Presented to RYLA Rotary Leadership Program in Rochester, New York. June 28, 2005

1. Managing
Cultural Diversity
in Global Business
RYLA Program at RIT
Presented by
Nat Yogachandra
June 28, 2005

3. AMECO Petroleum

4. Partial list of
companies/
brands
owned by
foreign
companies

5. What is the Nationality

6. What is the Nationality
 Headquartered in Japan
 Controlled by Renault (partly owned by the French
government
 In Mississippi, it’s a domestic car

7. What is the Nationality

8. What is the Nationality
 Symbol of British Empire
 Built by Germans - BMW

9. What is the Nationality

10. What is the Nationality
 Swedish brand
 Owned by Americans

11. What is the Nationality
 Swedish brand
 Subsidiary of General
motors
 Symbol of British Empire
 Owned by Americans

12. PT Cruiser – More German or
Mexican than American
Manufactured
in Mexico
Owned by the
Germans

13. A WORLDLY PLANE
One- half of McDonnell Douglas Corp,’s MD-95 was built overseas
Allied Signal Halla Heavy
Fischer (Austria) Industries
Alenia (Italy) (U.S.)
Interior Environmental (Korea)
Fuselage Controls Wing
Honeywell (U.S.)
Avionics
Israel Aircraft ShinMaywa
Korean (Israel) Industries
Aerospace Landing gear (Japan)
(Korea) Horizontal Tail
Allied Signal (U.S.) BMW/Rollsroyce
Nose APIC (France)
(Britain)
Customer Avionics
Engines Auxiliary power
1997 – McDonnell merged with Boeing and renamed to 717

14. Foreign Companies
Have Control of
 Nearly all the U.S. electronics industry
 Nearly all of the photo imaging industry
 Majority of the U.S. book/magazine publishing
 Almost half of the U.S. major motion picture studios
 One of the Big 3 auto manufacturers
 Majority of the U.S. tire manufacturers
 Large segment s of the U.S. food distribution

15. Toy Industry in the U.S.
American Icons
One after another …. Labeled American-
Made in China made, but racks, tiles
and letter bags are
made in China
Timer – Made in Taiwan
Playing pieces and Dice – made
in Britain
Rest made in America
Bath tub finger paints
are made in China
But, bath tub tints – fizzy
water color tablets are
made in the U.S.A.
Swan Lake Barbie and Happy Birthday
Barbie are made in Indonesia
The plastic Volvo that carries her and friends
are made in China

16. Customer Services
moving overseas
 Customer services are moving to India, Philippines,
China, Mexico, and Ireland.
 GE customer services calls - answered by Indians
from a small village closer to Mumbai in India (also
Nike, AMEX, BA)
 GE Capital saves up to $340 million a year by
moving tasks to India
 Toshiba – call center is in Istanbul
Average software engineer salary in U.S. = $75,000
India = $10,000 …. China = $15,000 - $20,000

17. India Woos Medical Tourists
A clinic recently
opened in Mumbai
 Private heart surgery in England is $50,000
 The same cost applies to joint replacement,
neurosurgery and cancer treatment
 The Maharashtra State government is now
working with British Medical Services

18. Salary Structure
India versus the World
IT Employee Cost per Year
Country Cost per Year
India $8,000
Canada $36,000
Ireland $28,000
China $ 9,600
Israel $25,000
Philippines $ 7,000
Eastern Europe $ 7,000
Russia $ 7,000
Mexico $ 7,000
South Africa $18,000

19. Global Business
 Capital raised in London in the
Eurodollar market by a New York-
based corporation may finance the
acquisition of heavy machinery
plant located in China

20. Global Business
 A management team from a
local firm in Rochester may take
over a French-built automotive
machinery plant in Indonesia

21. Global Business
 A German is appointed President of
a major American Corporation in
Rochester, while an American is
appointed head of a Swiss bank

22. Business Today
 Business are operated across
cultures today
 Definition of success now travel
beyond national boundaries

23. Business Today
 Growing importance of business
creates a demand for managers,
who are:
 Sophisticated in international
management
 Skilled at working with people from
other countries
 Emphasize on cross cultural
management

24. Culture
 Culture is a complex concept with
many different definitions.
o Cultured is the learned and shared
values, beliefs and behaviors of a
group of interacting people
o It is NOT innate – we are not born
with a culture

25. Culture has an influence on…
 Communications styles (Yes or No)
 Resolving conflicts
 How supervisors and subordinates are
perceived
 After work socialization
 Negotiation style
 Decision making
 Managing our business…..

26. Culture
Sub-cultures:
Based on race, class or geographic
location
United States
Japanese youth
Aristocrats in Britain
India
China
Sub culture is NOT inferior
Regard all equally

27. Culture is like an Iceberg
Language, food ,
First Impressions Stereotypes
dress, manners and
10% above surface ext. appearance
Visible Aspects
Thoughts Pattern of work
Religious Beliefs Decision making pace
Traditions Social role and status
90 % below surface Fundamental Values Body language
Confidence – Building Individual and group roles
Invisible Aspects Views of Life and Prejudices Dealing with conflicts
Journey of Self/Discovery

28. Four Dimensions of Cultural
Distance
 Individualism and
Collectivism
 Power Distance
 High and Low Context
 Universalistic and
Particularistic

29. Individualism vs. Collectivism
Individualism
 More self-centered/emphasize
on individual goals
 Prefer clarity in their communications-
effectively as opposed to a group
 Individual responsible for own actions
 Name a few countries

30. Individualism vs. Collectivism
Individualism
 More self-centered/emphasize
on individual goals
 Prefer clarity in their communications-
effectively as opposed to a group
 Individual responsible for own actions
 USA, Western Europe cultures

31. Individualism vs. Collectivism
Collectivism
 Have great emphasis on groups and
think more in terms of “WE,” against “I”
 Harmony and loyalty within the team
 Japan - The nail that sticks up gets
hammered down
 Employee loyalty is more important than
efficiency
 Name a few countries

32. Individualism vs. Collectivism
Collectivism
 Have great emphasis on groups and
think more in terms of “WE,” against “I”
 Harmony and loyalty within the team
 Japan - The nail that sticks up gets
hammered down
 Employee loyalty is more important than
efficiency – Arabs
E.g.: Japan, China, ASEAN, Greece, Italy,
Mexico, Brazil, Middle Eastern

33. Power Distance
High Power Distance
Low Power Distance

34. Power
 High Power Distance
 Hierarchy is important for success
 “Expert Role’”- the boss is always correct
and clearly has authority over
subordinates
 Subordinates rarely consider by passing
the boss
China, Russia, Mexico, Hong Kong, India, Korea,
Indonesia

35. Power Distance
 Low Power Distance
 Hierarchy is less important
 Employees expect to bypass the boss
frequently in order to get their work done
 Belief in flat, less hierarchical organizations
with clear roles
USA, Germany, Netherlands, Denmark, Norway,
Australia, New Zealand

36. Hierarchy in Korea
Extremely hierarchical and status-oriented
Each class has a set of prescribed rules that
dictate behavior and protocol.
Follow the rules pertaining to their class
Parent to child
Male to female
Elder to youngster
Teacher to student
Boss to subordinate
Customer to vendor

37.  Chairman: hwoichang
 President: sachang
Hierarchy  Vice president: busachang
in Korea  Executive director: jornmu
 Managing director: sangmu
Businessmen  Director: eesah
are sensitive to  Department manager: puchang
titles
 Deputy department manager: chachang
 Section chief: kwachang
 Deputy section chief: daerhee
 Chief clerk/supervisor: kaychang

38. Korea: Goodbye to Confucius
A woman must obey her
father before marriage
Obey her husband during her
married life
Obey her eldest son after the
death of her husband
- Confucius

