Cultural Impact on Global Management

1. Cultural Impact on Global Management Today almost 20% of world output is produced and consumed in global markets… Within 30 years it is estimated to be at least 80%

2. What is Culture? • the collective programming of the mind that distinguishes the members of one group or category of people from another group or category of people. • the mind refers to the head, hand and heart (thinking,feeling,acting) • Comprises the shared values, understandings, assumptions, and goals • gives people a sense of who they are, of belonging, and of how they should behave

3. Characteristics of Culture: • Learned: • culture not inherited, not biologically based • Acquired by sharing learning through friends, family, religion, education, society • Shared: • people as members of a group or organization all share the culture • not specific for an individual as that is personality • Transgenerational: • cumulative as it is passed on from one generation to another often with slight changes as culture itself is not static • Symbolic: • Culture is based on the human capacity to symbolize or use one thing to mean or represent something else

4. Culture Imperatives • Cultural savvy (working knowledge) • Cultural sensitivity: parochialism • ethnocentric Types of Cultural Analysis: • Culture as Learned Behavior • Culture as a Dialectic (Too many cooks….) • Culture as Shared Values (diagram) • Culture in Context: occupation, age, technology, religion, sex

5. Study of Culture: Alternative Approaches • Emic • Examines culture from the examinee’ perspective • Associated with anthropological studies of natives or newly discovered societies • Etic • Examines culture from an outsider perspective • Requires a descriptive classification scheme that allows differences and similarities of underlying culture to a small set of primary variables or dimensions • \view culture as factor of influence and operationalize variables to test across cultures

6. Skillful Global Managers Understand the Significance of the Following Statements: Japanese culture promotes a sense of groupidentity.Japanese ambiguity is an unconscious cultural process that often leads foreigners to draw false conclusions based on Japanese appearances. When doing business in Indonesia, shaking hands with either gender is acceptable, but using the left hand for taking food or giving gifts is unacceptable.

7. In an era of mergers, acquisitions and consolidations many of these ventures fail within five years, not because they were ill conceived, but rather the cultures of organizations were not successfully integrated. Estimates are that interpersonal who go abroad without cross-cultural preparation have a failure rate much higher than those who had the benefit of such training.

8. How is culture formed? Collective Programming of the Mind The culture of the group or category of people becomes evident in two ways. • Internal:transforming values into behavior 2. External: through symbols heroes and rituals.

9. Culture The Onion Diagram : Manifestations of Culture a different levels of depth. Symbols Values Heroes Rituals Practices Values

10. Values: • An enduring belief that a specific mode of conduct or end state of existence is personally and socially preferable to another • Values are invisible until they become evident in behavior Values are the mental programs for how we behave (Our hard wiring for behavior)

11. Examples of Values: • wisdom, equality • equity, prosperity • independence, imagination • beauty, responsibility • courage, loyalty • achievement, social status

12. Priorities of Cultural Values Table 4-1 Priorities of Cultural Values: United States, Japan, and Arab Countries United States Japan Arab Countries • Freedom • Independence • Self-reliance • Equality • Individualism • Competition • Efficiency • Time • Directness • Openness • Belonging • Group harmony • Collectiveness • Age/seniority • Group consensus • Cooperation • Quality • Patience • Indirectness • Go-between • Family security • Family harmony • Parental guidance • Age • Authority • Compromise • Devotion • Patience • Indirectness • Hospitality Note: “1” represents the most important cultural value, “10” the least. Adapted from Table 4-1: Priorities of Cultural Values: United States, Japan, and Arab Countries

13. Values in Culture Table 4-2 U.S.Values and Possible Alternatives U.S. Cultural Values Alternative Values Examples of Management Function Affected Individuals can influence the future (when there is a will there is a way). Life follows a preordained course, and, human action is determined by the will of God. Planning and scheduling Individuals should be realistic in their aspirations. Ideals are to be pursued regardless of what is “reasonable.” Goal setting and career development We must work hard to accomplish our objectives (Puritan ethic). Hard work is not the only prerequisite for success. Wisdom luck, and time also are required. Motivation and reward system Adapted from Table 4-2: U.S. Values and Possible Alternatives

