International Business Culture

1. International Business Culture

2. What is Management? “Management is a form of work that involves coordinating an organization’s resources - human and capital – to accomplish organizational goals.”

3. Levels of Management • 1. Top management • 2. Middle management • 3. Supervisory management

4. Functions of Management • Planning • Organizing • Staffing • Leading • Controlling

5. Roles of a Manager Interpersonal - leader, figurehead, liaison Informational - monitor, disseminate, represent Decisional - allocate resources, negotiate, problem solving

6. Management Skills Conceptual skills - decision making, planning, organizing Human relations skills - understand people, motivating, collaborating Technical skills - able to get a particular job done

7. What is International Management? “Process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage”

8. What is International Business? • “Profit related activities • conducted around national • boundaries, ever changing”.

9. What are the variables affecting the management function? • National variables - economic system, • legal system, political system • Socio-cultural variables - religion, education, • language • Cultural variables - values, norms, beliefs • Attitudes - work, time, individualism, • materialism • Response - motivation, productivity, ethics, • commitment

10. What is Culture? • Set of commonly held values • A way of life of a group of people • Includes knowledge, belief, art, morals, • law, customs and habits • Everything that people have, think and do • as members of their society • An integrated system of learned • behavior patterns that are characteristic • of the members of any given society

11. Cross Cultural Myths • Myth One:We really are all the same • Myth Two: I just need to be myself and • everything will be okay • Myth Three: I have to adopt the practices • Of the other culture to succeed • (Adapt rather than adopt)

12. US Values & Possible Alternatives • Beliefs - control vs. destiny • Change - action vs. accept • Attitude - practical vs. dreams aspirations • Approach/work ethic - hard work vs. luck • Promises - keep vs. perhaps • Time - depends on priorities • Obligation -company or family • Employment - short term vs. lifelong • Meritocracy - best person vs. • Other considerations

13. Stereotypical American (as seen by people of other countries) • Inconsiderate of other people’s cultures • Racially prejudices • Ignorant of other countries • Shallow, immature, naïve • Violent, aggressive • Generous, forgiving • Always in a hurry • Outgoing, friendly • Informal • Loud, rude, boastful • Hard working • Arrogant, proud, insensitive • Innovative • Extravagant, wasteful, • Confident they have all the answers

14. Culture is Learned • “Culture is transmitted through • the process of learning and • interacting with one’s environment • rather than through the generic • process” • Primary Socialization • Cultures and Subcultures • Secondary Socialization

15. Culture Universals • Common problems and common features • Economic systems • Marriage and family systems • Educational systems • Social control systems

16. Cultural Change • All cultures experience continued change • Cultural change is a selective process • Cultural change through borrowing • Cultural change through innovations • Cultural diffusion

17. Communicating across Cultures Languages

18. What is Communication? • Process of sharing meaning by transmitting • messages - words and behavior” • Critical factor in cross cultural management • Need for effective communication to: give • information, share ideas, give orders, and to • motivate • Interpersonal issues: leadership, motivation, • group interaction, negotiation

19. The Need to Understand Language • There is a close relationship between • language and culture • 2. Language is a precondition to success • in international business • Languages helps in understanding • culture • 4. Second language is first step to learning • third and fourth language • 5. Learning other languages helps us • appreciate our own language (and culture)

20. What is Language? • Language is “a symbolic code of • Communications • Meanings attached to any word are • totally arbitrary • Major languages of the world are: • Mandarin, Spanish, English, Bengali, • Hindi, Portuguese, Russian, Japanese, • German, Wu

21. The Influence of Culture on Language • The vocabulary of a language depicts • what is considered important in that • culture • Industrialized societies have more • Technological terms • Example: 7 words for bamboo in South • India but none for snow

22. The Influence of Language on Culture • Language influences perception, • categorization and worldview • Language reflects values of the group • Example “individualism” in the US – so • many words pertaining to “self” • In Japan. “we” always comes before the • “I” indicating the “collectivist” approach

23. Avoiding Misunderstandings Across Language Barriers • Recognizing the symptoms: blank stares, • unnatural stopping points in conversation, • feeling of “not connecting” • What to do: explain the message in several • different ways, use visual aids, slow down, • avoid slang and idiomatic expressions, listen • to the other person’s entire message…don’t • assume anything, keep good notes, follow up

24. High Context vs. Low Context Cultures Low context cultures: task oriented, communication is specific, elaborate, direct and unambiguous. Swiss, German, American, French, British High context cultures: based on relationships, rely on communication that is: indirect, ambiguous, nonverbal, and the context. Japanese, Chinese, Arab In between: Italian, Spanish, Greek

25. Communicating across Cultures The Nonverbal Dimension

26. Function of Nonverbal Communication • Helps convey feelings and emotional states • Elaborates on verbal messages • Governs the timing and turn taking • between communicators • Concerns: • 1, Same nonverbal cue carries different • meanings in different cultures • Different nonverbal cues carry the same • meaning in different cultures

