1. Chapter © 2008The McGraw-Hill Companies, Inc. All rights reserved. International OB: Managing Across Cultures 4 McGraw-Hill/IrwinCopyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

2. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-2 Ch. 4 Learning Objectives 1.Define the term culture, and explain how societal culture and organizational culture combine to influence on-the-job behavior. 2.Define ethnocentrism, and distinguish between high-context and low-context cultures. 3.Identify and describe the nine cultural dimensions from Project GLOBE. 4.Distinguish between individualistic and collectivist cultures, and explain the difference between monochronic and polychronic cultures.

3. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-3 Ch. 4 Learning Objectives 5.Specify the practical lesson from the Hofstede cross- cultural study. 6.Explain what Project GLOBE researchers discovered about leadership. 7.Explain why US managers have a comparatively high failure rate on foreign assignments. 8.Summarize the research findings about Northern American women on foreign assignments, and tell how to land a foreign assignment. 9.Identify four stages of the foreign assignment cycle and the OB trouble spot associated with each.

4. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-4 Culture Culture is: a set of beliefs and values about how people should and do act It involves “taken for granted assumptions” We do not understand that we do not understand

5. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-5 Cultural Influences on OB  Economic/technological setting  Political/legal setting  Ethnic background  Religion Societal Culture  Customs  Language  Personal values/ethics  Attitudes  Assumptions  Expectations Organizational culture Organizational behavior Figure 1

6. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-6 Your Experience I have worked with people of other cultures at work or school. A=Yes, B=No I have experienced a conflict or been frustrated when working with people of other cultures. A = Yes, B=No

7. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-7 Your Experience The conflict I experienced was due to cultural differences. A=Yes, B=No, C= I don’t know Learning about different cultures is interesting to me. 1=Strongly Disagree, 3= Neutral, 5= Strongly Agree

8. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-8 Ethnocentrism: A Cultural Roadblock Ethnocentrism is the belief that one’s native country, culture, language, and modes of behavior are superior to all others How do you overcome this?

9. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-9 Cultural Intelligence Cultural intelligence The ability to interpret ambiguous cross- cultural situations accurately. Involves: Recognizing different values and practices Understanding the meaning of others’ actions Perspective on one’s own ways

10. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-10 Test Your Knowledge A high performing manager was chosen for a foreign assignment. She tells a colleague “I plan on just doing business the way I always do. Why change what works?” People in the new culture may perceive her to be…. a.Ethnocentric b.Culturally intelligent

11. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-11 High vs. Low Context Cultures High-Context Rely heavily on situational cues for meaning What characterizes high-context cultures? What countries have high-context cultures? Low-Context Meaning is derived from the written and spoken word What characterizes low- context cultures? What countries have low-context cultures?

12. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-12 Contrasting High-Context & Low-Context Cultures

13. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-13 Cultural Dimensions from the GLOBE Project Power Distance Uncertainty Avoidance Institutional Collectivism In-group Collectivism Gender Egalitarianism Assertiveness Future Orientation Performance Orientation Humane Orientation

14. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-14 Countries Ranking in GLOBE Dimensions

15. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-15 Individualism vs. Collectivism Individualistic “I” and “Me” cultures Priority given to individual freedom and choice Example countries? Collectivist “We” and “Us” cultures Rank shared goals higher than individual desires and goals Subordinate their own wishes and goals to those of the relevant social unit Example countries?

16. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-16 Cultural Perceptions of Time Monochronic Preference for doing one thing at a time because time is limited, precisely segmented, and schedule driven. What characterizes monochronic cultures? What countries have monochronic cultures? Polychronic Preferences for doing more than one thing at a time because time is flexible and multidimensional. What characterizes polychronic cultures? What countries have polychronic cultures?

17. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-17 Interpersonal Distance Zones 12.0 4.0 1.5 0 US Interpersonal Zones (distance in feet) Public Social Personal Intimate ArabAsian + Latin American Cultures North American + Northern European Figure 4-3

18. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-18 Test Your Knowledge Cultures in which people tend to get right to the point would be considered: a.Polychronic b.Proxemics c.High context d.Low context

19. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-19 Cultural Dimensions: Hofstede Study Does the person embrace stereotypically competitive, masculine traits or nurturing, feminine traits? Masculinity- Femininity How loosely or closely is the person socially bonded? Individualism- Collectivism How much do people expect inequality in social institutions? Power Distance How strongly does the person desire highly structured situations? Uncertainty Avoidance

20. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-20 Test Your Knowledge: How did the US score? A= True, B= False 1.The US scored relatively high in individualism. 2.The US scored high in femininity. 3.The US scored low on uncertainty avoidance.

21. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-21 Leadership Attributes - GLOBE

22. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-22 Foreign Assignments Would you consider taking a foreign assignment for a 6 months to 1 year duration? A=Yes, B=No Expatriates – Anyone living or working in a foreign country

23. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-23 Why U.S. Expatriates Fail on Foreign Assignments Personal and family adjustment problems Homesickness Lack of: Cultural adaptability Patience Flexibility and Tolerance for other’s beliefs

24. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-24 North American Women on Foreign Assignments Proportion of female expatriates has grown Barriers: Self- disqualification and assumption that women would not be welcomed Viewed as foreigners first, then as women

25. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-25 Tips for Landing a Foreign Assignment While in school, pursue foreign study opportunities and become fluent in one or more foreign languages From first interview, clearly state your desire for a foreign assignment Become very knowledgeable about foreign countries where you would like to work Network with expatriates in your company Be visible Stay informed about company’s international strategies and programs Polish your cross-cultural communication skills

26. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-26 The Foreign Assignment Cycle (with OB Trouble Spots) 1.Selection & training “unrealistic expectations” 2.Arrival & adjustment “culture shock” 3.Settling in & acculturating “lack of support” 4.Returning home & adjusting “reentry shock” Home Country Experiences Foreign Country Experiences Reassignment Figure 4-4

27. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-27 Key Cross-Cultural Competencies

28. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-28 Test Your Knowledge When Peter becomes aware of practices different than his own, he tries to perceive things in a different cultural context. He also reminds himself to look at his own practices from the perspective of those from different cultures. Based on this vignette, is Peter demonstrating cross-cultural competence? A. Yes B. No

29. Chapter © 2008The McGraw-Hill Companies, Inc. All rights reserved. Supplemental Slides 4 4-29

30. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-30 Video Cases Cirque du Soleil Disney Imagineering

31. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-31 Management in the Movies Gung Ho – “Assan Motors” In this scene, Stevenson has finally found his meeting with the Assan Motors executives. He sets up and begins his proposal to bring Assan Motors to Hadleyville. What would you have done differently than Stevenson? What decisions should the executives consider before opening a plant in the U.S.?

32. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-32 Managers Hot Seat: Let’s Break a Deal Characters: Michael Sokolow - Mustang Jeans - US Norio Tokunaka - Popwear - Japan Which cultural differences played a major role in this interaction? Both individuals acted according to their cultural norms. Who should have the responsibility for changing their style to work most effectively?

33. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-33 Tips for Business Traveler’s Make Packing a Reflex Action Pack the same items in the same way for every trip Get Briefed Research latest economic and business information on the country you’re visiting Stick to top Business Hotels They have excellent business centers; health clubs; and prestige that has influence with locals Source: McGovern, P. (2007, April) How to be a Local, Anywhere, Inc. Magazine

34. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-34 Tips for Business Traveler’s Arrive Early Take a day or two to walk around and get “in tune” with the people, pace, and culture Bear Gifts In Asia, Latin America, and Africa present your host with a simple gift Practice Humility Don’t boast about your company or accomplishments Talk about your children and their’s and your participation in philanthropic activities

35. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-35 Ethical Dilemma: China China has an immense patient population with a variety of health problems (cancer, diabetes, infectious diseases) 160 million Chinese people have the hepatitis virus China has 44% of the world’s total number of cancer cases Testing new drugs is less expensive and easier to recruit patients than in the US Source: The Rush to Test Drugs in China, Bruce Einhorn, BusinessWeek, May 28, 2007

36. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-36 Ethical Dilemma: China ChinaUS 1-day in hospital $40-$100$750-$1,000 MRI $150-$300$1500-$3000 Yearly Oncologist Salary $40,000 & up$225,000 and up Cost of new drug development $120 million$1 billion Source: The Rush to Test Drugs in China, Bruce Einhorn, BusinessWeek, May 28, 2007

37. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-37 Ethical Dilemma: China But….. People recruited into drug trials aren’t always well- informed Ethical questions regarding stem cell injections and treatments that alter patient’s genes and trafficking human organs make China a less attractive option Source: The Rush to Test Drugs in China, Bruce Einhorn, BusinessWeek, May 28, 2007

38. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-38 MTV International Strategy “Mix youth sensibilities with local tastes” Don’t come across as a “cultural imperialist” Buy local businesses

39. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-39 MTV: World Tour CountriesSubscribers 1 st Qtr 2005 in Millions MTV Asia140.1 MTV Europe125.1 MTV United States87.6 MTV Russia27.1 MTV Brazil18.0 MTV Latin America13.7 MTV Canada0.8 MTV Japan5.4 MTV Australia1.0

40. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-40 Test Your Knowledge: Culture Quiz Which of the following is true? a.Chinese managers find U.S. workplaces comfortable and natural. b.Chinese managers find interpersonal communications to be more blunt than in China. c.Chinese CEO’s usually delegate more responsibility to their subordinates than Americans expect. d.Chinese managers are keenly aware of laws on sexual harassment and equal opportunity and are experienced at handling them.

41. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-41 Test Your Knowledge: Culture Quiz - India "So, does this agreement meet with your approval?" you finally ask your Indian business colleague across the table, after having spent several hours negotiating an important deal. You believe you are very close to an understanding but are disappointed that your Indian colleague begins shaking his head, indicating he does not agree with you. "What else can we do for you?" you ask, feeling let down and disappointed. "Nothing," he replies. How could this have gone so wrong? Taken from http://tools.monster.com/archives/culturequizzes/http://tools.monster.com/archives/culturequizzes/

42. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-42 Test Your Knowledge: Culture Quiz – India (cont.) A)Your problem comes from spending so much time at the table with your Indian colleague. In India, business meetings should last no more than one hour per session. B) In business negotiations in India, agreements must be approved by all people affected by the agreement, which typically means many others who may not have been present at the preceding negotiations. Therefore, asking whether the agreement 'meets with your approval' at the end of the negotiations reflects your naiveté and caused your Indian colleague to lose respect for you. Taken from http://tools.monster.com/archives/culturequizzes/http://tools.monster.com/archives/culturequizzes/

43. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-43 Test Your Knowledge: Culture Quiz – India (cont.) c. Indian businesspeople usually never sign paper agreements at the end of a negotiation. This is typically left for the solicitor, or attorney, and occurs over a period of several months after the negotiations are over. You simply should not have asked the question. d.You have an agreement; don’t worry! Your Indian colleague was not indicating disagreement to your question. You were misreading your Indian colleague’s nonverbal behavior. When Indians wobble their heads from side to side, in what sometimes looks like the 'no' sign to westerners, they are merely indicating they are listening thoughtfully to your statement. More often than not, it means they acknowledge and agree with what you are saying Taken from http://tools.monster.com/archives/culturequizzes/http://tools.monster.com/archives/culturequizzes/

44. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-44 Test Your Knowledge: Culture Quiz - Germany You have made a trip to Frankfurt and you have been eager to see one particular client who has been difficult to meet, and you finally get an appointment for 9 a.m. the next day. However, on your way to the meeting, you hit terrible traffic, and arrive at your appointment 20 minutes late. The door is closed, and the meeting room is filled with a certain chilliness that surprises you. "After all," you think to yourself, "what is 20 minutes when I’ve come across the ocean? I guess they are just looking for a way out of doing business with me." The meeting never seems to get going after that. Taken from http://tools.monster.com/archives/culturequizzes/http://tools.monster.com/archives/culturequizzes/

45. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-45 Test Your Knowledge: Culture Quiz – Germany (cont.) A.You are correct. They do not want to meet with you and are just using your lateness as an excuse to not do business with you. B.They probably do want to meet with you but expect you to be able to stay for lunch: It is critical in Germany that all first meetings with new people include lunch. C.It is an old-fashioned custom in some traditional businesses in Germany never to schedule meetings involving possible new ventures in the morning (as the morning is the time to get things done that are already needing attention, not new business deals, which might be risky). They probably do want to meet with you but are feeling a little put out that you did not call to let them know you were running late. D.Germans organize their time carefully, so punctuality is an important character trait, and something they look for in judging potential business partners.

46. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-46 Test Your Knowledge: Culture Quiz - Mexico You are excited to finally be in Mexico City and meeting your colleague, Carlos Cantu. You extend your hand and say you are pleased to meet him. However, Cantu suddenly pulls you close to him and wraps you in a strong embrace. You are a bit shocked and withdraw. You are really put out when, after a wonderful dinner in a restaurant near the Zocalo later that evening, he takes your arm for a stroll down the street. You wonder what Cantu can be thinking. Taken from http://tools.monster.com/archives/culturequizzes/http://tools.monster.com/archives/culturequizzes/

47. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-47 Test Your Knowledge: Culture Quiz – Mexico (cont.) A.Calm down. Cantu simply greeted you with a classic warm Mexican greeting: The abrazo, or embrace. It signals nothing more than genuine pleasure to know you. And, as a close associate with whom he feels he has developed trust, he is comfortable expressing his friendship by strolling after dinner with you, as friends might in Mexico, arm in arm. This is a very good sign.

48. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-48 Test Your Knowledge: Culture Quiz – Mexico (cont.) b.You did absolutely nothing wrong by quickly withdrawing from what was, perhaps for you, an uncomfortable and unusual indication of an unwanted advance. c.Strolling arm in arm simply expresses his pleasure that you picked up the bill at the restaurant. In Mexico, if you did not pick up the bill, he would not have taken your arm. As for the embrace earlier in the day, think nothing of it. He was expressing happiness that you were taking him out to dinner later that night.

49. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-49 What International Managers Like to Do VariableU.S.AustraliaItaly Leading employees 115 Controlling employees 1099 Making decisions 666 Negotiating773 Networking221

50. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-50 What International Managers Like to Do Cont. VariableJapanIsrael Leading employees 13 Controlling employees 98 Making decisions42 Negotiating Networking 7373 7575

51. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-51 What International Managers Like to Do Cont. VariableU.S.AustraliaItaly Innovating334 Monitoring452 Informing others 547 Doing desk work989 Handling time pressures 810

52. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-52 What International Managers Like to Do Cont. VariableJapanIsrael Innovating21 Monitoring54 Informing others 66 Doing desk work810 Handling time pressures 109

53. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-53 The Polychronic Attitude Index Strongly Disagree DisagreeNeutralAgreeStrongly Agree I do not like to juggle several activities at the same time. 54321 People should not try to do many things at once. 54321 When I sit down at my desk, I work on one project at a time. 54321 I am comfortable doing several things at the same time. 12345

54. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-54 The Polychronic Attitude Index 1.01.52.02.53.03.54.04.55.0 MonochronicPolychronic

55. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-55 Guidelines for Behavior & Ethics in Foreign Cultures: Problems: Morally arrogant Insensitivity to local cultural traditions and tastes Assumption: People in all cultures should follow one set of behavioral and ethical standards Cultural Imperialism “The sun never set on the British Empire” Respect for core human values, which determine the absolute moral threshold for all business activities Respect for local traditions The belief that context matters when deciding what is right and what is wrong Guiding Principles for a Middle Ground Problems: Morally inconsistent Fosters “anything is okay” attitude Assumption: Each culture is right in its own way; there are no international or universal standards Cultural Relativism “When in Rome, do as the Romans do”

56. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. 4-56 Conclusion Questions for discussion