Cross cultural management

Lecture 1:

Cross cultural management: 

Three layers of analysis: a general framework to better understand the cross cultural in cross cultural management

Indirect lines= indirect influences

Direct lines = direct influences

The institutional environment forms the framework in which human action takes place. Formal rules make up a small part of constraints, that shape behaviour; the governing structure is overwhelming defined by codes of conduct, norms of behaviour and conventions.

Formal and informal institutions:

• Institutions are the rules of the game in a society or, more fundamentally, are the humanly revised constraints that shape human interaction
• Are institution is a system of rules, beliefs, norms and organizations that together generate a regularity of social behavior.
• Institutions are a set of formal and informal rules, including their enforcement arrangements.
• Institutions include social reward and sanctions
• Institutions build the common grounds for interacting and decision-making (managers might have to know implicit rules (informal institutions of particular frameworks)

Culture:

• Culture consist in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiments in artefacts; the essential core of culture consists of traditional (historically derived and selected) ideas and especially their attached values
• Culture is shared mental software, the collective programming of the mind, that distinguished the members of one group or category of people from another
• While human nature is biologically innate and universal, culture is learned and may vary from one society to another
• Individual behaviour is guided by images and mental models individual have in their mind and these images and models are externally defined by the specific social group and individual is embedded and the group’s cultural norms and values
• Cultural norms and created and transmitted via socialization.

Help reduce complexity:

Why should I care about cross-cultural management:

• Firms’ international business activities constantly increased in the last decade
• In the Netherlands, Germany and other internationally- oriented countries every third person is working in an internationally active firm

Should I still care about cross-cultural management during and after covid:

• Previous disasters have in some cases resulted in an even stronger international diversification.
• So still relevant

Where takes the encounter place:

• Manager- manager/employee – employee
• Manager – employee
• Board member – manager
• Shareholder – board member
• Client -employee
• Expat family – local living conditions
• Offline – online

The pandemic will change how we work and most likely will reduce the number of face-to-face meetings and international business traveling. Video conferences in an international context will create new cross-cultural challenges

Lecture 2:

• Erez and Gati propose a multi-level model of culture, consisting of structural and dynamic characteristics that explain the interplay between various levels of culture
• Structural dimension: Nested structure of culture from the most macro level of a global culture, through national, organizational and team cultures, and down to the representation of culture at the individual level
• Dynamic dimensions: The dynamic nature of culture conveys the top-down-bottom-up processes where one cultural level affects changes in levels of culture
• The model proposes that globalization as the macro level of culture, affect, through top down processes, behavioural changes of members in various cultures à they effect each other

1.  Global culture: behavioural standards, symbols, values and material objects that have become common across the globe- they way cultures in different countries around the world have become more alike due to international flow of commodities, services, new information technologies and people
2. Organizational culture:  a set of beliefs and values shared by members of the same organization, which influence their behaviours à the more workers, the more beliefs and values
3. Group culture: at team level, shared values by team members reflect a group culture
4. Individual: conceptualization of culture at the individual level reflects the cultural values as they represented in the self

Levels of culture:

1. National culture: consists of ideas and things that are passed on from one generation to the next in a society- set of knowledge structures consisting of systems of values norms, attitudes, beliefs, rules, language, customs, symbols, mater products and behavioural meanings that are shared by members of a social group (society) and embedded in its institutions and that are learned from previous generations. Culture provides guidelines for living, learning our culture puts out social world in an understandable framework, providing a tool kit we can se to help us construct the meaning of our world
2. Values: abstract ideas about what a group believes to be good, right and desirable
3. Norms: social rules and guidelines that prescribe appropriate behaviour in particular situations
4. Society: a group of people who share a common set of values and norms
5. Socialization: the process of learning the rules and behavioural patterns appropriate to one’s given society i.e. cultural learning

Mental programming:

• Personality: while individuals learn through cultural socialization which behaviours are general acceptable or not acceptable, individual responses vary due to personality (partially genetic)
• Culture: cultural norms and values are not universally applicable
• Human nature: all humans have universal reactions to biological stimulants

So always ask yourself first the question what causes the problem, is it in culture, personality etc.

