Organizational Behavior Across Cultures ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Objectives To understand: How social, legal, ethical, political, and economic conditions vary in different cultures The operation of ethnocentrism and cultural shock Ways to overcome barriers to cultural adaptation ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Activity 1 You are a president of a United Arab Emirates firm and are thinking about setting up a factory in a foreign country. Would local attitudes toward work and productivity be an important consideration in your decision? How might unfavorable attitudes toward work and productivity affect production operations? Should your firm avoid investments in countries where there are unfamiliar favorable attitudes? ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Multinational Organizations A global economy is now a reality The emergence of the European Community Changes in the former Soviet Union and eastern Europe Strong markets developing in China, India, Japan, Korea, and other emerging nations Multinational organizations add new dimensions to organizational behavior There are different social, legal, political, and economic environments ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Managing technical aspects is easier than managing social factors Cultural issues arise because much of the world is less developed than the United States and other industrialized nations ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Conditions Affecting Multinational Operations There are similarities among nations, but there are also differences Some nations are economically developed; others are just developing their natural and human resources Some are educationally and socially advanced; others have minimal literacy and social development In each case, the conditions of work are different because of different attitudes, values, and expectations from participants Understanding these differences and how they influence international behavior is aided by examination of key social, legal, ethical, political, and economic conditions ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Conditions Affecting Multinational Operations Social Conditions Many countries have poorly developed human resources Shortages of managerial personnel, scientists, and technicians limit the ability to employ local labor productively Needed skills must be imported temporarily from other countries, while vast training programs begin to prepare local workers ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Lending skilled people to a nation for training their local replacements can provide a more lasting benefit than the lending of capital The loaned skilled people develop locals, who in turn train others People in local cultures are often not familiar with high-technology products and the close margin of error that they tolerate The work ethic can also vary significantly Japanese employees often work several hundred more hours per year than do their American counterparts ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Conditions Affecting Multinational Operations Legal and Ethical Conditions Managers need to be aware of the possible differences in both laws and ethical values that define acceptable and unacceptable behaviors in foreign countries Foreign Corrupt Practices Act of 1977 This law is particularly concerned with the bribery of officials in order to win business Women as expatriates major work issues revolve around the treatment of women and minorities Male-dominated cultures ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Conditions Affecting Multinational Operations Political Conditions Instability and nationalism Organized labor Layoff and transfer restrictions Economic Conditions Per capita income Rapid inflation Unequal distribution of wealth Constrains stability, security, and human resource development ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Conditions Affecting Multinational Operations Individual Differences Masculinity/femininity Individualism/collectivism Accent individual rights and freedoms Place considerable attention on self-respect Uncertainty avoidance Employees in some cultures value clarity and feel very comfortable receiving specific directions from supervisors ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Managing an International Workforce Multiculturalism Leadership styles Communication patterns Other practices Expatriates Parent-country nationals from the nation in which the home office is located Third-country nationals from some other nation ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Cultural Adaptation ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Cultural Shock Confusion and insecurity caused by a strange new environment ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Phases of Cultural Shock Excitement and stimulation Insecurity and disorientation Adaptation ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Overcoming Barriers to Cultural Adaptation Careful selection Desire and support Cultural intelligence Compatible assignments Socio-cultural clusters Anglo-American, Latin European, Latin American, Pacific Rim, Central European Predeparture training ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Cross-Cultural Communication Nonverbal Communication Time efficiency Thought patterns Need for personal space Eye contact Physical appearance Posture Gestures Silence Values placed on seeing the future Touch ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Cross-Cultural Communication Transcultural Managers Cultural preparation Importance of language skills Increasing need for ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved