BADM 633 - Wk 3 International Business Culture Terry Ryan

2. BADM 633 - Wk 3 International Business Culture Terry Ryan

3. British Isles Wrap-up Implications for Managers in UK and Ireland • “…two countries, separated by a common • language.” George Bernard Shaw • Language – minor challenges • Laws  US legal procedures mostly • based on British precedence • Regulations – many identical, BUT • applied differently • Openness to New Business – very high • Inward Direct Investment – welcomed

4. Cultural Anthropology & International Business Illustrations from Ferraro: • Friedman – communist bloc & free world • Lowering tariff barriers and explosion of IT • Illustrations – 12.5 % or one in eight US • residents are foreign-born • Foreign-owned businesses employ >5MM • Outsourcing of jobs • Foreign travel Outsourcing of religious rituals ( ! ! ! )

5. Cultural Anthropology & International Business • Friedman – “Lexus and the Olive Tree” • Berlin Wall • Weight replaced by speed • Cold War “us vs. them” replaced by all • peoples of the world as competitors • Historical fiction of industrial complexes • replacing nation-states • World-wide production facilities

6. Cultural Anthropology & International Business • Two views of anthology: • Indiana Jones • Academic • Anthropology – “the study of humanity” • Anthropology differs from other studies of • humans in both geography and history: • Archeology • Physical Anthropology • Anthropological Linguistics • Cultural Anthropology

7. Cultural Anthropology & International Business • Cultural Anthropology & Business • Much of the body of literature features • American-trained anthropologists • studying American companies. • US business organisations are composed of • people from diverse backgrounds • Organisations must understand their • associates just as marketers attempt to • identify different target segments • Values, attitudes, lifestyles (VALs) plus • opinions, expectations and behaviours

8. Cultural Anthropology & International Business • Cultural Anthropology & Int’l Business • Expertise  Travels: yes or no? • Inability to adapt to understand and adapt to • foreign ways of thinking and acting • Marketing Miscues • “rendezvous lounges” in Brazil • Perdue – “It takes a virile man to make a • chicken affectionate” ( ! ) • “Got milk?” • Japan team example • Bahrain example

9. Cultural Anthropology & International Business • Dominance of US Multi-Nationals • Changed and continuing to change • Trade deficits: • Unfair trade practices • “Quintessential consumers” • Expatriate Attrition • Saudi Arabia – 68% • Japan – 37 % • London – 18 % • Costs of failure

10. Cultural Anthropology & International Business • International Competency • Knowledge of others • Knowledge of self • Skills to interpret and relate • Skills to discover and interact • Valuing beliefs an behaviours of others • Seeing oneself relative to others • Linguistic competency • Winthrop recognised need for inter- • national awareness both in University- • wide GLI and within the CBA.

12. Culture & International Business • Cultured vs. Culture • “Finer things in life” • Interests and tastes • Culture is everything that people have, • think and do as members of their • societies. • Have: material goods or objects • Think: ideas, values, attitudes and beliefs • Do: behave in certain ways (normative or • expected patterns of behaviour)

13. Culture & International Business • Culture is learned • Nature or nurture • Born into an existing culture • Learning abilities are comparable • Cross-cultural expertise can be learned • Culture influences biological processes • Food • Pain control • Aesthetics – ear piercing, tattoos, plastic • surgery

14. Culture & International Business • Cultural Universals • 850 distinctly different cultures with mutually • unintelligible languages in Africa alone. • Number of differences between cultures • illustrates flexibility & adaptability of humans • Maslow’s hierarchy • Physiological • Safety • Belonging • Esteem • Self-actualisation

15. Culture & International Business • Cultural Universals • Economic Systems – producing, distributing • and consuming essentials • Marriage and Family Systems – mating, • marriage, child-rearing and family formation • Educational Systems – learn the way of life • Social Control Systems – most of the peo- • ple obey most of the rules most of the time • Supernatural Belief Systems – explaining • the unexplainable; religions help shape • attitudes towards work, savings, consump- • tion, efficiency and personal responsibility

16. Culture & International Business • Cultural Change - All cultures experi- • ence continual change. • Internal Forces – discovery and invention • External Forces – cultural diffusion • the innovation is superior • consistent with existing patterns • easily understood • can be tested experimentally • benefits are clear to a large number of people • Let’s discuss

17. Culture & International Business • Cultural Borrowing • Two-way street • Primitive vs. “Civilised” Societies • Borrowed ideas/items usually not • transferred in exact original form. • Some cultural traits more easily diffused • than others. • Dynamism of Cultures - Things, ideas and behaviour patterns can undergo additions, deletions and modifications.

