© 2005 Prentice-Hall, Inc. 1-1 Chapter 1 The Management of International Organizational Behavior

© 2005 Prentice-Hall, Inc. 1-2 Learning Objectives Define international organizational behavior Understand why it is important to study IOB Compare industrialization and culture as explanations for IOB Know the role of theory in the study of IOB Explain the benefits of the comparative perspective for studying IOB

© 2005 Prentice-Hall, Inc. 1-3 Globalization A social process in which the constraints of geography on social and cultural arrangements recede, and in which people become increasingly aware that they are receding

© 2005 Prentice-Hall, Inc. 1-4 Questions for the Global Manager Do all cultures have the same understanding of ethics? Are people in different cultures motivated in different ways? Are leadership styles the same in all cultures? How do different cultures manage diversity? Do all cultures negotiate business deals the same way?

© 2005 Prentice-Hall, Inc. 1-5 What is International Organizational Behavior? The study of behavior in organizations around the world

© 2005 Prentice-Hall, Inc. 1-6 Why U.S. OB Theories are Different From IOB Theories U.S. OB theories not sensitive to national cultural differences U.S. studies focus on individual roles and group functioning U.S. methodology emphasizes the scientific method

© 2005 Prentice-Hall, Inc. 1-7 Why Study IOB? Competitive advantage Understand the nature of competition in the global marketplace Explore and evaluate prospects for collaboration with other companies Facilitate borrowing ideas from other cultures to improve organization performance Improve management of people with diverse cultural backgrounds Understanding organizations Understanding own and others’ cultures

© 2005 Prentice-Hall, Inc. 1-8 Explaining IOB Industrialization Vs. Culture Industrialization – Due to industrialization, organizational structures and cultures fundamentally the same regardless of national culture Culture – National, organizational cultures and subcultures can explain behavior

© 2005 Prentice-Hall, Inc. 1-9 Explaining IOB Limitations of cultural explanations Numerous definitions of culture Culture difficult to measure Cultural determinism ignores other factors

© 2005 Prentice-Hall, Inc Theory and IOB Normative theory Formulates the way organizations ought to function Descriptive theory Attempts to portray organizations realistically Value judgments Culturally biased assessments of behavior

© 2005 Prentice-Hall, Inc Theory and IOB Ethnocentrism One's own group is the center of everything, and all others are scaled and rated with reference to it Culture shock An adverse or confused reaction to behavior in other cultures

© 2005 Prentice-Hall, Inc The Comparative Perspective An intellectually sophisticated approach to systematically describe and compare organizational behavior across multiple cultures Can discover differences or similarities in behavior across cultures Global processes - Globalization of the international financial industry Management pluralism- Cultural factors influencing management approach

© 2005 Prentice-Hall, Inc IOB in the 21 st Century Traditional cultural values persist even during the process of globalization Organizations are not all moving toward the same model Countries and organizations use their unique economic, political, and social advantages as leverage in the global marketplace

© 2005 Prentice-Hall, Inc Convergence or Divergence? Globalization Transformation of Work Major cities as centers of power and control Distinct cultural elements influence management of organizations Differences in management philosophies and practices

© 2005 Prentice-Hall, Inc Implications for Managers Understand how culture influences OB Distinguish between normative and descriptive theories Evaluate theories