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OB in the Cross-Cultural Context. Why are cross-cultural issues important? Growing impact of global business New markets Demand for global services Low cost manufacturing U.S. management practices not necessarily likely to translate to different cultures

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ob in the cross cultural context
OB in the Cross-Cultural Context
  • Why are cross-cultural issues important?
  • Growing impact of global business
    • New markets
    • Demand for global services
    • Low cost manufacturing
  • U.S. management practices not necessarily likely to translate to different cultures
  • Paradox: may be easier to adjust to a very different culture than to a very similar culture
why international management
Why International Management?
  • Important to have a global perspective
    • Overseas suppliers or markets
    • Low cost production
    • Emerging markets (Eastern Europe, LDC)
    • E-business has no borders
    • Immigrant labor force even in U.S.
  • Culture critical to global business, yet hardest to understand
    • Based on unspoken values and assumptions
    • Human behavior isn’t logical
    • But, human behavior is very complex
approaches to international business


Home country

methods are the



Host country

methods are the


Approaches to International Business


Use the best

methods, no matter

what the source

basic principles of culture
Basic Principles of Culture
  • What is logical and important in one culture may seem irrational and unimportant in another
  • In describing cultures, people tend to stress the differences and overlook the similarities
  • Stereotyping may be inevitable for people who lack frequent contact with another culture
  • Cultures are not homogenous; differences exist due to gender, age, socioeconomic status, education
  • Understanding another culture is a journey, not a goal
barriers to cross cultural understanding
Barriers to Cross-Cultural Understanding
  • Cultural chauvinism / corporate imperialism / ethnocentrism
  • Stereotypes (positive and negative)
  • The highly successful organization may find it more difficult to adapt
  • The ethical dilemma
  • Are there common values?
    • Basic idea of social organization, goal orientation
    • Personality structure (Big 5)
  • What about cultural convergence?
    • Cultural evolution
    • Cultural diffusion
    • Immigration and acculturation
what kinds of differences make a difference
What Kinds of Differences Make a Difference?
  • Some specific items:
    • Language
    • Religion
  • Business practices and etiquette
    • Different laws
    • Different customs
  • Culture in general
language issues
Language Issues
  • U.S. one of few countries where we don’t learn a second (or a third) language
  • Languages learned in school often do not translate to business usage
  • Do you try?
    • Not in France, not unless you can pronounce it right !
    • Other countries, yes: it’s a gesture of goodwill
  • But, even if the language is the same, will we understand? (Britspeak)
languages of the world
Languages of The World


world religions
World Religions


religious issues
Religious Issues
  • Islam:
    • Ramadan fasting
    • 5 daily prayers (15 minutes or so), even at work
    • Modest dress for women (including head scarf)
    • Friday, not Sunday (noon prayers on Fridays)
legal issues
Legal Issues
  • Sample of Mexican employment laws
    • Individual employment contracts required
    • Strict limits on overtime
    • Unionization by facility
    • Full pay for workers while on strike
    • Discrimination covers political doctrine and social condition
different country different customs dress and address
Different Country, Different Customs: Dress and Address
  • Dress
    • “Casual Days” are a U.S. custom
    • Removing one’s shoes
  • Addressing Other People
    • Herr und Frau, not first names in Germany
    • Titles (Dr., Professor, “Assistant Vice President”, etc.) very important everywhere but U.S.
  • Business cards essential in Latin America, Europe, Japan
  • Personal space: much smaller in Latin America, Spain, Italy
different country different customs time
Different Country, Different Customs: Time
  • Time
    • Time fluid in Latin America, Spain, Italy
    • Time off work: Germany, France, Scandinavia: 6 weeks vacation, August in the country
    • Africa: everyone attends funerals (impact of AIDS)
  • Working hours and pace
    • Europe (esp. Germany) isn’t open 24/7
    • Latin America, Middle East, Japan: take time to establish relationship before getting down to business
different country different customs eating and drinking
Different Country, Different Customs: Eating and Drinking
  • Drinking
    • Tea in Japan
    • Coffee in Egypt
    • Vodka in Russia
    • A pint over lunch in the UK
  • Dietary Restrictions:
    • India: no beef
    • Islamic countries: no pork or alcohol
perceptions of corruption
Perceptions of Corruption

Higher score = less corrupt

Source: Transparency International

economic freedom
Economic Freedom

Higher score = less freedom

Source: Wall Street Journal

cultural dimensions hofstede s big 4
Cultural Dimensions:Hofstede’s Big 4
  • Based on survey of IBM employees worldwide
  • The dimensions
    • Collectivism - Individualism
    • Power Distance
    • Uncertainty Avoidance
    • Masculinity / Femininity (quality of life)
  • Weaknesses:
    • Does not include LDCs
    • Data 20 years old

However, recent research confirms this structure

change in cultures
Change in Cultures
  • Hofstede’s data indicates some shift to individualism, but no change in other dimensions
  • Disneyland phenomenon
    • That is, surface indicators change, but meaning does not
  • But….the case of Hong Kong
    • Management values in Hong Kong intermediate between PRC and U.S.
    • Indication of flexibility / change?
collectivism individualism
Collectivism - Individualism
  • Identification with group vs. identification as an individual
  • Collective cultures:
    • Think in terms of in-groups and out-groups
    • Life decisions made by group
    • Look after one’s in-group, no matter what
  • Individualistic cultures
    • Concern for self and immediate family
    • Individual privacy
  • Association with level of economic development
collectivism individualism where








