gramlich, 2019). Another significant change since 2005 is Americans’ perception of China. Business deals between the United States and China has grown leaps and bounds over the last 15 years, but Americans who have a favorable view of China ranks at 26%, which is a 23% drop from 2005 (Gramlich, 2019). We know there can be significant cultural changes over time, and this affects how to utilize formal planning and power behavior. Culture, communication, regulations, and more evolve over time. Not all change is positive or negative but, rather, is a progression based on the ideals of what a culture wants. It is important to understand that Brexit, the role of presidents in the United States, and the legislation being passed in other prominent G7 nations all have an effect on societies. Making good business decisions on a global scale can make or break a company. Global businesses making bad decisions are likely to fail and fail quickly. Operating in different societies requires companies to be flexible in their value systems and social norms (Hill, 2021). The way that deals are negotiated (e.g., who is communicating, how the functionality of the communication is being done) is based on pay, organizational structure, the product, company relations between management and the workforce, and marketing. Each component is vital in order to accommodate cultural differences. Hiring a workforce in the country you are expanding into can be a great first step in understanding a new culture. This ensures that a company is investing in the people of the society to understand the differences in business dealings. Simply moving U.S. executives to another country for a few weeks is not enough. You will need to demonstrate across cultural boundaries that you are vested in the product as well as the people involved. In summary, no matter how hard you work at getting a business commitment, the small things sometimes matter more and can destroy a deal before there is even a chance for success! For example, as a U.S. citizen, it would be important to not feel offended if an individual from Germany corrects you on the spot. Additionally, it may be beneficial to expect deadlines to be missed on a regular basis in some cultures. How hard are you willing to work to make a deal for your product on a global scale? We know cultural differences can be abundant, so put your best foot forward, smile, respect other cultures, learn from talented and knowledgeable citizens in other countries, and work on the assignment in this unit for a better understanding on the planning approach to change and power-behavior approach to change.

References Gramlich, J. (2019, December 13). 19 striking findings from 2019. Pew Research Center.

https://www.pewresearch.org/fact-tank/2019/12/13/19-striking-findings-from-2019/ Hill, C. W. L. (2021). International business: Competing in the global marketplace (13th ed.). McGraw-Hill

Education. Hofstede, G. (2001). Culture’s recent consequences: Using dimension scores in theory and research.

International Journal of Cross Cultural Management, 1(1), 11–17. https://10.1177/147059580111002

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Suggested Unit Resources In order to access the resource below, utilize the CSU Online Library to begin your research. The following article discusses voluntary corporate social responsibility and initiatives to impose binding legal obligations on multinational enterprises.

Ruggie, J. G. (2018, September). Multinationals as global institution: Power, authority and relative autonomy. Regulation & Governance, 12(3), 317–333. https://doi.org/10.1111/rego.12154

In order to access the following resource, click the link below. The article below provides a country profile for the United Arab Emirates. Library of Congress. (2007, July). Country profile: United Arab Emirates (UAE).

https://www.loc.gov/rr/frd/cs/profiles/UAE-new.pdf