Learning Outcomes:

y Definition of culture y Importance of culture in international business y Importance of culture to IHRM y Differentiating between convergence, divergence and

cross-vergence

Definition of what we called a culture :

y Culture is the characteristic way of behaving and

believing that a group of people have developed overtime and share. Groups culture consist of: - gives them a sense of who they are, of belonging, of how they should behave. - capacity to adapt to circumstances (culture defines what is appropriate) - affects every aspect of the management process (how people think, solve problems and make decisions)

National Culture and Organizational culture:

y Organizational culture:

in organizational theory, culture is shaped by organization s unique history and situational growth. It can be defined as the values, beliefs and expectations more or less shared by the organization s members . It effects the way a company does business and makes known relevant employees, customers, suppliers, competitors.

y National Culture:

A nation s culture, similar to that of an organization, is comprised of the symbols, values, rituals, and traditions of the people living in a particular region. Language, food, and family traditions are all rooted in national culture. How people behave in public verse how they behave within their own home is also associated with values and standards of their nation. Cultures usually differ in relationships between the individual and society, ways of dealing with conflict, relationships to authority, and conceptions of class and gender.

The 4 Dimensions of culture:

y Dutch scientist, Greet Hofstede identified four

cultural dimensions around which counties have been clustered, with people in each group exhibiting identical behaviours. The four dimensions are Power distance, uncertainty avoidance, individualism and masculinity.

y 1. Power Distance:
power distance is the extent to which power is distributed unequally. High power distance countires have norm, values and beliefs such as:  inequality is fundamentally good  Everyone has a place, some are high, some are low  Most people should be dependent on a leader  The power is entitled to privileges  The powerful should not hide their power Eg: managers adopt theory X leadership style. i.e they must be authoritarian, must force workers to perform and must supervise closely.

y 2. Uncertainty Avoidance:
Uncertainty avoidance is the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that they try to avoid these. Countries with citizens who do not like uncertainty tend to have a high need for security and a strong belief in experts and their knowledge. The characteristics of such culture are:  Conflict should be avoided  Deviant people and ideas should not be tolerated  Laws are very important and should be followed  Experts and authorities are usually correct and  Consensus is important

y 3. Individualism:
individualism is the tendency of people to look after themselves and their family only. The opposite of this is collectivism. The characters of such culture are:  People are responsible for themselves,  Individual achievement is ideal  People need not be emotionally dependent on organizations or groups.

y 4. Masculinity:
It refers to a situation in which the dominant values in a society are success, money and other material things. High masculine culture have norms, values and beliefs that:  Gender roles should be clearly distinguished  Men are more assertive and dominant,  Machismo and exaggerated maleness is good  People-especially men-should be decisive  Works take priority over other things such as family  Advancement, success and money are important. the opposite of masculinity is FEMINITY

Managing Across Culture:

y Managing multiculturalism or cross-cultural management is of considerable significance as it offers the following potential benefits:  Increase creativity and innovation  Demonstrating more sensitivity in dealing with foreign customers  Hiring the best talent from anywhere  Demonstrating a global perspective  Creating a super-organisational culture , using the best of all cultures  Greater flexibility within the organisation both to adapt to a wider range of environments and to change within these environments  To evolve universally acceptable HR policies and practices.

Competencies needed for crosscultural management:

y Possess a strong personal identity y Have knowledge of and felicity with the beliefs and y y y y

values of culture Display sensitivity to the effective processes of the culture Able to communicate with the language of the cultural group Perform specially sanctioned behaviour Maintain active social relations

Leadership across cultures:

y The leader of an MNC needs to be endowed with the following

skills and abilities:

 Cosmopolitan: flexible to operate comfortably in pluralistic

cultural environment

 Skilled at International Communication: knowing

atleast one foreign language and understand foriegners

 Culturally sensitive: use experience in different national, regional and organizational cultures to build relationships  Capability of rapid Acculturation: adjusting to different cultural settings

y Knowledge about cultural and institutional influences on Management: understand how national culture and social institutions affect the entire management y A Facilitator of subordinates intercultural performance: prepare expatriates for overseas assignment taking in mind deep cultural difference. y User of cultural synergy: combine the strength of each cultural group and with performance standardes across culture.

y A promoter and user of the growing World Culture y A commitment to continuous improvement in

self-awareness and renewal

Global findings
y Participative leader is more acceptable in Canada, Brazil and Australia. y Americans like 2 kinds of leaders those who provide employees with empowerment, autonomy and those who are bold, fearful and risk takers. y Malaysians expect leaders to be humble, modest, dignified and they remain in power. y Arab treat leaders as Heroes y Iranians expect their leaders to exhibit power and strength y French expect their leaders to appreciate the finer aspects of French culture and arts and have good knowledge of mathematics y Dutch value equality.

What is the impact of culture on IHRM ?