Amity International Business School

MBA International Business 2nd Semester Cross Cultural Management

By Prof. (Dr.) Gurinder Singh Pro Vice Chancellor, Amity University, U.P. Director General, Amity International Business School & CEO, Association of International Business Schools, UK Sector -125, Noida, U.P., India

What is culture?
Culture is the commonly held and relatively stable beliefs, Attitudes and values that exist within the organization.

CHARACTERISTICS OF CULTURE:

1. Culture is learnt

Internal Environment
[ beliefs, attitudes & values]

External Environment
[Embedded in social, political, legislative, economic &Technological system]

2. Culture is both an input and an output: Culture is both the product of action and conditioning element of future action. It is likely to self perpetuating and highly resistant to change.

3. Culture is partly unconscious:

Member may unconsciously process information that influences the way they think. Conscious beliefs, attitudes and values that underlie behavior may repeatedly lead to success to the extant that they become taken for granted.

4. Culture is historically based: It developed from the original assumptions strategies and structures made by their founders.

5. Culture is commonly held rather than shared

6. Culture is heterogeneous

THE FORMATION OF CULTURE

The nature and formation of individual beliefs, attitudes and values

1.

BELIEF FORMATION

Information

Observation & Inference

Behavior

Beliefs

2.

BELIEFS & ATTITUDES BELIEFS ABOUT X EVALUAION OF ATTRIBUTES

1 2 3 N

ATTITUDES TOWARDS X

3.

VALUES

THE RELATIONSHIP BETWEEN BELIEFS, ATTITUDES, VALUES & BEHAVIOUR

Internal Environment
Sets of Beliefs External Environment

Attitudes

Values

Behavior

The culture of a society comprises the shared values, understandings, assumptions, and goals that are learned from earlier generations, imposed by present members of a society, and passed on to succeeding generations.

Influences on Culture

Managing in Cross culture

HR paradigm Global Benchmarking
Shrinking world Global market

Target and goal setting

Corporate vision Quantified SMART goals Core values defining behavior Performance Management System

We need to have a open mind

What it implies is a willingness to learn, much beyond economic principles be it language, business
culture, local history

respect the other and her cultural background see each interaction as an opportunity to learn adapt and think on her feet accept people for what they are An ability to fell comfortable in different situations An ability to think on a global scale

Session Plan
Session 1, 2, 3 What is Cross Cultural Management? Importance in the area of International Business Resistance of Global players Strategies for breaking Resistance Session 4, 5, 6 Japanese, American, Indian style of Management
Discussion and analysis of John Higgins Case

Session 7, 8 Presentation by students on Case Studies

Mary Kay Cosmetics: Asian Market Entry

 Session 9, 10 Cross Cultural Leadership

Session 11 Presentation by students on Case Studies

Session 12 Role of Ethics in managing Cross Cultures Readings Page 14-35 Case Ciba Geigy P-61, 66, P 67 76]

Session 13, 14 German, French, Spanish styles of management

 Session 15, 16 Presentation by students on Case Studies Session 17, 18 UK, Switzerland, Latin American countries Case Studies Hoover: Multinational Product Planning Harlequin Romances Cummins Engine Company Session 19, 20 Presentation by students on Case Studies

 Session 21, 22

International Negotiation Reference: articles on subtle art of Negotiation, Managing Negotiation

Session 23, 24 Presentation by students on Case Studies Electrolux

Session 25
Management of MNCs Case Studies: Managing Brand ITC: a cultural perspective Proctor & Gamble Snapple Warner- Lambert Ireland

 Session 26-29 Read Article of HBR: Competing with giants: survival strategies for local companies in emerging markets Prepare presentations by selecting a product and company of choice Presentation by the students on the Research Project Work undertaken by them on their respective MNCs and their strategies Session 30, 31 Managing Cultural Differences Session 32-34 Understanding personalities through handwriting, signatures, facial expression, body language, body postures and breathing gaps

