5 - 1

Learning Objectives

• The necessity for adapting to cultural differences• How and why management styles vary around the world• The extent and implications of gender bias in other

countries• The importance of cultural differences in business ethics• The differences between relationship-oriented and

information-oriented cultures

5 - 2

Required Adaptation

All who wish to deal with individuals, firms, or authorities in foreign

countries should be able to meet 10 basic criteria:- 1) open tolerance- 2) flexibility- 3) humility- 4) justice/fairness- 5) ability to adjust to varying tempos- 6) curiosity/interest- 7) knowledge of the country- 8) liking for others- 9) ability to command respect- 10) ability to integrate oneself into the environment

5 - 3

Degree of Adaptation

• Essential to effective adaptation is awareness of one’s own culture and the recognition that differences in others can cause anxiety, frustration, and misunderstanding of the host’s intentions.

• The self-reference criterion (SRC) is especially operative in business customs.

• The key to adaptation is to remain American but to develop an understanding of and willingness to accommodate the differences that exist.

5 - 4

Cultural Imperatives

• The business customs and expectations that must be met and conformed to or avoided

• Friendship motivates local agents to make more sales.• The significance of establishing friendship cannot be

overemphasized, especially in those countries where family relationships are close.

• In some cultures a person’s demeanor is more critical than in other cultures

• What may be an imperative to avoid in one culture is an imperative to do in another.

5 - 5

Cultural Electives and Exclusives

• Cultural electives:- Relate to behavior or customs that you may wish to

conform to or participate in but that are not required.- A cultural elective in one county may be an

imperative in another.- Cultural electives are visibly different customs

• Cultural exclusives:- Those customs or behaviors reserved exclusively for

the locals and from which the foreigner is barred.

5 - 6

The Impact of American Culture on Management Style

• “Master of destiny” viewpoint• Independent enterprise as the instrument of social action• Personnel selection and reward based on merit• Decisions based on objective analysis• Wide sharing in decision making• Never-ending quest for improvement• Competition producing efficiency

5 - 7

Authority and Decision Making

• Influencers of the authority structure of business:- High PDI Countries

• Mexico, Malaysia- Low PDI Countries

• Denmark, Israel• Three typical authority patterns:

- Top-level management decisions- Decentralized decisions- Committee or group decisions

5 - 8

Annual Hours Worked

• Insert Exhibit 5.1

5 - 9

Contextual Background of Various Countries

• Insert Exhibit 5.2

5 - 10

P-Time versus M-Time

• Monochronic time:- Tend to concentrate on one thing at a time- Divide time into units, concerned with promptness- Most low-context cultures operate on M-Time

• Polychronic time:- Dominant in high-context cultures- Characterized by the simultaneous occurrence of

many things- Allows for relationships to build and context to be

absorbed as parts of high-context cultures.

5 - 11

Gender Bias in International Business

• Women represent only 18% of the employees who are chosen for international assignments.

• In many cultures women are not in upper management, and men and women are treated very differently.

- Asia, Middle East, Latin America• Prejudices toward women in foreign countries.• Executives who have had international experience are

more likely to get promoted, have higher rewards, and have greater occupational tenure.

5 - 12

Bribery: Variations on a Theme

• Bribery and Extortion:- Voluntary payment by someone seeking unlawful

advantage is bribery.- payments extracted by someone in authority from a

person seeking what he is lawfully entitled to is extortion.• Subornation and Lubrication:

- Lubrication is small sums of cash, or gifts, given to a low-ranking official in a country where this is legal.

- Subornation involves large sums of money, often not accounted for, designed to entice an official to commit an illegal act on behalf of the one offering the bribe.

5 - 13

A Synthesis, Relationship-Oriented vs. Information-Oriented Cultures

• Studies note a strong relationship between Hall’s high/low context and Hofstede’s Individualism/Collective and Power Distance indexes.

• Information-Oriented Culture- United States

• Relationship Culture- Japan

• Understanding cultural differences allows us to make predictions about unfamiliar cultures.

5 - 14

Summary

• Some cultures appear to emphasize the importance of information and competition while others focus more on relationships and transaction cost reductions.

• Businesspersons working in another country must be sensitive to the business environment and must be willing to adapt when necessary.

• Understanding the culture you are entering is the only sound basis for planning.

• Business behavior is derived in large part from the basic cultural environment in which the business operates.