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Chapter 05 - Managing Across Cultures

This chapter discusses managing across cultures from an international management textbook. It examines strategic approaches to different cultures, including ethnocentric, polycentric, regiocentric, and geocentric predispositions. It defines each predisposition and describes how they differ in terms of mission, governance, strategy, structure, cultural approach, technology use, marketing, profit distribution, and staffing. The chapter also addresses challenges of global advertising and managing cultural diversity in areas like legal constraints, language limitations, and cultural differences across markets.
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0% found this document useful (0 votes)
107 views44 pages

Chapter 05 - Managing Across Cultures

This chapter discusses managing across cultures from an international management textbook. It examines strategic approaches to different cultures, including ethnocentric, polycentric, regiocentric, and geocentric predispositions. It defines each predisposition and describes how they differ in terms of mission, governance, strategy, structure, cultural approach, technology use, marketing, profit distribution, and staffing. The chapter also addresses challenges of global advertising and managing cultural diversity in areas like legal constraints, language limitations, and cultural differences across markets.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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International Management

International Ninth Edition Luthans | Doh


Fred Luthans

Management Jonathan P. Doh


Ninth Edition

Chapter 5

Managing Across Cultures


International Management Ninth Edition Luthans | Doh

Managing Across Cultures


• The specific objectives of this chapter are to
1. EXAMINE the strategic dispositions that
characterize responses to different cultures.
2. DISCUSS cross-cultural differences and
similarities.
3. REVIEW cultural differences in select countries
and regions, and note some of the important
strategic guidelines for doing business in each.
International Management Ninth Edition Luthans | Doh

The Strategy for Managing


Across Cultures
• There are four distinct strategic
predispositions toward doing things in a
particular way:
1. Ethnocentric 種族優越中心
2. Polycentric 多中心觀點
3. Regiocentric 區域中心觀點
4. Geocentric 地球為中心觀點
International Management Ninth Edition Luthans | Doh

Strategic Predispositions
• Ethnocentric predisposition
– A nationalistic philosophy of management
whereby the values and interests of the parent
company guide strategic decisions.
International Management Ninth Edition Luthans | Doh

Strategic Predispositions
• Ethnocentric predisposition
• The mission is profitability (viability) and the governance is
top-down.
• They use a global integration strategy and have a hierarchical
product division structure.
• They follow the culture of the home country and use mass
production technology.
• For marketing, their product development is determined
primarily by the needs of the home.
• The firm repatriates profits to the home country and people
of the home country are developed for key positions
everywhere in the world.
International Management Ninth Edition Luthans | Doh

Strategic Predispositions
• Polycentric predisposition
– A philosophy of management whereby strategic
decisions are tailored to suit the cultures of the
countries where the MNC operates.
International Management Ninth Edition Luthans | Doh

Strategic Predispositions
• Polycentric predisposition
• The mission is public acceptance (legitimacy) and the governance
is bottom-up, with each subsidiary deciding on local objectives.
• The strategy is national responsiveness and the structure is
hierarchical area divisions, with autonomous national units.
• They follow the culture of the host country and use batch
production technology.
• Marketing involves local product development based on local
needs.
• Profits are retained in the host country and people of local
nationality are developed for key positions in their own country.
International Management Ninth Edition Luthans | Doh

Strategic Predispositions
• Regiocentric predisposition
– A philosophy of management whereby the firm
tries to blend its own interests with those of its
subsidiaries on a regional basis.
International Management Ninth Edition Luthans | Doh

Strategic Predispositions

• Regiocentric predisposition
• The mission is both profitability and public acceptance and
governance is mutually negotiated between a region and its
subsidiaries.
• The strategy is for regional integration and national responsiveness
and the structure is product and regional organization tied through
a matrix.
• The culture is that of the region
• Marketing is standardized within the region, but not across regions.
• Profits are redistributed within the region and regional people are
developed for key positions anywhere in the region.
International Management Ninth Edition Luthans | Doh

Strategic Predispositions
• Geocentric predisposition
– A philosophy of management whereby the
company tries to integrate a global systems
approach to decision making.
International Management Ninth Edition Luthans | Doh

