Culture, Management Style And Business Systems Chapter .

Culture, Management Style And Business Systems Chapter .

Culture, Management Style And Business Systems Chapter . 05 Modular: Afjal Hossain Assistant Professor, Department of Marketing McGraw-Hill/Irwin International Marketing, 13/e PSTU Required Adaptation Adaptation is a key concept in international marketing.

As a guide to adaptation, all who wish to deal with individuals, firms, or authoriti es in foreign countries should be able to meet 10 basic criteria: 1) open tolerance 2) flexibility 3) humility 4) justice/fairness 5) ability to adjust to varying tempos

6) curiosity/interest 7) knowledge of the country 8) liking for others 9) ability to command respect 10) ability to integrate oneself into the environment Degree of Adaptation Essential to effective adaptation is awareness of ones own culture and the recognition that differ ences in others can cause anxiety, frustration, an d misunderstanding of the hosts intentions. The self-reference criterion (SRC) is especially op erative in business customs. The key to adaptation is to remain American but to develop an understanding of and willingness t o accommodate the differences that exist. Cultural Imperatives

The business customs and expectations that must be met and conformed to or avoided if relationships are to be successful. Friendship motivates local agents to make more sales. The significance of establishing friendship cannot be o veremphasized, especially in those countries where fa mily relationships are close. In some cultures a persons demeanor is more critical than in other cultures. What may be an imperative to avoid in one culture is an imperative to do in another. Cultural Electives and Exclusives Cultural electives: Relate to areas of behavior or to customs that cultural a liens may wish to conform to or participate in but that a re not required. A cultural elective in one county may be an imperative i

n another. Cultural electives are the most visibly different customs and thus more obvious. Cultural exclusives: Those customs or behavior patterns reserved exclusivel y for the locals and from which the foreigner is barred. Authority and Decision Making: PDI "Power distance is the extent to which less powerful members of institutions and organizations within a co untry expect and accept that power is distributed une qually." Power distance describes also the extent to which em ployees accept that superiors have more power than t hey have. Furthermore that opinions and decisions ar e right because of the higher position some has. In countries with high power distance employees are t

oo afraid to express their doubts and disagreements with their autocratic and paternalistic bosses. The ind ex for power distance describes the dependence of re lationships in a country Authority and Decision Making: PDI Hi PDI Low PDI Hierarchical Value Equality Social Role and Inheritance = Power Knowledge and respect = Power

Manipulation is more common More egalitarian views Higher distrust of others (not in their group) stronger boundaries More trusting of others Less written/formal information Tasked centered: What needs to be done Knowledge is situational; relational Knowledge is more transferable (codified) More internal understanding of what is communicated: less

direct Rule oriented, people play by external rules More long term relationships More short term relationships Power is coercive rather than legitimate Power is more legitimate Those who hold power are entitled to such Employees are less afraid to question superiors Authority and Decision Making: PDI Influencers of the authority structure of business:

High PDI Countries Mexico, Malaysia Low PDI Countries Denmark, Israel www.kwintessential.co.uk/map/hofstede-power-distance-inde x.html Three typical authority patterns: Top-level management decisions Decentralized decisions Committee or group decisions Management Objectives and Aspirati ons Culture influences affect the attitude of managers t owards innovation, and conducting business. To full y understand the management style of a country w

e must understand that nations values: Personal security and job mobility Relate directly to basic human motivation and therefore have widespread economic and social implications. Personal life Worldwide study of individual aspirations, (David McClelland). Greece, work gets in the way of enjoying life America, work ethic = standard of living Japan, work = sense of purpose Is profit more important than personal life Management Objectives and Aspirati

ons Culture influences affect the attitude of ma nagers towards innovation, and conducting business. To fully understand the managem ent style of a country we must understand t hat nations values: Affiliation and social acceptance In some countries, acceptance by neighbors and fell ow workers appears to be a predominant goal withi n business. In Asian countries high importance is placed on fitting in with a g roup Question: What do you do for a living American Answer: Im an engineer (Individualist)

Japanese Answer: I work for Mitsubishi (Collective) Power and achievement South American countries business leader = social o r political power America, business leaders = money Annual Hours Worked Britain 1,719 Canada 1,776

Germany 1,480 Hong Kong 2,287 Japan 1,842 Norway 1,399 Singapore

2,307 United States 1,979 Contextual Background of Various Countries Insert Exhibit 5.1 Contextual Background of Various Countries High Context Culture: Communication depends h eavily on the contextual or nonverbal aspects of c ommunication Who says it When it is said How it is said

