strat
DESCRIPTION
strategyTRANSCRIPT
Global Strategic Management : Philippe Lasserre
Basic AssumptionsMeaning
Behaviour
Values - Beliefs Preferences
Invisible, Unconscious, Taken for GrantedExample: « Time is limited», « All men are equal »
Explicit, Declared, Example: « Time is Money », « Authority has to prevail »
Observable, Manifest« Looking at the watchBanging on the Table
André Laurent
Global Strategic Management : Philippe Lasserre
THE THREE SOURCES OF CULTURAL DIFFERENCES
CORPORATECOMPANYCULTURE
PROFESSIONALINDUSTRYCULTURE
NATIONALETHNIC
CULTURE
• History of the company ( accumulated experiences: good and bad)• Leadership and dominant coalition• Ownership• Stage of development• Business diversity
• Functional orientation: Marketing Finance Engineering` R and D
• Industry norms: Technology Change Key success factors Types of customers
• Country history• Education• Social organisation• Religion, philosophy
Global Strategic Management : Philippe Lasserre
ANTHROPOLIGICAL AND SOCIOLOGICAL RESEARCHES AND BEHAVIORAL OBSERVATIONS HAVE SHOWN THAT THERE ARE
SIGNIFICANT DIFFERENCES IN BASIC ASUMPTIONS VALUES AND BEHAVIOUR ACROSS NATIONAL CULTURES THOSE DIFFERENCES HAVE
AN IMPACT ON MANAGEMENT BEHAVIOUR
HOFSTEDE’s STUDY:Four Dimensions: POWER DISTANCE / INDIVIDUALISMUNCERTAINTY AVOIDANCE / MASCULINITY-FEMINITY
ANDRÉ LAURENT’s STUDIES: Management and organisational principles
TROMPENAARS’ STUDIES:Value Orientation
RONEN and SHENKAR’S STUDIES: Country Clusters
HALL and HALL’s STUDY: The Silent Language
Global Strategic Management : Philippe Lasserre
Silent Language
Perception of Time
Perception of Space
Language of Material Goods
Friendship
Agreement /Disagreement
Context
SequentialScarce
PunctualityDeadlineEx: German
DelaysPostponment
Ex: Arabic
CircularFluid
Abundant
HighDistance
Avoid PhysicalemotionalProximityEx: British
LowDistance
Physical contactsShowing emotionEx: Latin
FinancialWealth
GivesstatusEx: USA
Materialistic Non-materialistic
EducationFamily
SeniorityGives statusEx: Malaysia
OperationalFactual
RelationshipEx: USA
LongAnd Deep Ex: Japan
WesternLegalisticCountries
ImplicitVerbal
Asiancountries
The PersonMatters more
Than the Content
The ContentMatters more
Than the Person
Anglo-SaxonGermanic
Nordic
African,AsianLatin Americancountries
Source: Adapted from Hall(1960)
QuickAnd Superficial
ExplicitDocumented
Global Strategic Management : Philippe Lasserre
INDIVIDUALISM
100806040200
PO
WE
R D
IST
AN
CE
100
80
60
40
20
0
Arab CountriesMexico
Brazil
Singapore
Taiwan
Hong KongThailand
IndiaIndonesia
JapanSpain
Italy
France
Denmark
Sweden
CanadaAustraliaGermany
UK
USA
Malaysia
Anglo-Saxon/ScandinavianEqalitarian/Individualists
Latin EuropeanHierarchical/Individualists
Asian/Latin AmericanHierarchical/Collectivists
Hofstede Mapping of Cultures on Power Distance and Individualism
Source:Hofstede, 1980
Global Strategic Management : Philippe Lasserre
10 17 1823
27
3844 46
53
6673
7778
0
10
20
30
40
50
60
70
80
90
100
S NL USA DK UK CH B D F I INDO SPAIN JAPAN
“It is important for a manager to have at hand precise answers to most of the questions that subordinates may raise about their work” (Q. 24)
André Laurent/INSEAD
Percent agreement rate across countries
Global Strategic Management : Philippe Lasserre
“IT IS IMPORTANT FOR A MANAGER TO HAVE AT HAND PRECISE ANSWERS TO MOST OF THE QUESTIONS THAT SUBORDINATES MAY
RAISE ABOUT THEIR WORK” (Q 24)1991-2000 DATA
