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  1. 1. Kwame Nkrumah University of Science & Technology, Kumasi, Ghana MCS 358 INTERCULTURAL MANAGEMENT Kwame Ohene Djan (BSc, MSc, PhD) Department of Marketing & Corporate Strategy KNUST School of Business 2/7/2023 1
  2. 2. 2/7/2023 K Ohene Djan 2 Course Outline Introduction to Intercultural Management Unit 1: Role of Culture in International business management 2.1 Culture and its effects on Organizations 2.2 Cultural Value Dimensions 2.3 Project GLOBE Cultural Dimensions 2.4 Hofstede’s Cultural Dimensions 2.5 Trompenaars’s Value Dimensions 2.6 Developing Cultural Profiles 2.7 Culture and Management Styles around the world Unit 2: Communication Across Cultures 3.1 The Communication Process 3.2 The Culture-Communication Link 3.3 Managing Cross-Cultural Communication
  3. 3. 2/7/2023 K Ohene Djan 3 Course Outline Cont’d Unit 3: Motivating and Leading 3.1 Global Leader’s Role and Environment 3.2 Cross Cultural Research on Motivation 3.3 Cross-cultural research on leadership 3.4 Contingency leadership: The Culture Variable Unit 4: International Human Resource Management 4.1 Expatriation and Repatriation
  4. 4. 2/7/2023 K Ohene Djan 4 Introduction to Intercultural Management Origin of the concept Intercultural management as a concept assumed an identity on its own in the mid 1980s. It gained considerable ground during the 1990s from international diversity perspective. Intercultural management concerns itself with the management of workforces functioning in culturally different operating contexts. These differences can be either ‘external’, where an organization operates across national and ethnic cultures, or ‘internal’, where an organization operates across different branches or regions. Intercultural management may be viewed as a subset of international management.
  5. 5. 2/7/2023 K Ohene Djan 5 Unit 1: Culture and Intercultural Management What is culture? Over 160 definitions of culture were uncovered in the research of Kroeber and Kluckholm (1985), cited by North and Hort, (2002). There is no universally satisfactory definition of the domain of culture (Daniels, 2004). Culture represents a complex pattern of beliefs, expectations, ideas, values, attitudes and behaviors shared by members of a group or team (Hellriegel and Slocum, 2004) who come from the same village, town, country or region – or from the same work unit, department, division or organization. Hofstede (1984, p.13) sees culture as “the collective programming of the mind, which distinguishes members of one human group from another Culture consists of people with shared attitudes, values and beliefs. Cultural activities could be national or organizational.
  6. 6. 2/7/2023 K Ohene Djan 6 Culture also refers to … A set of 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 (Deresky, 2017)
  7. 7. Visible and Invisible cultures • There are two dimensions to culture: visible and invisible. • The visible dimensions of culture include:  Language: that spoken language in different countries, organizations which reveals the existence and non-existence of certain concepts;  Short vs long term orientation: different cultural attitude toward time, either short-term thinking and pressure on time, or a more unhurried, longer- term perspective;  Use of space: it varies among different cultures, in terms of comfort in being close; physically to strangers or not;  Religion: that most people follow in each country or a group of countries, and it is the most influential part that can affect the society as whole.
  8. 8. Visible cultures Cont’d • Founders’ values - are critical as they hire the first set of managers • Founders likely hire those who share their vision. This develops the culture of the firm • Socialization - Newcomers learn norms and values • Learn not only because ‘they have to’ but because they want to • Organizational behavior, expectations, and background are presented • Symbols - Anything visible representing a shared value: simplest, basic cultural expression such as logos, architecture, parking priorities, uniforms, office location/size, art on the wall etc.
  9. 9. Invisible culture • Shared assumptions (e.g. time orientation) are the underlying thoughts and feelings that members of a culture take for granted and believe to be true. Societies differ in their assumptions about time. E.g. In India, Hindus belief that time is everlasting and frequently arrive late to meetings • Values and norms inform workers about what goals they should pursue and how they should behave to reach these goals – basic belief about condition that is important. E.g. TQM to Toyota. Some organizations work hard to create a culture that encourages and rewards risk-taking eg. Microsoft, Oracle seek innovation. Others create an environment of caution eg. Oil refineries, nuclear power plants must focus on caution.