• So on one hand we have country level and on the other hand national level and they interplay, theory assumes that culture affects the way countries develop
• Both also affect the characteristics and values of individuals in a population and therewith all areas of a business conduct

Levels of national culture:

Hofstede’s union:

1. Practices:  visible to outsides and therefore can be learned
2. Symbols: words, clothing hairstyles, flags, accents etc.
3. Heroes: role models (alive or dead, real or imaginary) with behavioural characteristics that are highly pries in culture à family, movie stars
4. Rituals: collective activities (ceremonies)
5. Values:  the core of the culture, implicitly learned so early in oud development that we do not even realize it à evil vs good, clean vs dirty

• Symbols, heroes and rituals are external (visible), values are internal (invisible)

Organizational (corporate culture) à like your academe, business, ranking

Corporate culture and collective behaviour:

• Corporate culture may replicate, reject or ignore national culture values and norms, vvreating a micro environment in which national norms are reinfored or do not apply
• Many internationally active firms deal with the challenges posed by multiple national cultures by creating clear behavioral guidelines across the organization
• In intra-organizational interactions the organizational norms and rules established with an organizational culture reduce the impact of multiple institutional environments
• Corporate culture is created in the mind of employees:

1. Corporate cultures reprsetns perceived realities à the influence of corporate culture on employees rests on how this culture is seen and experienced by  employees
2. Employees perceptions are heavily influenced by manageers from the top to the bottem of the organization – leaders and managers determine how the workplace is seen

• The corporate culture reflects the personality of an organization à the culture is not soly a manifestation of the organizational design, it also reflects the national culture where the hq and the facility is located, the nature and quality of the employees, the industry and the technology is used

Several characteristics in the work environment collectively create an organization’s unique corporate culture:

1. Symbols and behavior: manifestations of culture through the presence of artifacts and patterns of behavior: organizationas look and feel different to one another. The symbols and physical characteristics one can observe in an organization, provide information (open office vs separate office etc)
2. Power distribution: power structure of the organization – how can a person obtain maintain or lose power. What are the reward and punishment systems – what is really valued in the organization
3. Problem-solving process: how does and organization confronts problems? How do they respond (proactive vs reactive)
4. Espirit and team spirit: how close are teams? Do peo[le like their jobs or are they uninterested and isolated.

• Social structure:  a society’s basic social organization
• Social group:  a group is an association of two or more people who have shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behaviour – individuals are involved in families, work groups, social groups, recreational groups (gender-based, age-based, family-based)
• Social stratification:  all societies are stratified on a hierarchical basis into social categroeis or social strata (individual status withing a culture)
• Social mobility: the extent to which individuals can move out of the strata into which they are born (caste and class system)

Huge determinant of national cultures:

Reglion: shared beliefs and rituals that are concerned with the realm of the sacred, 4 dominate: chrisianity, islam, hinduism, buddhism

Ethical systems: a set of moral principles, or values, that are used to guide and shape behavior

Language is also a huge determinant of the national culture

Language: the spoken and unspoke means of communication (als nonverbal like facial expresions

• Chinese is the mother tongue of the largest number of people
• English is the moste widely spoken languange in the world and is alos the language of international business
• Knowledge of the local language is still beneficial and in some cases critical
• Fainling to understand the nonverbal cues of another culture can lead to communication failure

Lecture 3:

Interaction between high and low context peoples can be problematic:

• Japanese can find Westerners to be offensively blunt. Westerners can find Japanese to be secretive, devious and bafflingly unforthcoming with information
• French can feel that Germans insult their intelligence by explain the obvious, while Germans can feel that French managers provide no direction

