OB in the Cross-Cultural Context
Why are cross-cultural issues important? Growing impact of global business
New markets Demand for global services Low cost manufacturing
U.S. management practices not necessarily likely to translate to different cultures Paradox: may be easier to adjust to a very different culture than to a very similar culture
Why International Management?
Important to have a global perspective
Overseas suppliers or markets Low cost production Emerging markets (Eastern Europe, LDC) E-business has no borders Immigrant labor force even in U.S.
Culture critical to global business, yet hardest to understand
Based on unspoken values and assumptions Human behavior isn’t logical But, human behavior is very complex
Approaches to International Business
Geocentric Use the best methods, no matter what the source
Ethnocentric Home country methods are the best
Polycentric Host country methods are the best
Basic Principles of Culture
What is logical and important in one culture may seem irrational and unimportant in another In describing cultures, people tend to stress the differences and overlook the similarities Stereotyping may be inevitable for people who lack frequent contact with another culture Cultures are not homogenous; differences exist due to gender, age, socioeconomic status, education Understanding another culture is a journey, not a goal
Barriers to Cross-Cultural Understanding
Cultural chauvinism / corporate imperialism / ethnocentrism Stereotypes (positive and negative) The highly successful organization may find it more difficult to adapt
The ethical dilemma Are there common values?
Basic idea of social organization, goal orientation Personality structure (Big 5) Cultural evolution Cultural diffusion Immigration and acculturation
What about cultural convergence?
What Kinds of Differences Make a Difference?
Some specific items:
Different laws Different customs
Business practices and etiquette
Culture in general
U.S. one of few countries where we don’t learn a second (or a third) language Languages learned in school often do not translate to business usage Do you try?
Not in France, not unless you can pronounce it right ! Other countries, yes: it’s a gesture of goodwill
But, even if the language is the same, will we understand? (Britspeak)
Millions of Speakers
1,000 900 800 700 600 500 400 300 200 100 0
Languages of The World
a Sp rin an i En sh gl i Be sh ng al i Po H rtu ind gu i Ja es pa e ne R se us s G ian C hi erm ne se an ( Ja Wu va ) ne s Ko e re a Fr n en ch
M an d
Christianity Chinese Folk Other
Ramadan fasting 5 daily prayers (15 minutes or so), even at work Modest dress for women (including head scarf) Friday, not Sunday (noon prayers on Fridays)
Sample of Mexican employment laws
Individual employment contracts required Strict limits on overtime Unionization by facility Full pay for workers while on strike Discrimination covers political doctrine and social condition
Different Country, Different Customs: Dress and Address
“Casual Days” are a U.S. custom Removing one’s shoes
Herr und Frau, not first names in Germany Titles (Dr., Professor, “Assistant Vice President”, etc.) very important everywhere but U.S.
Addressing Other People
Business cards essential in Latin America, Europe, Japan Personal space: much smaller in Latin America, Spain, Italy
Different Country, Different Customs: Time
Time fluid in Latin America, Spain, Italy Time off work: Germany, France, Scandinavia: 6 weeks vacation, August in the country Africa: everyone attends funerals (impact of AIDS)
Europe (esp. Germany) isn’t open 24/7 Latin America, Middle East, Japan: take time to establish relationship before getting down to business
Working hours and pace
Different Country, Different Customs: Eating and Drinking
Tea in Japan Coffee in Egypt Vodka in Russia A pint over lunch in the UK
India: no beef Islamic countries: no pork or alcohol
Perceptions of Corruption
12 10 8 6 4 2 0
nl an d C an ad Si ng a ap or e m an y C hi le Ire la nd Ja pa n G er ly M ex ic Ug o an da R us si a Ni ge ria UK US Fi Ita
Higher score = less corrupt
Source: Transparency International
4.00 3.50 3.00 2.50
Higher score = less freedom
2.00 1.50 1.00 0.50 0.00
U S C hi le U Fi K nl a C nd an G ad er a m an y Ita l Ja y pa M n ex U ico ga nd N a ig er R ia us sia ap or Ire e la nd
Source: Wall Street Journal
Cultural Dimensions: Hofstede’s Big 4
Based on survey of IBM employees worldwide The dimensions
Collectivism - Individualism Power Distance Uncertainty Avoidance Masculinity / Femininity (quality of life) Does not include LDCs Data 20 years old
However, recent research confirms this structure
Change in Cultures
Hofstede’s data indicates some shift to individualism, but no change in other dimensions Disneyland phenomenon
That is, surface indicators change, but meaning does not Management values in Hong Kong intermediate between PRC and U.S. Indication of flexibility / change?
