Chapter 5

Culture, Management Style, and Business Systems

McGraw-Hill/Irwin

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

Chapter Learning Objectives

1.
1. The
The necessity
necessity for
for adapting
adapting to
to cultural
cultural
differences
differences
2.
2. How
How and
and why
why management
management styles
styles vary
vary around
around
the
the world
world
3.
3. The
The extent
extent and
and implications
implications of
of gender
gender bias
bias in
in
other
other countries
countries
4.
4. The
The importance
importance of
of cultural
cultural differences
differences in
in
business
business ethics
ethics
5.
5. The
The differences
differences between
between relationship-oriented
relationship-oriented and
and informationinformationoriented
oriented cultures
cultures

Introduction
Recognize
Recognize business
business culture,
culture, management
management values,
values, and
and business
business
methods
methods and
and behaviors
behaviors as
as important
important for
for success
success in
in international
international
market
market
Knowledge
Knowledge of
of foreign
foreign business
business practices
practices and
and
successful
successful business
business relations
relations
Importance
Importance of
of developing
developing friendship,
friendship, human
human
relations,
relations, and
and attaining
attaining aa level
level of
of trust
trust before
before
beginning
beginning business
business negotiations
negotiations
Thus,
Thus, management
management style
style has
has to
to be
be adapted
adapted in
in
international
international marketing
marketing
Need
Need to
to recognize
recognize that
that patterns
patterns of
of thinking,
thinking, local
local business
business tempo,
tempo,
religious
religious practices,
practices, political
political structure,
structure, and
and family
family loyalty,
loyalty, are
are
different
different and
and impact
impact business
business transactions
transactions

Required Adaptation
Adaptation
Adaptation is
is aa key
key concept
concept in
in international
international marketing
marketing
To
To successfully
successfully deal
deal with
with individuals,
individuals, firms,
firms, or
or authorities
authorities in
in
foreign
foreign countries,
countries, managers
managers should
should exhibit:
exhibit:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

open tolerance,
flexibility,
humility,
justice/fairness,
ability to adjust to varying tempos,
curiosity/interest,
knowledge of the country,
liking for others,
ability to command respect, and
ability to integrate oneself into the environment

Cultural Imperatives, Electives

and Exclusives
Cultural
Cultural imperatives
imperatives are
are the
the business
business customs
customs and
and expectations
expectations
that
that must
must be
be met,
met, conformed,
conformed, recognized
recognized and
and accommodated
accommodated ifif
relationships
relationships are
are to
to be
be successful
successful
Cultural
Cultural electives
electives relate
relate to
to areas
areas of
of
behavior
behavior or
or to
to customs
customs that
that cultural
cultural
aliens
aliens may
may wish
wish to
to conform
conform to
to or
or
participate
participate in
in but
but that
that are
are not
not
required
required

Cultural
Cultural exclusives
exclusives are
are those
those customs
customs or
or behavior
behavior patterns
patterns
reserved
reserved exclusively
exclusively for
for the
the locals
locals and
and from
from which
which the
the foreigner
foreigner
is
is barred
barred and
and must
must not
not participate
participate

The Impact of American Culture

Ways
Ways in
in which
which U.S.
U.S. culture
culture has
has influenced
influenced management
management style
style
include,
include, but
but are
are not
not limited
limited to,
to, the
the following:
following:
1.
2.
3.
4.
5.
6.
7.

Master of destiny viewpoint

Independent enterprise as the instrument of
social action
Personnel selection and reward based on
merit
Decisions based on objective analysis
Wide sharing in decision making
Never-ending quest for improvement
Competition yielding efficiency

Management Styles Around the World

Management
Management values,
values, and
and behaviors
behaviors vary
vary around
around the
the world.
world.
Differences
Differences in
in the
the contact
contact level,
level,
communications
communications emphasis,
emphasis, tempo,
tempo,
and
and formality
formality of
of foreign
foreign businesses
businesses
are
are encountered
encountered from
from culture
culture to
to
culture.
culture.
Ethical
Ethical standards
standards and
and sales
sales interactions
interactions and
and negotiation
negotiation styles
styles
differ
differ substantially.
substantially.

Management Styles Around the World

Cross-cultural
Cross-cultural differences
differences influence
influence management
management styles
styles in
in the
the
following
following areas:
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

Differences in Management Styles

Around the World
1.
1. Differences
Differences in
inAuthority
Authority and
and Decision
Decision Making
Making
In
In high-PDI
high-PDI countries
countries subordinates
subordinates are
are not
not likely
likely to
to contradict
contradict bosses,
bosses, but
but in
in
low-PDI
low-PDI countries
countries they
they often
often do
do

Three typical patterns exist:

top-level management decisions,
decentralized decisions, and
committee or group decisions
2.
2. Differences
Differences in
in Management
Management Objectives
Objectives and
and Aspirations
Aspirations towards:
towards:

Security especially of lifetime employment

Affiliation and Social Acceptance by neighbors and fellow
workers
Power and Achievement Orientation sought by managers
Importance of personal/family life over work and profit

Differences in Management Styles

Around the World
3.
3. Differences
Differences in
in Communication
Communication Styles
Styles

According to Edward T. Hall, the 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

Differences in Management Styles

Around the World
4.
4. Differences
Differences in
in Communication
Communication Styles
Styles

Level of formality in addressing business clients by first name

Level of formality in addressing your boss by first name
Tempo or speed in getting down to business
Perception of time varies in many cultures

5.
5. Differences
Differences in
in Negotiations
Negotiations Emphasis
Emphasis
Differences
Differences with
with respect
respect to
to the
the product,
product, its
its price
price and
and terms,
terms,
services
services associated
associated with
with the
the product,
product, and
and finally,
finally, friendship
friendship
between
between vendors
vendors and
and customers
customers

Differences in Management Styles

Around the World
6.
6. P-Time
P-Time versus
versus M-Time
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

Gender Bias in International Business

The
The gender
gender bias
bias against
against women
women managers
managers exists
exists in
in some
some
countries
countries

Women
Women are
are not
not accepted
accepted in
in upper
upper level
level
management
management roles
roles in
in Asian,
Asian, Middle
Middle Eastern,
Eastern,
and
and Latin
Latin American
American

Gender
Gender bias
bias poses
poses significant
significant challenges
challenges in
in cross-cultural
cross-cultural
negotiations
negotiations

Business Ethics
Business
Business ethics
ethics is
is complex
complex in
in the
the international
international marketplace
marketplace
because
because value
value judgments
judgments differ
differ widely
widely among
among culturally
culturally diverse
diverse
groups
groups
Corruption
Corruption varyingly
varyingly defined
defined from
from culture
culture to
to
culture
culture
Existence
Existence of
of different
different levels
levels of
of corruption,
corruption,
bribery,
bribery, and
and fraud
fraud
The
The Foreign
Foreign Corrupt
Corrupt Practices
Practices Act
Act 1997:
1997:
Imprisonment
Imprisonment for
for bribery
bribery
Bribery
Bribery creates
creates aa major
major conflict
conflict between
between ethics
ethics and
and profitability
profitability

Bribery: Variations on a Theme

Bribery:
Bribery:

Voluntarily offered payment by someone seeking

unlawful advantage
Extortion:
Extortion:

Payments are extracted under duress by someone in

authority from a person seeking only what they are
lawfully entitled

Bribery: Variations on a Theme

Lubrication:
Lubrication:

Involves a relatively small sum of cash, a gift, or a service given to a

low-ranking official in a country where such offerings are not prohibited
by law

Subornation:
Subornation:

Involves giving large sums of moneyfrequently not properly

accounted fordesigned to entice an official to commit an
illegal act on behalf of the one offering the bribe; involves
breaking the law

Ethical and Socially Responsible Decisions

Areas
Areas of
of decision
decision making
making where
where ethical
ethical issues
issues arise:
arise:

1.
2.
3.
4.

employment practices and policies,

consumer protection,
environmental protection,
political payments and involvement
in political affairs of the country,
and
5. basic human rights and fundamental
freedoms

A Framework for Ethical Precepts

Three
Three ethical
ethical principles
principles that
that provide
provide aa framework
framework for
for
distinguishing
distinguishing between
between right
right and
and wrong:
wrong:
(1)
(1) Utilitarian
Utilitarian ethics
ethics

Does
Does the
the action
action optimize
optimize the
the common
common good
good
or
or benefits
benefits of
of all
all constituencies?
constituencies? And,
And, who
who are
are
the
the pertinent
pertinent constituencies?
constituencies?

(2)
(2) Rights
Rights of
of the
the parties
parties

Does
Does the
the action
action respect
respect the
the rights
rights of
of the
the
individuals
individuals involved?
involved?

(3)
(3) Justice
Justice or
or fairness
fairness

Does
Does the
the action
action respect
respect the
the canons
canons of
of justice
justice or
or
fairness
fairness to
to all
all parties
parties involved?
involved?

Cultures Influence on Strategic Thinking

Culture
Culture influences
influences managers
managersthinking
thinking about
about business
business strategy
strategy
The
The British-American
British-American individualistic
individualistic view
view of
of capitalism
capitalism
typifies
typifies adversarial
adversarial relationships
relationships among
among labor,
labor, management,
management,
and
and government
government
The
The communitarian
communitarian form
form of
of capitalism
capitalism in
in Japan
Japan and
and Germany
Germany
are
are typified
typified by
by cooperation
cooperation among
among government,
government, management,
management,
and
and labor,
labor, particularly
particularly in
in Japan
Japan
The
The Chinese
Chinese emphasis
emphasis on
on guanxi
guanxi (ones
(ones network
network of
of personal
personal
connections)
connections) is
is aa kind
kind of
of capitalism
capitalism manifested
manifested by
by culture
culture