Strategic Predispositions
• Geocentric predisposition
• The mission is the same as regiocentric
• Strategy is global integration and national
responsiveness
• They follow a global culture and use flexible
manufacturing technology.
• Marketing is for global products with local variations.
• Profits are redistributed globally and the best people
from anywhere in the world are developed for key
positions anywhere in the world.
International Management Ninth Edition Luthans | Doh

Orientation of an MNC
Under Different Profiles
International Management Ninth Edition Luthans | Doh

Meeting the Challenge


• The Globalization Imperative
– Belief that one worldwide approach to doing business
is key to efficiency and effectiveness
✓ Economies of scale
✓ Development costs
✓ Promotion of a single brand product
✓ Building brand awareness
International Management Ninth Edition Luthans | Doh

Meeting the Challenge


– Many factors facilitate the need to develop unique
strategies for different cultures:

• Diversity of worldwide industry standards


• Continual demand by local customers for differentiated
products
• Importance of being an insider, as in case of customers
who prefer to “buy local”
• Difficulty of managing global organizations
• Need to allow subsidiaries to use own abilities and
talents unconstrained by headquarters
International Management Ninth Edition Luthans | Doh

Global Advertising
– For Standardized Advertising
• It has significant economic advantages
• Creative talent is scarce - one large effort to develop a campaign
will be more successful than many smaller efforts
• Brand names are global
– Against Standardized Advertising
• Cultural differences among nations are significant
• Country differences in advertising regulations block the
implementation of standardized advertising
– Some features may be in all advertising while other features are
localized
International Management Ninth Edition Luthans | Doh

The Message: Creative Challenges


• There are many problems in communicating a
firm’s product offerings to its various target
markets around the world. Some of these
include:
– Legal Constraints
– Linguistic Limitations
– Cultural Diversity
– Media Limitations
– Production and Cost Limitations
International Management Ninth Edition Luthans | Doh

Legal Constraints

Major advertising regulations:


❑ Advertising of Pharmaceuticals
❑ Comparative Advertising
❑ Content of Advertising Messages
❑ Advertising Targeting Children
❑ Issues of local languages
❑ Tax issues Advertising rates
International Management Ninth Edition Luthans | Doh

Linguistic Limitations
• Advertising from culture does not often
translate well in another culture due to
differences in languages and dialects
• In Taiwan, “Come alive with Pepsi” frightened
consumers as it literally meant “Pepsi will
bring your ancestors back from the grave.”
• Managers must be careful when translating
messages.
International Management Ninth Edition Luthans | Doh

Cultural Diversity
• Cultural Diversity: Ad campaigns and product
brand names being communicated may mean
different things to different cultures
International Management Ninth Edition Luthans | Doh

Cultural dimensions- Example

•Another research
shows that television
advertising in Hong
Kong, a masculine
society, uses more
masculine appeal
(“work”), while
television advertising
in Korea, a feminine
society, uses more
feminine appeals
(“courtesy” and
“family”).

• Source: http://geert-hofstede.com/countries.html
• Young Sook Moon, Kara Chan, (2005),"Advertising appeals and cultural values in television commercials: A
comparison of Hong Kong and Korea", International Marketing Review, Vol. 22 Iss: 1 pp. 48 - 66
International Management Ninth Edition Luthans | Doh

• Research findings
–When consumers’ values match the values
expressed by the ad, the liking for the brand
increases
–Comparative ad is more likely to be effective in
cultures that value masculinity and
individualism
International Management Ninth Edition Luthans | Doh

Media Limitations
• Media Limitations: in some underdeveloped
countries, there is a shortage of advertising
media such as radio stations, print media
(newspapers, magazines), and television
stations, cable TV, and satellite TV
International Management Ninth Edition Luthans | Doh

Production & Cost Limitations

• Production and Cost Limitations: In some


markets costs are prohibitive to advertise on
conventional advertising media; other
countries may have low quality paper to print
advertising
International Management Ninth Edition Luthans | Doh

Meeting the Challenge


Globalization vs. National Responsiveness
• In advertising
– Germans
• Want factual and rational advertising
• Typical German spot features standard family of two parents,
two children, and grandmother
– French
• Avoid reasoning or logic
• Advertising is predominantly emotional, dramatic, symbolic
• Spots are viewed as cultural events―art for sake of money―
and reviewed as if they were literatures or films
– British
• Value laughter above all else
• Typical broad, self-deprecating British commercial amuses by
mocking both advertiser and consumer
International Management Ninth Edition Luthans | Doh

