Learning Objectives

1. Learning Objectives • The necessity for adapting to cultural differences • How and why management styles vary around the world • The extent and implications of gender bias in other countries • The importance of cultural differences in business ethics • The differences between relationship-oriented and information-oriented cultures

2. Required Adaptation All who wish to deal with individuals, firms, or authorities in foreign countries should be able to meet 10 basic criteria: • 1) open tolerance • 2) flexibility • 3) humility • 4) justice/fairness • 5) ability to adjust to varying tempos • 6) curiosity/interest • 7) knowledge of the country • 8) liking for others • 9) ability to command respect • 10) ability to integrate oneself into the environment

3. Degree of Adaptation • Essential to effective adaptation is awareness of one’s own culture and the recognition that differences in others can cause anxiety, frustration, and misunderstanding of the host’s intentions. • The self-reference criterion (SRC) is especially operative in business customs. • The key to adaptation is to remain American but to develop an understanding of and willingness to accommodate the differences that exist.

4. Cultural Imperatives • The business customs and expectations that must be met and conformed to or avoided • Friendship motivates local agents to make more sales. • The significance of establishing friendship cannot be overemphasized, especially in those countries where family relationships are close. • In some cultures a person’s demeanor is more critical than in other cultures • What may be an imperative to avoid in one culture is an imperative to do in another.

5. Cultural Electives and Exclusives • Cultural electives: • Relate to behavior or customs that you may wish to conform to or participate in but that are not required. • A cultural elective in one county may be an imperative in another. • Cultural electives are visibly different customs • Cultural exclusives: • Those customs or behaviors reserved exclusively for the locals and from which the foreigner is barred.

6. The Impact of American Culture on Management Style • “Master of destiny” viewpoint • Independent enterprise as the instrument of social action • Personnel selection and reward based on merit • Decisions based on objective analysis • Wide sharing in decision making • Never-ending quest for improvement • Competition producing efficiency

7. Authority and Decision Making • Influencers of the authority structure of business: • High PDI Countries • Mexico, Malaysia • Low PDI Countries • Denmark, Israel • Three typical authority patterns: • Top-level management decisions • Decentralized decisions • Committee or group decisions

8. Annual Hours Worked • Insert Exhibit 5.1

9. Contextual Background of Various Countries • Insert Exhibit 5.2

10. P-Time versus M-Time • Monochronic time: • Tend to concentrate on one thing at a time • Divide time into units, concerned with promptness • Most low-context cultures operate on M-Time • Polychronic time: • Dominant in high-context cultures • Characterized by the simultaneous occurrence of many things • Allows for relationships to build and context to be absorbed as parts of high-context cultures.

11. Gender Bias in International Business • Women represent only 18% of the employees who are chosen for international assignments. • In many cultures women are not in upper management, and men and women are treated very differently. • Asia, Middle East, Latin America • Prejudices toward women in foreign countries. • Executives who have had international experience are more likely to get promoted, have higher rewards, and have greater occupational tenure.

12. Bribery: Variations on a Theme • Bribery and Extortion: • Voluntary payment by someone seeking unlawful advantage is bribery. • payments extracted by someone in authority from a person seeking what he is lawfully entitled to is extortion. • Subornation and Lubrication: • Lubrication is small sums of cash, or gifts, given to a low-ranking official in a country where this is legal. • Subornation involves large sums of money, often not accounted for, designed to entice an official to commit an illegal act on behalf of the one offering the bribe.

13. A Synthesis, Relationship-Oriented vs. Information-Oriented Cultures • Studies note a strong relationship between Hall’s high/low context and Hofstede’s Individualism/Collective and Power Distance indexes. • Information-Oriented Culture • United States • Relationship Culture • Japan • Understanding cultural differences allows us to make predictions about unfamiliar cultures.

14. Summary • Some cultures appear to emphasize the importance of information and competition while others focus more on relationships and transaction cost reductions. • Businesspersons working in another country must be sensitive to the business environment and must be willing to adapt when necessary. • Understanding the culture you are entering is the only sound basis for planning. • Business behavior is derived in large part from the basic cultural environment in which the business operates.