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Using Cultural Differences

Using Cultural Differences. For Fun and Profit. Approaches to Managing Cultural Differences. Multi-domestic Assumption: diversity has no impact. Each national unit is regarded as independent and autonomous with random rather than planned interaction between parts International

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Using Cultural Differences

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  1. Using Cultural Differences For Fun and Profit

  2. Approaches to Managing Cultural Differences • Multi-domestic • Assumption: diversity has no impact. • Each national unit is regarded as independent and autonomous with random rather than planned interaction between parts • International • Assumption: diversity causes only problems. Homogeneity is desirable and is a source of efficiency. • Corporate (headquarters) culture dominates • Multi-national • Assumption: diversity can either cause problems or lead to benefits. • Geographical differentiation is considered indispensable. Cultural interaction is encouraged but a balance is maintained between diversity and uniformity

  3. Applications • Negotiations • Human resources management • Motivation • Leadership • Strategic Planning • Design of organizations • Marketing • Cultural Differences (Tastes) • Income Differences (Demographics)

  4. General Conceptual Framework for Planning a Negotiating Strategy • Enumerate and characterize the parties • Assess their interest and no-deal alternatives • Envision potential agreements and bargaining ranges • Craft processes for both creating value and claiming it • Pay attention to the sustainability of agreements • Develop a negotiating strategy (i.e. decide on a negotiating process)

  5. Negotiation Process • Four stages: • Non-task sounding or relationship building • Task-related exchange of information • Persuasion • Making concessions and reaching agreements • Context, duration and importance of each stage can differ significantly across cultures

  6. Negotiation Behavior Differences: • Styles of persuasion (e.g. appeal to logic versus affective-intuitive style) • Conflict resolution preferences (e.g. confrontation versus balance and restraint, resolution through discussion of mutual interests versus referral to higher levels ) • Initial bargaining positions (e.g. low versus high initial offers) • Concession patterns (e.g. viewing concessions as acceptable or viewing them as displaying weakness)

  7. HRM: Motivation Approaches Awards for Mastery of Work-related Skills US Australia Canada Employee Relations Italy Germany Austria Japan Individualism India Argentina Brazil Hong-Kong Taiwan Korea Uncertainty Avoidance

  8. HRM: Leadership Styles Legitimate Power Reward Power Referent Power India Yugoslavia Brazil Hong-Kong Korea Taiwan Japan Expert Power Argentina Italy Power Distance US Canada Germany Australia Austria Individualism Individualism

  9. HRM: Strategic Planning • High-impact Planning • Research • Rules • Analysis US Australia Canada Italy Germany Austria Japan Individualism/Collectivism Flexible Planning Approaches Trust-based Interactions India Argentina Brazil Hong-Kong Taiwan Korea Uncertainty Avoidance

  10. Design of Organizations • Structures • Authority sources • Delegation • Rules • Conflict resolution processes

  11. Culture and Advertising 1 (Hoecklin)

  12. Culture and Advertising 2 (Hoecklin)

  13. Culture and Advertising 3 (Hoecklin)

  14. Marketing: Dealing with Socio-economic Differences • The developing world presents a great opportunity for corporate growth • The attitude toward developing countries must change and better understanding of their business environment much be acquired • It is not all about culture – other socio-economic factors are at play

  15. 1980s: Imperialist Mindset • “New markets for old products” • “Squeezing out profits out of sunset technologies” • Corporate center as the locus of innovation

  16. Late 1990s: Flip-side of the Coin • Competitive advantage is based on rethinking and reconfiguring business models based on direct experience in emerging markets. • New logic: understand economic, social, and cultural constraints and transform them into opportunities (preferences, infrastructure)

  17. Why A Different Mindset?

  18. Key Questions • Understand the specific needs of the local market (different demographics) • Understand the state and the evolution of distribution networks • Choose an appropriate mix of global/local leadership • Decide if customized or consistent strategies are preferable • Learning from local partners, when possible

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