Chapter 05 - Managing Across Cultures
Chapter 05 - Managing Across Cultures
Chapter 5
Strategic Predispositions
• Ethnocentric predisposition
– A nationalistic philosophy of management
whereby the values and interests of the parent
company guide strategic decisions.
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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.
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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.
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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.
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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
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
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Legal Constraints
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.
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Cultural Diversity
• Cultural Diversity: Ad campaigns and product
brand names being communicated may mean
different things to different cultures
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•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
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• 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
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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
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
continues
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