But….the case of Hong Kong
Collectivism - Individualism
Identification with group vs. identification as an individual Collective cultures:
Think in terms of in-groups and out-groups Life decisions made by group Look after one’s in-group, no matter what Concern for self and immediate family Individual privacy
Association with level of economic development
Collectivism - Individualism: Where
Venezuela Pakistan Taiwan Portugal Greece Brazil India Japan Arab countries
Spain Israel Austria Germany Norway France Canada Great Britain U.S.
The extent to which a culture accepts that power is distributed unevenly High power distance
People have a place in society, high or low Superiors are to be respected Less trust and cooperation Equal rights for everyone Hierarchies are established for convenience Power can be judged to be legitimate or not
Low power distance
Power Distance: Where
Philippines Mexico India Brazil Hong Kong France Turkey Pakistan Japan
Argentina U.S Canada Australia Germany Sweden Ireland Denmark Israel
The extent to which a society feels threatened by ambiguity and uncertainty High uncertainty avoidance
Lots of policies, rules, regulations Hard work valued, time is money Acceptance of authority Conflict avoided Look to common sense Tolerance, constructive conflict Aggression less accepted
Low uncertainty avoidance
Uncertainty Avoidance: Where
Uruguay Belgium Japan France Mexico Israel Italy Austria Arab countries
Germany Switzerland East Africa Canada U.S. India Great Britain Sweden Singapore
Masculinity / Femininity (Quality of Life)
The extent to which society values typically “masculine” values, such as assertiveness, and acquisition of things, as opposed to caring for others and quality of life. Masculine cultures
Clear gender roles; machismo Live to work Ambition, success valued Sympathy for the unfortunate Work to live People are important
Masculinity / Femininity: Where
Japan Italy Mexico Ireland U.S. Australia Hong Kong Arab countries Brazil
Israel Indonesia France Spain South Korea Portugal Finland Netherlands Sweden
Confucian Work Dynamic Based on work done in East Asia by “Chinese Cultural Connection” group Focus on:
Long-term Order Thrift Persistence Respect for tradition
Different Dimensions…Same Result
Company provided housing, marriage brokers, etc. in Asian countries
Feminine concern for people? Taking care of the in-group?
Cooperative labor negotiations
Japan: collective orientation Netherlands: feminine quality of life
Europe: Protestant Work Ethic (Individualistic, High Power Distance, Masculine) Asia: Confucian Work Dynamic
Economic growth and development
Do National Borders = Cultural Borders?
Canada Belgium India
Culturally homogeneous areas
Asians Northern Europe
General Expatriate Issues: The Sojourners
How many are there?
Nobody really knows Estimated 350,000 or more (estimate from 1996)
87% male Managers Sales, technical, professional Estimated 25% to 50% of assignments fail Cost…$50,000 and up
Who are they?
Why do Expatriates Fail?
Family problems (60%) Inability to adjust
Lack of flexibility “Culture shock”
Lack of sensitivity to host culture
An emotional and psychological reaction to the confusion, ambiguity, value conflicts and hidden clashes that occur as a result of fundamentally different ways of perceiving the world and interacting socially between cultures. Disequilibrium
Aspects of Adjustment
Social skills needed to operate in different culture Well-being, satisfaction “Culture shock”
What Can Be Done?
Selection procedures Organizational support: before, during, and after assignment Training
Few U.S. firms train expatriates (30%) Most European / Asian firms do Different success rates clearly establish value of training
Training for Expatriates
Language Cultural differences
Include spouse and, if possible, family members
Other Support Mechanisms
Mentor or buddy systems Trips home Assistance with schooling and other family needs Housing / cost of living differentials Security
Safe housing Guards, kidnapping insurance, etc.