Culture, Management Style, and Business Systems Chapter 5 Culture, Management Style, and Business Systems

Committed to the group - Elitist and rank conscious - Gender bias - Individualist - Consensus oriented – Committed to the group - Elitist and rank conscious - Gender bias - Bribery - management values; management style; business methods; business behaviors business ethics; Business system

patterns of thinking – local business tempo- religious practices – management values; management style; business methods; business behaviors business ethics; patterns of thinking – local business tempo- religious practices – political structure – family loyalty- Business system

Chapter Learning Objectives 1. Required Adaptation 2. American culture impacting management style 3.. Management styles around the world 4. Gender bias in international business 5. Cultural differences and business ethics 6. Culture’s influence on strategic thinking

Manager should have affirmative acceptance of Required Adaptation Manager should have affirmative acceptance of open tolerance, flexibility, humility, justice/fairness, ability to adjust to varying tempos,

7. knowledge of the country, 8. liking for others, Required Adaptation 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

Cultural Imperatives, Electives and Exclusives Cultural imperatives: business customs and expectations … Guanxi / Ningenkankei ( Human Relations in Vertically Structured Japanese Society) / Kankei Critical demeaners: face(cn), eye contact (jpn) Drink: aperitif and liqueur in Czech, coffee in Arab 4. Surname for German, bodily contact for Brazil What has the edge to deal with above 1st aspect ? Informal discussion, entertaining, mutual friends, contacts

Cultural Imperatives, Electives and Exclusives

Cultural Imperatives, Electives and Exclusives Cultural exclusives: customs or behavior patterns reserved exclusively for the locals. Foreigner is barred and must not participate Example: Christian and Muslim

The Impact of American Culture U.S. culture has influenced management style: “Master of destiny” viewpoint Independent enterprise -as the instrument of social action (over family, friend? mexico) Personnel selection and reward based on merit

The Impact of American Culture U.S. culture has influenced management style: Decisions based on objective analysis (comparison: dxm) Wide sharing in decision making (comparison: m.e.) Never-ending quest for improvement Competition yielding efficiency (Collectivistic culture in cn, jpn)

Management Styles Around the World Management values, and behaviors varies: IDV; PDI Contact level, communications emphasis, tempo, formality of foreign businesses Ethical standards Sales interactions and negotiation styles

Management Styles Around the World Cross-cultural differences influence management styles in the following areas: Authority and Decision Making Management Objectives and Aspirations Communication Styles Formality and Tempo P-Time versus M-Time Negotiations Emphasis

Differences in Management Styles Around the World 1. Differences in Authority and Decision Making In high-PDI countries subordinates are not likely to contradict bosses, but in low-PDI countries they often do Three typical patterns exist: top-level management decisions, decentralized decisions, and committee or group decisions

Differences in Management Styles Around the World 2. Differences in Management Objectives and Aspirations towards: Security and mobility payment, training, capability make security – Britain individual achievement, autonomy lifetime position , welfare and retirement plan - France – competent supervision + above

2. Differences in Management Objectives and Aspirations towards: Personal/family Life USA – hard working Protestant ethic JPN – work as most important part Importance of personal/family life over work and profit - Paid vacation

2. Differences in Management Objectives and Aspirations towards: Affiliation and Social Acceptance by neighbors and fellow workers Power and Achievement Orientation sought by managers -----S.America mgrs for power

Differences in Management Styles Around the World 3. Differences in Communication Styles Face to face communications: Edward T. Hall: the symbolic meanings of time, space, things, friendships, agreements, varies from cultures “In some cultures, messages are explicit ,the words carry most of the information.In other cultures, less information is contained in the verbal part of the message since more is in the context”

Differences in Management Styles Around the World 3. Differences in Communication Styles Face to face communications: High-context culture - the contextual ---- who says it? When and how ? ---- nonverbal communication, such as icons, gestures, colors (P110) ---- attitude toward internet Is high context culture a source of high UAI?

