Culture: What is it?

1. Culture: What is it? • Value system • Norms, beliefs, behaviors • Common way of thinking • Society’s communicable knowledge • Society’s characteristics passed on generation by generation

2. General Issues • Differences in culture • Measurement • Adaptation and Acculturation • Similarities in culture

3. Hofstede’s Dimensions of Culture • Power Distance • Small - trusting, less formal organizations • Large - mistrusting, hierarchical organizations • Uncertainty Avoidance • Weak - risk is non-threatening; diversity is appreciated • Strong - risk averse, diversity is threatening • Individualism • Collectivist - belonging to groups ideal; group decision making • Individualist - individual initiative and achievement; leadership is the ideal • Masculinity • Feminine - quality of life; people and relationships come first • Masculine - performance; money and transactions come first

4. Communication and Meaning(Aside from Language) Low Context Explicit: Written/ Spoken MEANING Context: Surroundings/ Non-verbal High Context

5. INTERPERSONAL Punctuality Interpersonal distance Tempo of business Negotiations Bribery Linear vs. circular communication High vs. low context communication ORGANIZATIONAL Organizational structure Decision making Leadership Adaptation of products HRM policies Entry mode choice Location of value-creating activities Implications for Management

6. Leadership • Perceived levels of power • Quality/characteristics of exchange with subordinates • Communication patterns • Trust (both ways) • Delegation of tasks

7. Organizational Structures/Systems • Formality of policies and rules • Hierarchical vs. “flat” organizations • Mechanistic vs. organic • Authoritative vs. consensual decision making • HRM systems • Accounting systems

8. Interpersonal Relationships With … • Customers • Suppliers • Subordinates/superiors • Co-workers

9. Motivation and Reward • Formation/role of setting goals • Achievements • Compensation system • Job satisfaction • Organizational commitment

10. Principal Research Question:Japanese-American Context • Job dissatisfaction • Lack of commitment towards company • Propensity to quit ? Cultural Differences

11. Evidence of a Problem? • “If Americans ‘fail’ on a project, they are never given another chance. Yet, Americans are rarely explicitly told what their authority is.” • “In Japan, formal job descriptions don’t exist. This can lead to role ambiguity in the U.S.” • “One source of frustration for Americans is the lack of input in decision making.”

12. “Our engineers leave because of the constraints placed on innovativeness and flexibility” • “I seem to have several bosses, which can be confusing.” • “My supervisor doesn’t spend enough time preparing me for this position.” • “There’s a lack of open, honest communication.” • “I can’t make your meeting, Wally, because two of our section leaders just quit.”

13. Not ALL bad... • “My Japanese boss is the best I ever had.” • “The Japanese Vice President’s treatment of people is excellent. I am proud of him and respect him.” • “Our company is excellent in terms of communication and human resources.”

14. Leadership is the Key: • “The most necessary training is…how to work with and manage and American workforce.” TMM Executive

15. Culture and the Causal Chain Negative Attitudinal Outcomes Intermediate Perceptions Supervisory Behaviors Cultural Differences

16. Mentoring Psycho-social Career-related Delegation Authority-specific Task-related Communication Effectiveness Formalization Monitoring General Corrective Intrusive Interpersonal Exchange Exchange Quality Acculturating Exchange Abusive Exchange Supervisory Behaviors

17. Communication Model Procedural Justice Commitment Communication Effectiveness Trust Job Satisfaction Cultural Difference Role Ambiguity Formalized Communication Low Propensity to Quit Role Conflict

18. Delegation Model Procedural Justice Commitment Authority Delegation Trust Job Satisfaction Cultural Difference Role Ambiguity Task Delegation Low Propensity to Quit Role Conflict

19. Mentoring Model Procedural Justice Psycho- social Mentoring Commitment Trust Career- related Mentoring Job Satisfaction Cultural Difference Role Ambiguity Low Propensity to Quit Job- related Feedback Role Conflict

20. Monitoring Model Procedural Justice Invasive Monitoring Commitment Trust General Monitoring Job Satisfaction Cultural Difference Role Ambiguity Low Propensity to Quit Corrective Monitoring Role Conflict

21. Personal Exchange Model Acculturation Exchange Procedural Justice Commitment Trust Job Satisfaction Exchange Quality Cultural Difference Role Ambiguity Low Propensity to Quit Abusive Exchange Role Conflict

22. How to Address Cultural Problems Negative Attitudinal Outcomes “Chain of causality” often neglected Intermediate Perceptions …”teachable”? Supervisory Behaviors … receive scant attention in most training programs Cultural Differences … basics commonly understood.

23. International Alliances:Strategic Considerations • Choice of Entry Mode • Resource Pooling • Redundant • Complementary • Learning • Strategic Options • Impact of Culture

24. International Alliances:Managerial Considerations • Contract vs. Equity • Structure • Learning: • Codifiable vs. Tacit Knowledge • Combinative Capability • Absorptive Capacity • Impact of Culture

25. 1984: The NUMMI Alliance GM Toyota NUMMI

26. 1986: Application of Knowledge I GM Toyota TMM-K NUMMI

27. 1990: Application of Knowledge II GM Toyota Saturn NUMMI

28. 1999: The Fuel Cell Alliance GM Toyota Alliance

29. Learning Race(s) GM Ford Race 2: Market Race 1: Market Toyota DaimlerChrysler

30. Rate of Learning in Alliances • Codified vs. tacit knowledge • Absorptive capacity • Combinative capability • Organization of learning

31. Strategic Option View of Alliances External Forces Equity Alliance Internal Forces Buyout Dissolution

32. Alliances and Culture • Entry: JVs preferred when: • Target country-market culturally different (CD) • Initiating firm high UA • Structure: Majority ownership preferred when: • Initiating firm high PD • Learning: Equity preferred when: • Initiating firm high PD

33. Alliances and Culture cont. • Longevity: JVs terminate faster/earlier when: • Partners are culturally different (CD) • Mistrust: Suspicions of poor performance when: • Initiating firm high UA • Trust: Expectations of good performance when: • Partners are culturally similar

34. Culture and Alliances as Options • Partnership buyouts more likely when: • Initiating firm high PD and UA • Alliance portfolios: • Japanese hold equity alliances longer • Japanese hold larger number of smaller alliances • Japanese more likely to invest further/acquire partner • Americans more likely to spin off partners (success) • Americans faster to terminate alliance (failure)