18. Culture & International Business • Ethnocentrism – Culture-centred • Tendency to believe that one's ethnic or • cultural group is centrally important and • that all other groups are measured in • relation to one's own ( S R C ) • American War of Independence • Who were the Rebels? • Who were the Patriots? • Continentals were the rebels • Tories were the Patriots who supported • the Red-coats • King’s Mountain – Col. Patrick Ferguson

19. Culture & International Business • Ethnocentrism • No society has a monopoly on ethnocentrism • “Our" way is right, proper and normal • “Their” way is wrong and inferior • Pronunciations • “Ugly American” (1958) • NYC is NOT the center of • the universe 

20. Culture & International Business • Integrated Culture • Cultures thought of as integrated wholes • coherent and logical systems • some parts are interrelated • Marital Practices • Polygamy – Legal barriers notwithstanding, it • takes lotsa $’s to support multiple wives/progeny • Polygyny supports social status based on size • of household • Polyandry-historical examples • “Ped-rage” NYC • Iceland - genealogical books

21. Culture & International Business • Precautions • Learned nature of culture • Cultural influences on biological processes • Cultural universals • Ubiquity of cultural change • Ethnocentrism • Integrated nature of culture • Generalizations • As with stereotypes, generalisations are • helpful, but are ONLY a starting point • Ideal vs. actual behaviour

22. Culture & International Business • Generalizations – cont’d • Rigidity in thinking can be disastrous • Escalade example • Japan example in textbook: • restaurant food • “Good” vs. real reasons • IQ Assessments – great debate: culturally- • biased testing

23. Culture & International Business • Corporations Have Own Cultures • Shared values, behaviours and • communications styles • Symbols, legends, heroes, non-verbal cues • Corporate Culture • Identify common beliefs • Gain consensus • Document essential features • Make culture visible to all on a continuing • basis • Provide explicit training corporate culture

24. Culture & International Business • Corporations Have Own Cultures • Shared values, behaviours and • communications styles • Symbols, legends, heroes, non-verbal cues • Corporate Culture • Identify common beliefs • Gain consensus • Document essential features • Make culture visible to all on a continuing • basis • Provide explicit training corporate culture

25. Culture & International Business • Cultural Differences in Business • Challenges – where do we hear about this?? • Examples? • Opportunities – how can we capitalise on • differences btwn. corporate cultures?? • Examples?

27. 2-1 Sam Lucas, a construction supervisor for an international engineering firm, had been chosen to supervise construction on a new hotel project, in Jidda, Saudi Arabia, primarily because of his outstanding work record. On this project, Sam supervised the work of about a dozen Americans and nearly one hundred Saudi laborers. It was not long before Sam realized that the Saudi laborers, to his way of thinking, were nowhere as reliable as the workers he had supervised in the United States. He was becoming increasingly annoyed at the seeming lack of competence of the local workforce. Following the leadership style that held him in such good stead at home, he would reprimand any worker who was not doing his job properly, and he would make certain that he did it publicly so that it would serve as an object lesson to all the other workers. He was convinced that he was doing the right thing and was being fair, for after all, he reprimanded both Americans and Saudis alike. He was troubled, however, by the fact that the problems seemed to be growing worse and more numerous. What advice might you give Sam?

28. 2-1 In the United States, public humiliation is one of a number of techniques that can be used quite effectively to change people’s behavior. In the world of Islam, however, where the preservation of dignity and self-respect is absolutely essential, public reprimand will be totally counterproductive. If Arabs feel that they have suffered a loss of personal dignity because they have been criticized in public, they take it as a dishonor to both themselves and their families. And when Sam insisted on using this “motivational” technique, he alienated not only the individual to whom the reprimand was directed but also all his fellow workers, who felt hurt on his behalf. When this happens, the person giving the reprimand loses the respect of those witnessing it.

29. 2-2 George Burgess was a chief engineer for a machinery manufacturer based in St. Louis. His company had recently signed a contract with one of its largest customers in Japan to upgrade the equipment and retrain mechanics to maintain the equipment more effectively. As part of the contract, the Japanese company sent all ten of their mechanics to St. Louis for a three-month retraining course under George’s supervision. Although George had never lived or worked abroad, he was looking forward to the challenge of working with the group of Japanese mechanics, because he had been told that they were all fluent in English and tireless workers. The first several weeks of the training went along quite smoothly, but soon George became increasingly annoyed with the constant demands they were making on his personal time. They would seek him out after the regularly scheduled sessions were over for additional information. They sought his advice on how to occupy their leisure time. Several even asked him to help settle a disagreement that developed between them. Feeling frustrated by all these demands on his time, George told his Japanese trainees that he preferred not to mix business with pleasure. Within a matter of days, the group requested another instructor. What was the principle operating here?

