1. The Strategy for Managing Across Cultures
Renault car example
Strategic Predispositions
o Ethnocentric predisposition:a nationalistic philosophy of
management whereby the values and interests of the parent company
guide strategic decisions
o Polycentric predisposition:a philosophy of management whereby
strategic decisions are tailored to suit the cultures of the countries
where the MNC operates
o Regiocentric predisposition: a philosophy of management whereby
the firm tries to blend its own interests with those of its subsidiaries
on a regional basis
o Geocentric predisposition:a philosophy of management whereby
the company tries to integrate a global systems approach to decision
making
o If the MNC relies on one of these profiles for an extended time, the
approach may become institutionalized, however it is difficult for
firms
Meeting the Challenge
o Globalization imperative: a belief that one worldwide approach to
doing business is the key to both efficiency and effectiveness
o A large number of companies use a large number use the same
strategies abroad as they do at home (US, Canada, France, Germany,
Japan, UK)
o Factors that help facilitate the need to develop unique strategies for
different cultures, including:
 The diversity of worldwide industry standards such as those in
broadcasting, where television sets must be manufactured on a
country-by-country basis.
 A continual demand by local customers for differentiated
products, as in the case of consumer goods that must meet
local tastes.
 The importance of being an insider, as in the case of customers
who prefer to “buy local.”
 The difficulty of managing global organizations, as in the case
of some local subsidiaries that want more decentralization and
others that want less.
 The need to allow subsidiaries to use their own abilities and
talents and not be restrained by headquarters, as in the case of
local units that know how to customize products for their
market and generate high returns on investment with limited
production output
o The way that a product is marketed (ex. toothpaste as a cosmetic
product or as a cavity-fighter)
 Germans want advertising that is factual and rational

2.  French avoid reasoning or logic
 British value laughter
o Table 5-1 (pg. 130)
Cross- Cultural Differences and Similarities
Parochialism and Simplification
Parochialism: the tendency to view the world through one’s own eyes and
perspectives
Simplification:process of exhibiting the same orientation toward different
cultural groups
Similarities Across Cultures
Ex. Korean firms and US firms
o As organizational size inc, commitment declined
o As structure became more employee-focused, commitment increased
o the more positive the perception of organizational climate, the greater
the employee commitment
Many Differences Across Cultures
Human resource management (HRM) – example
HAIRL –
o Helicopter – the capacity to take a broad view from above
o Analysis – the ability to evaluate situations logically and completely
o Imagination – the ability to be creative and think outside the box
o Reality – the ability to use info realistically
o Leadership – the ability to effectively galvanize and inspire personnel
Different clusters require a different approach to forming an effective
compensation strategy
o Pacific rim countries – incentive plans should be group-based
o EU nations (France, Spain, Italy, and Belgium) – similar compensation
strategies
o Great Britain, Ireland, and the United States – managers value their
individualism and are motivated by the opportunity for earnings,
recognition, advancement, and challenge
Study – US affiliates used a hybrid form of HRM practices, where they closely
follow local practices when dealing with the rank and file but even more
closely approximate parent- company when dealing with upper-level
management
Stereotypes may not be valid
Cultural Differences in Selected Countries and Regions
Doing Business in China
Technical competence – send engineers to answer questions in precise detail
Punctual
Nod to show that they understand
Guanxi; “good connections”
Guanxi represents nepotism, where individuals in authority make decisions
on the basis of family ties or social connections rather than objective indices
Good listening skills

3. Collective society in which people pride themselves on being members of a
group
Doing Business in Russia
Build personal relationship with partners – personal relationships are very
important
Use local consultants
Different business ethics (giving bribes)
Could take months for something to get done, so be patient
Stress exclusivity
Be careful about compromising or settling things too quickly, because this is
often seen as a sign of weakness
Doing Business in India
Be on time for meetings
Unless close, personal questions shouldn’t be asked
Public displays of affection are considered inappropriate
The namaste gesture can be used to greet people
Bargaining for goods and services is common
Pointing is done with the chin and beckoning is done with the palm turned
down
Doing Business in Brazil
Physical contact is an acceptable form of communication
Face-to-face is preferred as a way to communicate, so avoid simply e-mailing
or calling
Form a strong relationship before bringing up business issues (tend not to
trust people)
Appearance is very important
Patience, because many processes are drawn out
Still be prepared despite the slow processes and relaxed environments