Cross-Cultural Differences
and Similarities
• Parochialism本位主義 and Simplification 單一化
– Parochialism: the tendency to view the world
through one’s own eyes and perspectives
– Simplification: the process of exhibiting the same
orientation toward different cultural groups
International Management Ninth Edition Luthans | Doh

Cross-Cultural Differences
and Similarities
• Similarities across cultures
– In a cross-cultural study comparing Korean and
U.S. workers, Korean employees’ position in the
hierarchy, tenure, and age all related to
organizational commitment—same as the U.S.,
and other similarities include:
– As organizational size increased, commitment declined.
– As structure became more employee-focused, commitment
increased.
– The more positive the perceptions of organizational climate,
the greater the employee commitment.
International Management Ninth Edition Luthans | Doh

Cross-Cultural Differences
and Similarities
• Differences across cultures
– Far more differences than similarities found in
cross-cultural research
– Wages, compensation, pay equity, maternity leave
– Importance of criteria used in evaluation of
employees
International Management Ninth Edition Luthans | Doh

Cross-Cultural Differences
and Similarities
Differences across cultures
• In Pacific Rim countries, incentive plans should be group-based.
• In high-masculinity cultures—Japan, Hong Kong, Malaysia, the
Philippines, Singapore—high salaries should be paid to senior
level managers.
• In Portugal and Greece, both with a low individualism index,
profit-sharing plans would be more effective than individual
incentive plans.
• While in Denmark, the Netherlands, and Germany, personal-
incentive plans would be highly useful due to the high
individualism in these cultures.
• Compensation plans should reflect these needs.
International Management Ninth Edition Luthans | Doh

