Culture: What is it?

• Value system• Norms, beliefs, behaviors• Common way of thinking• Society’s communicable knowledge • Society’s characteristics passed on

generation by generation

General Issues

• Differences in culture• Measurement• Adaptation and Acculturation• Similarities in culture

Hofstede’s Dimensions of CulturePower Distance• Small - trusting, less formal organizations• Large - mistrusting, hierarchical organizations

Uncertainty Avoidance• Weak - risk is non-threatening; diversity is appreciated• Strong - risk averse, diversity is threatening

Individualism• Collectivist - belonging to groups ideal; group decision making• Individualist - individual initiative and achievement; leadership is the ideal

Masculinity• Feminine - quality of life; people and relationships come first• Masculine - performance; money and transactions come first

Communication and Meaning(Aside from Language)

MEA

NIN

G

Explicit:Written/Spoken

Context:Surroundings/

Non-verbalHighContext

LowContext

Implications for ManagementINTERPERSONAL

• Punctuality• Interpersonal distance• Tempo of business• Negotiations• Bribery• Linear vs. circular

communication• High vs. low context

communication

ORGANIZATIONAL• Organizational structure• Decision making• Leadership• Adaptation of products• HRM policies• Entry mode choice• Location of value-creating

activities

Leadership

• Perceived levels of power• Quality/characteristics of exchange

with subordinates• Communication patterns• Trust (both ways)• Delegation of tasks

Organizational Structures/Systems• Formality of policies and rules• Hierarchical vs. “flat” organizations• Mechanistic vs. organic• Authoritative vs. consensual decision making• HRM systems• Accounting systems

Interpersonal Relationships

With …• Customers• Suppliers• Subordinates/superiors• Co-workers

Motivation and Reward

• Formation/role of setting goals• Achievements• Compensation system• Job satisfaction• Organizational commitment

Principal Research Question:Japanese-American Context

CulturalDifferences

?• Job dissatisfaction• Lack of commitment

towards company• Propensity to quit

Evidence of a Problem?• “If Americans ‘fail’ on a project, they are never

given another chance. Yet, Americans are rarely explicitly told what their authority is.”

• “In Japan, formal job descriptions don’t exist. This can lead to role ambiguity in the U.S.”

• “One source of frustration for Americans is the lack of input in decision making.”

• “Our engineers leave because of the constraints placed on innovativeness and flexibility”

• “I seem to have several bosses, which can be confusing.”

• “My supervisor doesn’t spend enough time preparing me for this position.”

• “There’s a lack of open, honest communication.”• “I can’t make your meeting, Wally, because

two of our section leaders just quit.”

Not ALL bad...

• “My Japanese boss is the best I ever had.”• “The Japanese Vice President’s treatment of

people is excellent. I am proud of him and respect him.”

• “Our company is excellent in terms of communication and human resources.”

Leadership is the Key:

• “The most necessary training is…how to work with and manage and American workforce.” TMM Executive

NegativeAttitudinalOutcomes

Culture and the Causal Chain

CulturalDifferences

IntermediatePerceptions

SupervisorySupervisoryBehaviorsBehaviors

Supervisory Behaviors• Mentoring

– Psycho-social– Career-related

• Delegation– Authority-specific– Task-related

• Communication– Effectiveness– Formalization

• Monitoring– General– Corrective– Intrusive

• Interpersonal Exchange– Exchange Quality– Acculturating Exchange– Abusive Exchange

Communication ModelProcedural

Justice

Trust

RoleAmbiguity

RoleConflict

JobSatisfaction

Commitment

LowPropensity

to Quit

CulturalDifference

CommunicationEffectiveness

FormalizedCommunication

Delegation ModelProcedural

Justice

Trust

RoleAmbiguity

RoleConflict

JobSatisfaction

Commitment

LowPropensity

to Quit

CulturalDifference

AuthorityDelegation

TaskDelegation

Mentoring ModelProcedural

Justice

Trust

RoleAmbiguity

RoleConflict

JobSatisfaction

Commitment

LowPropensity

to Quit

CulturalDifference

Psycho-social

Mentoring

Career-related

Mentoring

Job-related

Feedback

Monitoring ModelProcedural

Justice

Trust

RoleAmbiguity

RoleConflict

JobSatisfaction

Commitment

LowPropensity

to Quit

CulturalDifference

InvasiveMonitoring

GeneralMonitoring

CorrectiveMonitoring

Personal Exchange ModelProcedural

Justice

Trust

RoleAmbiguity

RoleConflict

JobSatisfaction

Commitment

LowPropensity

to Quit

CulturalDifference

ExchangeQuality

AcculturationExchange

AbusiveExchange

NegativeAttitudinalOutcomes

How to Address Cultural Problems

CulturalDifferences … basics commonly understood.

IntermediatePerceptions …”teachable”?

SupervisorySupervisoryBehaviors … receive scant attention inBehaviors … receive scant attention in most training programsmost training programs

“Chain of causality” often neglected

International Alliances:Strategic Considerations

• Choice of Entry Mode• Resource Pooling

– Redundant– Complementary

• Learning• Strategic Options• Impact of Culture

International Alliances:Managerial Considerations

• Contract vs. Equity• Structure• Learning:

– Codifiable vs. Tacit Knowledge – Combinative Capability– Absorptive Capacity

• Impact of Culture

1984: The NUMMI Alliance

GM Toyota

NUMMI

1986: Application of Knowledge I GM Toyota

NUMMITMM-K

1990: Application of Knowledge II GM Toyota

NUMMISaturn

1999: The Fuel Cell Alliance

GM Toyota

Alliance

Learning Race(s)GM

Toyota

Ford

DaimlerChrysler

Race 1:Market

Race 2:Market

Rate of Learning in Alliances

• Codified vs. tacit knowledge • Absorptive capacity• Combinative capability• Organization of learning

BuyoutBuyout DissolutionDissolution

EquityAlliance

External Forces

Internal Forces

Strategic Option View of Alliances

Alliances and Culture• Entry: JVs preferred when:

– Target country-market culturally different (CD)– Initiating firm high UA

• Structure: Majority ownership preferred when:– Initiating firm high PD

• Learning: Equity preferred when:– Initiating firm high PD

• Longevity: JVs terminate faster/earlier when:– Partners are culturally different (CD)

• Mistrust: Suspicions of poor performance when:– Initiating firm high UA

• Trust: Expectations of good performance when:– Partners are culturally similar

Alliances and Culture cont.

Culture and Alliances as Options• Partnership buyouts more likely when:

– Initiating firm high PD and UA• Alliance portfolios:

– Japanese hold equity alliances longer– Japanese hold larger number of smaller alliances– Japanese more likely to invest further/acquire partner– Americans more likely to spin off partners (success)– Americans faster to terminate alliance (failure)