CULTURAL ENVIRONMENT

CROSS CULTURAL MANAGEMENT & MODELS

An Understanding of Culture & its Impact on Business

 Culture is a set of beliefs and values about what is desirable and undesirable in a community of people and a set of formal or informal practices to support the values. Acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior.

Priorities of Cultural Values

Components of Culture
social interactions among people; nuclear family, extended family; reference groups
technologies that are used to produce, distribute, and consume goods and services language has two parts: the spoken and the silent language

values shape peoples norms and standards

ideas and perceptions that a culture upholds in terms of beauty and good taste

One of the major vehicles to channel from one generation to the next

communitys set of beliefs that relate to a reality that cannot be verified empirically

How Culture Affects Managerial Approaches

Centralized vs. Decentralized Decision Making:
In some societies, top managers make all important organizational decisions. In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions.

How Culture Affects Managerial Approaches

Safety vs. Risk:
In some societies, organizational decision makers are risk averse and have great difficulty with conditions of uncertainty. In others, risk taking is encouraged, and decision making under uncertainty is common.

How Culture Affects Managerial Approaches

Individual vs. Group Rewards:
In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions. In others, cultural norms require group rewards, and individual rewards are frowned upon.

How Culture Affects Managerial Approaches

Informal Procedures vs. Formal Procedures:
In some societies, much is accomplished through informal means. In others, formal procedures are set forth and followed rigidly.

How Culture Affects Managerial Approaches

High Organizational Loyalty vs. Low Organizational Loyalty
In some societies, people identify very strongly with their organization or employer. In others, people identify with their occupational group, such as engineer or mechanic.

How Culture Affects Managerial Approaches

Cooperation vs. Competition
Some societies encourage cooperation between their people. Others encourage competition between their people.

How Culture Affects Managerial Approaches

Short-term vs. Long-term Horizons
Some culture focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Others are more interested in long-range goals, such as market share and technologic developments.

How Culture Affects Managerial Approaches

Stability vs. Innovation
The culture of some countries encourages stability and resistance to change. The culture of others puts high value on innovation and change.

The dilemma: The culture theory jungle

Hall

Trompenaars

Hofstede

Which is most useful for managers?

GLOBE

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HOFSTEDES CULTURAL DIMENSIONS

. It is based upon a study of 100,000 IBM employees who work in IBM divisions throughout the world. Hofstedes survey revealed five underlying dimensions of culture: Power Distance, Uncertainty Avoidance, Individualism/Collectivism, and Masculinity/Femininity, long term vs short term

Cultural dimensions: Hofstede

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EDWARD T HALL STUDY

Edward T. Halls concept of polychronic versus monochronic time orientation describes how cultures structure their time. The monochronic time concept follows the notion of one thing at a time, while the polychronic concept focuses on multiple tasks being handled at one time, and time is subordinate to interpersonal relations.

Cultural dimensions: Hall

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Cultural dimensions: Trompenaars

GLOBE- INTEGRATING CULTURE AND MANAGEMENT

GLOBAL LEADERSHIP AND ORGANISATIONAL BEHAVIOUR EFFECTIVENESS A Multi country study and evaluation of cultural attributes and leadership behaviors among more than 17000 managers from 825 organizations in 62 countries.

Seeking convergence for managers: Core cultural dimensions

Hall

Trompenaars

Hofstede

Core cultural dimensions (a managerial perspective)

GLOBE

Core cultural dimensions

Hierarchical Power Distribution Egalitarian

Individualistic

Social Relationships

Collectivistic

Mastery

Environment Relationships

Harmony

Monochronic

Time/work patterns

Polychronic

Rule-based

Uncertainty and social control

Relationshipbased

Power distribution
Hierarchical
Centralized. Belief that power should be distributed hierarchically across society. Belief in ascribed or inherited power with ultimate authority residing in institutions. Emphasis on organizing vertically and autocratic or centralized decision-making.

Egalitarian
Decentralized. Belief that power should be distributed relatively equally across society. Belief in shared or elected power with ultimate authority residing in the people. Emphasis on organizing horizontally and participatory or decentralized decision-making.

Emphasis on who is in charge.

Acceptance of authority; reluctance to question authority.

Emphasis on who is best qualified.

Rejection or skepticism of authority; willingness to question authority.

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Social relationships
Individualistic
Person-centered. Belief that people achieve selfidentity through individual accomplishment.

Collectivistic
Group-centered. Belief that people achieve self-identity through group membership. Preference for preserving social harmony over individual rights. Focus on accomplishing group goals. Sanctions reinforce conformity to group norms. Relationship-based agreements. Tendency toward high-context (subtle, indirect) communication and group or participative decision-making.
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Focus on accomplishing individual goals.

Sanctions reinforce independence and personal responsibility. Contract-based agreements. Tendency toward low-context (direct, frank) communication and individual decision-making.

Environmental relationships
Mastery-oriented
Dominance over nature. Focus on changing or controlling ones natural and social environment. Achievement valued over relationships. Emphasis on competition in the pursuit of personal or group goals. Embraces change and unquestioned innovation. Emphasis on material possessions as symbols of achievement. Emphasis on assertive, proactive, masculine approach. Preference for performance-based extrinsic rewards.

Harmony-oriented
Accommodation with nature. Focus on living in harmony with nature and adjusting to the natural and social environment. Relationships valued over achievement. Emphasis on social progress, quality of life, and the welfare of others. Defends traditions; skepticism towards change. Emphasis on economy, harmony, and modesty. Emphasis on passive, reactive, feminine approach. Preference for seniority-based intrinsic rewards.

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Time and work patterns

Monochronic
Linear. Sequential attention to individual tasks. Single-minded approach to work, planning, and implementation. Precise concept of time; punctual. Job-centered; commitment to the job and often to the organization. Separation of work and personal life.

Polychronic
Non-linear. Simultaneous attention to multiple tasks. Interactive approach to work, planning, and implementation. Flexible concept of time; often late. People-centered; commitment to people and human relationships. Integration of work and personal life.

Approach to work is focused and impatient.

Approach to work is at times unfocused and patient.

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Uncertainty and social control

Rule-based
Individual behavior should be largely regulated by rules, laws, formal policies, standard operating procedures, and social norms that are widely supported by societal members and applied uniformly to everyone. Emphasis on legal contracts and meticulous record keeping. Low tolerance for rule breaking.

Relationship-based
While rules and laws are important, they often require flexibility in their application or enforcement by influential people (e.g., parents, peers, superiors, government officials) or unique circumstances. Emphasis on interpersonal relationships and trust; less emphasis on record keeping. Moderate tolerance for rule breaking. Decisions often based on subjective criteria (e.g., hunches, personal connections).

Decisions based largely on objective criteria (e.g., legal constraints, data, policies).

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