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Cross Cultural Management

Cross Cultural Management. Describes organizational behavior within countries and cultures Compares organizational behavior across countries and cultures

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Cross Cultural Management

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  1. Cross CulturalManagement • Describes organizational behavior within countries and cultures • Compares organizational behavior across countries and cultures • Seeks to understand and improve the interaction of customers, suppliers, employees, executives, and others from countries and cultures around the world

  2. Culture defined • “The collective programming of the mind which distinguishes the members of one human group from another…the interactive aggregate of common characteristics that influence a human group’s response to its environment.” – Hofstede • Socially derived, taken-for-granted assumptions that shape behavior, or structure one’s perception of the world

  3. What are Americans like? • Direct, don’t talk around things. • Competitive • Independent and individualistic • Questioners: Ask a lot of questions • Dislike silence • Would rather talk about the weather than deal with silence • Punctual

  4. Why Study International Organizational Behavior? • “For managers who have to operate in an unfamiliar culture, training based on home-country theories is of very limited use and may even do more harm than good” • An American was sent to manage a bank in Venezuela. He asked the employees for their input and recommendations to solve a problem. How did the employees react?

  5. Expectations of Manger’s Across Cultures • “It is important for managers to have at hand precise answers to most of the questions their subordinates may raise about their work.” • Percentage agreeing with the above: • Sweden: 10% • Germany: 46% • Spain & Japan: 78% • USA: 18%

  6. Average vacation days for employees with one year of service • USA: 10 days • Spain: 22 days • Germany: 18 • Sweden: 30 • Finland: 20 • Japan:10

  7. Maternity Leave • Sweden: Either parent, 90% pay for 12 months • Denmark, 90% pay for 28 weeks • Germany, 14 weeks, 100% pay • Ireland, 14 weeks, 70% pay • Italy, 20 weeks, 80% pay • USA, 12 weeks, unpaid (FMLA)

  8. Hofstede’s Study • Study of IBM employees across the world • National culture explained more of the differences in work-related values and attitudes than did: • Position within the organization • Profession • Age • Gender • Found four core dimensions of national culture

  9. Hofstede’s Dimensions of National Culture • Individualism versus collectivism • Individualism: (USA, Australia) • Emphasis on the individual: make primary contributions to oneself • Collectivism: (Japan) • Emphasis on the group: make primary contributions to group goals and objectives • Members are expected to look after other members • Implications • Organizational loyalty, teamwork, social loafing

  10. Hofstede’s Dimension’s (cont.) • Power distance: • measures the extent to which the less powerful members of an organization accept/expect an unequal distribution of power • Large “PD” (Venezuela, Philippines) • Wide differences in power are accepted and often preferred • Titles & hierarchy are very important • Small “PD” (Denmark, Ireland) • Power differences are played down • Boss is not someone to fear • Implications • Organizational structure (pyramid vs. flat) • Decision-making issues: Participative vs. authoritarian, decentralized vs. centralized

  11. Hofstede’s Dimensions (cont.) • Uncertainty Avoidance • The extent to which people feel threatened by ambiguity & uncertainty (risk) and therefore try to avoid such situations • Implications • Career stability (job security), formal rules • High in uncertainty avoidance (Portugal, Greece) • Concept of “lifetime employment” • Formal rules help to reduce uncertainty • Working hard is a way of reducing uncertainty (“karoshi”) • Low in uncertainty avoidance (Denmark, Singapore) • Risk taking is more accepted & encouraged

  12. Hofstede’s Dimensions (cont.) • Quantity vs. quality of life • Quantity: emphasizes acquisition of money and things (materialism) – (USA) • Quality: emphasizes relationships and overall quality of life (time for activities outside of work is important) – (Sweden) • Implications for work hours, vacation time, pay issues • Gender roles:The extent to which career and family roles for men and women are distinct • Similar: Both men and women work outside the home and take care of family obligations (Sweden) • Unique: Men work outside of the home, women take care of the family (Japan, Austria, Mexico) • Implications for paternity & maternity leave, on-site day care, flex-time

  13. Expatriates • People from one national culture working in another for a fixed period of time • U.S. expatriates (3 years is the average assignment) • Average 3 year assignment can cost firms up to $1 million per expat • Moving expenses, education, expat premiums, cost of living differences, inflation, etc.

  14. Catskill Roads • What should they do? Why? • In general, what factors should be considered in the decision to accept or reject an expatriate assignment?

  15. Why U.S. managers would accept an international assignment • Cross-cultural experience (52%) • Gain a greater understanding of another way of life • Money (40%) • Higher salary, more fringe benefits • Career Advancement (21%) • Increased opportunities & exposure

  16. Why U.S. managers would NOT accept an international assignment • Location • Political unrest, dangerous • Career • High risk of job failure, isolation from home company, forgotten • Family • Dual-careers, spouse unwilling to move

  17. Repatriation Issues • Will I have a job at the same company when I return? • 46% of U.S. firms do not guarantee a position at home upon completion of the assignment • Mergers, downsizing, layoffs • An international assignment may be a high-risk career strategy • Why type of job will I have upon return? • Less challenging, lower status, and less responsibility • High rate of turnover for “expats” upon return (25% within a year) • Consider the cost of an expatriate assignment (about $1 million) and the potential loss of part of this “investment”

  18. U.S. “Expats” (up to 45% failure rate) 1) Inability of spouse to adjust Career disruption Social needs Personal & career identity 2) Manager’s inability to adjust 3) Other family reasons Children at school & related adjustments Issues with family in the U.S. (elder care) Reasons for Expatriate Failure

  19. Expatriate Selection Issues • Personality issues • High tolerance for ambiguity • High self-monitor • Emotional stability • Nonjudgmental, nonevaluative • Flexibility & willingness to try new ways • Initiative

  20. Expatriate Selection Issues (cont.) • Family Issues • “Would your spouse be interrupting a career to accompany you? If yes, how might this affect your spouse and your relationship with each other? • “Are you prepared to have less contact with your extended family?” • AT&T’s self-assessment of “cultural-adaptability”

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