International Management and Cross-Cultural Competence Chapter 4 International Management and Cross-Cultural Competence 1

Chapter Outline Global Organizations for a Global Economy The Internationalization Process From Global Companies to Transnational Companies 2

Chapter Outline (continued) Toward Greater Global Awareness and Cross-Cultural Competence Travelers versus Settlers Contrasting Attitudes Toward International Operations The Cultural Imperative 3

Chapter Outline (continued) Comparative Management Insights Applying American Management Theories Abroad Ouchi’s Theory Z: The Marriage of American and Japanese Management A Cross-Cultural Study of Work Goals An International Contingency Model of Leadership 4

Chapter Outline (continued) Staffing Foreign Positions Why Is the U.S. Expatriate Failure Rate So High? Cross-Cultural Training What about North American Women on Foreign Assignments? Relying on Local Managerial Talent 5

GLOBAL ORGANIZATIONS FOR A GLOBAL ECONOMY The Six-Stage Internationalization Process Stage 1: Licensing Stage 2: Exporting Stage 3: Local warehousing and selling Stage 4: Local assembly and packaging Stage 5: Joint ventures Stage 6: Direct foreign investments 7

GLOBAL ORGANIZATIONS FOR A GLOBAL ECONOMY (continued) Global company: a multinational venture centrally managed from a specific country. Transnational company: a global network of productive units with a decentralized authority structure and no distinct national identity. For Discussion: Why are some people alarmed at the development of transnational companies? What is your opinion? 7

CONTRASTING ATTITUDES TOWARD INTERNATIONAL OPERATIONS Ethnocentric attitude: home-country oriented (“My culture and ways are superior.”) Polycentric attitude: host-country oriented (“When in Rome, do as the Romans Do.”) Geocentric attitude: world-oriented (“Search the globe for the best talent.”) 8

CONTRASTING ATTITUDES TOWARD INTERNATIONAL OPERATIONS (continued) For Discussion: 1. What evidence of an ethnocentric attitude have you observed lately? 2. What problems will ethnocentric managers have in the new global economy? 9

THE CULTURAL IMPERATIVE Culture: the pattern of taken-for granted assumptions about how a given collection of people should think, act, and feel as they go about their daily affairs. For Discussion: What are the largely unspoken “cultural rules” for student behavior in the typical classroom in your native country? 10

THE CULTURAL IMPERATIVE (continued) High-context cultures: people rely heavily on nonverbal and subtle situational messages when communicating with others. Low-context cultures: spoken and written words are used to convey primary meaning. For Discussion: How much emphasis do you put on precise wording, formal contracts, and legal obligations in your business affairs? How is this an expression of your culture? 11

OTHER SOURCES OF CULTURAL DIVERSITY Time monochronic time: perception of time as a straight line broken into standard units. (“Time is money. It is spent, saved, or wasted.”) polychronic time: perception of time as flexible, elastic, and multidimensional. 12

OTHER SOURCES OF CULTURAL DIVERSITY (continued) Interpersonal space Language Religion 13

OTHER SOURCES OF CULTURAL DIVERSITY (continued) For Discussion: 1. Do you tend to be monochronic or polychronic? Explain. How well do you deal with people who have the opposite orientation toward time? 14

OTHER SOURCES OF CULTURAL DIVERSITY (continued) For Discussion: 2. How close is “too close” when you are carrying on a business conversation with a stranger? 15

OTHER SOURCES OF CULTURAL DIVERSITY (continued) For Discussion: 3. How important is it to have a mastery of the local language when doing business in a foreign country? 16

SURVEY OF HOFSTEDE’S CULTURAL DIMENSIONS Instructions: Rate yourself on each of the four dimensions by circling a response. Next, rate your native culture by drawing an X through the appropriate response. Power distance: How readily do individuals accept the unequal distribution of power in organizations and institutions? Low power distance (equality) High Power distance (rank) 1----2----3----4----5----6----7----8----9----10 17

SURVEY OF HOFSTEDE’S CULTURAL DIMENSIONS (continued) Uncertainty avoidance: How threatening are uncertain and ambiguous situations, and how important are rules, conformity, and absolute truths? Avoid uncertainty (rules) Accept uncertainty (chance) 1----2----3----4----5----6----7----8----9----10 18

SURVEY OF HOFSTEDE’S CULTURAL DIMENSIONS (continued) Individualism-collectivism: Are people responsible for their own welfare within a loosely knit social framework, or does the group look out for individuals in exchange for loyalty? Personal responsibility Collective responsibility 1----2----3----4----5----6----7----8----9----10 19

SURVEY OF HOFSTEDE’S CULTURAL DIMENSIONS (continued) Masculinity-femininity: How important are masculine attitudes (assertiveness, money and possessions, and performance) versus feminine attitudes (concern for people, the quality of life, and the environment)? Masculine attitudes Feminine attitudes 1----2----3----4----5----6----7----8----9----10 20

SURVEY OF HOFSTEDE’S CULTURAL DIMENSIONS (continued) For Discussion: 1. How well does your personal profile match your native culture profile? 2. How will your personal profile help (or hinder) your career as a manager? 21

WORK GOALS SURVEY Instructions: Rank the following eleven work-related goals from 1 = most important to you to 11 = least important to you. Rank Interesting work ____ Pay ____ Job Security ____ Match between person and the job ____ 22

WORK GOALS SURVEY (continued) Rank Opportunity to learn ____ Variety ____ Interpersonal relations ____ Autonomy ____ Convenient work hours ____ Opportunity for promotion ____ Working conditions ____ 23

WORK GOALS SURVEY (continued) For Discussion: 1. Which national profile in Table 4.5 most closely matches your rankings? Is there a cultural connection? 2. What sort of career does your work goals profile suggest would be best for you? Explain. 24

CROSS-CULTURAL TRAINING TECHNIQUES Documentary programs Culture assimilator Language instruction Sensitivity training Field experience 25

CROSS-CULTURAL TRAINING TECHNIQUES (continued) For Discussion: 1. If you were going on an 18-month assignment in a country where something other than your native language is spoken, which of these training programs would you want? Why? 26

CROSS-CULTURAL TRAINING TECHNIQUES (continued) For Discussion: 2. Could you transact a complex business negotiation in two or more languages? How much of an advantage are your foreign-language skills in the job market today? 27

RECENT RESEARCH INSIGHTS ABOUT NORTH AMERICAN WOMEN ON FOREIGN ASSIGNMENTS Enjoyed above average success Greatest barriers are self-disqualification and prejudice among home-country managers Culture is a bigger hurdle than gender (foreigner first, woman second) For Discussion (Women): Does this evidence increase your desire to pursue a foreign assignment? Explain. 25