1. Culture, Management Style, and Business Systems
Chapter 5
Culture, Management Style, and Business Systems

2. Committed to the group - Elitist and rank conscious - Gender bias -
Individualist -
Consensus oriented –
Committed to the group -
Elitist and rank conscious -
Gender bias -
Bribery -
management values; management style;
business methods; business behaviors
business ethics;
Business system

3. patterns of thinking – local business tempo- religious practices –
management values; management style;
business methods; business behaviors
business ethics;
patterns of thinking –
local business tempo-
religious practices –
political structure –
family loyalty-
Business system

4. Chapter Learning Objectives
1. Required Adaptation
2. American culture impacting management style
3.. Management styles around the world
4. Gender bias in international business
5. Cultural differences and business ethics
6. Culture’s influence on strategic thinking

5. Manager should have affirmative acceptance of
Required Adaptation
Manager should have affirmative acceptance of
open tolerance,
flexibility,
humility,
justice/fairness,
ability to adjust to varying tempos,

6. 7. knowledge of the country, 8. liking for others,
Required Adaptation
6. curiosity/interest,
7. knowledge of the country,
8. liking for others,
9. ability to command respect,
10. ability to integrate oneself into the environment

7. Cultural Imperatives, Electives and Exclusives
Cultural imperatives: business customs and expectations …
Guanxi / Ningenkankei ( Human Relations in Vertically Structured Japanese Society) / Kankei
Critical demeaners: face(cn), eye contact (jpn)
Drink: aperitif and liqueur in Czech, coffee in Arab
4. Surname for German, bodily contact for Brazil
What has the edge to deal with above 1st aspect ?
Informal discussion, entertaining,
mutual friends, contacts

8. Cultural Imperatives, Electives
and Exclusives

9. Cultural Imperatives, Electives
and Exclusives
Cultural exclusives:
customs or behavior patterns reserved exclusively for the locals.
Foreigner is barred and must not participate
Example: Christian and Muslim

10. The Impact of American Culture
U.S. culture has influenced management style:
“Master of destiny” viewpoint
Independent enterprise -as the instrument of social action
(over family, friend? mexico)
Personnel selection and reward based on merit

11. The Impact of American Culture
U.S. culture has influenced management style:
Decisions based on objective analysis (comparison: dxm)
Wide sharing in decision making (comparison: m.e.)
Never-ending quest for improvement
Competition yielding efficiency (Collectivistic culture in cn, jpn)

12. Management Styles Around the World
Management values, and behaviors varies: IDV; PDI
Contact level,
communications emphasis,
tempo,
formality of foreign businesses
Ethical standards
Sales interactions and negotiation styles

13. Management Styles Around the World
Cross-cultural differences influence management styles in the following areas:
Authority and Decision Making
Management Objectives and Aspirations
Communication Styles
Formality and Tempo
P-Time versus M-Time
Negotiations Emphasis

14. Differences in Management Styles
Around the World
1. Differences in Authority and Decision Making
In high-PDI countries subordinates are not likely to contradict bosses, but in low-PDI countries they often do
Three typical patterns exist:
top-level management decisions,
decentralized decisions, and
committee or group decisions

15. Differences in Management Styles
Around the World
2. Differences in Management Objectives and Aspirations towards:
Security and mobility
payment, training, capability make security
– Britain
individual achievement, autonomy
lifetime position , welfare and retirement plan
- France
– competent supervision + above

16. 2. Differences in Management Objectives and Aspirations towards:
Personal/family Life
USA – hard working Protestant ethic
JPN – work as most important part
Importance of personal/family life over work and profit - Paid vacation

17. 2. Differences in Management Objectives and Aspirations towards:
Affiliation and Social Acceptance by neighbors and fellow workers
Power and Achievement Orientation sought by managers
-----S.America mgrs for power

18. Differences in Management Styles
Around the World
3. Differences in Communication Styles
Face to face communications:
Edward T. Hall: the symbolic meanings of time, space, things, friendships, agreements, varies from cultures
“In some cultures, messages are explicit ,the words carry most of the information.In other cultures, less information is contained in the verbal part of the message since more is in the context”

19. Differences in Management Styles
Around the World
3. Differences in Communication Styles
Face to face communications:
High-context culture - the contextual
---- who says it? When and how ?
---- nonverbal communication, such as icons, gestures, colors (P110)
---- attitude toward internet
Is high context culture a source of high UAI?