27. Nonverbal Language • Eye Contact: intermittent in U.S., Intense, • Unbroken in Arab countries, Very little in • Japan • Para Language: um, er, ah, hai • Smiling, • Head movements: Bulgaria, India • Arm Movements: Italy vs. Japan • Posture: U.S. vs. China • Handshakes

28. How to Manage Communication Effectively • Develop cultural sensitivity - be aware of self • and the other! • Careful encoding - use proper words, gestures • Selective transmission - use proper medium • Careful decoding of feedback - careful • interpretation of message • Seek feedback - ask, verify, follow-up

29. Contrasting Cultural Values

30. Time Dimension Single Focus (American Western Europe, Industrialized Asia): one task at a time; meet deadlines, “Let’s get to work”, “Time is money” Multi Focus (Southern Europe, Latin America, Middle East): Simultaneous tasks, completion \ of task based on strength of relationship, delays are expected, commitments are not Written in stone

31. Environment Dimension Control Cultures (Western Societies): “Go for it”, “Life is what you make it”, “The future can be planned for” Harmony Cultures (Asian Cultures): “Don’t rock the boat”, “Go with the flow” Constraint Culture (Latin America, Middle East): “It’s a matter of fate”, “You take what life gives you”

32. Action Dimension Doing Cultures (American): “God helps those who help themselves” “If at first you don’t succeed, try again” “Who are you?” Answer with job title Being Cultures (Latin America, Africa, Middle East, Southern Europe): “Who are you?” Answer with family description or philosophical outlook

33. Competitive Dimension Competitive Cultures (U.S., Western Europe, Hong Kong, Mexico, Argentina, Japan): “Winner takes all” “Predominantly materialistic” “We live to work” Cooperative Cultures (Scandinavian Countries, Some Latin Countries, Some European Countries, Parts of Asia): “We’re in this together” “We work to live”

34. Individualistic and Collectivist Cultures Individualist: USA, UK, Italy, Scandinavia, France, Germany Intermediate: Israel, Spain, Japan, Argentina Collectivist: Brazil, Turkey, Mexico, South America, Much of Asia.

35. Negotiating Across Cultures

36. Negotiations • “a process between two or more parties aimed • at reaching a mutually acceptable agreement” • Goal - to bring about a win-win situation • where all parties benefit • Process: preparation, relationship building, • exchange of task related information, • persuasion, concession and agreement.

37. Variables in the Negotiation Process • Competitive process or problem solving • approach? • How negotiators are selected - best qualified? • How are persuasive arguments presented? • Rational or emotional? • Motivations? Personal, family, company, • country? • Ability to take risk? • Decision making process - individual or • collective? • Trust - handshake or legal document?

38. Effective Strategies for International Negotiators • Concentrate on long term relationships • Focus on interest behind the positions • Avoid reliance on cultural generalizations • Be sensitive to timing • Remain flexible • Prepare carefully • Learn to listen • Be patient!

39. Eight Recommendations for Success In Global Negotiations • Do pre-work with the other side if possible, • possibly using cultural go-betweens • Develop a strategy to deal with the language • barrier • Use visual aids extensively, but check with • cultural expert • Be prepared for long negotiations • Decide on strategy for obtaining a written • agreement, where acceptable • Know your walk away point • Avoid ethnocentrism

40. Confrontation • Expect less confrontation in high context, • collectivist cultural settings • But, face is more important within the • culture than outside it • “Disrespectful” out-of-group behavior • does not carry as many social issues • as the same behavior within the • cultural group • Agents or third parties can be helpful when • confrontation may be expected

41. Monochronic People • Do one thing at a time • Concentrate on the job • Take time commitments seriously • Are low context and need information • Show great respect for private property, • seldom borrow or lend • Are accustomed to short term relationships

42. Polychronic People • Do many things at once • Are highly distractible and subject to • interruptions • Consider time commitments an objective • to be achieved, if possible • Are high-context and already have info • Borrow and lend things often and easily • Have tendency to build lifetime • relationships

43. Developing Global Managers

44. Global Management Goals • Maximize long term retention of • international managers so that company • can develop a top management team with • global experience • Understand, value and promote role of • women and minorities in order to maximize • underutilized resources, and • 3. Work effectively within local labor laws

45. The Need to Develop Global Managers • Difficult to control geographically • dispersed operations • 2. Need for local decision making independent • of home office • 3. Suitability of managers from alternative • sources

46. Training Global Managers • Area studies - history, geography, politics, • economy • 2. Language training • 3. Sensitivity training • 4. Field experiences )host family, immersion) • 5. In-country training

47. Developing Skills for Global Managers • Communications skills • Personality traits • Motivation • Family circumstances • Cross cultural training

48. Managing Process for Global Managers • Preparation • Adaptation • Repatriation - reverse cultural • shock • 4. Transition - mentor program

49. Developing Global Management Teams Objective - “how to develop and empower intercultural groups and task forces at all levels of an organization to achieve set goals. Synergy advantages: different perspectives, share experiences, share technology Disadvantages: language problems, different management styles, complex decision making process