Low context cultures are vulnerable to communication breakdowns when they assume more shared understanding than there really is. This is especially true in an age of diversity. Low context cultures are now known for their ability to tolerate or understand diversity, and tend to be more insular

Critics: quite old data and only for corporations,  but he created awareness of how important culture is, Do not focus on a single dimension, but look at the all the dimensions

Critics: Did not really use an theoretical data basis, questionnaire is really long à In your study use both Hofstede and Globe

Cultural value orientation:

• Schwartz basic argument: all societies confront and must cope with basic problems in regulating human activity in order to survive
• The three most critical societal problem:

1. Defining the boundaries between the person and the group and the optimal relations between them (nature of relationship between group and person)
2. Ensuring coordination among people to produce goods/services in ways that preserve to social fabric (how we see the society)
3. Regulating the utilization of human and natural services (relationship with natural world)

• Cultural value emphases reflect and justify preferred societal responses to these problems
• Schwartz derived a set of dimensions for comparing cultures by considering societal values that might underlie alternative societal responses to these problems
• Prevailing cultural value orientation represents ideals that promote coherence among the various aspects of culture
• Aspects of culture that are incompatible with them are likely to generate tension, and to elicit criticism and pressure to change
• Subgroups within societies espouse conflicting values and dominant cultural orientations change in response to shifting power relations among these subgroups

1. To what extent should people be treated as autonomous vs as embedded in their groups

2. How can human interdependencies be manages in a way that elicits coordinated, productive activity rather than disruptive behaviour or withholding of effort

3. To what extent should individuals and groups control and change their social and natural environment vs leaving it undisturbed and unchanged

Inglehart:

• Study of socio-cultural and political change
• Collected data from 89 societies
• Various waves of data collection
• Representative survey per nation
• Political culture: attitudes towards the political system and its various parts, and attitudes towards the role of the self in system
• Enduring political orientation acquired due to the socialization process
• Economic and cultural and political change go together in coherent pattern that are changing the world in predictable ways

Convergence, stability or divergence of cultural diversirty? Arguments in favour of:

Convergence:

• Closer communication and trade links
• Worldwide marketing and product distributions
• Globalization of businesses and business education
• Cultural impact and penetration

Divergence:

• Different cultural interpretations
• Need to maintain cultural identity
• Adaption to different markets
• Trade disputes

Cultual evolves over time – changes in calue systems can be slow and painful for a society, social turmoil an inevitable outcome of cultural change (as countries become more economically strong, cultural change is particullary common à from collectivism to individualism)

• Little consensus about globalization’s effects on culture, howerver it is a major influence in the emergence of common worldwide culture
• Critiscs charge that globalization is harmful to local cultures, their artistic expressions and sensibilities, and their replacement by a homogenouus often amaricanized culture
• Others argue that increased global communications is positive because it permits the flow of cultural ideas, beliefs and values
• The homogenization of culutre is demonstrated by the growing tendency of people in much of the word to consume the same food and drinks, watch the same movies, listen to the same music, drive the same cars and stay in the same hotels
• Cultural homogeneity and heterogeneity are not mutually exclusive alternatives or substitutes they may exist simultaneously
• Cultural flows originate in many palces, just as hamnurgers have become popular in japan and sushi in Europe
• While some past ways of life will be eclipsed in globalization the process is also liberating people culturally by undermining the ideologica conformiry of nationalism
• Technological advances are a key detererminant of cultural change, encouraging convergence in global culture
• The death of distance refers to the demise of the boundaries that once seperated people, due to intergrating effects of modern communications, information and transportation technologies – more homogenized cultures are developing
• One emerging global culture? But different emmittors and responses
• Diffused through elite and popular channels (instagram)
• Engagement in pop culure signals participation in global modernity
• Cultural value orientations do change gradually. Societal sdaption to epidemics, technological advances, increasing wealth, contact with other cultures, wars, and other exogenous factors leads to changes in cultural value emphases