Alan M Rugman and Simon Collinson, International Business, 5 th Edition, © Pearson Education Limited 2009 Introduction Culture: “the sum total of the beliefs,

Alan M Rugman and Simon Collinson, International Business, 5th Edition, © Pearson Education Limited 2009

Introduction

• Culture: “the sum total of the beliefs, rules, techniques, institutions and artifacts that characterize human populations” or “the collective programming of the mind”.

• Socialization Process: The process of enculturation or the adoption of the behaviour patterns of the surrounding culture.

Alan M Rugman and Simon Collinson, International Business, 5th Edition, © Pearson Education Limited 20093-2

Key Terms

• Culture Savvy A working knowledge of the cultural variables affecting management decisions

• Cultural Sensitivity or Cultural Empathy An awareness and an honest caring about another individual’s culture.


• Culture– The acquired knowledge that people use to

interpret experience and generate social behavior– Cultural knowledge forms values, creates

attitudes, and influences behavior– Characteristics of culture include:

• Learned• Shared• Transgenerational• Symbolic• Patterned • Adaptive


Key Terms

• Culture of a society Comprises the shared values, understandings, assumptions, and goals that are learned from earlier generations, imposed by present members of a society, and passed on to succeeding generations.

What would be occasion in Pakistan that you considered cultural?


Key Terms• Self reference criterion The unconscious

reference point of one’s own cultural values


Key Terms• Parochialism Occurs when a Frenchman,

for example, expects those of French origins in another country to automatically fall into patterns of behavior common in France

Ethnocentrism Describes the attitude of those who operate from the assumption that their ways of doing things are best – no matter where or under what conditions they are applied


Elements of culture


Table 5.1 World population percentages in terms of home region, language and religionSources: www.census.gov; www.adherents.com


Language

• Language is critical to culture because it is the primary means used to transmit information and ideas.

• Knowledge of local language can:– permit a clearer understanding of a situation;

– provide access to local people;

– allows the person to pick up nuances, implied meanings, and other information that is not stated outright.


Religion

• Religions influence lifestyles, beliefs, values and attitudes and can have a dramatic effect on the way people in a society act toward each other and towards those in other societies.

• Religion also influences:– the work habits of people;

– the work and social customs (from the days of the week on which people work to their dietary habits);

– politics and business.


Values and attitudes

• Values: basic convictions that people have regarding what is right and wrong, good and bad, important and unimportant.

• Attitude: a persistent tendency to feel and behave in a particular way toward some object.


Customs and manners

• Customs: common or established practices.• Manners: behaviour regarded as appropriate in a

particular society.


Corporate culture

• Corporate culture is a term used to characterize, how the managers and employees of particular companies tend to behave.

• Corporate culture is also used by human resource managers and senior management in their attempts to proactively shape the kind of behaviour (“innovative”, “open”, “dynamic”, etc.) they hope to nurture in their organizations.

• Promoting a distinctive corporate culture is also expected to enhance the sense of community and shared identity that underpins effective organizations.


The importance of culture in different business contexts


Influences of culture on international management

Culture influences strategic management in a number of ways:• Work attitudes

–for example, work ethics, organization commitment, etc.

• Achievement motivation –the desire to accomplish objectives and achieve

success.• Time and future

–for example: punctuality, decision-making time constraints, time expectations on implementation of plans, etc.

• Ethics–standards of conduct and morality.


Culture and strategic management

• Cross-cultural management issues arise in a number of situations, including:– Within a firm: Work attitudes, achievement

motivation, time and future and ethics, etc.

– Between firms: M&As, joint ventures, alliances and buyer-supplier relationships.

– Between a firm and customers: Dealing with customers.

Cf.) Dealing with national institutions.


National stereotypes and key dimensions of culture


Two approaches to culture

Two different approaches to looking at culture:• the psychic or psychological level, which focuses

on the “internalized” norms, attitudes and behaviour of individuals from a particular culture;

• the institutional level, which looks at national (or group) culture embodied in institutions (government, education, economic institutions as well as in business organizations).


Geert Hofstede’s four cultural dimensions

• Power distance: measures the degree to which less powerful members of organizations and institutions accept the fact that power is not distributed equally.

• Uncertainty avoidance: measures the extent to which people feel threatened by ambiguous situations and have created institutions and beliefs for minimizing or avoiding those uncertainties.


• Individualism vs. collectivism– Individualism: the tendency of people to look after

themselves and their immediate family only.

– Collectivism: the tendency of people to belong to groups who look after each other in exchange for loyalty.

Geert Hofstede’s four cultural dimensions (Continued)


• Masculinity vs. femininity– Masculinity: the degree to which the dominant

values of a society are success, money and material goods.

– Femininity: the degree to which the dominant values of a society are caring for others and the quality of life.

Geert Hofstede’s four cultural dimensions (Continued)


Figure 5.2 Hofstede’s power distance against individualism for 20 countriesSource: Hofstede, G. (1983). The cultural relativity of organizational practices and theories, Journal of International Business Studies, Fall, p. 92. Copyright © Geert Hofstede


Fons Trompenaars’ sevencultural dimensions

1. Universalism vs. particularism– Universalism: the belief that ideas and practices

can be applied everywhere in the world without modification.