Communication in a low-context culture depends more on explicit, verbally expressed communications

Differences in Management Styles Around the World 4. Differences in Communication Styles: Formality and tempo Level of formality in addressing business clients by first name ---- American breezy informality and haste , without lack of job commitment -----German, France Level of formality in addressing your boss by first name

Tempo or speed in getting “down to business” ----Haste does not work in middle east. Arabs do not like deadlines though they may decide rapidly. -----Latin America business need genuine relationship of respect and friendship

Differences in Management Styles Around the World 5. P-Time versus M-Time M-time, or monochromic time, typifies most North Americans, Swiss, Germans, and Scandinavians ----Concentrate one thing at a time ----promptness ----time is money ----get straight to business (USA) Most low-context cultures operate on M-time concentrating on one thing at a time

P-time, or polychronic time, is more dominant in high-context cultures. -----P-time is emphasis more on completion of a human transaction. -----looser time schedule, deeper involvement with individuals and a wait-to-see-what-develops attitude. exp1. Brazil, timepiece less reliable ; late arrivals and excuse for being late. exp2.Latin Americans forget time when talking characterized by multi-tasking and by “a great involvement with people”, absorb context

Mix of Time attitude Japan: On time for meeting –M time After meeting begins – P time How to made time-harmonious relationship?

6. Differences in Negotiations Emphasis Differences with respect to the product, its price and terms, services associated with the product, and finally, friendship between vendors and customers Try to avoid offending Try to avoid misinterpreting motives.

Gender Bias in International Business The gender bias against women managers exists in some countries Women are not accepted in upper level management roles in Asian, Middle Eastern, and Latin American and German ? USA and most Eur countries Birth discrimination Gender bias poses significant challenges in cross-cultural negotiations

Corruption varyingly defined from culture to culture (skip) Business Ethics Business ethics is complex because value judgments differ widely among culturally diverse groups Corruption varyingly defined from culture to culture (skip) Existence of different levels of corruption, bribery, and fraud (P118 table) Low income nations, esp. political economy. Low IDV and high PDI Attitude to corruptions in different countries ---- bribery deductible for German, Dutch, French, Japan etc.

Attitude to corruptions in different countries: ----33 OECD nations signed a convention to combat bribery ----Organization of (Latin ) American States ----USA The Foreign Corrupt Practices Act 1997: Imprisonment for bribery Bribery creates a major conflict between ethics and profitability

Bribery: Variations of Bribery Voluntarily offered payment by someone seeking unlawful advantage ----- mis-classify import goods Extortion: Payments are extracted under duress by someone in authority from a person seeking only what they are lawfully entitled . It is illegal as for USA companies. ----threat to cancel a deal

Bribery: Variations on a Theme Lubrication: Involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law -----exp., to facilitate or fasten a duty. Subornation: Involves giving large sums of money—­frequently not properly accounted for—designed to entice an official to commit an illegal act on behalf of the one offering the bribe; involves breaking the law

Bribery: Variations on a Theme Agent fees: may or may not be a bribe -----Use middleman to pay intermediary fees in form of agent fee, unlawful.

Ethical and Socially Responsible Decisions Dilemma: No local law Local (social) practice Competitor

Ethical and Socially Responsible Decisions Areas of decision making where ethical issues arise: employment practices and policies, consumer protection, environmental protection, political payments and involvement in political affairs of the country, basic human rights and fundamental freedoms

A Framework for Ethical Precepts Three ethical principles that provide a framework for distinguishing between right and wrong: (1) Utilitarian ethics Does the action optimize the “common good” or benefits of all constituencies? And, who are the pertinent constituencies? (2) Rights of the parties Does the action respect the rights of the individuals involved? (3) Justice or fairness Does the action respect the canons of justice or fairness to all parties involved?

The Chinese emphasis on guanxi (one’s network of personal connections) is a kind of capitalism manifested by culture

Culture’s Influence on Strategic Thinking Culture influences managers’ thinking about business strategy The British-American “individualistic” view of capitalism typifies adversarial relationships among labor, management, and government ----IDV German and Japan business system call for co-op with government, management, and labor. ----IDV ------labor representative on corporate boards ------Japan management care for labor welfare

Relationship Oriented v.s. Information Oriented Culture High/low context IDV PDI Linguistic distance Transparency international’s corruption perception index They are largely measuring the same thing.

Cross-cultural Values Americans Japanese Freedom Independence Self-reliance Equality Individualism Competition Efficiency Time Directness Openness Belonging Group harmony Collectiveness Age/seniority Group consciousness Cooperation Quality Patience Indirectness Go-between Elashmawi & Harris 1993