Impact of Cultural Differences on Organisations

What is Culture?
Set of values, beliefs, rules, and institutions held by a specific group of people

Ethnocentricity

Cultural literacy
Detailed knowledge of a culture that enables a person to function effectively within it

Belief that ones own ethnic group or culture is superior to that of others

Culture Matters: Creating a Global Mindset

Cultural Adaptability

Bridging the Gap

Building Global Mentality

Flexibility Is Key

National Culture
Nation states build museums and monuments to preserve the legacies of important events and people

Filmmaking and Broadcasting

Guggenheim and Hong Kong Disney

Subculture
People who share a unique way of life within a larger culture (language, race, lifestyle, attitudes, etc.)
EXAMPLES

Goth, Punk, Emo

Chinas Dialects Groups in U.S. Arabs Globally

Discussion Question
Why should business people try to avoid ethnocentricity and develop cultural literacy?

Answer to Discussion Question

Ethnocentricity distorts ones views of other cultures and causes them to overlook important human and environmental differences among cultures. Cultural literacy improves the ability of managers to manage employees, develop and market products, and conduct negotiations in local markets.

Components of Culture
Physical environments

Aesthetics

Values & attitudes Manners & customs Social structure

Education
Personal communication

Culture

Religion

Aesthetics
Music
Painting Dance

Drama
Architecture

Values and Attitudes

Values
Ideas, beliefs, and customs to which people are emotionally attached

Attitudes
Positive or negative evaluations, feelings, and tendencies people hold toward objects or concepts

Freedom Responsibility Honesty

Time Work Cultural change

Manners and Customs

Manners
Appropriate behavior, speech, and dressing in general

Customs
Traditional ways or behavior in specific circumstances

Customs
Folk

Popular

Gift Giving

Discussion Question
Customs differ from _______ in that they define appropriate ways or behaviors in specific situations. a. Values b. Attitudes c. Manners

Answer to Discussion Question

Customs differ from _______ in that they define appropriate ways or behaviors in specific situations. a. Values b. Attitudes c. Manners

Social Structure
Social group
Two or more people who identify and interact with each other

Social stratification
Process of ranking people into social layers

Social mobility
Ease of moving up or down a culture's "social ladder"

World Religions
Christianity
Islam Hinduism Buddhism Confucianism Judaism Shinto
Origin of Human Values

Language Blunders
Japanese knife manufacturer labeled its exports to the United States with Caution: Blade extremely sharp! Keep out of children. English sign in a Moscow hotel read, You are welcome to visit the cemetery where famous Russians are buried daily, except Thursday. Sign for non-Japanese-speaking guests in a Tokyo hotel read, You are respectfully requested to take advantage of the chambermaids. Sign in English at Copenhagen ticket office read, We take your bags and send them in all directions. Braniff Airlines English-language slogan Fly in Leather was translated into Fly Naked in Spanish.

Lingua Franca
Hola? Guten Tag? Ni Hao? Bonjour?

Hello??

Hello!!!

Mixed Signals

Discussion Question
How does an understanding of the spoken, written, and body language in a market abroad contribute to business success?

Answer to Discussion Question

Knowledge of a cultures spoken and written language gives international managers insight into why people think and act the way they do.

Education
Cultures pass on traditions, customs, and values through schooling, parenting, group memberships, etc.

Education level
Well-educated attract high-paying jobs, while poorly educated attract low-paying manufacturing jobs

Brain drain
Departure of highly educated people from one profession, geographic region or nation to another

Problem of Illiteracy

Source: Based on World Development Indicators, World Bank Web site (www.worldbank.org).

Kluckhohn-Strodtbeck Framework
Relation to nature Material or spiritual

Time orientation

Responsibility to others

Trust and control

View of personal space

Hofstede Framework
Individualism vs. collectivism Uncertainty avoidance Achievement vs. nurturing Long-term orientation Power distance

Power Distance & Individualism vs. Collectivism

Source: Geert Hofstede, The Cultural Relativity of Organizational Practices and Theories, Journal of International Business Studies, Fall 1983, p. 82.

Power Distance & Uncertainty Avoidance

Source: Geert Hofstede, The Cultural Relativity of Organizational Practices and Theories, Journal of International Business Studies, Fall 1983, p. 84.

Discussion Question
Cultures with small ____________ tend to display greater equality and a more equal distribution of rewards. a. Individualism b. Power distance c. Uncertainty avoidance

Answer to Discussion Question

Cultures with small ____________ tend to display greater equality and a more equal distribution of rewards. a. Individualism b. Power distance c. Uncertainty avoidance

Cross-Cultural Risk
A situation or event where a cultural miscommunication puts some human value at stake Arises when we enter environments characterized by unfamiliar languages and unique value systems, beliefs, attitudes, and behaviors One of the four major risks in international business
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Manifestations of Cross-Cultural Risk

Ethnocentric orientation: using our own culture as the standard for judging other cultures Polycentric orientation: a mindset in which the manager develops a greater affinity with the country in which he/she does business than the home country. Geocentric orientation: a global mindset in which the manager is able to understand a business or market without regard to national boundaries. Managers should strive for a geocentric orientation

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What Culture Is not

Culture is: Not right or wrong. Culture is relative. There is no cultural absolute. Different nationalities simply perceive the world differently. Not about individual behavior. Culture is about groups. It refers to a collective phenomenon of shared values and meanings. Not inherited. Culture is derived from the social environment. We are not born with a shared set of values and attitudes; we learn and acquire as the grow up.

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Culture is Learned
Socialization:The process of learning the rules and behavioral patterns appropriate to one's given society, i.e. cultural learning. Acculturation: The process of adjusting and adapting to a culture other than one's own, commonly experienced by expatriate workers. Culture is like an iceberg above the surface, certain characteristics are visible; below the surface is a massive base of assumptions, attitudes and values that strongly influence decisionmaking, relationships, conflict, and other dimensions of business.

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Cross-Cultural Proficiency is Paramount in Managerial Tasks

Examples Developing products and services Communicating and interacting with foreign business partners Negotiating and structuring international business ventures Interacting with current and potential customers Preparing advertising and promotional materials

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 Teamwork. What should managers do if foreign and domestic nationals dont get along? Lifetime employment. Workers in Japan often expect to work for the same firm throughout their careers; How should a foreign firm handle this? Pay for performance system. In China and Japan, a persons age is important in promoting workers. Yet how do such workers perform when merit performance-based measures are used? Organizational structure. Preferences for centralized, bureaucratic structures may deter information sharing. Union-management relationships. Workers in European firms enjoy a more equal status with managers. Attitudes toward ambiguity. If youre uncomfortable working with minimum guidance or taking independent action, you may have difficulty fitting into some cultures.
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Cross-Cultural Differences may Create Challenges

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