39. High Context Culture
 Emphasize non-verbal communications
 Verbal message will be less direct
(also emphasize on social relationships)
Arab countries, Southern Europe (Italy,
Greece) and South America, Japan

40. Low Context Culture
 Place more emphasis/more direct
on the message
 What you say is more important
than how you say it.
Britain, America and Western

41. Universalistic Society
Rules and relationships
Laws are written for everyone and must
be upheld by all
• Legal or illegal takes precedence over
personalities involved in the situation.
• Rely on extensive contracts to conduct
business
USA, Canada, Western Europe,

42. Particularistic Society
Rules and relationships
• It makes a big difference if someone is a
friend or relative
• Use much looser agreement and rely on
the strength of their personal relationship
to maintain the commitment
• View detail contracts (e.g.) penalty
clauses as a sign that they are not
trusted and therefore no relationship
South Korea, China, Mexico,
Russia, Indonesia

43. Cross-Cultural Judgment
Cross-culturally we use our own culture as a
standard of measurement:
 A Swiss executive waits more than an hour past the
appointment time for his Spanish colleague to
arrive and to sign a supply contract
 In his impatience he concludes that Spaniards
must be lazy and totally unconcerned about
business
 The Swiss executive has misevaluated his
colleague by negatively comparing him to his own
cultural standards for business punctuality
 Implicitly, he has labeled his own culture’s
behavior as good and the Spanish do not arrive
on time and that is bad”)

44. Japanese as seen by others
Appearance Vs Reality
 They deafen you with silence
 Reality. True. Silence show respect for the
speaker.
 They often look glum
 Reality. Happiness hides behind a straight face
 They say YES when they mean NO
 Reality. They do not like to offend you by showing
open disagreement or refusal
 They never look you right in the eye
 Reality. They are taught that it is rude to stare
 When they smile, they do not look sincere
 Reality. They often smile to make you feel
comfortable – one should be thankful

45. Differences : American - Mexican
Aspect Mexico United States
Work/Leisure Works to live. Leisure considered Lives to work. Leisure seen as reward
essential for full life for hard work
Loyalty Mostly loyal to superior (person than Mainly self-loyalty. Performance
organization) motivated by ambition
Staffing Family and friends are preferred due to Relatives usually barred. No nepotism
trustworthiness. Promotions based on here. Promotions based on performance
loyalty to superior
Competition Avoids personal competition. Favors Enjoys proving self in competitive
harmony at work situations
Time Relative concept. Deadlines flexible Literal imperative. Deadlines and
commitments are firm
Family Family is the first priority. Children are Family is usually second to work. Children
celebrated and sheltered. Wife fulfills often minimally parented; are independent.
domestic role Wife often fulfills dual roles
Personal Appearance Dress and grooming are status symbols Appearance is secondary to performance
Status Title and position more important than Money is main status measure and is
money in eyes of society reward for achievement
Ethics Truth is tempered by need for diplomacy. Direct Yes/No answers given and
Truth is a relative concept expected. Truth seen as absolute value

46. Differences: Germany - Asia
Germany Asia
 The highest ranking or eldest person  True in most Asian countries (Japan,
usually enters the room first. Korea, Thailand) It’s always the
senior person begin and lead the
conversation
 True in some NE Asian countries
 Generally, prefers 3rd party intro.
 Some physical space
 More physical space between each
person Versus Asians, Americans or  Have tea, share jokes, talk about
Europeans family and favorite sports before
and after meetings
 Expect to plunge straight into matters  Spend lots of time getting to know
without any jokes, humor, small talk or each other and build trust during
sharing photo of the kids meetings and after meetings
 Tend to separate their private and
professional lives (unlike Americans)  Friendship First, Tasks Later
 Nonconfrontational. Good strategy is not
to “trash” the competition
 Hard negotiators. Have lots of
patience
 Tasks First, Friendship later  Sending advanced presentation
 Hard negotiators. Discussion is likely to be materials help the Asians
to the point  Not deadly serious