Arab countries








Great Britain


Collectivism - Individualism: Where


power distance
Power Distance
  • The extent to which a culture accepts that power is distributed unevenly
  • High power distance
    • People have a place in society, high or low
    • Superiors are to be respected
    • Less trust and cooperation
  • Low power distance
    • Equal rights for everyone
    • Hierarchies are established for convenience
    • Power can be judged to be legitimate or not
power distance where
Power Distance: Where


  • Philippines
  • Mexico
  • India
  • Brazil
  • Hong Kong
  • France
  • Turkey
  • Pakistan
  • Japan
  • Argentina
  • U.S
  • Canada
  • Australia
  • Germany
  • Sweden
  • Ireland
  • Denmark
  • Israel
uncertainty avoidance
Uncertainty Avoidance
  • The extent to which a society feels threatened by ambiguity and uncertainty
  • High uncertainty avoidance
    • Lots of policies, rules, regulations
    • Hard work valued, time is money
    • Acceptance of authority
    • Conflict avoided
  • Low uncertainty avoidance
    • Look to common sense
    • Tolerance, constructive conflict
    • Aggression less accepted
uncertainty avoidance where
Uncertainty Avoidance: Where


  • Uruguay
  • Belgium
  • Japan
  • France
  • Mexico
  • Israel
  • Italy
  • Austria
  • Arab countries
  • Germany
  • Switzerland
  • East Africa
  • Canada
  • U.S.
  • India
  • Great Britain
  • Sweden
  • Singapore
masculinity femininity quality of life
Masculinity / Femininity (Quality of Life)
  • The extent to which society values typically “masculine” values, such as assertiveness, and acquisition of things, as opposed to caring for others and quality of life.
  • Masculine cultures
    • Clear gender roles; machismo
    • Live to work
    • Ambition, success valued
  • Feminine cultures
    • Sympathy for the unfortunate
    • Work to live
    • People are important
masculinity femininity where
Masculinity / Femininity: Where


  • Japan
  • Italy
  • Mexico
  • Ireland
  • U.S.
  • Australia
  • Hong Kong
  • Arab countries
  • Brazil
  • Israel
  • Indonesia
  • France
  • Spain
  • South Korea
  • Portugal
  • Finland
  • Netherlands
  • Sweden
plus one
…Plus One
  • Confucian Work Dynamic
  • Based on work done in East Asia by “Chinese Cultural Connection” group
  • Focus on:
    • Long-term
    • Order
    • Thrift
    • Persistence
    • Respect for tradition
different dimensions same result
Different Dimensions…Same Result
  • Company provided housing, marriage brokers, etc. in Asian countries
    • Feminine concern for people?
    • Taking care of the in-group?
  • Cooperative labor negotiations
    • Japan: collective orientation
    • Netherlands: feminine quality of life
  • Economic growth and development
    • Europe: Protestant Work Ethic (Individualistic, High Power Distance, Masculine)
    • Asia: Confucian Work Dynamic
do national borders cultural borders
Do National Borders = Cultural Borders?
  • Multiple cultures
    • Canada
    • Belgium
    • India
  • Culturally homogeneous areas
    • Scandinavia
  • Cultural clusters
general expatriate issues the sojourners
General Expatriate Issues: The Sojourners
  • How many are there?
    • Nobody really knows
    • Estimated 350,000 or more (estimate from 1996)
  • Who are they?
    • 87% male
    • Managers
    • Sales, technical, professional
  • What happens?
    • Estimated 25% to 50% of assignments fail
    • Cost…$50,000 and up
why do expatriates fail
Why do Expatriates Fail?
  • Family problems (60%)
  • Inability to adjust
    • Lack of flexibility
    • “Culture shock”
  • Lack of sensitivity to host culture
culture shock
Culture Shock
  • An emotional and psychological reaction to the confusion, ambiguity, value conflicts and hidden clashes that occur as a result of fundamentally different ways of perceiving the world and interacting socially between cultures. Disequilibrium


aspects of adjustment
Aspects of Adjustment
  • Sociocultural
    • Social skills needed to operate in different culture
  • Psychological
    • Well-being, satisfaction
    • “Culture shock”
what can be done
What Can Be Done?
  • Selection procedures
  • Organizational support: before, during, and after assignment
  • Training
    • Few U.S. firms train expatriates (30%)
    • Most European / Asian firms do
    • Different success rates clearly establish value of training
training for expatriates
Training for Expatriates
  • Knowledge-based
    • Language
    • Cultural differences
  • Cultural sensitivity
    • General
    • Specific
  • Include spouse and, if possible, family members
other support mechanisms
Other Support Mechanisms
  • Mentor or buddy systems
  • Trips home
  • Assistance with schooling and other family needs
  • Housing / cost of living differentials
  • Security
    • Safe housing
    • Guards, kidnapping insurance, etc.