– Particularism: the belief that circumstances dictate how ideas and practices should be applied and somethings cannot be done the same everywhere.


2. Individualism vs. collectivism: centres on whether individual rights and values are dominant or subordinate to those of the collective society.

3. Neutral culture vs. emotional culture:– Neutral culture: A culture in which emotions are

held in check.

– Emotional culture: A culture in which emotions are expressed openly and naturally.

Fons Trompenaars’ sevencultural dimensions (Continued)


4. Specific vs. Diffuse: measures whether work relationships (e.g. the hierarchical relationship between a senior manager and a subordinate) are workplace ‘specific’ or extend (diffuse) into the social context outside the workplace.

5. Achievement vs. Ascription: measures whether one’s status within organizations is based on merit (“achieved”) or on class, gender, education or age (“ascribed”).



6. Attitudes toward time – Sequential: cultures that view time in a

sequential or linear fashion; order comes from separating activities and commitments.

– Synchronic: cultures that view events in parallel over time; order comes from coordinating multiple activities and commitments.



7. Attitudes toward the environment: measures the emphasis, a particular culture places on people’s relationship with nature and the natural environment.



The GLOBE project’s ninedimensions of culture

1. Assertiveness.

2. Future orientation: A propensity for planning, investing, and delayed gratification.

3. Gender differentiation: The degree to which gender role differences are maximized.

4. Uncertainty avoidance: A reliance on societal norms and procedures to improve predictability, a preference for order, structure and formality.

5. Power distance.


6. Institutional collectivism: individualism vs. collectivism.

7. In-group/family collectivism: A pride in small-group

membership, family, close friends etc.

8. Performance orientation: (much like achievement

orientation).

9. Humane orientation: An emphasis on fairness, altruism

and generosity.

The GLOBE project’s ninedimensions of culture (Continued)


Culture Embodied in National Institutions


Culture embodied in national institutions

• Western Pluralism: emphasizes individual

competitiveness, commonly represented by separate

ventures competing in price-defined markets for

success.

• Command Economies: are centrally planned

hierarchies with less individualism and less individual

incentive.


• Organic Ordering: refers to the family-centred hierarchies of Asia, Southern Europe and Latin America.

• Structured Networks: reflect the more equal, structured relationships between companies and with public sector organizations that exist in some countries.

Culture embodied in national institutions (Continued)


Organizational Culture

• A pattern of basic assumptions - invented, discovered, or

developed by a given group as it learns to cope with its

problems of external adaptation and internal integration

• That has worked well enough to be considered valid and,

therefore, to be taught to new members as the correct way

to perceive, think, and feel in relation to those problems

(Schien, 1985).


National and Global Culture

• Relationship between national and corporate

culture is complex:

– National culture and other elements in an

organization's environment may determine internal

organizational culture

– Globalization also affects organizational culture


Henry Ford, founder of the Ford Motor Company said:

• Getting together is beginning

• Keeping together is progress

• Working together is success


Understanding Organizational Culture

• Organizations are culture free in some

respects, but culture bound in many others

(Trice & Beyer, 1993).

• Global, national, and organizational elements

interact to influence organizational culture and

behavior.


National and Global Culture

• One can not understand what’s going on inside an organizational culture

without understanding what exists outside the boundary.

– National culture provides basic assumptions that legitimize and guide

organizational behavior.

– Industrialization promotes changes in national culture.

– Globalization increases awareness of successful practices elsewhere.

– Modern communication enhances connections among manufacturers,

merchants, financiers, consumers, etc. globally.

– MNCs seek consistency and shape organizational culture on a global

basis.


Culture-Free Approach

• It argues that technology, policies, rules, organizational structure, and other variables that contribute to efficiency and effectiveness make national culture irrelevant for management.– McDonald’s fast food service – World Disney – IKEA


McDonald's Restaurants

• Pakistan– Types of the restaurant – Food adaptation– Service adaptation– Perceptions of jobs– Workplace culture– Employee commitment

• U.S.– Fast food life style– Convenience – Temporary jobs– High turnover rate– Standard food items


National Vs. Organizational Culture

• National culture– Broader – More complex– Influence org. culture– Primary and secondary

socialization

• Organizational culture– Narrower– Manageable – Secondary

socialization– Subcultures


What Organizational Culture Does

FUNCTIONS• Provides an external

identity• Creates a sense of

commitment• Acts as source of high

reliability• Defines an interpretive

scheme• Acts as a social control

mechanism

FUNCTIONS• Provides an external

identity• Creates a sense of

commitment• Acts as source of high

reliability• Defines an interpretive

scheme• Acts as a social control

mechanism

DYSFUNCTIONS• Can create barriers to

change• Can create conflict

within the organization• Subcultures can

change at different rates than other units

DYSFUNCTIONS• Can create barriers to

change• Can create conflict

within the organization• Subcultures can

change at different rates than other units

Documents

Alan M Rugman and Simon Collinson, International Business, 5 th Edition, © Pearson Education Limited 2009 Introduction Culture: “the sum total of the beliefs,