Chapter 1

A. Globalization and
Cross-cultural Management

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 Globalization:
• Definition:
– a process whereby worldwide interconnections is
virtually every sphere of activity are growing. Some of
these interconnections lead to integration/unity
worldwide; others do not.
• Trend to more integrated and interdependent
World Economy
– Accelerating rate of change of this trend

https://www.youtube.com/watch?v=0OC7GKpuSp4
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 Globalization:
• Growing Economic Interconnectedness
– EU( 歐盟 ), NAFTA ( 北美自由貿易協定 ), APEC (
亞太經合組織 ), WTO ( 世界貿易組織 )…
– FDI
– MNCs
• More Complex and Dynamic Work Environment
– Workforce reductions
– Permanent migrants (women, highly skilled)
– Privatization
– Team-based management
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 Globalization:
• Increase Use and Sophistication of Information
Technology
– Economies of scale
– Virtual firms
• More and Different Players on the Global Stage
– Governments, special interest groups,
international agencies, economic alliances
– Small businesses
– Service sector
– International gangs and terrorists (e.g. bitcoin)
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 “Drivers” of Globalization
• Trade Liberalization
– GATT (General Agreement on Tariffs and Trade), WTO; Removal of FDI
restrictions/barriers
– Average Tariff Rates on Manufactured Products
• Financial Liberalization
– IMF, World Bank
• Technological Revolution
– Telecommunications and microprocessors
– The internet and the world-wide web
– Transportation technology
• New Form of Industrial Organization (e.g. virtual
company)

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Globalization of Production

• Source goods and services from narrow set of

locations around the world
• National advantages in factors of production a
key driver to “where to produce?” decision
– Labor, land, capital, energy, expertise
• Global web of suppliers
• Stake of foreign governments in MNC
operations

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Globalization of Markets
• Historically distinct and separate markets are
merging into on huge global marketplace
– Mostly NOT consumer product markets
– Mostly industrial products
– Tastes and preferences of consumers converging
• MNCs creating global marketplace
• MNCs around the world becoming more
vulnerable to competition in their home
markets

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 Managing the Global
Marketplace

• An international business is any firm that

engages in international trade or
investment
• An MNE engages in international
investment over which it has managerial
control

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 Managing the Global Marketplace
• International business involves managing across:
– Differences in cultures, political, legal and
economic systems and levels of economic
development.
– Political, legal and economic systems are derived
from a country’s culture and history
– Culture is largely invisible
– On people
• International managers confronted with a greater
range of complexity: demands, constraints and
choices.
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 Group discussions
• 1. Globalization of Production
• Advantages; Problems caused
• 2. Globalization of Markets
• Advantages; Challenge for MNCs
• 3. Anti-globalization
Evidence; Reasons behind
• Trend: globalization or anti-globalization?