Low Context Culture: Communication depends on more explicit, verbally expressed communication Germans, very low context oriented: Just give the fact s, very frank and blunt Communication Styles Face-to-face communication: Managers often fail to develop even a basic understanding of just one other language. Much business communication depends on implicit messa ges that are not verbalized. Internet communications: Nothing about the Web will change the extent to which pe ople identify with their own language and cultures. Estimates are that 78% of todays Web site content is writt en in English, but an English e-mail message cannot be und erstood by 35% of all Internet users.

Country-specific Web sites Web site should be examined for any symbols, icons, and o ther nonverbal impressions that could convey and unwant ed message. Formality and tempo P-Time versus M-Time Monochronic time: Tend to concentrate on one thing at a time Divide time into small units and are concerned with promptness Most low-context cultures operate on M-Time Polychronic time:

Dominant in high-context cultures Characterized by the simultaneous occurrence of many things Allows for relationships to build and context to be absorbed as parts of hig h-context cultures. Most cultures offer a mix of P-time and M-time b ehavior, but have a tendency to be either more Ptime or M-time in regard to the role time plays. As global markets expand more businesspeople fr om P-time cultures are adapting to M-time. Negotiations Emphasis Business negotiations are perhaps the most fund amental business rituals. The basic elements of business negotiations are t

he same in any country. They relate to the product, its price and terms, services associated with the product, and finall y, friendship between vendors and customers. One standard rule in negotiating is know thysel f first, and second, know your counterpart. Gender Bias in International Business Women represent only 18% of the employees who are chosen for international assignments. In many cultures women are not typically found in upp er levels of management, and men and women are trea ted very differently. Asia, Middle East, Latin America Prejudices toward women in foreign countries Cross-mentoring system Lufthansa

Executives who have had international experience are more likely to get promoted, have higher rewards, and have greater occupational tenure. Female Directors on Corporate Boards as a % of Totals Insert Exhibit 5.2 Corruption Defined Types of Corruption: Profits (Marxism) Individualism (Japan) Rampant Consumerism (India) Missionaries (China) Criticisms of Mattel and Barbie: Sales of Barbie declined worldwide after the global sta

ndardization Parents and government did react Mattels strategy boosted sales of its competition Bribery: Variations on a Theme Bribery and Extortion: Voluntary offered payment by someone seeking unlawfu l advantage is bribery. If payments are extracted under duress by someone in a uthority from a person seeking only what he are she is la wfully entitled to that is extortion. Subornation and Lubrication: Lubrication involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country w here such offerings are not prohibited by law. Subornation involves giving large sums of money, freque ntly not properly accounted for, designed to entice an o

fficial to commit an illegal act on behalf of the one offeri ng the bribe. Bribery: Variations on a Theme (continued) Agents Fees: When a businessperson is uncertain of a countr ys rules and regulations, an agent may be hired to represent the company in that country. The Foreign Corrupt Practices Act Change will come only from more ethically and socially responsible decisions by both buyers an d sellers and by governments willing to take a st and. Ethical and Socially Responsible Decisions

In normal business operations, difficulties arise in making decisions, est ablishing policies, and engaging in business operations in five broad are as: Employment practices and policies Consumer protection Environmental protection Political payments and involvement in political affairs of the country Basic human rights and fundamental freedoms Laws are the markers of past behavior that society has deemed unethic al or socially irresponsible. Three ethical principles to help the marketer distinguish between right and wrong, determine what ought to be done, and properly justify his o r her actions: Utilitarian Ethics Rights of the Parties Justice or Fairness

Cultures Influence on Strategic Thinking British-American Individualistic Japan & Germany Communitarian In the less individualistic cultures labor and manag ement cooperate. A competitive, individualistic approach works well in the context of an economic boom. Fourth kind of capitalism that common in Chines e cultures Predicted by culture A Synthesis, Relationship-Oriented vs. Informa tion-Oriented Cultures

Studies are noting a strong relationship between Halls high/low context and Hofstedes Individualis m/Collective and Power Distance indexes. Not every culture fits every dimension of culture i n a precise way. Information-Oriented Culture United States Relationship Culture Japan Synthesis of cultural differences allows us to make predictions about unfamiliar cultures.

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