0
10
20
30
40
50
60
S ZAUSA NL DK
CNDG
BAUS D CH B BR F
JAP P I E
Per
cen
t ag
ree
© A. Laurent 2003
Global Strategic Management : Philippe Lasserre
It is important for a manager to have at hand precise answers to most of the questions that subordinates may raise about their work” (Q 24)
0
10
20
30
40
50
60
70
Sweden
USA NLDK UK
Germ
any
CH
Belgiu
m
France
Italy
1977-1979 1991-2000
PE
RC
EN
T A
GR
EE
© André Laurent 2003
Global Strategic Management : Philippe Lasserre
DOING vs. BEING
"DOING" "BEING"X
USAX
ITALY
André Laurent/INSEAD
Global Strategic Management : Philippe Lasserre
The main reason for having a hierarchical structure is so that everybody knows who has authority over whom. Q.14
83
7050
43
42
3434
3130
2617
0 20 40 60 80 100
INDONESIA
JAPAN
ITALY
UK
SWEDEN
USA
André Laurent/INSEAD
Percent agreement rate across countries
Global Strategic Management : Philippe Lasserre
74
5956
5145
4443
3635
3226
0 20 40 60 80
SPAIN
ITALY
GERMANY
FRANCE
UK
SWEDEN
In order to have efficient work relationships, it is often necessary to bypass the hierarchical line. (Q.2)
André Laurent/INSEAD
Percent disagreement rate across countries
Global Strategic Management : Philippe Lasserre
VALUE ORIENTATION
EXAMPLE
1 UNIVERSALISM :
vs. PARTICULARISM :
Rules-based behaviour Relationship-based behaviour
Germanic countries Asian countries
2. INDIVIDUALISM :
vs. COLLECTIVISM :
Individual's rights are supreme Group's rights are supreme
Western countries Asian countries
3. NEUTRAL :
vs. AFFECTIVE :
Emotions are subdued and expressed indirectly Emotions are expressed freely and directly
Asian countries Western countries
4. DIFFUSE :
vs. SPECIFIC :
Focus is on context of situation Focus is on specific issues
Asian countries Germanic countries
5. ACHIEVEMENT :
vs. ASCRIPTION :
Status and respect are achieved by 'doing' Status and respect are ascribed by 'being'
Western countries Asian countries
TROMPENAAR'S FIVE VALUE ORIENTATIONS
Global Strategic Management : Philippe Lasserre
RATIONALITY How objectives are set Importance of systems and procedures
Democratic process System, Rules led
Democratic Consensus led
Democratic Negotiation led Conflict resolution
Democratic Consensus led
Autocratic
Autocratic
AUTHORITY The ground rules for Vertical order. Origin of power
Constitution The Law Decentarilsation
The Law Decentralisation
The State The Law Centralisation
The State The Corporations Decentralisation
The State The Corporations Centralisation
The Families Centralisation
IDENTITY The ground rules for Horizontal order. (What makes society stick)
Individual rights Contracts Heterogeneity (micro cultures)
Social Welfare Homogeneity
Social Welfare Cultural Identity Heterogeneity (micro cultures)
National belonging Cultural Identity Homogeneity
Nationalism Cultural Identity Homogeneity
Clans Ethnic binding
CAPITAL How Financial Capital is found and channelled
Financial markets Low gearing
Banks Medium gearing
State and market Medium gearing
Banks High Gearing
State High Gearing
Family High Gearing
Anglo-American
GermanNordic
French& Latin
Japanese Korean OverseasChinese
Business Systems
Sources: Redding, Whitley, Albert, Berger and Dore, Hampden-Turner, Trompenaars.
Global Strategic Management : Philippe Lasserre
HUMAN CAPITAL How human skills are developed
Academic Performance Led
Academic and Apprenticeship led
Academic Elitist
Academic plus on the job
Academic Elitist
Academic on the job.