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 Chapter 1
B. Determinants of culture
 The concept of culture
What culture is?/is not?
• Culture is a code of attitudes, norms and
values, the way of thinking...
• Culture determines:
– How we see ourselves
– How we see the world
• Culture is not right or wrong, not inherited, not
about individual behavior...
 What is culture
• Hundreds of definition!
• That complex whole which includes knowledge, belief,
art, moral, law, custom, and any other capabilities and
habits acquired by man as a member of society (Tylor,
1871)
• The collective programming of the mind which
distinguishes the members of one group or category of
people from another (Geert Hofstede, 1980)
• Everything that people have, think, and do as members
of society (Ferraro, 2002)
 Features of Culture
• Culture is shared
– Culture is something shared by members of a particular group.
– Culture as mental programming that lies between human nature and
personality. (Hofstede 1991)
• Culture is learned
– Culture is transmitted through the process of learning and interacting
with the environment. Over time, the people in a society develop
patterned ways of interacting with their environment.
• Culture is systematic and organized
– Cultures are integrated coherent logical systems, the parts of which are
interrelated. It is an organized system of values, attitudes, beliefs, and
behavioral meanings related to each other and to the environmental
context.
 Three layers
The concept of culture has three layers:
1) Artifacts and attitudes
– Behavioural or explicit level
2) Norms (rules) and values
– Every culture has its own system
3) Basic assumptions
– Difficult to describe or explain.
Cultural layers
 Metaphors of Cultural
• A different approach to understand culture is the use
of metaphors
• An important phenomenon, activity, or institution that
members of a culture see as important as a metaphor
for that culture
• Let’s do a game to see which group guess out more
cultural metaphors
• Reference from “Understanding global cultures
metaphorical journeys through 23 nations” by Gannon
M.J. (2001)
https://www.youtube.com/watch?v=vjVRY
xyBb6E
 Why Cultures Differ and Persist
• Survival
– Cultural concepts that have their foundation in ancient beliefs about survival or
fundamental beliefs about right and wrong are probably programmed at a very
deep level of consciousness. (e.g. 男權文化 )
• Language
– Language is an artifact of culture that helps perpetuate its values, attitudes,
beliefs and behavioral routines. (e.g. 港式中文 )
• Religion
– Religion reflects beliefs and behaviors shared by groups of people that cannot
be verified by empirical tests. (e.g. 媽祖 )
• Other factors
– Climate, topography and indigenous economy affect traditions and behavior in
primitive societies that persist over time. (e.g ice hockey is popular in Canada,
not in HK).
– Proximity and topography; economic systems and technology; political
boundaries affect interaction between cultures. (e.g. HK and Shenzhen)
 Organisational culture
• In organisations, culture affects the way:
– Strategy is determined
– Goals are established
– How the organisation operates.
• The personnel of the organisation:
– are influenced by their cultural backgrounds;
– share their own values and perceptions.
(Schein, 1999)
Three levels of organizational
culture by Schein (1984)
• 1. 人工製品（ Observable Artifacts ）。 人工製品是那些外顯的文化產品，能
夠看得見、聽得見、摸得著（如制服），但卻不易被理解。包括實物佈局、
辦公環境、著裝要求、標語、雜訊標準和心理氣氛等方面。儘管內部文化的
這一層次對外部成員來說是最顯而易見的，但這些“物質形態”卻揭示了企
業的一些重要特徵，如果你不是這種文化中的一員，就很難理解它們的真正
內涵。
• 2. 信仰與價值（ Espoused Values ）。 藏於人工製品之下的便是組織的“信
仰與價值”，它們是組織的戰略、目標和哲學。如果將銀行和廣告公司的文
化加以比較，我們會發現，在銀行的文化中，成 功來自嚴格的財務控制
、保守 謹慎和對管理等級制度的尊重。相反，廣告公司的文化則可能將個人
的自我想像視為成功的來源，因此，不太重視權威和意見的交流。在這兩類
企業中，那些過去發生的事都能體現出企業的價值觀，進而反映出企業文化
。
• 3. 基本隱性假設與價值（ Basic Assumptions ）。組織文化的核心或精華是早
已在人們頭腦中生根的不被意識到的假設、價值、信仰、規範等，由於它們
大部分出於一種無意識的層次，所以很難被觀察到。然而，正是由於它們的
存在，我們才得以理解每一個具體組織事件為什麼會以特定的形式發生。這
些基本隱性假設存在于人們的自然屬性、人際關係與活動、現實與事實之中
。
 Culture and management
Cross-cultural management
• Explains the behaviour of people in
organisations around the world
• Describes and compares organisational
behaviour across countries and cultures
• Seeks to understand and improve the interaction
of : co-workers, managers, executives, clients,
suppliers and alliance partners.
(Adler, 2002)
 Video: Cross-cultural
Understanding

• https://www.youtube.com/watch?v=GOHvMz
7dl2A

• https://www.bilibili.com/video/av8898878/

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• Divide yourself into several groups, each group has
5-6 students
• Each group hand in group list with photo next class

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