A Partially Completed Contingency Matrix for


International Human Resource Management

continues
International Management Ninth Edition Luthans | Doh

A Partially Completed Contingency Matrix for


International Human Resource Management
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: China
• Doing Business in China
1. The Chinese place values and principles above money
and expediency.
2. Business meetings typically start with pleasantries such
as tea and general conversation about the guest’s trip to
the country, local accommodations, and family.
3. The Chinese host will give the appropriate indication for
when a meeting is to begin and when the meeting is over.
4. Once the Chinese decide who and what is best, they
tend to stick with these decisions. Although slow in
formulating a plan of action, once they get started, they
make fairly good progress.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: China
5. In negotiations, reciprocity is important. If the
Chinese give concessions, they expect some in
return.
6. Because negotiating can involve a loss of face, it is
common to find Chinese carrying out the whole
process through intermediaries.
7. During negotiations, it is important not to show
excessive emotion of any kind. Anger or frustration
is viewed as antisocial and unseemly.
8. Negotiations should be viewed with a long-term
perspective. Those who will do best are the ones
who realize they are investing in a long-term
relationship.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: Russia
• Doing Business in Russia
1. Build personal relationships with partners. When there
are contract disputes, there is little protection for the
aggrieved party because of the time and effort needed
to legally enforce the agreement.
2. Use local consultants. Because the rules of business have
changed so much in recent years, it pays to have a local
Russian consultant working with the company.
3. Ethical behavior in the United States is not always the
same as in Russia. For example, it is traditional in Russia
to give gifts to those with whom one wants to transact
business.
4. Be patient. In order to get something done in Russia, it
often takes months of waiting.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: Russia
5. Russians like exclusive arrangements and often
negotiate with just one firm at a time.
6. Russians like to do business face-to-face. So when
they receive letters or faxes, they often put them on
their desk but do not respond to them.
7. Keep financial information personal. Russians wait
until they know their partner well enough to feel
comfortable before sharing financial data.
8. Research the company. In dealing effectively with
Russian partners, it is helpful to get information
about this company, its management hierarchy, and
how it typically does business.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: Russia
9. Stress mutual gain. The Western idea of “win–win” in
negotiations also works well in Russia.
10. Clarify terminology. The language of business is just
getting transplanted in Russia so double-check and make
sure that the other party clearly understands the
proposal, knows what is expected and when, and is
agreeable to the deal.
11. Be careful about compromising or settling things too
quickly because this is often seen as a sign of weakness.
12. Russians view written contracts as binding only if they
continue to be mutually beneficial, so continually show
them the benefits associated with sticking to the deal.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: India
• Doing business in India
1. It is important to be on time for meetings.
2. Personal questions should not be asked unless
the other individual is a friend or close associate.
3. Titles are important, so people who are doctors
or professors should be addressed accordingly.
4. Public displays of affection are considered to be
inappropriate, so one should refrain from
backslapping or touching others.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: India
5. When eating or accepting things, use the right
hand because the left is considered to be
unclean.
6. The namaste gesture can be used to greet
people; it also is used to convey other messages,
including a signal that one has had enough food.
7. Bargaining for goods and services is common;
this contrasts with Western traditions, where
bargaining might be considered rude or abrasive.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: France
• Doing business in France
1. When shaking hands with a French person, use a
quick shake with some pressure in the grip.
2. It is extremely important to be on time for meetings
and social occasions. Being “fashionably late” is
frowned on.
3. During a meal, it is acceptable to engage in pleasant
conversation, but personal questions and the
subject of money are never brought up.
4. Great importance is placed on neatness and taste.
Visiting businesspeople should try very hard to be
cultured and sophisticated.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: France
5. The French tend to be suspicious of early friendliness in
the discussion and dislike first names, taking off jackets,
or disclosure of personal or family details.
6. In negotiations the French try to find out what all of the
other side’s aims and demands are at the beginning, but
they reveal their own hand only late in the negotiations.
7. The French do not like being rushed into making a
decision, and they rarely make important decisions
inside the meeting.
8. The French tend to be very precise and logical in their
approach to things and will often not make concessions
in negotiations unless their logic has been defeated.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: Brazil
• Doing business in Brazil
1. Physical contact is an acceptable form of communication. Brazilians
stand close to others when having a conversation and may touch the
person’s back, arm, or elbow as a greeting or sign of respect.
2. Face-to-face interaction is preferred, so avoid email or telephone
calls. Meetings may start 10 to 30 minutes late. Greet with a
pleasant demeanor and accept refreshments.
3. Trust is not a given in Brazil, so be sure to form a strong relationship
before bringing up business issues. Close relationships are very
important because Brazilians will do anything for friends.
4. Appearance is very important. It reflects you and your company.
Men should polish their shoes and wear conservative dark suits.
Women should dress nicely, but avoid being too conservative or
formal. Think fashion.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: Brazil
5. Patience is key. Many processes are long and drawn
out, including negotiations. Expressing frustration or
impatience and attempting to speed up processes
may lose the deal. Brazilians will be very loyal and
committed once the agreement is reached.
6. It is not acceptable to be ill-prepared. Presentations
should be informative and expressive. Consistency is
important. Be sure to state your case multiple times.
Brazilians often bring multiple people to
negotiations. Subsequent meetings may include
members of higher management, requiring a
rehashing of information.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: Arab Countries
• Doing business in Arab countries
1. It is important never to display feelings of superiority,
because this makes the other party feel inferior. Let one’s
action speak for itself and do not brag or put on a show
of self-importance.
2. One should not take credit for joint efforts. A great deal
of what is accomplished is the result of group work, and
to indicate that one accomplished something alone is a
mistake.
3. Much of what gets done is a result of going through
administrative channels in the country. It often is difficult
to sidestep a lot of this red tape, and efforts to do so can
be regarded as disrespect for legal and governmental
institutions.
International Management Ninth Edition Luthans | Doh

Cultural Differences in Selected


Countries and Regions: Arab Countries
4. Connections are extremely important in conducting
business.
5. Patience is critical to the success of business transactions.
This time consideration should be built into all
negotiations.
6. Important decisions usually are made in person, not by
correspondence or telephone. This is why an MNC
manager’s personal presence often is a prerequisite for
success in the Arab world. Additionally, while there may
be many people who provide input on the final decision,
the ultimate power rests with the person at the top, and
this individual will rely heavily on personal impressions,
trust, and rapport.
International Management Ninth Edition Luthans | Doh

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.
3. In what way are parochialism and simplification barriers to
effective cross-cultural management? In each case, give an
example.
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.

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