Chapter 2 Culture and Multinational Management

What is Culture? It is the shared beliefs, norms, values, and symbols that guide everyday life. Norms: determines behaviors what we should do and what we cannot do. Values: what is good/beautiful/holy, and what are legitimate goals for life. Beliefs: represent our understandings about what is true. Symbols, stories, and rituals: communicate the norms, values, and beliefs of a society or a group to its members. Culture is pervasive in society: Affects all aspects of life Not all aspects are observable It is the shared beliefs, norms, values, and symbols that guide everyday life. Norms: determines behaviors what we should do and what we cannot do. Values: what is good/beautiful/holy, and what are legitimate goals for life. Beliefs: represent our understandings about what is true. Symbols, stories, and rituals: communicate the norms, values, and beliefs of a society or a group to its members. Culture is pervasive in society: Affects all aspects of life Not all aspects are observable

Three Levels of Culture 1.National culture: the dominant culture within the political boundaries of the nation- state. 2.Business culture: norms, values, and beliefs that pertain to business in a culture and tells people the correct, acceptable ways to conduct business in a society. 3.Occupational and organizational culture: Occupational culture: the norms, values, beliefs, and expected ways of behaving for people in the same occupational group. Organizational culture: the set of important understandings that members of an organization share. 1.National culture: the dominant culture within the political boundaries of the nation- state. 2.Business culture: norms, values, and beliefs that pertain to business in a culture and tells people the correct, acceptable ways to conduct business in a society. 3.Occupational and organizational culture: Occupational culture: the norms, values, beliefs, and expected ways of behaving for people in the same occupational group. Organizational culture: the set of important understandings that members of an organization share.

Hofstede’s Model of National Culture Five dimensions of basic values Power distance Uncertainty avoidance Individualism Masculinity Long-term orientation Five dimensions of basic values Power distance Uncertainty avoidance Individualism Masculinity Long-term orientation

Hofstede’s Model Applied to Organizations and Management Management practices considered in the discussion of Hofstede’s model include: Human resources management Management selection Training Evaluation and promotion Remuneration Leadership styles Motivational assumptions Decision making and organizational design Strategy Management practices considered in the discussion of Hofstede’s model include: Human resources management Management selection Training Evaluation and promotion Remuneration Leadership styles Motivational assumptions Decision making and organizational design Strategy

Power Distance Power distance concerns how cultures deal w/ inequality and focuses on: Norms that tell superiors (e.g., bosses) how much they can determine the behavior of their subordinates Values and beliefs that superiors and subordinates are different kinds of people High power distance countries have norms, values, and beliefs such as Inequality is fundamentally good Everyone has a place: some are high, some are low Most people should be dependent on a leader The powerful are entitled to privileges The powerful should not hide their power Power distance concerns how cultures deal w/ inequality and focuses on: Norms that tell superiors (e.g., bosses) how much they can determine the behavior of their subordinates Values and beliefs that superiors and subordinates are different kinds of people High power distance countries have norms, values, and beliefs such as Inequality is fundamentally good Everyone has a place: some are high, some are low Most people should be dependent on a leader The powerful are entitled to privileges The powerful should not hide their power

Exhibit 2.2: Managerial Implications for Power Distance

Uncertainty Avoidance Norms, values, and beliefs regarding tolerance for ambiguity Conflict should be avoided Deviant people and ideas should not be tolerated Laws are very important and should be followed Experts and authorities are usually correct Consensus is important Norms, values, and beliefs regarding tolerance for ambiguity Conflict should be avoided Deviant people and ideas should not be tolerated Laws are very important and should be followed Experts and authorities are usually correct Consensus is important

Exhibit 2.3: Managerial Implications of Uncertainty Avoidance

Individualism/Collectivism Focus is on the relationship between the individual and the group Countries high on individualism have norms, values, and beliefs such as People are responsible for themselves. Individual achievement is ideal. People need not be emotionally dependent on organizations or groups. Collectivist countries have norms, values, and beliefs such as One’s identity is based on group membership. Group decision making is best. Groups protect individuals in exchange for their loyalty to the group. Focus is on the relationship between the individual and the group Countries high on individualism have norms, values, and beliefs such as People are responsible for themselves. Individual achievement is ideal. People need not be emotionally dependent on organizations or groups. Collectivist countries have norms, values, and beliefs such as One’s identity is based on group membership. Group decision making is best. Groups protect individuals in exchange for their loyalty to the group.

Exhibit 2.4: Managerial Implications of Individualism/Collectivism

Masculinity Tendency of a culture to support traditional masculine orientation High masculinity countries have beliefs such as Gender roles should be clearly distinguished. Men are assertive and dominant. Machismo/exaggerated maleness in men is good. Men should be decisive. Work takes priority over other duties. Advancement, success, and money are important. Tendency of a culture to support traditional masculine orientation High masculinity countries have beliefs such as Gender roles should be clearly distinguished. Men are assertive and dominant. Machismo/exaggerated maleness in men is good. Men should be decisive. Work takes priority over other duties. Advancement, success, and money are important.

Exhibit 2.5: Managerial Implications of Masculinity

Long-Term Orientation Belief in substantial savings Willingness to invest Acceptance of slow results Persistence to achieve goals Sensitivity to social relationships Pragmatic adaptation Belief in substantial savings Willingness to invest Acceptance of slow results Persistence to achieve goals Sensitivity to social relationships Pragmatic adaptation

Exhibit 2.6: Managerial Implications of Long-term Orientation

Propensity to Trust Growing concern with the development of trusting relationships with partners There is differences among cultures in terms of how and when people trust each other Logic presupposes that individualism should be related to low trust but research shows the opposite Individualistic cultures have higher trust relative to collectivist societies Growing concern with the development of trusting relationships with partners There is differences among cultures in terms of how and when people trust each other Logic presupposes that individualism should be related to low trust but research shows the opposite Individualistic cultures have higher trust relative to collectivist societies

Stereotyping & Ethnocentrism Stereotyping: assumes that all people within one culture behave, believe, feel, and act the same. Ethnocentrism: occurs when people believe that their culture are the only correct set of norms, values, and beliefs. Cultural relativism: all cultures, no matter how different, are correct and moral for the people of those cultures. Stereotyping: assumes that all people within one culture behave, believe, feel, and act the same. Ethnocentrism: occurs when people believe that their culture are the only correct set of norms, values, and beliefs. Cultural relativism: all cultures, no matter how different, are correct and moral for the people of those cultures.