OHT 6.1 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 International socio- cultural environment

OHT 6.2 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 High context and low context cultures (1) High context cultures Define personality more in terms of the group than the individual Tend to have a high sensory involvement (low boundaries in terms of personal space) Low context cultures Are more individualistic than group Tend to have a low sensory involvement (high boundaries in terms of personal space)

OHT 6.3 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 High context and low context cultures (2) Initiate and receive more bodily contact when talking Are polychronic, i.e. time has non-linear aspects so punctuality and scheduling low priority Convey more information via explicit codes rather than non verbal language Are monochronic, i.e. time is non-linear so punctuality and scheduling high priority

OHT 6.4 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Hofstede’s five cultural dimensions (1) 1.Individualism (versus collectivism) 2.Power distance –Large (power respect) –Small (power tolerance) 3.Uncertainty avoidance –Weak (uncertainty accepting) –Strong (uncertainty avoiding)

OHT 6.5 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Hofstede’s five cultural dimensions (2) 4.Masculinity/Femininity –Masculine (aggressive goal behaviour) –Feminine (passive goal behaviour) 5.Long-term orientation (versus short-term)

OHT 6.6 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Hofstede’s five dimensions of culture

OHT 6.7 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Confucian societies Motives: role obligation versus self interest Reciprocation: self loss versus self gain Time orientation: long-term versus short-term Power differentiation: Xia versus power Personal versus institutional authority Sanction: share versus guilt

OHT 6.8 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Cultivating guanxi Group identification/altercasting Tendering favours Nurturing long-term mutual benefits Cultivating personal relationships Cultivating trust

OHT 6.9 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Developing intercultural competence (1) Strategies must take account of: –Degree of similarity among the cultural norms of the individuals on the team –Extent to which such norms are manifested in the group

OHT 6.10 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Developing intercultural competence (2) –The level of fluency in the common language used by the team –Communication styles and expectations of what constitutes effective group behaviour –The management style of the team leader

OHT 6.11 Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004 Cultural team building (8-stage process) Corporate cultural profiles Cultural incompatibility identification Development of a joint business purpose Operational independence Structural choice Management systems agreement Staffing the international alliance Assessing the international alliance’s demands on parent company culture