  10. 10. 2/7/2023 10 Levels of Culture A culture starts developing in a context where a group of people have a shared experience. - Family members share a life together - In a business context, culture can develop at different levels within a department or at the various ranks of hierarchy. - A company can develop its own culture provided it has ‘a sufficient shared history’ (Schein, 1999). - Applies also for a collection of companies within a particular business or sector (e.g. airline companies, car making companies, public sector organizations etc. - Regions of a country, regions across countries, or groupings of nations sharing a commonexperience like language, religion, ethnic origins or a shared history in development
  11. 11. E.g. Swahili is a Bantu language spoken mainly in Tanzania, Uganda and Kenya, and also in Burundi, Mozambique, Oman, Somalia the Democratic Republic of the Congo and South Africa by about 98 million people. Swahili is an official language of Tanzania, Uganda and Kenya, and is used as a lingua franca throughout East Africa. 2/7/2023 K Ohene Djan 11
  12. 12. 2/7/2023 K Ohene Djan 12 3 Main Levels of Culture 1. Societal Culture Tayeb (2003) argues that there is a constant thread through our lives which makes us distinguishable from others, especially those in other countries: this thread is our national culture. Societies are organized politically into nations, but within this national unity subcultures may exist with specific cultural characteristics. These groups use the society in which they are embedded as their framework of reference, and share their nationality, language and institutions, while being delineated by their socio-economic, historic or geographic characteristics. National variables + Sociocultural variables = Societal Culture
  13. 13. Environmental Variables Affecting Management Functions 3-13 Copyright ©2017 Pearson Education, Inc.
  14. 14. 2. Organizational Culture 1. Exists within and interacts with societal culture 2. Varies a great deal from one organization, company, institution, or group to another 3. Represents those expectations, norms, and goals held in common by members of that group 4. Cultural elements affect the way strategy is determined, goals are established and how the organization operates • Organizational culture functions equivalently to societal culture, but varies a great deal from one organization to another—even within a single societal culture. Nonetheless, organizational culture is at least partially a function of and must respond to societal culture. 2/7/2023 14
  15. 15. • Examples: – IBM vs. Apple – KLM – McDonald’s in Russia • IBM is considered a traditionally to be very formal, hierarchical, and rules- bound, and with its employees usually in suits, and Apple Computer, whose organizational culture is very organic or “loose” and informal with its employees typically wearing casual clothes and interacting informally. • Airline KLM responded to Dutch attitudes regarding families and norms regarding relationships by extending its travel benefits policy to any couple who formally registered as living together—regardless of whether the couple was heterosexual or homosexual, formally married or not. • McDonald’s provides more extensive training to employees in Russia than to those in the US because Russians are less familiar with working within a capitalist system. 2/7/2023 15
  16. 16. TYPES OF ORGANISATIONAL CULTURE • Bureaucratic culture • Formalization, rules, hierarchy • Clan culture • Tradition, loyalty, personal commitment • Entrepreneurial culture • Risk-taking, dynamism, creativity • Market culture • Achievement of financial/market goals
  17. 17. 3. Corporate Culture • Corporate culture takes the question of organizational culture a step further • If an organization develops into a multinational conglomerate, the culture at headquarters may influence that of its subsidiaries abroad. • Similarly, a firm involved in a joint venture with a company from another country may well find that the presence of the foreign partners influences the underlying culture of the firm • What evolves over time in terms of ‘corporate culture’ can have as its basis the ‘original’ organizational culture, or the national/regional culture- or a combination of the two. 2/7/2023 17
  18. 18. 2/7/2023 18 The extent of influence of corporate culture is disputed among experts in the field. Some regard a clearly defined corporate culture as key to a (multi)national company’s success. Others consider flexible culture to be the key to success because it can adapt to, and respond more effectively to, a local/national environment. Group Assignment to be submitted 3rd June, 2021. Is it necessary for a Multinational company to change its organizational culture? When and Why?