SOCIAL CAPITAL How trust is created
High trust Contracts. Legal Institutions
High Trust Contracts
Low trust negotiation
High Trust within groups
High Trust within groups. Low outside
High trust within Family. Low outside
OWNERSHIP Who own enterprises
Shareholders
Banks, Employees, Shareholders
State, Shareholders
Banks, Cross-Shareholding
Business groups, Cross-shareholding
Family Groups
NETWORKING How economic agents relate to each other. (The rules of business transactions)
Contracts
Contracts.. Some Elitist relationships
Elitist Relationships. State Interventionism
Elitist Relationships
Personal Relationships. State Intervention
Personal Relationships
MANAGING How employees are induced to cooperation in the firm
System led Motivation Perforamnce measures
Hierarchical Technical Competence
Hierarchical bureaucracy. Negotiation
Corporate identity. Corporate Loyalty
Hirarchical Corporate Loyalty
Hierarchical Family Loyalty
Anglo-American
GermanNordic
French& Latin
Japanese Korean OverseasChines
Business Systems
Sources: Redding, Whitley, Albert, Berger and Dore, Hampden-Turner, Trompenaars.
Global Strategic Management : Philippe Lasserre
THE IMPACT OF INTERNATIONAL CULTURAL DIFFERENCES FOR MANAGEMENT
• Communication• Etiquette• Decoding attitudes and behaviour• Understanding “silent” language
• “Expatriates” vs “Locals”• Group
building/working/Relationships/`• Conflict resolutions
• Feedback• Control• Reward/Punishments• Personal space• Motivations
• Contracts negotiations• Joint Ventures/Partnerships• Official meetings• Community events/Social events
HIERARCHICAL /MANAGERIAL INTERACTIONS BOSS/COLLEAGUES/SUBORDINATES)
INTERPERSONAL RELATIONSHIPS
PARNERSHIPS/TRANSACTIONS
MULTICULTURAL TEAMS
Global Strategic Management : Philippe Lasserre
MULTICULTURAL vs. MONO-CULTURAL TEAMS
MULTICULTURAL TEAMS
PERFORMANCE
MONO-CULTURAL TEAMS
LOW HIGH
DISASTER SYNERGY
André Laurent/INSEAD
Global Strategic Management : Philippe Lasserre
MAJOR OBSTACLES TO PERFORMANCE IN MULTI-CULTURAL SITUATIONS (1)
• Discussion of differences perceived as uncomfortable,inappropriate, threatening or illegitimate.
• Assumption of similarity/homogeneity.
• Cultural diversity is denied, lost as a potential resourceand transformed into a significant handicap.
• Richness of diversity lost on the way.
André Laurent/INSEAD
Global Strategic Management : Philippe Lasserre
• The gap between pretended similarity and inner convictionof actual difference widens and creates uncomfortablesituation.
• Cautious behavior and unproductive costly politeness emergeas coping mechanisms to handle the situation.
• This leads to low risk taking, avoidance of confrontation and achievement of the smallest common denominator.
MAJOR OBSTACLES TO PERFORMANCE IN MULTI-CULTURAL SITUATIONS (2)
André Laurent/INSEAD
Global Strategic Management : Philippe Lasserre
MAJOR OBSTACLES TO PERFORMANCE IN MULTI-CULTURAL SITUATIONS (3)
• Western individualism.
• Fear of stereotyping
• Parochial mindset (only one way of thinking/acting).
• Ethnocentric mindset (the best way of thinking/acting).
• Blindness to one’s own cultural conditioning.
André Laurent/INSEAD
Global Strategic Management : Philippe Lasserre
MAJOR OBSTACLES TO PERFORMANCE IN MULTI-CULTURAL SITUATIONS (4)
• Perception of the other culture as unfortunate deviation from the norm.
• If diversity is neither recognized, understood, acknowledged nor discussable, how could it possibly be appreciated, valued and utilized?
• Cultural diversity then re-enters as a handicap likely to lead to failure. Any synergy between cultures becomes inaccessible.
André Laurent/INSEAD
Global Strategic Management : Philippe Lasserre
Negotiation Styles: American vs Japanese
Source : Sunshine, 1990
Negotiation Parameters Typical American Typical Japanese
Attitude toward silence during negotiations
Strongly averse; uncomfortable’; “fill the void”
Essential: for decorum; and for non-verbal communication and empathy (haragei).
Reaction to Cross-cultural signals
Unaware; or consider it unimportant
Aware indifference
Attitude toward sequential bargaining and negotiating progress
Strongly attracted to both Unimportant
Attitude toward sharing information
Open; willing Collect it avidly, but don’t give it out
Form of the Contract Long; detailed; covering all foreseeable contingencies
Prefer very short; and limited to general principles and affirmations.