47. Other Cultural Aspects
 Importance of Face
 Direct criticism
 Use a third party to convey
your message
 Avoiding Eye Contact
 Touching the head of a Thai
secretary
 Yes and No
 Language of time
 Delay means – not interested or low priority (West)
 Low-level officials elevate the prestige of their work
by taking long time to complete a work (East)

48. Eye Contact
 In cultures, where power distance is high, the
speakers will maintain close eye contact when
delivering messages. Implies dominance and
one’s personal position ( Spain, Greece and
Arab countries)
 Latino culture- staring means dissatisfaction
and anger or romantic interest

49. Japanese non-verbal message
 Smile does not necessarily indicate agreement. It may
reflect sorrow or embarrassment for you or for them
 If a foreigner insists on request a yes or no answer, they
will usually smile
 Sighing means relief in Japanese culture
 Removing glasses or stretching ears indicates confusion
 Crossed arms means possible refusal, disagreement or
wonder
 If a Japanese sucks air through his teeth, it is a non verbal
sign that he has a problem
 Direct eye contact is impolite
 When a Japanese pat their head they are disappointed
or don’t understand
 Remaining silent means they are thinking or simply have
nothing to discuss. BUT, DO NOT put your cards on the
table right away

50. Distance Between People
According to a study of space in
communications across cultures
 Conversation distances
 U.S. and European 18” to 30”
 Latin American/Caribbean 8” to 18”
 Saudi 9” to 10”
 Leads to stereotypes….

51. TOUCHING
 Greeting:
 European American men: shake hands with
little touching there-after
 Jamaican, Latino men, Caribbean:
Hugging, slapping backs, body contact.
Sometimes grabbing the arm for a few
seconds
 European Americans feel that Latinos
touch to a degree that is uncomfortable,
threatening and oftentimes insulting to
European Americans . May be perceived
flirting or sexual harassment

52. TOUCHED BY an Alien
Crown Prince Abdullah and Canadian PM, Jean Chretian
President Bush and President Mubarak

53. May be YES or NO - Philippines
Filipino “yes” puzzles most foreigners.
A YES could mean
 Just that or it could also mean
 May be” or
 I do not know or
 If it will please you
Filipinos generally say what other
person wants to hear

54. May be YES or NO - Indonesia
Impolite to say NO in
Indonesia
YES means sometimes
“I mean NO”

55. May be YES or NO - Mexico
 Mexicans avoid
saying “NO”
 “May be” or “We will
see” may actually
mean ‘NO”

56. May be YES or NO
When a Saudi says “yes’ it
usually means “possibly”

57. May be YES or NO - India
 The word “NO” has harsh
implications
 Evasive refusals are more common,
and are considered more polite

58. May be YES or NO - China
The closest a
traditional Chinese
businessperson ever
gets to saying
“NO” would be “It
would be difficult.”

59. May be YES or NO –
Hong Kong
“YES” does not necessarily
mean
“I agree with you.”
A closer meaning would
be “I heard you”

60. Working with Numbers
Si (four) Sounds like “death” in Chinese
4 
 Avoid using 4 in contracts- brings bad luck in China, Japan,
Korea and Asia
6  Lin (Six) Represents luck. It also stands for six spirits of
7 nature- wind, mountain, river, lightning, moon and sun
 Seven is lucky number in Japan and Western World
8  Ba (eight) – Sound like fa- wealthy- and is accepted for all
occasions – Hong Kong, Japan and other Pacific countries
9  Ju (nine)- stands for longevity. In ancient times, only
Chinese emperors were allowed to use number 9. The
forbidden city in China was designed with 9,999 rooms
9

