Chapter 5 Managing across Cultures 2018 by Mc
Chapter 5 Managing across Cultures © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Learning Objectives • Examine the strategic dispositions that characterize responses to different cultures • Discuss cross-cultural differences and similarities • Review cultural differences in select countries and regions, and note some of the important strategic guidelines for doing business in each © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Strategic Predispositions Ethnocentric • Firm allows values and interests of the parent company to guide strategic decisions Polycentric • Company makes strategic decisions tailored to suit the cultures of the countries where the MNC operates Regiocentric • Firm blends its own interests with those of its subsidiaries on a regional basis Geocentric • Company integrates a global systems approach to decision making © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Table 5. 1 - Orientation of an MNC under Different Profiles © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Globalization Imperative • Belief that one worldwide approach to doing business is key to efficiency and effectiveness • Effective multinational companies (MNCs) should make efforts to address local needs – Regional strategies can be used effectively to capture and maintain worldwide market niches © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Need for Unique Strategies for Different Cultures • Diversity of worldwide industry standards • Continual demand by local customers for differentiated and locally-sourced products • Difficulty of managing global organizations • Local units should be allowed to use their own abilities and talents unconstrained by headquarters © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Delivery of Marketing Message Nationality Nature of advertising Germans • Factual and rational • Spots feature a standard family of two parents, two children, and grandmother French • Avoidance of reasoning or logic • Emotional, dramatic, and symbolic • Spots are viewed as cultural events and reviewed as if they were literature or films British • Laughter is valued • Typical broad, self-deprecating commercial mocks both the advertiser and consumer © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Challenges Faced by MNCs • Staying abreast of local market conditions and not assuming that all markets are same • Knowing the strengths and weaknesses of its subsidiaries and assisting them in addressing local demands • Giving more autonomy to the subsidiary © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Barriers to Cross-Cultural Management Parochialism • Tendency to view the world through one’s own eyes and perspectives Simplification • Process of exhibiting the same orientation toward different cultural groups © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Table 5. 2 - Six Basic Cultural Variations © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cross-Cultural Similarities • Russia and U. S. – Traditional management, communication, human resources, and networking activities – Organizational behavior modification interventions © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cross-Cultural Similarities (continued) • Korea and U. S. – Organizational commitment relates to employees' position in the hierarchy, tenure in their current position, and age – Commitment increases with positive perceptions of organizational climate © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cross-Cultural Differences Examples Human resource management differences Mexico • Concept of an hourly wage plays a minor role Austria and Brazil • Employees with one year of service are automatically given 30 days of paid vacation Some jurisdictions in Canada • Legislated pay equity between male- and femaleintensive jobs Japan • Compensation levels are determined by age, length of service, and educational background United Kingdom • Employees are allowed up to 40 weeks of maternity leave, and employers must provide a governmentmandated amount of pay for 18 of those weeks Majority of large Swedish companies • Head of human resources is on the board of directors © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Approaches for Formulating Effective Compensation Strategies in Different Clusters Examples Strategies Pacific Rim countries • Incentive plans should be group-based Japan, Hong Kong, Malaysia, the Philippines, and Singapore • High salaries should be paid to senior-level managers Italy and Belgium • Higher salaries should be paid to local senior-level managers Portugal and Greece • Profit-sharing plans are effective Denmark, the Netherlands, and • Personal-incentive plans are useful Germany Great Britain, Ireland, and the United States • Compensation plans should provide opportunity for earnings, recognition, advancement, and challenge © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
GLOBE Project • Provides an extensive breakdown of: – How managers behave – How different cultures can affect the perspectives of managers © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Business in China • Primary criterion - Technical competence • Value is placed on punctuality, patience, guanxi networking, and reciprocity – Guanxi: Good connections © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Business in Russia • Building personal relationships with partners is important • Working with local consultants can be valuable • Gift-giving is considered ethical when engaging in business transactions © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Business in India • India has become a desirable market because of unsaturated consumer markets with cheap labor and production locations • Bureaucratic restrictions have been lifted to attract foreign investment and raise economic growth rate © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Business in France • Social interactions are affected by class stereotypes • French organizations tend to be highly centralized and have rigid structures • Management is autocratic in nature © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Business in Brazil • Brazilian businesspeople tend to have a relaxed work ethic • Face-to-face interaction is preferred • Patience is key when managing business © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Business in Arab Countries • Arab businesspeople: – Follow a fatalistic approach to time – Tend to attach a great deal of importance to status and rank • Business-related discussions may not occur until the third or fourth meeting © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss 1. Define the four basic predispositions MNCs have toward their international operations 2. If a locally based manufacturing firm with sales of $350 million decided to enter the EU market by setting up operations in France, which orientation would be the most effective: ethnocentric, polycentric, regiocentric, or geocentric? Why? – Explain your choice © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 1) 3. In what ways are parochialism and simplification barriers to effective crosscultural management? – Give an example for each case © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 2) 4. Many MNCs would like to do business overseas in the same way that they do business domestically – Do research findings show that any approaches that work well in the U. S. also work well in other cultures? • If so, identify and describe two © 2018 by Mc. Graw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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