Commitment to the Contract Total binding Weak; the relationship is what counts, not the document; and inevitable changing conditions will necessitate later amendments
Global Strategic Management : Philippe Lasserre
Negotiation Styles: American vs Japanese
Source : Sunshine, 1990
Negotiation Parameters Typical American Typical Japanese
Basic approach to business in general
Transactional; profit-oriented; detail-conscious; legalistic
Structured; strategic; starting from trust
Central purpose of the negotiation
Reaching agreement on a contract
Launching a long-term relationship
Selection Criteria for negotiator(s)
Verbally articulate generalists; technical competence’; “rational abilities”
Rank; position; ”social competence”
Appropriate number of negotiators
Few Many: in order to demonstrate seriousness and for functional coverage, including learning.
Appropriate role(s) of Lawyers
Key participant: leader, contract advisor, and/or draftsperson
None: seen as adversarial troublemakers.
Attitude toward decision-making process, and appropriate degree of delegation of authority to negotiators
Top-down decision-making; very high degree of delegation of authority
Consensual middle-up decision-making (ringi seido); little or no authority delegated to negotiators.
1 of 2
Global Strategic Management : Philippe Lasserre
Negotiation Styles: American vs Japanese
Source : Sunshine, 1990
Negotiation Parameters Typical American Typical Japanese
Appropriate tone for negotiation and communication
Direct; informal; familiar; egalitarian; candid
Highly indirect; highly formal; hierarchical; reserved
Negotiators’ interest in personal feelings and values of counterparts
Little or none; irrelevant or improper; logic more important than emotions; issues more important than personalities
Acute; personal rapport essential to establish trust (ningen kankei).
Appropriateness of socialising with counterparts
Inappropriate; unacceptable; risks conflict of interest and loss of personal control
Highly appropriate; and traditional release; also, ritualised gift-giving.
Attitude toward time during negotiations
Acutely time-conscious; “time is money”; impatient
Patience in the key.
2 of 2
Global Strategic Management : Philippe Lasserre Source: Tony Fang, 1997
Chinese Business Negotiating Styles
• Large team, vague authority,
presence of technical people, often
with incompetent interpreter
• Exploit “agreed principles”
• Play home court
• Buy best technology but show no
appreciation
for monetary value of knowledge
• Making interests
• Price-sensitive
• Stalling, delays and indecision
• Hierarchical
• Non-legalistic vs. Legalistic approach
• Play competitors off against each
other
• “Sweet and sour” approach
• Attrition
• Shaming technique
• Exploiting vulnerabilities
• Taking surprising actions
• Showing anger
• Friendship means obligation
• Double standards
• “Richer bears heavier burden”
• Mixed feelings toward foreigners
• Re-negotiate old issues.
Global Strategic Management : Philippe Lasserre
ETIQUETTE
Addressing How to name the other person
In Malaysia nobility titles are the proper way to address ( Encik, Tan, etc..
In France people are addressed by their title (Monsieur le Directeur)
In the USA first name is normal In Japan, the exchange of business cards is
critical
Gesturing How to position oneself and how to use body language
Feet soles showing are offending Arabs Left hand shaking is not proper in Muslim
countries Finger pointing is considered as highly
threatening and impolite in Asia
Dressing Dress code Malaysian businessmen use jacket and ties while in Singapore long sleeves shirts are normal business attires
Eating Importance of meals in business dealing. Behaviour at the table
French business transactions usually take place at a lunch or dinner table
Chinese banquets and sometime drinking punctuate deals
Timing How to control time Signs of impatience are considered as improper in many cultures
Lengthy preliminaries are usual in the Middle East
Talking Importance of verbal communication
Silent pauses are the norms in Chinese or Japanese
Differences in Business Practice Examples
Global Strategic Management : Philippe Lasserre
RELATIONS Engaging Importance given to
establishing personal relationships in business transactions
Most Asian countries privilege the personalisation of contacts before engaging in business transactions
Contracting Importance given to overall agreements on principles versus details
Legal contracting is the norm in the USA while broad agreements are considered satisfactory in Japan
COMPETING Advantages Product’s technology
versus Connexions as a source of competitive advantage
In China, connexions (Guanxi) are still a very important factor of competitive advantage
Supplying Preferences given to friends and families in supplies contracts
In Asia the notion of “extended families” implies that preferential treatment be given to families and friends for supplies contracts.
Differences in Business Practice Examples