1. TRANSNATIONAL BUSINESS DR. RAGHDA EL EBRASHI ASSISTANT PROFESSOR OF STRATEGIC MANAGEMENT CHAPTER 4: THE CULTURAL ENVIRONMENT

2. WHAT IS CULTURE?

3. CULTURE  Is a concept that has been used in several social science disciplines to explain variations in human thought processes in different parts of the world.  Is to a society what memory is to an individual.  Objective Component: Consists of such things as infrastructure of roads, architecture, patterns of music, food, and dress habits.  Subjective Component: Ways that people categorize experience, associations, beliefs, attitudes, self- definitions, role definitions, norms, and values.

4. CULTURE AND ITS EFFECT ON THE ORGANIZATION Country Specific Influences Economic system, Political system Technological level Important Historical events Customs and Traditions of the Country Religion, Dialects and Languages Education Cultural Orientation and Value Patterns Attitudes Toward Work, Money, Time, Family, Authority, Change, Risk, Equality International Management Functions Organizing and controlling, Managing technological change, Motivating, Communicating, Decision-making, Negotiating, Ethical/ social responsibility Influences

5. CULTURAL SENSITIVITY  May be defined as a state of heightened awareness for the values and frames of reference of the host culture. Parochialism  Is the belief that there is no other way of doing things except that found within one’s own culture, that is, that there is no better alternative. Ethnocentrism  Is similar to parochialism, and tends to reflect a sense of ethnic superiority, and ethnocentric individuals believe that their ways of doing things are the best, no matter which cultures are involved. Geocentrism  Different from both, reflects a belief that it is necessary to be responsive to local cultures and markets.

6. EXAMPLES OF CULTURAL INSENSITIVE MNCS BEHAVIORS  P&G and Camay soap in Japan TV AD.  Saudi Arabia and magazine ads on flights.  Green and representation of disease in countries with jungles, but associated with cosmetics by the French and Swedes.  Black and representation of death in Egypt, EU, and America, while white represents death in Japan and other Asian countries.  Purple is associated with death in Latin America, and dark red in Ivory Coast.

7. THE DIMENSIONS OF CULTURE

8. KLUCKHOHN AND STRODTBECK’S FRAMEWORK DIMENSIONSEMPHASIS IN CULTURE Relation to Nature Basic human nature Time orientation Space orientation Activity orientation Relationship among people Subjugation Harmony Mastery Evil Mixed Good Past Present Future Private Mixed Public Being Thinking Doing Hierarchical Group based Individualistic

9. HOFSTEDE FRAMEWORK CollectivistIndividualistic People are born into extended families or other in groups which continue to protect them in exchange for loyalty Everyone grows up to look after himself or herself and his or her immediate (nuclear) family only Identity based on the social network the one belongs to Identity is based in the individual Children learn to think in terms of “we”Children learn to think in terms of “I” Harmony should always be maintained and direct confrontation is avoided Speaking one’s mind is a characteristic of an honest person The purpose of education is learning how to do The purpose of education is learning how to learn The employer-employee relationship is perceived in moral terms, like a family-link The employer-employee relationship is a contract based on mutual advantage Hiring and promotion decisions take into account the employee’s in-group Hiring and promotion decisions are based on skills and rules only Management is management of groupsManagement is management of individuals Relationships prevail over tasksTask prevails over relationship

10. HOFSTEDE FRAMEWORK (CONT’D) Low Power DistanceHigh Power Distance Inequalities among people should be minimized Inequalities among people are expected and desired Teachers are experts who transfer impersonal truths Teachers are gurus who transfer personal wisdom Hierarchy in organization means an inequality of roles, established for convenience Hierarchy in organization means there are inequalities between superiors and subordinates Decentralization is popularCentralization is popular The salary range between the top and the bottom of the organization is narrow The salary range between the top and the bottom of the organization is wide Subordinates expected to be consultedSubordinates expect to be told what to do The ideal boss is a resourceful democratThe ideal boss is a benevolent autocrat or good father Privileges and status symbols are frowned upon Privileges and status symbols for managers are both expected and popular

11. HOFSTEDE FRAMEWORK (CONT’D) Weak Uncertainty AvoidanceStrong Uncertainty Avoidance Uncertainty is a normal feature of life and each day is accepted as it comes The uncertainty inherent in life is felt as a continuous threat that must be fought Low stress; subjective feeling of well-beingHigh stress; subjective feeling of anxiety Aggression and emotions should be shownAggression and emotions may be ventilated at appropriate times and place Ambiguous situations and unfamiliar risks cause no discomfort Familiar risks are accepted; unambiguous situations and unfamiliar risks raise fears What is different is curiousWhat is different is dangerous Rules should be limited to those that are strictly necessary There is an emotional need for rules, even if they will never work Comfortable feeling when lazy; hard work only when needed Emotional need to be busy; inner urge to work hard Tolerance of deviant and innovative ideas and behavior Suppression of deviant ideas and behavior; resistance to innovation Motivation by achievement and esteem or belongingness Motivation by security and esteem or belongingness

12. HOFSTEDE FRAMEWORK (CONT’D) FeminineMasculine Dominant values in society are caring for others and quality of life Dominant values in society are material success and progress People and warm relationships are important Money and things are important Everyone is supposed to be modestMen are supposed to be assertive, ambitious, and tough Both men and women are allowed to be tender and concerned with relationships Women are supposed to be tender and take care of relationships Sympathy for the weakSympathy for the strong Work in order to liveLive in order to work Managers use intuition and strive for consensus Managers should be decisive and assertive Stress on equality, solidarity, and quality of work life Stress on equity, competition, and performance Conflicts are resolved through compromise and negotiation Conflicts are resolved by fighting them out

13. THANK YOU!