Cross Cultural Midterm Review

Negotiating with low power distance

"just call me John"; be less formal - titles won't impress them - don't expect the same respect you receive at home (if you are high status) - address questions to the group - treat them as equals - use teamwork - acknowledge experience and expertise, not status - respect individuality - respect subordinates, ask for their opinions

negotiating with a masculine culture

- approach the negotiation competitively - be ready to argue - assume they are going for a "win" not a win-win - money and power are key - be assertive, shake hands, avoid emotions - expect "power plays", power tactics, a rights based discussion and positional bargaining - challenging them may result in consequences - expect them to be loud and verbal, with a tendency to criticize and argue. - they will be reluctant to make concessions - they want to win because it "feels good" and that's what they do

negotiating with low uncertainty avoiders

- be more informal - propose something novel; they will like it - brainstorm ideas - consider the alternatives - use generalists on your negotiating team - be willing to take limited risks - wait for them to propose the first concessions (good for both parties)

pressures for national and regional responsiveness

- diff product standards - diff customer needs and tastes - businesses or consumers prefer locally made products managing details in a global organization is difficult and complex subsidiaries know local market needs and management practices better than headquarters employees in subsidiaries seek promotion opportunities

Strategic Orientations of global companies

- ethnocentric - polycentric - regiocentric -geometric

negotiating with LTO cultures

- expect "slow going" - expect strong perseverance - have a strong focus - expect future negotiation opportunities - build long-term relationships - demonstrate your long-term focus - expect a strong work ethic - have great respect for tradition - work with their extensive personal networks - help them understand the current situation

negotiating with individualists

- expect low context communication and extroverted behavior - they will have personal goals distinct from group goals - stress personal gains and individual goals - use a "what's in it for me" approach - recognize their individuality, they value their individual rights. expect them to think and act individually - seek their personal opinions - talk of "me" and "I"

negotiating with collectivists

- expect your proposals to be received by a larger group - expect high context communication and introverted behavior - expect a team - don't expect immediate action; they must consult others - everything will take longer - consider the collective goals and interests - individuals rights are less important - insiders are treated differently than outsiders - give them face - harmony may be more important than honesty - talk of "we"

negotiating with STO cultures

- focus on today and the short term - incorporate their immediate needs - make it happen "right now" - expect quick changes - help them examine the "long run" and the consequences of a "quick win"

Negotiating with High Context Communicators

- read between the lines - don't take them literally, gather "clues" - pay close attention to context and non-verbal's - ask for further clarification - draw out their full ideas with questions - ask them to be more direct - face is very important - don't challenge them; they may lose face - explain that you do not fully understand - take time to build a good relationship

The Political Environment

Typical Political Risks: - expropriation (gov taking priv land against their wishes and using it for public use) & confiscation - nationalization (the transfer of a businesses or firm from private to state ownership or control) - terrorism - macro & micro political risk event - discriminatory treatment - barriers to repatriation (sending back) of funds - interference in managerial decision making - dishonesty by government officials

a stereotype

a faulty belief that everyone from a given group or given culture is the same believes that ALL members of a group share traits positive and negative (could help simplify cross cultural experiences) most managers use stereotypes as a starting point and continually revise them EX: OK = tornadoes, country, rodeos, fishing

Cultural Intelligence (CQ)

a person's ability to function effectively in situations characterized by cultural diversity. an outsider's seemingly natural ability to interpret someone's unfamiliar and ambiguous gestures the way that person's compatriots would (fellow citizen of country)

Globalization

absence of borders and barriers to trade a view of the world as a single place

cultural barriers

appropriacy (refers to whether a word is suitable for the context it is being used in): who/to whom / what/ how/ when / where

past vs present vs future oriented (human-time) (Trompenaars)

are we most concerned with the past, present, or future sequential approach: people do one thing at a time, prefer to follow plans synchronous: people tend to multitask, schedules are subordinate to relationships present oriented/future oriented: future or present is more important or all three are equally important

