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Cross Cultural Management

Session 1 - Introduction

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Introduction
• Culture is constituted of shared values, beliefs and
behaviour of a nation’s population
• Culture is rooted in history, religious beliefs, prior
generations and nations’ overall environment
• Culture differences influenced by variables such as:
• Education
• Politics
• Economics
• Differences in culture important as world business
moves towards globalisation of markets

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• We judge others on basis of own self-

perceptions
• The risk is parochial attitudes that unfairly
judge other cultures
• Ethnocentric attitude of believing own culture
is benchmark against which to judge other
cultures
• Increasing need for managers to develop
greater cultural sensitivity
• Necessary in order for managers to be
effective when operating internationally

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Religion
• Religion reflects diversity of spiritual values
across the world
• Religion influences moral values and may be
basis of nation’s economic model
• Carl Weber (German sociologist) provided
earliest assessment of religion in relation to
economics
• Focused on Protestant Work Ethic (PWE) that
emerged in Europe in 16th/17th Centuries

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• Protestant Reformation emphasised values of

personal restraint and working hard to
generate profits
• Function of life to be personally successful and
use success to fund charitable acts
• Argues that PWE was basis and catalyst for
emergence of capitalism
• Subsequent analysis of other religions/nations
such as India and China indicated religion
could be barrier to acceptance of capitalist
principles

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Gender Equality
• Different cultures have different views over gender
equality
• Even in Europe/USA women’s equality did not begin
to emerge until end of 19th Century
• Religious views can have strong influence over
gender equalities
• Islamic faith in Arab countries defines women and
men having different societal roles
• No Arab country has law making domestic violence a
criminal act

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• Evidence of changing attitudes in some Arab nations

• Female participation in workforce greater in labour
abundant and economically rich Arab nations (e.g.
Egypt, Tunisia)
• Abundant labour and limited resource nations
female workforce participation is lower (e.g. Yemen)
• In oil rich countries gradual move to expand female
workforce participation but often in segregated
working environments
• Some Arab governments (e.g. Bahrain) are initiating
actions to improve equality

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Kinship
• Values inside family will influence the person who is
born and grows up in the family
• Nature of family unit varies by country and in some
countries extended family of multiple generations,
many relatives and close friends
• Strong commitment can be reflected in work place
(e.g. high number of family firms in China)
• Weak commitment (e.g. USA) family membership not
an issue when recruiting or promoting employees

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Confucian Principles
• Confucian principles emerged in China during Ming
Dynasty (1368-1644)
• Scholars became merchants seeking balance
between virtue and profitability
• ‘Ren’ is focus on benevolence and humaneness
• ‘Li’ are norms of behaviour important within a stable
society
• Influence of Taoism in relation to defining balance
between spiritual and material harmony

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• Confucian values provide basis for harmony,

stability and prosperity for collective
communities
• Family and community seek to exists in
harmony
• Individuals’ activities/behaviour must not
disrupt family/community
• Basis of “collectivist” society structure
• Family is seen as prototype model for all social
organisations

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• Individual is subordinate to needs of family

• Child is not an individual but instead the
member of a family
• Children taught to restrain individualism to
maintain family/social harmony
• Parent-child relationship is reciprocal –
children respect parents and parents treat
children with care and kindness
• Wives expected to respect husbands and
husbands to exhibit care and protection

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• In society have two relationships:

(1) Between ruler and those ruled
(2) Between friends in same community
• Confucian principles based on co-operation,
coexistence and mutual respect/support
• Communism attempted to remove Confucian
values but have re-emerged during current
economic growth/economic freedom trends
• Employers and employees perceive Confucian
principles influencing working environments

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Education
• Involvement in education exposes people to new
ideas, values and behaviour patterns
• At University-level may encounter international ideas
and people from other nations
• Education may cause people to question values
taught to them in their families
• Can cause cultural friction between younger people
and older generations not provided with educational
experience

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Economics
• As society industrialises, population moves
from rural to urban environments
• Higher incomes and city living can cause new
values to emerge (e.g. importance of
materialism)
• Can result in friction between previous
generations still living in rural areas
• Often creates reduction in loyalty to family
and/or others in same social communities

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Politics
• Values of society reflected by those in power
in a country
• In autocratic societies, government often
imposes their values on the population
• Democratic systems permit more intellectual
freedom
• Politicians can be replaced at the voting box
• Tendency of more rapid/fundamental value
shifts in democratic societies
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Responding to Foreigners
• Fall of communism in Europe in late 1980s/early
1990s came as surprise to Western world
• Warsaw Pact Nations (e.g. Baltic States) no longer
under control of Russia
• Assumption by Western firms that Western
democratic values would emerge in Eastern Europe
• Valid assumption in Warsaw Pact countries (e.g.
Poland) where old national values and independence
of thought have re-emerged

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• Russia has history of invasions, and in 20th Century

20 million died in World War II
• Russians deeply suspicious of foreigners
• Also rule of Tsars and then communism based on
strong, centralist, autocratic government
• Democratic thinkers such as Gorbachev replaced by
more autocratic rule under President Putin
• Western firms found concepts of protection through
legal system not applicable in Russia
• High level of corruption and state prepared to
repudiate contracts to remove Western firms
influence

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Colonisation
• Many nations in emerging economies have faced
centuries of invasions/arrival of immigrants from
overseas
• Colonisers often used force to imprint their
social/cultural values on these nations (e.g. Spain in
Latin America; Britain in India)
• Over time cultures have merged to develop new
social rules and attitudes
• More recently some countries achievement of
independence has been accompanied by re-
emergence of values from pre-colonial era

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Values and Economics

• In 16-18th Century Europeans saw Caribbean and
Latin America as potentially rich as place to grow
cash crops (e.g. sugar)
• Introduced slavery and built large plantations to
generate high wealth from exports
• North America not perceived as land of similar
opportunity
• North American immigrants often political or social
refugees
• Agriculture based on small farms and limited use of
slaves

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• In 19th Century due to demand for wheat and

industrial revolution, US economy started to grow
• Citizens strong believers in universal suffrage,
equality, freedom of speech and equality under law
• In Central/South American rich minority kept
majority from being able to act democratically
• Lack of democracy, continuing belief in autocratic
minority (right and left wing) seen as key cause why
these economies did not continue to grow

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