30. 2-2 The employee–employer relationship in Japan is very different than in the United States. When a Japanese firm hires an employee, he or she becomes part of the corporate family. Whereas labor and management in the United States operate largely from an adversarial perspective, the relationship between the Japanese worker and the company is based on loyalty and a long-term commitment to one another. Not only do most employees expect to stay with the firm for the duration of their careers, but the firm also takes an active role in the personal lives of its employees and their families. Housing, recreation, and schooling for the children are just some of the areas arranged by the employers for their workers. Moreover, far less separation of business and personal matters occurs between Japanese employees and their supervisors. Thus, it is little wonder that the Japanese mechanics thought that George was not acting like a responsible supervisor because he was unwilling to become involved in their personal lives.

31. 2-4 Bob Mitchell, a retired military attaché with considerable experience in the Middle East, was hired by a large U.S. computer software company to represent it in a number of Persian Gulf countries. Having received an introduction from a mutual acquaintance, Bob arranged to meet with Mr. Saade, a wealthy Lebanese industrialist, to discuss the prospects of a joint venture between their companies. Having spent many years in the Middle East, Bob knew that they would have to engage in considerable small talk before they would get down to business. They talked about the weather, Bob’s flight from New York, and their golf games. Then Saade enquired about the health of Bob’s elderly father. Without missing a beat, Bob responded that his father was doing fine, but that the last time he saw his father at the nursing home several months ago he had lost a little weight. From that point on, Saade’s demeanor changed abruptly from warm and gracious to cool and aloof. Though the rest of the meeting was cordial enough, the meeting only lasted another two hours, and Bob was never invited back for further discussions on the joint venture. What went wrong?

32. 2-5 A U.S. fertilizer manufacturer headquartered in Minneapolis decided to venture into the vast potential of third-world markets. The company sent a team of agricultural researchers into an East African country to test soils, weather conditions, and topographical conditions in order to develop locally effective fertilizers. Once the research and manufacturing of these fertilizer products had been completed, one of the initial marketing strategies was to distribute, free of charge, one hundred-pound bags of the fertilizer to selected areas of rural farmers. It was thought that those using the free fertilizer would be so impressed with the dramatic increase in crop productivity that they would spread the word to their friends, relatives, and neighbors. Teams of salespeople went from hut to hut in those designated areas, offering each male head of household a free bag of fertilizer along with an explanation of its capacity to increase crop output. Although each head of household was very polite, they all turned down the offer of free fertilizer. The marketing staff concluded that these local people were either uninterested in helping themselves grow more food and eat better or so ignorant that they couldn’t understand the benefits of the new product. Why was this an ethnocentric conclusion?

33. 2-6 While on a short business trip to Bolivia, Dr. Susan Henry, an organizational consultant from Atlanta, is invited to the home of one of her Bolivian business associates. Wanting to express her gratitude, Susan brings the host a couple of dozen purple tulips. When Susan presents them with the flowers, however, she notices that both the husband and the wife look startled. After the flowers had been taken to the kitchen, Susan feels somewhat insulted because they never displayed the flowers nor thanked her for them. What happened?

34. 2-7 As an organizational consultant from Philadelphia working with a Mexican company, Dan Shaver has been traveling to Mexico City every other week for months to help his client develop more-effective management systems. On this occasion, Dan scheduled a three-day trip, during which he planned to meet with a number of employees. But on the first day of scheduled meetings, Dan was informed that everyone would be leaving work at 2:00 P.M. because it was a fiesta day. Dan was furious because he had come all the way to Mexico just to have his first day of work cut short. As it turns out, Dan’s Mexican colleagues failed to understand why he was so angry. What was behind this misunderstanding?

35. 2-8 As an international organizational consultant from Toronto, Melissa Post was working on a two-month project in Quito, Ecuador. After several weeks on the project, Melissa had become a very good friend with Maria, a local employee of her client. Melissa had noticed that whenever Maria greeted her other female friends from Ecuador, they would kiss each other on the cheek. Since Melissa was feeling very good about her relationship with Maria, she decided that the next time they ran into one another outside the office, she would greet Maria with a kiss on the cheek. So, several days later Melissa unexpectedly met Maria at a coffeehouse and greeted her with an enthusiastic kiss on the cheek. Much to Melissa’s surprise, Maria seemed startled and somewhat put off by the greeting. Had Melissa done something inappropriate?