Globalization Imperative (importance)

belief that one worldwide approach to doing business is the key to both efficiency and effectiveness

Long-term orientation / Confucian dynamism (Short-Term Orientation (hofstede)

how every society has to maintain some links with its own past while dealing with the challenges of the present and future Normative societies (LOW) prefer to maintain traditions and norms while viewing societal change with suspicion Short term orientation: value pride, respect for tradition, fulfilling social obligations Pragmatic Approach (HIGH): encourage thrift and efforts in modern education as a way to prepare for the future Long-term orientation: tendency to value future rewards, savings, perseverance, and thrift

Specific vs. Diffuse (Trompenaars)

how far do we get involved? *do we specifically get involved) specific: large public space shared with others and small private space they guard closely and share only with close friends - high specific: ppl are more often and extroverted, strong separation of work and private life diffuse: public and private space are similar in size, guard public space carefully because it is shared with private - high diffuse: ppl often appear to be indirect and introverted, and work and private life are often closely linked

Achievement vs. Ascription (Trompenaars)

how rewards in a society are handed out: performance vs. place in society do we have to prove ourselves to receive status or is it given to us? achievement: status is accorded based on how well people perform their functions ascription: status is based on who or what a person is

Individualism/Collectivism (Hofstede)

relationship between the induvial and the group (degree to which individuals are integrated in groups) HIGH (Individualism) = wealthier, greater individual initiative, promotions based on market value, ***everybody is expected to look after himself or immediate family whether people's self image is defined in terms of "I" or "we" LOW (Collectivism) = fostering group success, responsible for family and extended family, adherence to norms/group consensus, shared property/group ownership

Neutral vs affective (emotional) (Trompenaars)

withholding emotion vs. expressing emotion do we display our emotions neural: emotions are held in check, try not to show their emotions, maintain composure emotional (affective): emotions are expressed openly and naturally, people smile a lot, talk loudly when excited, greet with enthusiasm

low-context cultures

words provide most of the meaning (what is said is more important than how or where it was said) silence = disagreement "get to the point" expect explanations when something is unclear communication is direct, precise, dramatic, open and based on feelings or true intentions

negotiating with high uncertainty avoiders

- stick with the status quo - persuade them with history - establish ground rules, regulations, and controls - use agendas, structure, and ritual in the negotiation - be clear on expectations - prepare for their technical specialists on the negotiating team - expect resistance to novel proposals - expect a long negotiation; they need to remove ambiguities - build and demonstrate a good 'track record" so they are comfortable - present all the details - provide precise instructions and detailed descriptions - expect few concessions - seek harmony and avoid conflict

Negotiating with low context negotiators

- take their words at face value - no need to read between the lines - what you hear, is what you get - communicate clearly and explicitly - be "upfront" - ask direct questions; share frank observations - say "no" if you mean "no" - avoid ambiguous expressions - reframe their directness as helpful info (not rudeness) - listen - be ready to negotiate at the first meeting - handle some business over the phone or internet

negotiating with high power distance cultures

- understand & defer to their hierarchy - use titles (don't be informal) and respect authority - prepare by learning about the position of each person on their team - exchange business cards early - treat them with respect - don't be intimidated by their status - demonstrate your rank - privileges are expected by superiors - blame subordinates don't insist on everyone's input. - expect highly centralized decision making - authority may be limited

negotiating with a feminine culture

- use interest-based bargaining - try not to be competitive; be caring - they may support your goals (if possible) - "separate the people from the problem" - seek a long-term relationship - engage in small-talk, active listen - they will be willing to offer concessions - be mindful of the emotions involved

Four aspects of cultural intelligence

1. Motivational Cultural Intelligence: cultural intelligent people distinguish themselves by being highly motivated to learn about other cultures. 2. Knowledge (Cognitive Cultural Intelligence): cultural intelligence is increased with experience, practice and a positive attitude towards lifelong learning cultural systems, norms and values. 3. Mindfulness (Metacognitive Cultural Intelligence): heightened awareness when interacting with people of other cultures - awareness, planning, checking 4. Behavioral Cultural Intelligence (Skills/action): cultural intelligence captures a person's capability to adapt effectively to new cultural contexts using verbal and non-verbal skills

