International Management Chp 2

1. Cultural Differences

2. Cultural Differences What cultural differences have you noticed in the last few weeks?

3. 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

4. Features of Culture Culture is shared Culture is intangible Culture is social Can have:National CultureBusiness CultureOccupational Culture

5. Universal Cultural Values Kinship Economy Politics Religion Education

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

7. Hofstede’s Cultural Dimensions Four Primary Dimensions1. Power Distance2. Uncertainty Avoidance3. Individualism4. Masculinity

8. 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

9. 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

10. 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

11. 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?

12. 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

13. 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

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

15. 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

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

17. 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?

18. 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

19. 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

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

21. 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

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

23. 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?

24. 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

25. 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

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

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

28. 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

29. 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?

30. 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

31. The Swedish manager should: Avoid asking personal questions in business settings Communicate directly and clearly Address a person professionally

32. HSBC: Car Commercial http://www.youtube.com/watch?v=v1vvLQd53Ps