Managing in a global environment

1. Managing in a global environment A stranger in a strange land

2. The rise of globalism � one world Domestic Export (international) Multi country Global

3. The Business environment Key factors to understanding international markets

4. What is different? Economic Legal-political Socio-cultural

5. Economic Factors Different rates of economic development Infrastructure Resources and product markets Exchange rates

6. Legal � Political Political risk Politcal instability Laws and regulations International treaties and trade agreements

7. Socio-cultural Cultural factors are more complex and difficult to understand than economics and legal systems

8. What is Culture What does it mean to be culturally competent?

9. Cultural Competence Culture is a learned set of shared perceptions about beliefs, values and norms Culture is Contextual, relational and situational Cultural competence is not an individual attribute but a series of behaviors in a context, between individuals in a given situation. Selecting the right set of behaviors depends on knowledge, motivation and actions which occur in specific contexts with messages that are appropriate and effective

10. Cultural Patterns Beliefs, values and norms form cultural patterns Cultural patterns are based on the premise that: People in all cultures face common human problems for which they must find solutions The range of alternative solutions to a culture�s problems is limited Within a given culture there will be preferred solution, which most people with the culture will select, but there will also be people who will choose other solutions. Over time, the preferred solutions shape the culture�s basic assumptions about beliefs, values and norms (Kluckhohn and Strodtbeck)

11. What are the common human problems for which cultures must find solutions? How humans orient to activity What is the relationship of humans to each other? What is the nature of human beings? What is the relationship of humans to the natural world? What is the orientation of humans to time?

12. The range of alternative solutions to a culture�s problems is limited How humans orient to activity Being --- becoming --- doing What is the relationship of humans to each other? Hierarchical � group identification � individual autonomy What is the nature of human beings? Evil � mixture of good and evil � good What is the relationship of humans to the natural world? Subjugated by nature � in harmony with nature � master nature What is the orientation of humans to time Past orientation � present � future Being cultures value contemplative behavior Becoming orientation sees humans as evolving and changing Doing cultures value doing stuff Being cultures value contemplative behavior Becoming orientation sees humans as evolving and changing Doing cultures value doing stuff

13. Within a given culture there will be preferred solution, which most people with the culture will select, but there will also be people who will choose other solutions.

14. Over time, the preferred solutions shape the culture�s basic assumptions about beliefs, values and norms A problem regularly solved in a similar way defines shared value and becomes part of the society Cultural patterns, thus developed are sustained

15. Context

16. What is context? Imagine two people go into a room to communicate. The room is isolated from the environment. The first person, Joe, is from a world deep beneath the earth�s surface. He has never been to the surface before. The second person, Juana, is from Cleveland, and she doesn�t know that there are cities beneath the surface.

17. What is context? Joe asks Juana �Tell me about Cleveland� Juana says �Cleveland is sunny today but very cold, and there is a brisk wind blowing off the lake.� Joe is baffled by the conversation? Why?

18. Each of the characteristics of Cleveland must be described along with a description of how it fits into the context. Juana has to describe the context as well as the condition. The meaning is contained entirely in the message.

19. On the other hand, if Joe and Juana are both from Cleveland and meet in an airport, the simple answer � It was cold, sunny and windy � would convey meaning which is mostly in the context.

20. What is context? In the first example, the communications are low context in which the meaning is entirely within the message. Systems are designed to convey messages and people become more like the machines they design. In the second example, the communications are high context with the meaning situated within the context. Information is widely shared and simple messages with deep meaning flow freely

21. What is context? For the individual, context eventually sinks below the level of consciousness. The assumption is that everyone in the world has the same context and that they all communicate in the same way � which of course is false. So, what is the strategy for dealing with different contexts?

22. What is context? Destroy the context that is different than yours. � Native Americans, Africans Ignore the differences � pretend they don�t exist or aren�t important. Transcend your own system. Recognize that there is a second system Understand the nature of the system

23. One can only do this when confronted with a context or culture that is different than one�s own.

24. High Context Emphasis placed on nonverbal communication Information drawn from the environment Skilled at interpreting non verbal communications Fewer words used Time is open, less structured, flexible based on needs of the people Africans are high context but not as high as Arabs or Asians

25. Low Context Greater emphasis on verbal communication More likely to miss non verbal cues Tend to segment information Control information on need to know basis Prefer careful instructions from someone who knows Time highly structured Americans tend to be low context communicators but not as low as Swiss or Gremans

26. Leadership and Culture Societal Values

27. Hofstede�s Leadership Study 18 year study 150,000 people 60 Countries Five Dimensions of Leadership, each on a continuum from high to low, based on societal values. Individualism, Power Distance, Uncertainty Avoidance, Masculinity, Time Orientation

28. Individualism-Collectivism Individualism is a mental set in which people see themselves first as individuals and believe their own interests and values take priority (Canada, Great Britain, and the United States) Collectivism reflects the feeling that the group or society should receive top priority (Hong Kong, Greece, Japan, and Mexico),

29. Power Distance Power distance reflects the extent to which members of a social system accept the notion that members have different levels of power. High power distance suggests that leaders make decisions simply because they are the leader (France, Japan, Spain, and Mexico). Low power distance suggests that social system members do not automatically acknowledge the power of a hierarchy (Germany, Israel, Ireland, and the United States).

30. Uncertainty Avoidance Low uncertainty avoidance is reflected by people who accept the unknown and tolerate risk and unconventional behavior (Australia, Canada, and the United States). High uncertainty avoidance is characterized by people who want predictable and certain futures (Argentina, Israel, Japan, and Italy).

31. Masculinity-Femininity Masculinity refers to an emphasis that gets placed on assertiveness and the acquisition of money and material objects, coupled with an emphasis on caring for others (Italy and Japan). Femininity places an emphasis upon personal relationships, ~ concern for others, and a high quality of life (Denmark and Sweden).

32. Time Orientation Long-term orientation is characterized by a long-range perspective coupled with a concern for thrift and weak expectations for quick returns on investments (Pacific Rim countries). Short-term orientation is characterized by demands for immediate results and a low propensity to save (Canada and the United States).

33. PD ID MA UA LTUSA 40 L 91 H 62 H 46 L 29 LGermany 35 L 67 H 66 H 65 M 31 MJapan 54 M 46 M 95 H 92 H 80 HFrance 68 H 71 H 43 M 86 H 30*LNetherlands 38 L 80 H 14 L 53 M 44 MHong Kong 68 H 25 L 57 H 29 L 96 HIndonesia 78 H 14 L 46 M 48 L 25*LWest Africa 77 H 20 L 46 M 54 M 16 LRussia 95*H 50*M 40*L 90*H 10*LChina 80*H 20*L 50*M 60*M 118 HPD = Power Distance; ID = Individualism; MA Masculinity; UA Uncertainty Avoidance;LT = Long-Term OrientationH = top third, M = medium third, L = bottom third (among 53 countries and regions for the first four dimensions; among 23 countries for the fifth)