UBI-GM-Presentation05.050112-mgt style ppsx

Culture, Management Style, and Business SystemsChapter 5 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc.. Recognize that there are profound differences in culture, management va

Culture, Management Style, and Business Systems

Chapter 5

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc All rights reserved.

PowerPoint presentation prepared by:

Alfred Lowey-Ball Associate Professor of Marketing UBI-United Business Institutes Brussels, Belgium

Chapter Outline

• Required Adaptation

• Degree

• Imperatives, electives, exclusives

• Impact of American culture on management styles

• Management styles around the world

• Authority & decision-making

• Management objectives & aspirations

• Communication styles etc

• Gender Bias in International Business

• Business Ethics

• Culture’s influence on Strategic thinking

• Relationship-oriented vs Information-oriented cultures

• Required Adaptation

• Degree

• Imperatives, electives, exclusives

• Impact of American culture on management styles

• Management styles around the world

• Authority & decision-making

• Management objectives & aspirations

• Communication styles etc

• Gender Bias in International Business

• Business Ethics

• Culture’s influence on Strategic thinking

• Relationship-oriented vs Information-oriented cultures

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc All rights reserved.

Do Blondes have more fun in Japan?

• A high-level woman executive leads negotiations for

Ford Motor company with Japanese partners

• Tall (5’ 8“, 175 cm), Blonde

• She was not directly addressed

• No questions were asked of her

• When she asked questions, she was met by embarassed laughter

Wise to conform to the customs of the country

Recognize that there are profound differences in culture, management values, and business

methods and behaviours

Recognize that there are profound differences in culture, management values, and business

methods and behaviours

In doing business abroad, your management style must be

adapted to local mores in each country to have a chance

of success

In doing business abroad, your management style must be

adapted to local mores in each country to have a chance

of success

In many countries, great importance of developing friendship, and attaining a level of trust before beginning business negotiations

In many countries, great importance of developing friendship, and attaining a level of trust before beginning business negotiations

Patterns of thinking (“Asian” vs “Western”), local business tempo, religious practices, political structures and attitudes toward family loyalty are different and impact business transactions

Patterns of thinking (“Asian” vs “Western”), local business tempo, religious practices, political structures and attitudes toward family loyalty are different and impact business transactions

Required Adaptation

• Adaptation is a key concept in international marketing and

willingness to adapt is crucial

• To successfully deal with individuals, firms, or authorities in

foreign countries, managers should exhibit:

• Adaptation is a key concept in international marketing and

willingness to adapt is crucial

• To successfully deal with individuals, firms, or authorities in

foreign countries, managers should exhibit:

1 open tolerance  “Different but equal”

7 knowledge of the country,

8 liking for others,

9 ability to command respect, and

10 ability to integrate oneself into the local

environment

Required Adaptation to business cultures

• Cultural imperatives are the business customs and expectations

that must be met, conformed, recognized and accommodated if relationships are to be successful

• Cultural imperatives are the business customs and expectations

that must be met, conformed, recognized and accommodated if relationships are to be successful

• Cultural electives relate to areas of behavior and customs that

cultural aliens may wish to conform to or participate in but that are not required

• Cultural electives relate to areas of behavior and customs that

cultural aliens may wish to conform to or participate in but that are not required

• Cultural exclusives are those customs or behavior patterns

reserved exclusively for the locals and from which the foreigner

is barred and must not participate

• Cultural exclusives are those customs or behavior patterns

reserved exclusively for the locals and from which the foreigner

is barred and must not participate

The Impact of American Culture

• Ways in which U.S culture has influenced management style

include, the following:

• Ways in which U.S culture has influenced management style

include, the following:

1 “Master of destiny” viewpoint

2 Independent enterprise as the instrument

of social action

3 Personnel selection and reward based on

merit

4 Decisions based on objective analysis

5 Wide sharing in decision making

6 Never-ending quest for improvement

7 Competition yielding efficiency

Management Styles Around the World

• Management values and behaviors vary widely around the

world

• Management values and behaviors vary widely around the

world

• Differences in the contact level,

communications emphasis, tempo, and formality of foreign businesses are encountered from culture to

culture

• Differences in the contact level,

communications emphasis, tempo, and formality of foreign businesses are encountered from culture to

Management Styles Around the World

• Cultural differences influence management styles in

the following areas:

• Cultural differences influence management styles in

the following areas:

1 Authority and Decision Making

2 Management Objectives and Aspirations

3 Communication Styles

4 Formality and Tempo

5 P-Time versus M-Time

6 Negotiations Emphasis

Authority & Decision-making

1. Differences in Authority and Decision Making

• In high-PDI countries subordinates are not likely to contradict

bosses, but in low-PDI countries they often do

1. Differences in Authority and Decision Making

• In high-PDI countries subordinates are not likely to contradict

bosses, but in low-PDI countries they often do

Three typical patterns exist:

• top-level decision-making  often in Latin countries, depends

on ownership structure of company

• decentralized decision-making  US or Northern Europe (but control is held by BoD)

