Cross Cultural Management

Why is cultural understanding important in the business context?

•       Every business has contact with other cultures. Migration of workforce leads to employees from different cultures.

•       Managers needs to be aware of cultural differences so that they can help teams and organisations navigate better in global waters.

•       Many management models: Japanese corporate culture, American scientific management, Chinese family business, Northern European concern for employee welfare, Latin emphasis on flexibility and resourcefulness. Can they travel ?

•       Organisational theories made in one cultural context does not always work in another, cultural understanding can give you some answers to why they don’t work.

The concept of culture

What is culture?

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, inherited, about individual behaviour...

Culture is those deep, common, un-stated experiences which members of a given culture share, which they communicate without knowing, and which form the backdrop against which all other events are judged. (Hall 1966).

Culture is the Software of the Mind (Hofstede 2000).

Culture is the way in which a group solves problems and reconciles dilemmas (Schein 1985 and Trompenaars and Hampden-Turner 2003)

“All people are the same. It’s only their habits that are so different.” 

Culture is coherent

–      Each fragment of a culture makes sense if you know the whole tapestry of culture.

•       What are strange things in your culture?

Culture is learned

–      Through families, school, friends, colleagues.

Culture is the view of a group of people

–      Nation, region, clan, family, organisation, company.

Culture ranks what is important (values)

Culture furnishes attitudes and dictates behaviour

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 

 Comparison of value systems of societies

Four categories (Ruano-Borbalan, 2002)

•       Traditional society (Arab countries)

–      Religion plays an important role

•       Rational society (Germany)

–      Interests of the individual come first

•       Society where materialism is predominant

   -(ex-communist countries)

•       Post-modern society (Scandinavia)

Tolerant and democratic

European Culture

What is important in the forming process of a European culture?

•       Meeting of diversity

•       Complementarity of ideas

•       Interaction and interference within opposite values :

–      Religion/rationality

–      Mythical thought/critical thought

–      Humanism/science

                (Morin,1987)

Levels of cultures
in a business context

Cultures can develop at different levels:

•       Culture and nation

•       National culture

•       Organizational culture

•       Corporate culture

•       Professional culture- eg. doctors, lawyers…

•       Culture and management

Culture and nation

Influence of culture/nation on organizations:

Macro level

–      Laws and economic institutions

–      The nation must be considered by organizations going about their business.

Micro level

–      The organization is influenced through a number of cultural elements relating to:

–      employer–employee relationships

–      behaviour among employees

Elements that contribute to the creation of a national culture:

–      Physical environment

–      History of the nation

Institutions that contribute to the establishment of a national culture

–      Family/Religion/Education

–      Mass communication media

–      The multinational company as culture-building institution.

                (Tabey, 2003)

Organizational culture

In organizations, culture affects the way:

–      strategy is determined

–      goals are established

–      how the organization operates

The personnel of the organization:

–      are influenced by their cultural backgrounds

–      share their own values and perceptions.

                (Schein, 1999)

Cultural assumptions in management

Edgar Schein defines culture as:

                ‘a set of basic assumptions – shared solutions to universal problems of external adaptation (how to survive) and internal integration (how to stay together) - which have evolved over time and are handed down from one generation to the next’

                (Schein, 2004, p.4)

Corporate culture

Corporate culture is a combination of:

–      Organizational culture

–      National/regional culture

Two differing views on the influence of corporate culture on a (multi-) national company:

–      Success depends on it having either

                1. A clearly defined corporate culture, or

                2. A flexible culture.

Internal factors play an important  role, in particular the extent of cultural control.

Professional culture

Three professional cultures in management:

Operators

–      involved in production (goods/services)

Engineers

                 – design and monitor the technology

Executives

–      senior managers

                (Schein, 1996)

The question remains: how do these professional cultures co-exist?

Culture and management

Cross-cultural management  explains the behaviour of people in organizations around the world

Describes and compares organizational behaviour across countries and cultures

Seeks to understand and improve the interaction of : co-workers, managers, executives, clients, suppliers and alliance partners.

                (Adler, 2002)

Understanding culture

Cultures do not vary in essence (people spend their time trying to solve similar problems) but in their preference for certain solutions.

Example how do you cure a flu(sickness) in your country?

Understanding culture is to understand the underlying meanings attached by a given community/group of people to those universal concepts and activities, and to the behaviours they incur.

        Prime 2003 in Rugimbana and Mwankwo 2003

How do you meet another culture ?

For how many is this the first time of meeting a new culture ? How does it feel?

If you do not speak the same language how do you cope, what is difficult, what do you do?

If you are by yourself in a culture that is not yours, how do you feel when you meet somebody who talks your language?

Myth 1 - Converging cultures ?

The world is getting smaller, and cultures will after a while become similar (converge).

True or False ?

Discuss

Myth 2 – Management is Management

When cultures are converging, we are creating global corporate villages and then the same “scientific” management practices can be used all over.

True or false ?

Globalisation of Culture

What processes decide whether cultures converge or diverge?

•       Technology – Communication

•       Economy – Trade – Globalisation

•       Education (Knowledge Society)

•       Religion (Emphasis on values)

Converging Commonality or Diverging Diversity

From Rao, C.P. (In Rugimbana and Mwanwko (ed) 2003).

Converging commonality

From consumer behaviour across countries similar consumption patterns can be seen worldwide, as the middle classes emerge through increased wealth, improved education and communication.

Diverging Diversity

More cultural disparity as cultural minorities get their own voices – asserting their identity.

USA (and Australia) is not a melting pot, but a mixed salad.

Ex. Silicon Valley’s Indian Connection. The Chinese Networks in the Asia-Pacific region.

Converging Commonality or Diverging Diversity

•       Will forces of modernism and consumption be stronger than the forces of tradition, social cultural values and norms.

•       The new consumption cultures, are cross-cultural and segmented into life-style cultures, which may conflict with traditional cultural values. (Youth culture, singles culture, young urban, double income no kids etc).

•       In US less than 20% households qualify as traditional family.

Culture and Communication

Defining Negotiation

A special kind of communication…

Negotiation is an interaction between two or more parties who are working together to seek to resolve incompatible goals (Pruitt & Carnevale 1993).

If you agree on everything there is no need to negotiate.

               

                Pruitt, D G & P J Carnevale. 1993. Negotiation in Social Conflict. Buckingham: Open University Press.