20. Communication in a low-context culture depends more on explicit, verbally expressed communications

22. Differences in Management Styles
Around the World
4. Differences in Communication Styles: Formality and tempo
Level of formality in addressing business clients by first name
---- American breezy informality and haste , without lack of job commitment
-----German, France
Level of formality in addressing your boss by first name

23. Tempo or speed in getting “down to business”
----Haste does not work in middle east. Arabs do not like deadlines though they may decide rapidly.
-----Latin America business need genuine relationship of respect and friendship

24. Differences in Management Styles
Around the World
5. P-Time versus M-Time
M-time, or monochromic time, typifies most North Americans, Swiss, Germans, and Scandinavians
----Concentrate one thing at a time
----promptness
----time is money
----get straight to business (USA)
Most low-context cultures operate on M-time concentrating on one thing at a time

25. P-time, or polychronic time, is more dominant in
high-context cultures.
-----P-time is emphasis more on completion of a human transaction.
-----looser time schedule, deeper involvement with individuals and a wait-to-see-what-develops attitude.
exp1. Brazil, timepiece less reliable ; late arrivals and excuse for being late.
exp2.Latin Americans forget time when talking
characterized by multi-tasking and by “a great involvement with people”, absorb context

26. Mix of Time attitude Japan: On time for meeting –M time
After meeting begins – P time
How to made time-harmonious relationship?

28. 6. Differences in Negotiations Emphasis
Differences with respect to the product, its price and terms, services associated with the product, and finally, friendship between vendors and customers
Try to avoid offending
Try to avoid misinterpreting motives.

29. Gender Bias in International Business
The gender bias against women managers exists in some countries
Women are not accepted in upper level management roles in Asian, Middle Eastern, and Latin American and German ?
USA and most Eur countries
Birth discrimination
Gender bias poses significant challenges in cross-cultural negotiations

30. Corruption varyingly defined from culture to culture (skip)
Business Ethics
Business ethics is complex because value judgments differ widely among culturally diverse groups
Corruption varyingly defined from culture to culture (skip)
Existence of different levels of corruption, bribery, and fraud (P118 table)
Low income nations, esp. political economy.
Low IDV and high PDI
Attitude to corruptions in different countries
---- bribery deductible for German, Dutch, French, Japan etc.

31. Attitude to corruptions in different countries:
OECD nations signed a convention to combat bribery
----Organization of (Latin ) American States
----USA The Foreign Corrupt Practices Act 1997:
Imprisonment for bribery
Bribery creates a major conflict between ethics and profitability

34. Bribery: Variations of Bribery
Voluntarily offered payment by someone seeking unlawful advantage
----- mis-classify import goods
Extortion:
Payments are extracted under duress by someone in authority from a person seeking only what they are lawfully entitled . It is illegal as for USA companies.
----threat to cancel a deal

35. Bribery: Variations on a Theme
Lubrication:
Involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law -----exp., to facilitate or fasten a duty.
Subornation:
Involves giving large sums of money—­frequently not properly accounted for—designed to entice an official to commit an illegal act on behalf of the one offering the bribe; involves breaking the law

36. Bribery: Variations on a Theme
Agent fees: may or may not be a bribe
-----Use middleman to pay intermediary fees in form of agent fee, unlawful.

37. Ethical and Socially Responsible Decisions
Dilemma:
No local law
Local (social) practice
Competitor

38. Ethical and Socially Responsible Decisions
Areas of decision making where ethical issues arise:
employment practices and policies,
consumer protection,
environmental protection,
political payments and involvement in political affairs of the country,
basic human rights and fundamental freedoms

39. A Framework for Ethical Precepts
Three ethical principles that provide a framework for distinguishing between right and wrong:
(1) Utilitarian ethics
Does the action optimize the “common good” or benefits of all constituencies? And, who are the pertinent constituencies?
(2) Rights of the parties
Does the action respect the rights of the individuals involved?
(3) Justice or fairness
Does the action respect the canons of justice or fairness to all parties involved?

40. The Chinese emphasis on guanxi (one’s network of personal connections) is a kind of capitalism manifested by culture

41. Culture’s Influence on Strategic Thinking
Culture influences managers’ thinking about business strategy
The British-American “individualistic” view of capitalism typifies adversarial relationships among labor, management, and government IDV
German and Japan business system call for co-op with government, management, and labor. ----IDV
------labor representative on corporate boards
------Japan management care for labor welfare

42. Relationship Oriented v.s. Information Oriented Culture
High/low context
IDV
PDI
Linguistic distance
Transparency international’s corruption perception index
They are largely measuring the same thing.

44. Cross-cultural Values
Americans
Japanese
Freedom
Independence
Self-reliance
Equality
Individualism
Competition
Efficiency
Time
Directness
Openness
Belonging
Group harmony
Collectiveness
Age/seniority
Group consciousness
Cooperation
Quality
Patience
Indirectness
Go-between
Elashmawi & Harris 1993