  19. 19. The Effect of Culture on Organizational Process Copyright ©2017 Pearson Education, Inc. 3-19 U.S. Culture Alternative Function Affected Individual influences future Life is preordained Planning, scheduling The environment is changeable People adjust to the environment Morale, productivity Hark work leads to success Wisdom and luck are also needed Motivation, rewards Employment can be ended Employment is for a lifetime Promotions, recruitment
  20. 20. Culture and its Effects on Organizations • An awareness of and an honest caring about another individual’s culture Cultural Sensitivity or Cultural Empathy? 3-20 Copyright ©2017 Pearson Education, Inc.
  21. 21. Culture’s Effects on Management • Convergence—the phenomenon of the shifting of individual management styles to become similar to one another • Self-Reference Criterion—the subconscious reference point of ones own cultural values. Many people in the world understand and relate to others only in terms of their own cultures • Parochialism—occurs, for example, when a Frenchman expects those from or 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 3-21 Copyright ©2017 Pearson Education, Inc.
  22. 22. An example of the need to overcome the self-reference criterion is when Japanese workers must put courtesy aside and interrupt conversations with Americans when there are problems. P & G demonstrated ethnocentrism when they ran a popular European advert for Camay soap in Japan. The ad depicted a man walking in on his wife in the bath. The commercial backfired in Japan because the Japanese viewed the man’s behavior as bad manners. 2/7/2023 K Ohene Djan 22
  23. 23. Influences on National Culture Subcultures Stereotyping Copyright ©2017 Pearson Education, Inc. 3-23  Many countries comprise diverse subcultures whose constituents conform only in varying degrees to the national character. Example: Canada • A cultural profile that tends to develop some tentative expectations—some cultural context—as a backdrop to managing in a specific international setting
  24. 24. Cultural Subsystems that Influence People and Their Behavior 3-24 Copyright ©2017 Pearson Education, Inc. Kinship Education System Economic System Political System Health System Recreation Religion
  25. 25. Cultural Value Dimensions Values Are a society’s ideas about what is good or bad, right or wrong Determine how individuals will probably respond in any given circumstances Help managers anticipate likely cultural effects Allow for contingency management Can vary across subcultures 3-25 Copyright ©2017 Pearson Education, Inc.
  26. 26. 2/7/2023 26 Values determine how individuals probably will act in given circumstances. They are communicated via the eight subsystems just described and are passed down through generations. Contingency management requires managers to adapt to the local environment and people and to adjust their management styles accordingly. Value dimensions and resulting cultural profiles provide only an approximation of national character. There may be variations in national culture—i.e., subcultures may exist as well. For example, American tend to think of the Chinese as culturally homogenous, but distinct ethnic groups within China have their own customs and dialects.
  27. 27. GLOBE STUDIES (1993 by Robert J House )  Global Leadership and Organizational Behavior Effectiveness Research Project  How culture influences leadership and organizational processes  What cultural attributes affect societies’ susceptibility to leadership influence  To what extent do cultural forces influence the expectations that individuals have for leaders and their behavior  To what extent will leadership styles vary in accordance with culturally specific values and expectations?  What principles and laws of leadership and organizational processes transcend cultures?
  28. 28. To understand and measure: cultures and leadership  62 countries  170 investigators  17,370 middle managers who worked in  951 organizations  Asked about culture, leadership and organization  Tested 27 hypotheses  Included archival data, media analysis, individual and group interviews and unobtrusive measures
  29. 29. GLOBE studies: 9 cultural dimensions  Dimensions drew on previous research 1. Uncertainty avoidance 2. Power distance 3. Collectivism I: societal collectivism 4. Collectivism II: In-group collectivism 5. Gender egalitarianism 6. Assertiveness 7. Future orientation 8. Performance orientation 9. Humane orientation
  30. 30.  Important to know:  What the dimensions mean  What high/low on a dimension means  Where your country fits on the dimensions
  31. 31. GLOBE studies: Defining the dimensions 1. Uncertainty avoidance The extent to which a society, organization, or group relies on social norms, rules, and procedures to alleviate unpredictability of future events 2. Power distance The degree to which members of a collective expect power to be distributed equally. 3. Collectivism I: societal collectivism The degree to which organizational and societal institutional practices encourage and reward collective distribution of resources and collective action. 4. Collectivism II: In-group collectivism The degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families.