61. What color (or is it colour)

62. Gift Giving- Business
 Gift giving is an art in Japan. Integral part of the culture
 Observe proper etiquette. Do not open directly upon receiving
 Use the most auspicious colors for wrapping
 Germans do not give or expect expensive gifts
 Not a major part of German business etiquette. Anything with
your company logo is safe. Perfume and other clothing
considered too personal
 French likes good taste in business gifts
 Avoid gifts with your company logo. Do not include your business
card with your gift. Bring flowers or fine chocolates or liqueur to
the host and present them before, not after the party
 Gift giving in China is a sensitive issue

63. Importance of Gift-Giving
 High Priority
 Japan
 Medium Priority
 Pacific Rim countries
 South Korea, Taiwan, Hong Kong, China, Thailand,
Malaysia, The Philippines, Indonesia, and Singapore
 Low Priority
 United States
 Canada
 Australia
 Europe

64. Managers Working for Multi-
national Companies Should
 An ability to get along well with people
 An awareness of cultural differences
 Open-mindedness
 Tolerance of foreign culture
 Adaptability to new cultures, ideas and
challenges
 An ability to adjust quickly to new conditions
 An interest in facts and not blind assumptions
 An ability to learn foreign language

65. Test your cultural knowledge
In some South American countries, it is
considered normal and acceptable to
show up for a social appointment:
 ten to fifteen minutes early
 ten to fifteen minutes late
 fifteen minutes to an hour late
 one to two hours late

66. Test your cultural knowledge
In some South American countries, it is
considered normal and acceptable to
show up for a social appointment:
 ten to fifteen minutes early
 ten to fifteen minutes late
 fifteen minutes to an hour late
 one to two hours late

67. Test your cultural knowledge
When eating in India, it is
appropriate to:
 take food with your right hand
and eat with your left
 take food with your left hand and
eat with your right
 take food and eat it with your left
hand
 take food and eat it with your
right hand

68. Test your cultural knowledge
When eating in India, it is
appropriate to:
 take food with your right hand
and eat with your left
 take food with your left hand and
eat with your right
 take food and eat it with your left
hand
 take food and eat it with your
right hand

69. Test your cultural knowledge
One wedding gift that should not
be given to a Chinese couple
would be:
 a jade bowl
 a clock
 a basket of oranges
 shifts embroidered with
dragon patterns
4

70. Test your cultural knowledge
One wedding gift that should not
be given to a Chinese couple
would be:
 a jade bowl
 a clock
 a basket of oranges
 shifts embroidered with dragon
patterns
4

71. Test your cultural knowledge
If you wanted to give a necktie
or scarf to a Latin American, it is
best to avoid the color:
 red
 purple
 green
 black

72. Test your cultural knowledge
If you wanted to give a necktie
or scarf to a Latin American, it is
best to avoid the color:
 red
 purple
 green
 black

73. Test your cultural knowledge
When doing business in Japan,
never:
$ a.
touch someone
$ b.
leave your chopsticks in the
rice
$ c.
take people to pricier
restaurants than they took you
$ d.
all of the above
Source: Hoggard International

74. Test your cultural knowledge
When doing business in Japan,
never:
$ a.
touch someone
$ b.
leave your chopsticks in the
rice
$ c.
take people to pricier
restaurants than they took you
$ d.
all of the above
Source: Hoggard International

75. Test your cultural knowledge
In Japan, loudly slurping your soup is
considered to be:
$ a.
rude and obnoxious
$ b.
a sign that you like the soup
$ c.
okay at home but not in public
$ d.
something that only foreigners do
Source: Hoggard International

76. Test your cultural knowledge
In Japan, loudly slurping your soup is
considered to be:
$ a.
rude and obnoxious
$ b.
a sign that you like the soup
$ c.
okay at home but not in public
$ d.
something that only foreigners do
Source: Hoggard International

77. Test your cultural knowledge
 As an American teacher you have the opportunity to study
for a year at one of the better Japanese universities. Today
one of the professors has treated a subject which you had
already studied. You are sure that he was wrong in some
crucial part of the matter. You feel the obligation to do
something about your point of view.
How do you approach this matter?
 You try to gather signatures from those fellow students who
agree with your opinion on the problem.
 You go to the dean and talk to him about the low performance
of the professor.
 You go to the professor to apologize for your interference and
show your interest in the subject.