 Session 35, 36

Stress Management: Tackling Tough Situations

Session 37, 38

Relationship Handling and Cross Cultural Management

Session 39-40

Case Studies Sony Corporation: Car Navigation Systems Arcelik White Goods

COUNTRY ALLOCATION
Section A & B : EU and North America

Section C, D & E : Asia, LAC, Middle East and CIS Countries

Section F, G & H : Africa

Assignment # 1
1. You need to conceptualize a business concept and translate it into a company which should be of a Foreign origin. You can choose any country. Be creative in conceptualizing the business concept. It may please be original. 2. Your group will consist of minimum 4 students who will have the following designations:CEO (Chief Executive Officer) CFO (Chief Financial Officer) CMO (Chief Marketing Officer) COO (Chief Operating Officer)

3. You need to study the culture, corporate environment, HR practices, management style, governance structure, statutory requirements, strategic management requirements, financial structure, International environment & growth aspects while making your concrete business plan. 4. You may like to search the websites of the successful companies in the area where you want your company to be established. 5. Do extensive research on the country and come up with a report and presentation which may help you in the times to come to start your own business venture in the country.

6. For the country assigned to your group Identify 10 companies ( 5 domestic & 5 international Prepare a strategic paln to do your internship in any of these companies
7. Prepare a report on the country assigned to your group. Also make a video on the country to depict its culture 8. Read one book per week to understand the culture of the country assigned to your group. Write review of the book and give a presentation on the same during the class. 9. Identify top business school / Universities in the assigned country and find out the names of Vice Chancellor or President Of thoes Business School / Universities and invite them during INBUSH. Also explore the possibility for student exchange progarms with them.

Japanese Style of Management

Pertinent Characteristics of Japanese Management

Company-wide union or house union. General preference for inexperienced fresh graduates from schools or colleges. Preference for promotions from within.

Life-time employment.
Quality Control Circles (QCCs).

Pertinent Characteristics of Japanese Management

Training practices On-the-job training In-house and outside training Job rotation Decision making and consultation practices Bottom-up communication Regular management-labour consultation Settlement of conflict trough negotiations

Understand Japanese Management The Company as the Family

Social belonging Life-time employment and loyalty Social status of employees linked to success of company

Social role of employment company song company pin Paternalism Emphasis on harmony (suppression of conflict)
Seniority system

Understand Japanese Management The Company as the Family

Zaibatsu Groups the financial & industrial conglomerates were outgrowths of family enterprises Scarcity of daily necessities during World War II Fostered company-based cooperative activities in the procurement and distribution of goods Companies were used by the government to distribute rations

Understand Japanese Management Recruitment and Training

Fresh graduates are recruited each spring through company's entrance examinations and interviews Well known corporations usually focus on a few high ranking schools and universities Costs and benefits of training internalised within one firm (paternalism / loyalty) Continuous training Seniority system facilitates on-the-job training Senior workers train junior workers without fear of jeopardizing their own position

Understand Japanese Management Participatory Management

Process of decision making not centralized at the top Process of broad consultation and consensus System cannot move capable individuals upwards Moves authority downward through personal contacts and relationships (of CEO and junior)

Understand Japanese Management Participatory Management

Anyone with a stake in the decision will be consulted (hierarchical relationship blurred). Explains why talented, able and young employees can be satisfied under the seniority-based system The Father-leader Authoritarian Able to advance corporate goals through unobtrusive persuasion and conciliation Synthesizes group with warmth, sincerity and humaneness

Japanese Meetings
Punctuality is important it shows respect for the attendees. Consensus nature of decision making in Japan Meetings are often preceded by long, non-business polite conversation which could cover such topics as mutual contacts, the merits of your company, Japanese food etc. as it is an essential element of the relationship-building process. Humour should be avoided during serious business meetings where it will be viewed as out of place. Humour will, in any case, probably not be comprehensible Avoid strong eye contact which can be seen as threatening or hostile behaviour. Body language is minimal and it can be very difficult to gauge progress made or the general sentiment of a meeting. Decisions are arrived at through a lengthy consensus-building process. As it is almost impossible to speed up this process, patience is needed. As the Japanese are loath to say 'no' or disagree, it can be very difficult to be completely confident that a decision or agreement has been reached.