  32. 32. 5. Gender egalitarianism The degree to which a collective minimizes gender inequality. 6. Assertiveness The degree to which individuals are assertive, confrontational, and aggressive in their relationships with others. 7. Future orientation The extent to which individuals engage in future-oriented behaviors such as delaying gratification, planning, and investing in the future. 8. Performance orientation The degree to which a collective encourages and rewards group members for performance improvement and excellence. 9. Humane orientation The degree to which a collective encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others.
  33. 33. GLOBE Research Project Dimensions • Low: Russia, Argentina, Italy • High: Netherlands, Switzerland, Singapore Future Orientation • Low: Germany, Spain, France • High: Malaysia, Ireland, Philippines Humane Orientation 3-33 Copyright ©2017 Pearson Education, Inc.
  34. 34. GLOBE Research Project Dimensions • Low: Sweden, Japan, Switzerland • High: Greece, Austria, Germany Assertiveness • Low: Russia, Argentina, Italy • High: U.S., Hong Kong, Singapore Performance Orientation 3-34 Copyright ©2017 Pearson Education, Inc.
  35. 35. Hofstede (1983) • Hofstede’s research, which was conducted prior to the GLOBE project, is based on 116,000 people in 50 countries. Nonetheless, all of the research was conducted in a single firm—IBM. As such, the result should be interpreted with caution. 2/7/2023 35
  36. 36. Hofstede’s Value Dimensions Power Distance The level of acceptance by a society of the unequal distribution of power in institutions Uncertainty Avoidance The extent to which people in a society feel threatened by ambiguous situations Individualism The tendency of people to look after themselves and their immediate families only and to neglect the needs of society Collectivism The desire for tight social frameworks, emotional dependence on belonging to “the organization,” and a strong belief in group decisions 3-36 Copyright ©2017 Pearson Education, Inc.
  37. 37. Hofstede’s Value Dimensions Copyright ©2017 Pearson Education, Inc. 3-37 Power Distance MAL PHI MEX IND FRA ITA JPN SPA ARG US GER UK DEN ISR AUT Uncertainty Avoidance GRE JPN POR KOR ARA GER AUL CAN US UK IND DEN SIN High Orientation Toward Authority Low High Desire for Stability Low
  38. 38. Hofstede’s Value Dimensions Copyright ©2017 Pearson Education, Inc. 3-38 Individualism AUL US UK CAN FRA GER SPA JPN MEX ITA KOR SIN Masculinity JPN MEX GER UK US ARA FRA KOR POR CHC DEN SWE Individualism Collectivism Assertive/Materialistic Relational
  39. 39. Hofstede’s Value Dimensions Copyright ©2017 Pearson Education, Inc. 3-39 Long-term/Short-term Orientation CHI HK JPN TAI VIE BRA IND US CAN UK E/W AFR High Low
  40. 40. Trompenaar’s (1993) value dimension • He used 15,000 managers from 28 countries and they are as follows : 1. Universalism vs. Particularism – many ways / one right way 2. Individualism vs. Communitarianism – Individual / group 3. Specific vs. Diffuse cultures – Extroversion / Introversion 4. Affective vs. Neutral cultures – Openly on emotions 5. Achievement vs. Ascription – Societal standing on effort towards success and vice versa 6. Sequential vs. Synchronic cultures – Systematic and simultaneous 7. Internalistic vs. Externalistic – Power over nature and vice versa
  41. 41. Trompenaar’s Dimensions Copyright ©2017 Pearson Education, Inc. 3-41 Obligation High Low US GER SWE UK ITA FRA JPN SPA SIN Emotional Orientation in Relationship High Low JPN UK GER SWE USA FRA SPA ITA CHI Universalistic Particularistic Neutral Affective
  42. 42. Trompenaar’s Dimensions Copyright ©2017 Pearson Education, Inc. 3-42 Privacy in Relationship High Low UK US FRA GER ITA JPN SWE SPA CHI Source of Power and Status High Low US UK SWE GER FRA ITA SPA JPN CHI Specific Diffuse Personal Society
  43. 43. Critical Operational Value Differences • Time—differences in temporal values • Change—control and pace of change • Material Factors—physical goods and status symbols versus aesthetics and the spiritual realism • Individualism—“me/I” versus “we” 3-43 Copyright ©2017 Pearson Education, Inc.