78. Test your cultural knowledge
 As an American teacher you have the opportunity to study
for a year at one of the better Japanese universities. Today
one of the professors has treated a subject which you had
already studied. You are sure that he was wrong in some
crucial part of the matter. You feel the obligation to do
something about your point of view.
How do you approach this matter?
 You try to gather signatures from those fellow students who
agree with your opinion on the problem.
 You go to the dean and talk to him about the low performance
of the professor.
 You go to the professor to apologize for your interference and
show your interest in the subject.

79. Test your cultural knowledge
 The statement "In order to have efficient
work relationships, it is often necessary to
bypass the hierarchical line" would be
agreeable to managers in which country?
A) Sweden
B) Oman
C) Japan
D) Venezuela

80. Test your cultural knowledge
 The statement "In order to have efficient
work relationships, it is often necessary to
bypass the hierarchical line" would be
agreeable to managers in which country?
A) Sweden
B) Oman
C) Japan
D) Venezuela

81. Test your cultural knowledge
In which country is meaning communicated
more by clear, direct words than by body
language?
A) England
B) Mexico
C) China
D) France

82. Test your cultural knowledge
In which country is meaning communicated
more by clear, direct words than by body
language?
A) England
B) Mexico
C) China
D) France

83. Test your cultural knowledge
“My company has had an excellent relationship with a
supplier from Japan for two years. I have been assigned to
replace John who was the supplier's contact with our
company. The supplier's representative now says that his
boss wants to re-negotiate our contract although it has five
years to run. What do you advise me?”
A) Your company broke the contract.
B) By changing the person whom the Japanese had a trusting
relationship, they believe that the contract itself has to be
looked at as if it were new.
C) The Japanese don't keep their promises.
D) The contract is in English and the Japanese do not
understand it.

84. Test your cultural knowledge
“My company has had an excellent relationship with a
supplier from Japan for two years. I have been assigned to
replace John who was the supplier's contact with our
company. The supplier's representative now says that his
boss wants to re-negotiate our contract although it has five
years to run. What do you advise me?”
A) Your company broke the contract.
B) By changing the person whom the Japanese had a trusting
relationship, they believe that the contract itself has to be
looked at as if it were new.
C) The Japanese don't keep their promises.
D) The contract is in English and the Japanese do not
understand it.

85. Summary…..
 Take time to understand and appreciate other
cultures
 Cultivate a culture of respect and value
human dignity
 Take time to understand and appreciate your
own culture
 Doing homework is critical to selling your
services in a market
 Recognize the importance of dealing with
cultural differences and the possible
consequences of taking no action –
understand the music behind the words
 Establishing credibility
 Respect

86. Thank You

87. Tokyo
10
Is forbidden to steal hotel towels
please. If you are not person to
do such thing is please not to
read this note

88. Istanbul
9
To call room service, please
open the door and call
room service

89. Mexico City
8
Broken English spoken
perfectly

90. Belgrade
7
To move the elevator cabin, push button
for wishing floor. If the cabin should enter
more persons, each one should press a
number of wishing floor. Driving is then
going alphabetically by national order

91. Israeli
6
If you wish breakfast, lift the
telephone and our waitress
will arrive. This will be enough
to bring up your food

92. Athens
5
Visitors are expected to
complain at the office
between the hours of 9 am
and 11am daily

93. Acapulco
4
We are pleased to announce that
the manager has personally passed
all the water served here

94. Vienna
3
In case of fire, do your utmost
to alarm the porter

95. Tokyo
2
Cools and heats. If you want the
condition of cool in your room,
please control yourself

96. a city in Japan
1
You are invited to take advantage
of the chambermaid

97. Thank You