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Mgt 485CHAPTER 5

CULTURE

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FYI HTS Service Codes (still used by some

countries, but not US)– 4 digit code– Section 98 and 99 (after misc.)

9875 management consulting services

– HTS Manual, 2004 / 2005 does not include service Example of specific information

– http://www.sellingtothegovernment.net/form_product_codes.asp

– http://www.officialexportguide.com/

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Imports – through U.S. Intntl. Trade Commission (USITC)

http://www.ita.doc.gov/td/tic/tariff/country_tariff_info.htmhttp://r0.unctad.org/trains/2001%20Egypt.htmhttp://www.amcham.org.eg/dbe/trade.asp

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Exports – through the Census Bureau (no export qty restrictions)

Mgt 470-5-5Irwin/McGraw-Hill [Modified by EvS]

Additional Internet Sites: http://dir.yahoo.com/regional/countries/ http://globaledge.msu.edu/ibrd/ibrd.asp http://www.ciesin.org/IC/wbank/wtables.html http://lcweb2.loc.gov/frd/cs/cshome.html http://www.atlapedia.com/index.html http://www.nationmaster.com/ http://www.census.gov/foreign-trade/faq/sb/sb0008.html http://www.usitc.gov/tata/index.htm http://www.trade.gov/td/tic/tariff/resources.htm http://unstats.un.org/unsd/cr/registry/ http://www.census.gov/foreign-trade/statistics/product/enduse/

exports/index.html http://library.uncg.edu/depts/docs/international/intermkt.html

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Understanding Culture

BeliefsBeliefsValuesValuesAssumptionsAssumptionsExpectationsExpectations

MannersMannersRitualsRitualsSymbolsSymbolsArtifactsArtifactsCustomsCustomsBehaviorBehaviorRightsRightsTraditionsTraditions

IndividualIndividual GroupGroup

Personality Culture

NormsNormsValuesValuesExpectationsExpectations

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Perspectives on Culture

Interaction with our surroundings (and organizational systems)– Hofstede

Work values and roles (interaction with the organization)– Ronen, Kraut and Shenkar

Interpersonal relationships– Trompenaar

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The Nature of Culture (cont.)

Values in Culture– Values

Basic convictions that people have regarding what is right and wrong, good and bad, important and unimportant

– Research has identified both differences and similarities in values of different cultural groups

– Values in transition Changes taking place in managerial values as a result of

both culture and technology– Research on Japanese managers

• Individualism on the rise in Japan

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Management Approaches Affected by Cultural Diversity

CulturalDiversity

Sort-term vs.long-term horizons

Stability vs.innovation

Individual vs.group rewards Cooperation vs.

competition

Centralized vs. Decentralized

decision making

Informal vs.formal procedures

Safety vs. risk High vs. loworganizational

loyalty

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Nature of CultureLearned

Culture is acquired by learning and experience

SharedPeople as a member of a group, organization ,or society share

culture

TransgenerationalCulture is cumulative, passed down from generation to generation

SymbolicCulture is based on the human capacity to symbolize

PatternedCulture has structure and is integrated

AdaptiveCulture is based on the human capacity to change or adapt

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Comparing Cultures as Overlapping Normal Distribution Figure 5-2

French Culture U.S. Culture

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Stereotyping from the Cultural Extremes

French Culture U.S. Culture

How Americans see the French• arrogant• flamboyant• hierarchical• emotional

How French see Americans• naive• aggressive• unprincipled• workaholic

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Value Priorities

United States Japan Arab Countries 1. Freedom 1. Belonging 1. Family Security 2. Independence 2. Group Harmony 2. Family Harmony 3. Self-Reliance 3. Collectiveness 3. Paternalism 4. Equality 4. Age/Seniority 4. Age 5. Individualism 5. Group Consensus 5. Authority 6. Competition 6. Cooperation 6. Compromise 7. Efficiency 7. Quality 7. Devotion 8. Time 8. Patience 8. Patience 9. Directness 9. Indirectness 9. Indirectness10. Openness 10. Go-between 10. Hospitality

Values- basic convictions that people have regarding what is right and wrong, good and bad, important or unimportant

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Value Differences and Similarities Across Cultures

Differences– U.S. managers value tactful

acquisition of influence

– Japanese managers value deference to superiors

– Korean managers value forcefulness and aggressiveness

– Indian managers value nonaggressive pursuit of objectives

– Australian managers value low-key approach with high concern for others

Similarities– Strong relationship between

managerial success and personal values

– Value patterns predict managerial success

– Successful managers favor pragmatic, achievement-oriented values while less successful managers

prefer static and

passive values

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Hofstede’s Dimensions of Culture

Power Distance (Large or Small)– The extent to which less powerful members of

institutions accept that power is distributed unequallyLarge (Mexico, South Korea, India)

– blindly obey order of superiors– hierarchical organizational structure

Small (U.S., Denmark, Canada)

– decentralized decision making– flat organizational structures

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Uncertainty Avoidance (High or Low)– The extent to which people feel threatened by

ambiguous situationsHigh( Germany, Japan, Spain)