• committee or group decisions  prevails in many parts of Asia,

eg Japan & China

Management Objectives & aspirations

2. Differences in Management Objectives and Aspirations

• Relative importance of Personal Life over work and profit

• Affiliation and Social Acceptance by neighbors and fellow

workers

• Power and Achievement Orientation sought by managers

• Importance of money & high rank in USA

• Importance of social recognition

Communication Styles

3 Differences in Communication Styles

• symbolic meanings of time, space, things, friendships, and

agreements, vary across cultures

• “In some cultures, messages are explicit; the words carry most of the information In other cultures less information is contained

in the verbal part of the message since more is in the context”

• Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or

nonverbal aspects of communication

• Communication in a low-context culture depends more on

explicit, verbally expressed communications

• Hall places eleven cultures along a high-context/low-context

continuum

The importance of context

Formality & Tempo

4 Differences in Formality & Tempo

• Level of formality in addressing business clients by first name

• Level of formality in addressing your boss by first name

– France/Germany vs USA

• Tempo or speed in getting “down to business”

– Need for friendship or understanding before doing business

in Latin or Arab societies

• Perception of time varies in many cultures

Differences in Management Styles

Around the World

5 P-Time versus M-Time

• M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians

• Most low-context cultures operate on M-time concentrating on one thing at a time

• P-time, or polychronic time, is more dominant in high-context cultures

• P-time is characterized by multi-tasking and by “a great

involvement with people”

Pace of Life

Negotiations Emphasis

6 Differences in Negotiations Emphasis

• Basic elements of business negotiations are the same the world

over: product and services, price, delivery and terms

• The role of friendship and the need for “understanding”

between vendors and customers varies enormously between cultures

• “Know thyself” and “know your opponent”

• Be aware of the SRC and ethnocentric implications

• Basic elements of business negotiations are the same the world

over: product and services, price, delivery and terms

• The role of friendship and the need for “understanding”

between vendors and customers varies enormously between

cultures

• “Know thyself” and “know your opponent”

• Be aware of the SRC and ethnocentric implications

Gender Bias in International Business

• A gender bias against women managers in business exists to

some degree in most countries

• A gender bias against women managers in business exists to

some degree in most countries

• Gender bias poses significant challenges in cross-cultural

negotiations

• Gender bias poses significant challenges in cross-cultural

negotiations

• Women are not easily accepted in upper level

management roles in Asian, Middle Eastern, and Latin American and some western

societies (esp Germany)

• Women are not easily accepted in upper level

management roles in Asian, Middle Eastern, and Latin American and some western

societies (esp Germany)

Business Ethics

Business ethics is complex in the international marketplace

because value judgments about it differ widely among diverse

cultures

Business ethics is complex in the international marketplace

because value judgments about it differ widely among diverse

cultures

The legal angle:

The FCAct 1997 in the USA:

Imprisonment for briberyThe OECD Convention

The legal angle:

The FCAct 1997 in the USA:

Imprisonment for briberyThe OECD Convention

Corruption or “Normal cost of doing business”??

 Existence of different levels of corruption,

bribery, and fraud

Corruption or “Normal cost of doing business”??

 Existence of different levels of corruption,

bribery, and fraud

Bribery creates a major conflict between ethics and profitability

Bribery: Variations on a Theme

• a small sum of money to a low ranking official where not prohibited by law

• a large sum of money designed to entice an official to commit an illegal act

Bribe Payers Index

Ethical and Socially Responsible Decisions

• Areas of decision making where ethical issues arise:

• Areas of decision making where ethical issues arise:

1 employment practices and policies,

2 consumer protection,

3 environmental protection,

4 political payments and involvement in

political affairs of the country, and

5 basic human rights and fundamental

freedoms

A Framework for Ethical Precepts

• Three ethical principles that provide a framework for

distinguishing between right and wrong:

• Three ethical principles that provide a framework for

distinguishing between right and wrong:

(1) Utilitarian ethics

(2) Rights of the parties

(3) Justice or fairness

Does the action optimize the “common good”

or benefits of all constituencies? And, who are the pertinent constituencies?

Does the action optimize the “common good”

or benefits of all constituencies? And, who are the pertinent constituencies?

Does the action respect the rights of the

individuals involved?

Does the action respect the rights of the

individuals involved?

Does the action respect the canons of justice or

fairness to all parties involved?

Does the action respect the canons of justice or

fairness to all parties involved?

Culture’s Influence on Strategic Thinking

• Culture influences managers’ thinking about business strategy

• Culture influences managers’ thinking about business strategy

• The British-American “individualistic” view of capitalism

typifies adversarial relationships among labor, management,

and government

• The British-American “individualistic” view of capitalism

typifies adversarial relationships among labor, management,

and government

• The “communitarian” form of capitalism in Japan and Germany

are typified by cooperation among government, management, and labor, particularly in Japan

• The “communitarian” form of capitalism in Japan and Germany

are typified by cooperation among government, management, and labor, particularly in Japan

• The Chinese emphasis on guanxi (one’s network of personal

connections) is a kind of capitalism manifested by culture

• The Chinese emphasis on guanxi (one’s network of personal

connections) is a kind of capitalism manifested by culture

Information- vs Relationship-Orientation