  44. 44. Developing Cultural Profiles Managers can gather considerable information on cultural variables from current research, personal observation, and discussion with people. Managers can develop cultural profiles of various countries. Managers can use these profiles to anticipate drastic differences that may be encountered in a given country. It is difficult to pull together descriptive cultural profiles in other countries unless one has lived there and been intricately involved with those people. 3-44 Copyright ©2017 Pearson Education, Inc.
  45. 45. • Though profiles have their limitations, managers can use them to anticipate differences in the level of motivation, communication, ethics, loyalty, and individual and group productivity that may be encountered in a given culture. This Comparative Management in Focus section illustrates how to synthesize information from Hofstede and others to gain a sense of the character of a society. • Much of Japanese culture and working relationships can be explained by the principle of wa. Wa is embedded in the value of indulgent love, which leads to mutual confidence, faith, and honor necessary for business relationships. As such, the workplace is characterized by a mix of authoritarianism and humanism—much like a family. Management systems stress rank and looking after employees. There is devotion to work, collective responsibility, and a high degree of employee productivity. 2/7/2023 45
  46. 46. Comparative Management in Focus Japan Germany Copyright ©2017 Pearson Education, Inc. 3-46 • “Wa”—peace and harmony • A mix of authoritarian and humanism in the workplace • Emphasis on participative management, consensus, and duty • Open expression and conflict discouraged • Preference for rules and order, privacy • Dislike of inefficiency and tardiness • Assertive, but not aggressive • Organizations are centralized but still favor consensus decision making
  47. 47. Comparative Management in Focus Latin America Copyright ©2017 Pearson Education, Inc. 3-47 • Not homogenous, but common similarities • “Being-oriented” compared with “doing-oriented” • Work and private lives are more closely integrated • Very important to maintain harmony and save face
  48. 48. Copyright ©2017 Pearson Education, Inc. 3-48 Under the Lens: Doing Business in Brazil  Almost everyone has a combination of European, African, and indigenous ancestry  Individual relationships are important  Brazilians take time when negotiating  Brazilian business is hierarchical, and meetings are required  Avoid confrontations  Dress well and conservatively  Business cards are exchanged  Having your business card printed in Portuguese on the opposite side is a good idea.
  49. 49. Developing Management Styles and Ways of Doing Business: Saudi Arabia 3-49 Tribalism Paternalism, nepotism Close friendships Person-orientation, Theory Y management (treat workers with freedom and respect) Honor, shame Conflict avoidance, positive reinforcement Copyright ©2017 Pearson Education, Inc.
  50. 50. Developing Management Styles and Ways of Doing Business: Chinese Family Business • Small, family businesses predominate • “Guanxi” connections • People are put ahead of business – human centered management style • Globalization has resulted in more competitive management styles: the new generation manager is more individualistic, more independent and takes more risks 3-50 Copyright ©2017 Pearson Education, Inc.
  51. 51. Copyright ©2017 Pearson Education, Inc. 3-51 Summary of Key Points  Each society has its own unique culture  Managers must develop cultural sensitivity  Researchers such as Hofstede and Trompenaar have created studies which help describe cultural profiles; GLOBE study created a body of data on cultural dimensions  Managers can use research results and personal observations to develop cultural profiles of countries