1. Lecture VII
MNC’s Cultural Framework and Managing across Corporate Boundaries (ch. 6)

2. Cultural Complexity – Contextual variations [E. T
Cultural Complexity – Contextual variations [E. T. Hall, The Silent Language, 1973]
Low-context culture
Explicit
More legal paperwork
Verbal communication 
High-context culture
Implicit
Nonverbal communication
Emphasis on value, social norms
Individual’s position in society

3. High-context culture
Implications on MNE’s managerial ideologies, ways of doing business, and cross-cultural negotiations

4. Cultural Typology of MNC’s Organization
Monolithic – Homogeneous, minimum structural integration
Plural – Work force includes host nationals
(structural integration), but the company doesn’t value its cultural diversity
Multicultural – Full structural and informal Integration

5. Case Study
Use the above cultural typology to illustrate the differences among BG’s four strategic orientations of international, multinational, global and transnational companies

6. Factors influencing cultural diversity
Acculturation
Method of resolving the difference between the dominant culture and the minority culture through assimilation, pluralism, or separation
Structural integration
Informal integration
Cultural bias
Highest in the monolithic organizations; least in the multicultural organizations
Intergroup conflicts
Conflicts are higher in the plural organizations

7. Benefits of multiculturalism [Fatehi, 1996]
Reduced costs, and better resources allocation
Marketing advantage
Creativity
Problem solving
Flexibility .. etc

8. National Customs and Business customs
Coincide – Language
Religious effect
Political effect
Laws
Taxes
 Differ – Subject matter
Degree of technicalities

9. National Customs and Business customs (Contd..)
Business customs change continually.
Although highly resistant to change, national customs are transformed by the rapid changes in the business customs

10. Other cross-cultural issues in international business research
Gender role rigidity
Hofstede’s cultural dimensions of Individualism/collectivism, Power distance, Uncertainty avoidance,…
P-time, M-time cultures

11. International Negotiation
Intracultural models
Position –oriented
Interest-oriented
Fisher and Ury [1981], “principled negotiation”
Intercultural models – building the rapport

12. A 10-point intracultural/intercultural negotiation Strategy (F. L
A 10-point intracultural/intercultural negotiation Strategy (F. L. Acuff, 1993)
Plan the negotiation
Adopt a win-win approach
Maintain high standards
Use language that is simple and accessible
Ask lots of questions, then listen with your eyes and ears
Build solid relationships
Maintain personal integrity
Conserve concessions
Be patient
Be culturally literate and adapt to the negotiating strategies of the host country environment

13. Why Strategic Alliances
Technology
Market Access
Pool Capital
Capacity
Shared Risks – reduced risks
An alternative to Merger
Test the water before a full-fledged global integration

14. Strategic Alliances Risks and Costs
competitive collaboration – cases in China
Speed – easy, but not always the best solution
Alliances need not be permanent
Flexibility
Learning