Using Cultural Differences For Fun and Profit

Approaches to Managing Cultural Differences Multi-domestic Assumption: diversity has no impact. Each national unit is regarded as independent and autonomous with random rather than planned interaction between parts International Assumption: diversity causes only problems. Homogeneity is desirable and is a source of efficiency. Corporate (headquarters) culture dominates Multi-national Assumption: diversity can either cause problems or lead to benefits. Geographical differentiation is considered indispensable. Cultural interaction is encouraged but a balance is maintained between diversity and uniformity

Applications Negotiations Human resources management Motivation Leadership Strategic Planning Design of organizations Marketing Cultural Differences (Tastes) Income Differences (Demographics)

General Conceptual Framework for Planning a Negotiating Strategy Enumerate and characterize the parties Assess their interest and no-deal alternatives Envision potential agreements and bargaining ranges Craft processes for both creating value and claiming it Pay attention to the sustainability of agreements Develop a negotiating strategy (i.e. decide on a negotiating process)

Negotiation Process Four stages: 1)Non-task sounding or relationship building 2)Task-related exchange of information 3)Persuasion 4)Making concessions and reaching agreements Context, duration and importance of each stage can differ significantly across cultures

Negotiation Behavior Differences: Styles of persuasion (e.g. appeal to logic versus affective-intuitive style) Conflict resolution preferences (e.g. confrontation versus balance and restraint, resolution through discussion of mutual interests versus referral to higher levels ) Initial bargaining positions (e.g. low versus high initial offers) Concession patterns (e.g. viewing concessions as acceptable or viewing them as displaying weakness)

HRM: Motivation Approaches Employee Relations Awards for Mastery of Work-related Skills Australia India Taiwan Hong-Kong US Italy Canada Korea Argentina Japan Brazil Austria Germany Uncertainty Avoidance Individualism

HRM: Leadership Styles Legitimate Power Reward Power Referent Power Expert Power Individualism Austria Australia Canada Germany Italy US TaiwanJapan Argentina Hong-Kong Korea India Brazil Yugoslavia Individualism Power Distance

HRM: Strategic Planning Flexible Planning Approaches Trust-based Interactions High-impact Planning Research Rules Analysis Australia India Taiwan Hong-Kong US Italy Canada Korea Argentina Japan Brazil Austria Germany Uncertainty Avoidance Individualism/Collectivism

Design of Organizations Structures Authority sources Delegation Rules Conflict resolution processes

Culture and Advertising 1 (Hoecklin)

Culture and Advertising 2 (Hoecklin)

Culture and Advertising 3 (Hoecklin)

Marketing: Dealing with Socio-economic Differences The developing world presents a great opportunity for corporate growth The attitude toward developing countries must change and better understanding of their business environment much be acquired It is not all about culture – other socio-economic factors are at play

1980s: Imperialist Mindset “New markets for old products” “Squeezing out profits out of sunset technologies” Corporate center as the locus of innovation

Late 1990s: Flip-side of the Coin Competitive advantage is based on rethinking and reconfiguring business models based on direct experience in emerging markets. New logic: understand economic, social, and cultural constraints and transform them into opportunities (preferences, infrastructure)

Why A Different Mindset?

Key Questions Understand the specific needs of the local market (different demographics) Understand the state and the evolution of distribution networks Choose an appropriate mix of global/local leadership Decide if customized or consistent strategies are preferable Learning from local partners, when possible