CULTURE AND MULTINATIONAL MANAGEMENT

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CHAPTER 2 CULTURE AND MULTINATIONAL MANAGEMENT
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What Is Culture?

• Culture is the pervasive and shared beliefs,
  norms, values, and symbols that guide everyday
  life
• transmitted by symbols, stories and rituals
• often taken-for-granted

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Levels of Culture
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NATIONAL
CULTURE
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NATIONAL
CULTURE
BUSINESS
CULTURE
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NATIONAL
CULTURE
BUSINESS
CULTURE
ORGANIZATION
OCCUPATIONAL
CULTURE
CULTURE
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NATIONAL
CULTURE
BUSINESS
CULTURE
ORGANIZATION
OCCUPATIONAL
CULTURE
CULTURE
MULTINATIONAL
MANAGEMENT
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Caveats and Cautions

• Stereotyping
• Ethnocentrism
• Cultural relativism

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Two Diagnostic Models to Aid the Multinational
Manager

• Hofstedes Model of National Culture
• 7d Cultural Dimensions Model

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Hofstedes Model of National Culture

• Issues of equality - power distance
• What is different and dangerous - uncertainty
  avoidance

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Hofstedes Model of National Culture, continued

• The individual and the group in society -
  collectivism/individualism
• Gender roles - masculinity
• Confucian values - long term orientation

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POWER DISTANCE

• Inequality is good
• Everyone has a place
• People should depend on a leader
• The powerful are entitled to privileges
• The powerful should not hide their power

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Exhibit 2.2Management Implications Of Power
Distance
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Uncertainty Avoidance

• Avoid conflict
• Low tolerance of deviant people and ideas
• Respect for laws and rules
• Experts and authorities are usually correct
• Consensus is important

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Exhibit 2.3 Management Implications of
Uncertainty Avoidance
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Individualism

• People are responsible for themselves
• Individual achievement is ideal
• People are not emotionally dependent on
  organizations or groups

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Collectivism

• Self identity based on group membership
• A belief that group decision making is best
• A belief that groups protect you in exchange for
  loyalty

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Exhibit 2.4 Management Implications of
Individualism
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Masculinity

• Clear definitions of gender roles
• Men are assertive and dominant
• Support for Machismo
• Men should be decisive
• Work is priority
• Growth, success, and money are important

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Exhibit 2.5 Management Implications Of
Masculinity
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Long Term (Confucian) Orientation

• Belief in substantial savings
• Willingness to invest
• Acceptance of slow results
• Persistence to achieve goals
• Sensitivity to social relationships
• Pragmatic adaptation

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Exhibit 2.6 Management Implications Of Long Term
Orientation
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Hofstedes Dimensions By Countries Exhibit 2.4

• Anglo cultures (US, GB, Australia)
• high on individualism and masculinity, low on
  power distance and uncertainty avoidance

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• Latin European
• high uncertainty avoidance
• Nordic
• low masculinity
• Far Eastern
• high power distance, low individualism

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The 7d Model of Culture Cultural Dimensions and
Critical Questions

• Relationships with People
• universalism vs. particularlism
• Do we consider rules or relationships more
  important?

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The 7d model, continued

• individualism vs. communitarianism
• Do we act mostly as individuals or as groups?
• specific vs. diffuse
• How extensively are we involved with the lives of
  other people?

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The 7d model, continued

• emotional vs. neutral
• Are we free to express our emotions or are we
  restrained?
• achievement vs. ascription
• Do we achieve status through accomplishment or is
  it part of our situation in life (e.g., gender,
  age, social class)?

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The 7d model, continued

• Perspective on Time
• sequential vs. snchronic
• Do we do tasks in sequence or several tasks at
  once?
• Relationship with the Environment
• internal vs. external control
• Do we control the environment or does it control
  us?

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Exhibit 2.9 Universalism versus Particularism
Differences and Managerial Implications
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Exhibit 2.10 Individualism versus Collectivism
Differences and Managerial Implications
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Exhibit 2.11 Neutral versus Affective
Differences and Managerial Implications
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Exhibit 2.12 Specific versus Diffuse Differences
and Managerial Implications
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Exhibit 2.13 Achievement versus Ascription
Differences and Managerial Implications
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Exhibit 2.14 Time Horizon Differences and
Managerial Implications
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Exhibit 2.15 Internal versus External Control
Differences and Managerial Implications
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Conclusions

• Culture has a variety of levels that affect
  multinationals
• Models provide starting point to understand
  culture
• Learning another culture is a never ending process