– high need for security– strong beliefs in experts

Low (Denmark, UK)

– willing to accept risks– less structuring of activities

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Individualism (vs. Collectivism)– The tendency of people to look after themselves and

their immediate family only strong work ethic promotions based on merit

• U.S., Canada, Australia

Collectivism– The tendency of people to belong to groups and to look

after each other in exchange for loyalty weaker work ethic promotions based on seniority

• China, South American cultures

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Masculinity (Vs. Femininity)– the dominant values in society are success,

money and thingsemphasis on earning and recognitionhigh stress workplace

• Japan

Femininity– the dominant values in society are caring for

others and the quality of lifeemployment securityemployee freedom

• Scandinavian cultures

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Attitudinal Dimensions of Culture Work Value and Attitude Similarities

– Research has revealed many similarities in both work values and attitudes

Ronen and Kraut– Smallest space analysis (SSA) - maps the relationship

among countries by showing the distance between each on various cultural dimensions

– Can identify country clusters Ronen and Shenkar

– Examined variables in four categories• Importance of work goals• Need deficiency, fulfillment, and job satisfaction• Managerial and organizational variables• Work role and interpersonal orientation

– Identified eight country clusters and four independent countries

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A Synthesis of Country CulturesNORDIC

FinlandDenmark

Sweden

NEAREASTERN

Turkey

GreeceIran

ARAB

Oman

Bahrain

Abu-Dhabi

Saudi Arabia

GERMANICAustria

Germany

Switzerland

FAREASTERN

MalaysiaSingaporeHongKong

PhilippinesIndonesia

Taiwan

INDEPENDENTIndiaJapan

IsraelBrazil

ANGLO

United Kingdom

Canada

United States

Ireland

South AfricaLATINAMERICAN

Argentina

MexicoChile

Peru

LATINEUROPEAN

France

Belgium

Italy Spain

Figure 5-8

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Comparing Dimensions

Hofstede TrompenaarsPower Distance (high / low)Uncertainty Avoidance (high / low)Individualism / Collectivism Individualism / CollectivismMasculine / Feminine (Success/ Quality)Time Orientation (Long / Short) Time (sequential / synchronous)

Neutral / Emotional (emotional control)Universalism / Particularism Specific / Diffuse (sharing space)Achievement / Ascription (ability / status)Environmental (control / laissez faire)

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Trompenaar’s Cultural DimensionsInterpersonal Relationships

Universalism vs. ParticularismUniversalism: the belief that ideas and practices

can be applied everywhere without modification– U. S., Germany, and Sweden

Particularism: the belief that circumstances dictate how ideas and practices should be applied.

– Spain and Japan

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Individualism Vs. Collectivism

Individualism: refers to people regarding themselves as individuals

–U.S., UK, and Sweden

Collectivism: refers to people regarding themselves as part of a group

– Japan and France

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Neutral Vs. AffectiveNeutral: emotions are held in check

– Japan and the U.S. Affective: emotions are openly and naturally expressed

– Mexico, Netherlands, and Switzerland

Specific Vs. DiffuseSpecific: individuals have a large public space and a

small private space – UK, U. S., and Switzerland

Diffuse: both public and private space are similar in size

– Venezuela, China, and Spain

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Achievement Vs. AscriptionAchievement: people are accorded status based

on how well they perform their functions– U.S., Switzerland, and UK

Ascription: status is attributed based on who or what a person is

– Venezuela and China

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Time

Past or Present-Oriented Vs. Future-Oriented– Past or present-oriented : emphasize the history and

tradition of the culture Venezuela, Indonesia, and Spain

– Future-oriented: emphasize the opportunities and limitless scope

that any agreement can have U. S., Italy, and Germany

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Sequential Vs. Synchronous Time Sequential: time is prevalent, people tend to do only one activity at a time, keep appointments strictly, and prefer to follow plans

– U.S.

Synchronous: time is prevalent, people tend to do more than one activity at a time, appointments are approximate, and schedules are not important

– Mexico and France

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IssueTime

orientationPast Present Future

GeneralPlanning Extension of past

behaviorShort-term Long-term

Emphasis in decision criteria

Precedence Current impact

Desired effects

Reward systems

Historically determined

Currently contracted

Contingent on performance

Variations

Managerial ImpactSpecific by Variation

Variations in Time Orientation

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Environment– Inner-directed

People believe in controlling environmental outcomes

– Outer-directed People believe in allowing things to take their natural

course

Cultural Patterns or Clusters– Defined groups of countries that are similar to

each other in terms of the five dimensions and the orientations toward time and the environment

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Trompenaars’ Cultural GroupsTable 5-5

Anglo cluster

Relationship United States United Kingdom

Individualism x xCommunitarianism Specific relationship x xDiffuse relationship Universalism x xParticularism Neutral relationship xEmotional relationship xAchievement x xAscription

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Trompenaars’ Cultural GroupsTable 5-5

Asian cluster

Relationship Japan China Indonesia Hong Kong Singapore

IndividualismCommunitarianism x x x x xSpecific relationshipDiffuse relationship x x x x xUniversalismParticularism x x x x xNeutral relationship x x x xEmotional relationship xAchievementAscription x x x x x