 Business Cards It is important, when doing business in Japan, that you have a plentiful supply of business cards with information printed on the back in Japanese. Cards are presented at an early stage in a formal manner. Present and receive the card with two hands. (Present your card Japanese side up.) Treat your Japanese contact card with respect the card is the man. Do not write on it or leave it behind, as this would show disrespect. During the meeting, place the cards carefully on the table in front of you with the senior personal card on the top.

Gift Giving Gift giving is an endemic part of Japanese business life and should not be confused with notions of bribery and corruption. Gifts should not be too lavish but should always be of good quality. It is important to take a number of small gifts to Japan to distribute to new and existing contacts. Gifts should always be wrapped. Avoid giving gifts in quantities of four or nine as these are unlucky numbers. Anything sharp could signify the desire to end a relationship.
Alcohol, especially good single malt whiskey, is always an appreciated gift.

 Business meals form an integral part of commercial life in Japan

If you are invited out for lunch or dinner (rarely breakfast), it is important to accept. When using chop-sticks, never point them at anybody and do not leave them sticking into your rice. When not in use, rest your chop-sticks on the holder which will be provided on the table. It is considered polite to leave some food on your plate (or in the bowl) at the end of the meal to show that you have eaten a sufficiency. It is customary to remove your shoes when entering.

Japanese Teams
they are naturally group-oriented which underlies the need for a truly consensus approach to issues. The consensus-building process or Nemawashi determines that agreement is sought before a formal meeting in order to avoid any direct confrontation. Self-promotion in the western sense is seen as childish and embarrassing behaviour. It is also important that group members maintain 'face' in front of other group members, which amongst other things means that people must be seen to be modest and humble.

Japanese Communication Styles

Japanese communications are epitomised by subtlety and nuance, where how one appears and what one publicly states (tatemae) and what one really thinks (honne) are often poles apart. There is often a huge distance between the expressed tatemae and the felt honne they can often even be contradictory. It is probably best to say that everything should be questioned in order to ensure that clear understanding has been achieved. Check back several times for clarification of anything that remains unclear.

Japanese body language is very minimal, making it difficult for the untrained observer to read.
Levels of English in Japan are at best very patchy. Much of what is said by English speaking businessmen in cross-national meetings is simply not understood or more worryingly misunderstood.

Women in Business in Japan

Women are largely expected to perform lower grade tasks and to leave employment upon marriage or the birth of children. Western women working in Japan will probably only encounter difficulties when trying to manage Japanese male colleagues

Japanese Dress Code

Appearance is vitally important in Japan and people are often judged on the way they are dressed. The business dark suit, shirt and tie is very much the norm in Japanese mainstream business and although other colours are seen more often nowadays than in the past, it is probably safest to maintain a conservative approach. For women, business dress should be restrained and formal women do not commonly wear trousers in business in Japan. Accessories should be up market but not ostentatious.

The climate in Japan is very varied through the seasons, so take appropriate wear for the season overcoats/raincoats may be needed in the winter.

American Style of Management

Management Style
The United States has adopted what could be labelled a 'scientific' approach to business. This 'scientific' approach - the constant search for better, more effective methods - has led to a business environment typified by the presence of change as a constant factor. American management style can be described as individualistic in approach Managers are accountable for the decisions made within their areas of responsibility. American managers are more likely to disregard the opinions of subordinates

 New is good. Change is ever present in American corporate life and therefore so is the easy acceptance of new ideas, new models etc. Gift giving is unusual in the States and many companies have policies to restrict or forbid the acceptance of presents

Titles can be very confusing within American organisations with a bewildering array of enormously important-sounding job descriptors on offer (Second Vice-President etc.).
Titles are an unreliable guide to relative importance within an organisation due to their proliferation. Respect is earned through conspicuous achievement rather than through age or background. Self-deprecation is often misunderstood by Americans as a sign of weakness. Sell your plus points.

