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Cultural Differences

What cultural differences have you noticed in the last few weeks?


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Why is Culture Important?

Influences management, decision making, negotiations

Impacts the way strategic moves are presented

Culture can make international business difficult, frustrating, or exciting“There are truths on this side of the Pyrenees that are falsehoods on the other”-Blaise Pascal


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Features of Culture

Culture is shared

Culture is intangible

Culture is social

Can have:National CultureBusiness CultureOccupational Culture


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Universal Cultural Values

Kinship

Economy

Politics

Religion

Education


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National Geographic Video:

http://video.nationalgeographic.com/video/player/movies/god-grew-tired/cultural-differences-ggtu.html


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Hofstede’s Cultural Dimensions

Four Primary Dimensions1. Power Distance2. Uncertainty Avoidance3. Individualism4. Masculinity


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Power Distance

Power Distance–the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally


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Power Distance

Low Power Distance:-Narrow salary range-Interdependence between less and more powerful people-Inequalities among people should be minimal-Privileges and statuses are disapproved

High Power Distance:-Wide salary range - Less powerful people dependent on the more powerful -Inequalities are both expected and desired -Privileges and statuses are expected and desired


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Power Distance

Power Distance–the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally


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Example:

A company from Austria (low power distance) is considering entering the Mexican (high power distance) market.What are some tips for how the Austrian manager should communicate to the Mexican employees?


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Austrian manager  Mexican employees

Low Power Distance:-Narrow salary range-Interdependence between less and more powerful people-Inequalities among people should be minimal-Privileges and statuses are disapproved

Ex. Austria

High Power Distance:-Wide salary range - Less powerful people dependent on the more powerful -Inequalities are both expected and desired -Privileges and statuses are expected and desiredEx. Mexico


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Austrian manager should:

Give clear directions so every person understands their duty

Show great respect to those above him or her

Don’t assume or expect employees to take initiative


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Uncertainty Avoidance

Uncertainty Avoidance—the extent to which members of a society feel threatened by uncertain or unknown situations


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Uncertainty Avoidance

Weak Uncertainty Avoidance:-low stress-aggression and emotions not shown-comfortable in ambiguous situations & unfamiliar risk-there should not be more rules than necessary-tolerance to innovation-motivated by achievement

Strong Uncertainty Avoidance: -high stress -aggression & emotions may be shown -fear of ambiguous situations & unfamiliar risk -desire rules, even if they are unsuccessful -resistance to innovation -motivated by security


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Uncertainty Avoidance

Uncertainty Avoidance—the extent to which members of a society feel threatened by uncertain or unknown situations


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Example:

A company from France (high uncertainty avoidance) is considering investing in Denmark (low uncertainty avoidance)What are some tips for how the French manager should communicate to the Denmark employees?


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French manager  Denmark employees

Weak Uncertainty Avoidance:-low stress-aggression and emotions not shown-comfortable in ambiguous situations & unfamiliar risk-there should not be more rules than necessary-tolerance to innovation-motivated by achievementEx. Denmark

Strong Uncertainty Avoidance: -high stress -aggression & emotions may be shown -fear of ambiguous situations & unfamiliar risk -desire rules, even if they are unsuccessful -resistance to innovation -motivated by securityEx. France


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French manager should:

Try to be more flexible or open in his or her approach to new ideas than he may be use to

Be prepared to accomplish agreed plans quickly as they would be expected to be realized quickly

Allow employees the autonomy and space to execute their tasks on their own; only guidelines and resources will be expected


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Individualism

Individualism—the tendency of people to look after themselves and their immediate family and neglect the needs of society


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Individualism

Low individualism:-Think in terms of “we”-Employer to employee relationship is perceived in moral terms, like a family-Hiring and promotion decision take employee’s in-group into account-Relationship prevails over task

High individualism: -Think in terms of “I” -Employer to employee relationship based on mutual advantage -Hiring and promotion should be based on skills and rules only -Task prevails over relationship


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Individualism

Individualism—the tendency of people to look after themselves and their immediate family and neglect the needs of society


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Example

A British company (high individualism) is considering investing in Korea (low individualism)

What are some tips for how the British manager should communicate to the Korean employees?


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British manager  Korean employee

Low individualism:-Think in terms of “we”-Employer to employee relationship is perceived in moral terms, like a family-Hiring and promotion decision take employee’s in-group into account-Relationship prevails over task

Ex. Korea

High individualism: -Think in terms of “I” -Employer to employee relationship based on mutual advantage -Hiring and promotion should be based on skills and rules only -Task prevails over relationshipEx. Britain


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British manager should:

Give praise directed towards the team rather than the individual

Understand that raises typically depend on seniority and experience

Note that employees have a strong sense of responsibility for their families

Be aware that the decision making will be rather slow, many members will have to be consulted before a decision can be made


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Masculinity

Masculinity—focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of achievement, control, and power


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Masculinity

Masculinity—focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of achievement, control, and power


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Masculinity

Low Masculinity:-Dominant Values—caring for others and preservation-People and warm relationships are important-Sympathy for the weak-Managers use intuition and strive for consensus-Resolution of conflicts by compromise and negotiation

High Masculinity: -Dominant Values—material success and progress -Money and things are important -Sympathy for the strong -Managers are expected to be decisive and assertive -Resolution of conflicts by fighting them out


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Example

A company from Sweden (low masculinity) is considering investing in Japan (high masculinity)What are some tips for how the Swedish manager should communicate to the Japanese employees?


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Swedish manager  Japanese employee

Low Masculinity:-Dominant Values—caring for others and preservation-People and warm relationships are important-Sympathy for the weak-Managers use intuition and strive for consensus-Resolution of conflicts by compromise and negotiation

Ex. Sweden

High Masculinity: -Dominant Values—material success and progress -Money and things are important -Sympathy for the strong -Managers are expected to be decisive and assertive -Resolution of conflicts by fighting them outEx. Japan


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The Swedish manager should:

Avoid asking personal questions in business settings

Communicate directly and clearly

Address a person professionally


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HSBC: Car Commercial

http://www.youtube.com/watch?v=v1vvLQd53Ps


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