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Latin American cluster

Relationship Argentina Mexico Venezuela Brazil

Individualism x x xCommunitarianismSpecific relationshipDiffuse relationship x x x xUniversalismParticularism x x x xNeutral relationship x x xEmotional relationship xAchievement x x Ascription x x

Trompenaars’ Cultural GroupsTable 5-5

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Latin-European cluster

Relationship France Belgium Spain Italy

Individualism xCommunitarianism x x xSpecific relationship x xDiffuse relationship x xUniversalism x x xParticularism xNeutral relationship xEmotional relationship x x xAchievement xAscription x x x

Trompenaars’ Cultural GroupsTable 5-5

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Germanic cluster

Relationship Austria Germany Switzerland Czechoslovakia

Individualism xCommunitarianism x x xSpecific relationship x x x Diffuse relationship xUniversalism x x x xParticularism Neutral relationship x xEmotional relationship x x Achievement x x xAscription x

Trompenaars’ Cultural GroupsTable 5-5

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Environment

Inner DirectedBelieve in controlling outcomes

– U.S.

Outer DirectedBelieve in letting things take their own

course– Asian Cultures

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Other Cultural Dimensions

Institutional Collectivism In-group Collectivism Gender Egalitarianism Assertiveness Power Distance Performance Orientation Future Orientation Uncertainty Avoidance Humane Orientation

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IssueBasic human

natureEvil Neutral or

mixedGood

GeneralControl system

Tight, suspicion-based

Moderate, experienced-

based

Loose, information-

basedManagement

styleClose

supervision, Top-down

Moderate supervision, consultative

Laissez-faire , participative

Organization climate

Adversarial, contractual

Collaborative, informal

Variations

Managerial ImpactSpecific by Variation

Variations in Human Nature

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FIGURE 2 Influence Pattern of Culture on Assumptions, Perceptions, and Management Behavior

Potential for success or conflict, and unintended consequences

Interpersonal communication

and management situations

Different interpretation (perceptions) of events,

interactions, and behavior of other people

Different shared mental programs and assumptions

about the “shoulds” or “ought-to’s” (both content and process

assumptions)

Different backgrounds

Person “a” from culture “x”

Person “b” from culture “y”

Individual perceptions

Social, legal, political, economic

institutions

Social, legal, political, economic

institutions

Individual perceptions

Culture “x” Value orientations:

Systemic Learned Shared

Contributing factors History

Language Religion

Environment

Contributing factors History

Language Religion

Environment

Culture “y” Value orientations:

Systemic Learned Shared

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Issue

Relation to nature

Subjugation to nature

Harmony with nature

Mastery over nature

GeneralGoal setting Qualified,

hesitant, vagueContingent, moderated

Specific, confident,

unambiguous, high level

Budget systems

Futile, outcomes predetermined

Exercise, "actuals" are

real

Real, relevant, useful

Variations

Managerial ImpactSpecific by Variation

Variations in Relations to Nature

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IssueActivity Being Containing

and controlling

Doing

GeneralDecision criteria

Emotional Rational Pragmatic

Rewards system

Feelings-based Logic-based Results-based

Concern for output

Spontaneous Balanced objectives

Compulsive

Information and

measurement systems

Vague, feeling-based, intuitive

Complex, qualitative,

broad

Simple, operational, few

indices

Variations

Managerial ImpactSpecific by Variation

Variations in Activities

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IssueRelationships Hierarchical Group Individualistic

GeneralOrganizational

structureAttention on

vertical differentiation

Attention on horizontal

differentiation

Informal, flexible behavior vis-à-vis structures

Communication and influence

patterns

Authority-based Within group emphasis

Multiple, as-needed, open

Reward system Status-based Group-based Individually based

Teamwork Regulated, formal

Normative, routine

Voluntary, informal

Variations

Managerial ImpactSpecific by Variation

Variations in Relationships

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Variations in Spacial OrientationIssueSpace Private Mixed Public

GeneralCommunication

and influence patterns

One-to-one, secret

Selective, semiprivate

Wide, open

Office layout Emphasis on barriers (closed

doors, large desks, ets.)

Specialized spaces (informal furniture next to

formal desk)

Open concept

Interaction patterns

Physically distant, one-to-

one, serial

Moderately spaced,

moderated numbers, organized

Physically close, frequent touching,

multiple relations (sometimes

spontaneously)

Variations

Managerial ImpactSpecific by Variation

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IKEA case

Strength from mastery of value chain– unique design capabilities– unique sourcing– tightly controlled logistic

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IKEA case

Can a company’s “national culture” become a source of competitive advantage?

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IKEA case

Can a company’s “national culture” become a source of competitive advantage?– If yes, then it also must be that a

company’s national culture can become a source of competitive disadvantage

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IKEA case

Strategic SourcingMarketing Mix

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IKEA case

Management - Informal, open, caring– Participatory HR

How did Germany react? France?U.S.?

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IKEA case

Lessons?

– Appeal to customer’s needs & wantsconvenience

– Staged– Focused– “Potato field” approach– Luck & boldness