14. Values in Culture Table 4-2 U.S.Values and Possible Alternatives U.S. Cultural Values Alternative Values Examples of Management Function Affected A primary obligation of an employee is to the organization. Individual employees have a primary obligation to their family and friends. Loyalty, commitment, and motivation Employees can be removed if they do not perform well. The removal of an employee from a position involves a great loss of prestige and will rarely be done. Promotion Company information should be available to anyone who needs it within the organization. Withholding information to gain or maintain power is acceptable. Organization, communication, and managerial style Adapted from Table 4-2: U.S. Values and Possible Alternatives

15. Values in Culture Table 4-2 U.S.Values and Possible Alternatives U.S. Cultural Values Alternative Values Examples of Management Function Affected Competition stimulates high performance. Competition leads to unbalances and disharmony. Career development and marketing What works is important.. Symbols and the process are more important than the end point. Communication, planning, and quality control. Adapted from Table 4-2: U.S. Values and Possible Alternatives

16. Culture The Onion Diagram : Manifestations of Culture a different levels of depth. Symbols Values Heroes Rituals Practices Values

17. Rituals: • keeping the individual bond with the norms of the collectivity(group). • manifest in ways of greetings, paying respect, social and religious ceremonies. Thailand Pee/Nong Wai Khru Ceremony USA 1st of July

18. Culture The Onion Diagram : Manifestations of Culture a different levels of depth. Symbols Values Heroes Rituals Practices Values

19. Heroes: • are persons dead or alive, imaginary or real who possess characteristics that are highly prized in a culture and thus serve as role models for behavior America- George Washington Thailand- King Rama 5 (พระบาทสมเด็จพระจุลจอมเกล้าเจ้าอยู่หัว) Toh Phrom Ma Rangsee (สมเด็จพระพุฒาจารย์ (โต พรหมรํสี)

20. Culture The Onion Diagram : Manifestations of Culture a different levels of depth. Symbols Values Heroes Rituals Practices Values

21. Symbols: • these consist of words, gestures, pictures and objects language flags. Islamic countries “May God be willing” Israel flag Star of David (in god we trust) Thai Flag Blue/White and Red

22. Culture The Onion Diagram : Manifestations of Culture a different levels of depth. Symbols Values Heroes Rituals Practices Values

23. Practices: • symbols and heroes and rituals are subsumed under the term “practices” • they are visible to an outside observer but their explicit cultural meanings are invisible and lie precisely and only in the way these practices are interpreted by insiders.

24. How Culture Affects Managerial Approaches Centralized Decision Making Decentralized Decision Making VS. In some societies, top managers make all important organizational decisions. In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions.

25. How Culture Affects Managerial Approaches VS. Safety Risk In some societies, organizational decision makers are risk averse and have great difficulty with conditions of uncertainty. In others, risk taking is encouraged, and decision making under uncertainty is common.

26. How Culture Affects Managerial Approaches Individual Rewards Group Rewards VS. In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions. In others, cultural norms require group rewards, and individual rewards are frowned on.

27. How Culture Affects Managerial Approaches Informal Procedures Formal Procedures VS. In some societies, much is accomplished through informal means. In others, formal procedures are set forth and followed rigidly.

28. How Culture Affects Managerial Approaches High Organizational Loyalty Low Organizational Loyalty VS. In some societies, people identify very strongly with their organization or employer. In others, people identify with their occupational group, such as engineer or mechanic.

29. How Culture Affects Managerial Approaches VS. Cooperation Competition Some societies encourage cooperation between their people. Others encourage competition between their people.

30. How Culture Affects Managerial Approaches Short-term Horizons Long-term horizons VS. Some cultures focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Others are more interested in long-range goals, such as market share and technologic development.

31. How Culture Affects Managerial Approaches Stability Innovation VS. The culture of some countries encourages stability and resistance to change. The culture of others puts high value on innovation and change.

32. Negotiation Video-Values American NegotiatorJapanese Negotiator Independence Collectiveness Self-reliance Co-operation Competition Group Harmony Efficiency/Practicality Patience Directness Indirectness