1. Cover Slide

2. Managing across Cultures
Chapter 5
Managing across Cultures

3. Learning Objectives
Examine the strategic dispositions that characterize responses to different cultures
Discuss cross-cultural differences and similarities
Review cultural differences in select countries and regions, and note some of the important strategic guidelines for doing business in each

4. Strategic Predispositions
Firm allows values and interests of the parent company to guide strategic decisions
Ethnocentric
Company makes strategic decisions tailored to suit the cultures of the countries where the MNC operates
Polycentric
Firm blends its own interests with those of its subsidiaries on a regional basis
Regiocentric
Company integrates a global systems approach to decision making
Geocentric

5. Table 5.1 - Orientation of an MNC under Different Profiles

6. Globalization Imperative
Belief that one worldwide approach to doing business is key to efficiency and effectiveness
Effective multinational companies (MNCs) should make efforts to address local needs
Regional strategies can be used effectively to capture and maintain worldwide market niches

7. Need for Unique Strategies for Different Cultures
Diversity of worldwide industry standards
Continual demand by local customers for differentiated and locally-sourced products
Difficulty of managing global organizations
Local units should be allowed to use their own abilities and talents unconstrained by headquarters

8. Delivery of Marketing Message
Nationality
Nature of advertising
Germans
Factual and rational
Spots feature a standard family of two parents, two children, and grandmother
French
Avoidance of reasoning or logic
Emotional, dramatic, and symbolic
Spots are viewed as cultural events and reviewed as if they were literature or films
British
Laughter is valued
Typical broad, self-deprecating commercial mocks both the advertiser and consumer

9. Challenges Faced by MNCs
Staying abreast of local market conditions and not assuming that all markets are same
Knowing the strengths and weaknesses of its subsidiaries and assisting them in addressing local demands
Giving more autonomy to the subsidiary

10. Barriers to Cross-Cultural Management
Tendency to view the world through one’s own eyes and perspectives
Parochialism
Process of exhibiting the same orientation toward different cultural groups
Simplification

11. Table 5.2 - Six Basic Cultural Variations

12. Cross-Cultural Similarities
Russia and U.S.
Traditional management, communication, human resources, and networking activities
Organizational behavior modification interventions

13. Cross-Cultural Similarities (continued)
Korea and U.S.
Organizational commitment relates to employees' position in the hierarchy, tenure in their current position, and age
Commitment increases with positive perceptions of organizational climate

14. Cross-Cultural Differences
Examples
Human resource management differences
Mexico
Concept of an hourly wage plays a minor role
Austria and Brazil
Employees with one year of service are automatically given 30 days of paid vacation
Some jurisdictions in Canada
Legislated pay equity between male- and female-intensive jobs
Japan
Compensation levels are determined by age, length of service, and educational background
United Kingdom
Employees are allowed up to 40 weeks of maternity leave, and employers must provide a government-mandated amount of pay for 18 of those weeks
Majority of large Swedish companies
Head of human resources is on the board of directors

15. Approaches for Formulating Effective Compensation Strategies in Different Clusters
Examples
Strategies
Pacific Rim countries
Incentive plans should be group-based
Japan, Hong Kong, Malaysia, the Philippines, and Singapore
High salaries should be paid to senior-level managers
Italy and Belgium
Higher salaries should be paid to local senior-level managers
Portugal and Greece
Profit-sharing plans are effective
Denmark, the Netherlands, and Germany
Personal-incentive plans are useful
Great Britain, Ireland, and the United States
Compensation plans should provide opportunity for earnings, recognition, advancement, and challenge

16. GLOBE Project Provides an extensive breakdown of: How managers behave
How different cultures can affect the perspectives of managers

17. Business in China Primary criterion - Technical competence
Value is placed on punctuality, patience, guanxi networking, and reciprocity
Guanxi: Good connections

18. Business in Russia
Building personal relationships with partners is important
Working with local consultants can be valuable
Gift-giving is considered ethical when engaging in business transactions

19. Business in India
India has become a desirable market because of unsaturated consumer markets with cheap labor and production locations
Bureaucratic restrictions have been lifted to attract foreign investment and raise economic growth rate

20. Business in France
Social interactions are affected by class stereotypes
French organizations tend to be highly centralized and have rigid structures
Management is autocratic in nature

21. Business in Brazil
Brazilian businesspeople tend to have a relaxed work ethic
Face-to-face interaction is preferred
Patience is key when managing business

22. Business in Arab Countries
Arab businesspeople:
Follow a fatalistic approach to time
Tend to attach a great deal of importance to status and rank
Business-related discussions may not occur until the third or fourth meeting

23. Review and Discuss
Define the four basic predispositions MNCs have toward their international operations
If a locally based manufacturing firm with sales of $350 million decided to enter the EU market by setting up operations in France, which orientation would be the most effective: ethnocentric, polycentric, regiocentric, or geocentric? Why?
Explain your choice

24. Review and Discuss (continued 1)
In what ways are parochialism and simplification barriers to effective cross-cultural management?
Give an example for each case

25. Review and Discuss (continued 2)
Many MNCs would like to do business overseas in the same way that they do business domestically
Do research findings show that any approaches that work well in the U.S. also work well in other cultures?
If so, identify and describe two