American Meetings
Meetings in the USA, is often aggressive.

This 'confrontational' approach, (where openly and directly debating all the relevant issues even at the expense of personal relationships is valued, ) is very alien to those cultures who always put diplomacy and harmony at the heart of their approach to meetings.
Meetings often include formal presentations by one or more of the participants. These presentations are a vital element in the demonstration of professional competence.

 Presentations should not only be relevant and well researched but also delivered in a positive, enthusiastic and committed manner.
The meeting and especially one in which a presentation has to be made, is seen as an opportunity to impress important if personal success is to be achieved. Punctual for meetings - if you are late apologise.

American Teams
In the States, teams are groups of individuals brought together for the moment to complete a given task or project.

It is important to show enthusiasm for the project and to show belief in the ultimate achievement of the objectives.

In the States, teams are expected to be transitory in nature.

Despite the seeming lack of hierarchy within an American organisation, the boss is the boss and is expected to make decisions and is held accountable for those decisions.

American Communication Styles

Coded speech and verbosity is often seen as time wasting and in time pressured corporate USA, that is a crime. Americans value straight talking and 'getting to the point'. When an impasse is reached in meeting situations, the reaction is often to address it directly and with feeling. This direct, robust debate in the States is seen positively and as a sign of definite progress. Paradoxically, on first introductions, American can seem very friendly, polite and solicitous of your well being which seems to be at odds with the verbal behaviour exhibited half an hour later in the meeting.

 Overt friendliness (Have nice day!, Hi, how are you doing? etc.) should be taken for what it is part of the protocol of the language and not as an attempt at establishing a life long friendship.

Americans are much more open in conversation about private affairs than many European cultures and the converse of this is that Americans will often, quite naively, ask very personal questions at an early stage in a relationship which may be perceived by some people as intrusive.

Women in Business in The USA

Women play an active part in business in the US. Although progress to the boardroom might still be more difficult A large percentage of American executives are women and this percentage is rising year on year.

American Dress Code

Describing dress codes for men traveling on business in the States can be a risky business. Dress will vary from the formal, dark business suit, shirt and tie to literally T-shirt and shorts. Dress code for women is as varied as that for men

Organization and Business Ethics an international perspective

# Business ethics and conflict in Cross Cultural Environment. # Many times personalities become more important and issues become secondary Is it ethical?

# What ethical importance do emotions have in business ?

# How to resolve conflict?

CASE FACTS
# John Higgins (1) Born in U.S.A (2) studies in Japan (3) finishes his M.B.A in Japan.(4) Gets married to Japanese girl.(5) Goes back to U.S.A and joins Weaver Pharma Multinational Co. (6) Stable, loyal, dedicated, hardworking individual.

# for six years working in the same company.

# Gets the promotion and becomes very close to the C.E.O because of his working style.

# After six years C.E.O makes him the Vice President of the Weaver Pharma (Japan).

# Higgins is an American who is embodied with Japanese values. He firmly believes in Japanese style of management and business ethics. 3 Continue..

# In Japan he is reporting to Mr. Prescot who is the president of the company

# Mr. Prescott, an experienced successful business executive follows the American style of Management.

# He is very formal and does not believe in giving up.

# Follows the philosophy of independence rather then philosophy of interdependence.

4
Continue..

# Mr. Higgins is sent to Japan and clash occurs between him and Mr. Prescott over the style of management and Business Ethics.

# Mr. Prescott gets angry with Mr. Higgins when he overlooks his order of suspending two employees for negligence of work.

# With Mr. Parkers approval Mr. Higgins takes the alternate decision which further complicates the situation.

PROBABLE SOLUTIONS
1. Call back Mr. Higgins to U.S.A and give Mr. Prescott complete authority.

2.

Mr. Prescott should be removed from the Japanese unit giving Mr. Higgins complete authority.

3.

Appoint an official between Mr. Prescott and Mr. Higgins breaking the hierarchy and flow of communication.

Thank you