Kluckhohn and Strodtbeck's Cultural Framework

1. People are basically evil or good (What Is Our Basic Human Nature? - evil, mixed, good) 2. Nature dominates people or people dominate nature (How Do People Relate To Nature? (harmony, mastery)) 3. People focus on the past, present or future (What is the sense of time?) 4. Being/Doing (How Do People Conduct Activities (being, becoming, doing)) 5. Authoritarian (enforcing strict obedience to authority)/Collateral/Individual (What are the relationships of people to one another) 6. Concept of space (what is the physcial space we use between us (proxemics?) (private (personal), mixed (social), public) - physical space - relationship of people to another - being or doing activities - time - relate to nature - evil or good (human nature)

Hofstede's Cultural Framework

1. Power Distance 2. Uncertainty Avoidance 3. Individualism-Collectivism 4. Masculinity-Femininity 5. Long-term orientation / Confucian dynamism 6. indulgence vs restraint

The Economic Environment

1. loss of profitability due to abrupt changes in monetary and fiscal (gov earnings/taxes) (EX: cannot repatriate (send back) earnings, currency exchange rate exposure) 2. loss of profitability due to changes in foreign investment policies 3. risk of currency exchange rate

Schwartz's 4 motivational domains

1. openness to change 2. self-enhancement 3. conservation 4. self-transcendence

Perceptual Barriers

1. perception is selective 2. perceptual patterns are learned 3. perception is culturally determined

cultural intelligence

A person's capability to adapt effectively to new cultural contexts

Integration/Responsiveness Grid and Strategy Types

Global Transnational international multidomestic

Political Risk Assessment

Helps companies manage exposure to risk and minimize financial loss 2 forms: 1. consultation with experts 2. development of internal staff capabilities

Verbal Communication Styles

Indirect Direct Elaborating Exacting Succinct Personal Contextual Affective Instrumental

Triandis Vertical/horizontal dimension

LOOK AT PAGE 13 vertical and horizontal orientation to the individualism-collectivism scale vertical individualism (VI): the tendency to be concerned with comparing oneself to others and being distinct horizontal individualism (HI): describes a social situation of low social distance and flat hierarchical relations. The emphasis is towards seeking individuality without distinctiveness. vertical collectivism (VC): stresses the hierarchical structure of society and more distinct relations, characterizing a social setting in which individuals are primarily parts of collective and accept social inequality. horizontal collectivism (HC): hierarchy and distance are minimal' therefore, people belonging to a group ideally experience themselves as members in an equal collective.

Communication Barriers

Language Cultural Perceptual Nonverbal communication lack of cultural self-awareness

culture

relates to shared assumptions, ideas, beliefs, and values that guide behavior is acquired (LEARNED) transmitted from generation to generation with adaptation over time Norm EX: french greeting with a kiss

Cultural Intelligence (Chris Earley)

Meta-cognition (Head): learning strategies, clues to shared knowledge. Motivation (heart): overcome setbacks, high self-efficacy and confidence.

Culture is NOT

Not right or wrong not about individual behavior - about groups and their shared values and meanings Not inherited - derived from social environment - we learn them as we grow up

Shwartz's values model:

Openness to change (motivation to pursue innovative ways) hedonism: enjoyable life stimulation: life of excitement and challenge self-direction: personal freedom, independence, creativity Conservation -(motivation to preserve the status quo) conformity: respect for others, self discipline security: security for loved ones, harmony, safety tradition: respect for tradition, humility Self-enhancement (motivated by self-interest) power: wealth, authority, recognition, respect of others achievement: success, sense of accomplishment self-transcendence (motivation to promote welfare of others and nature universalism: inner peace, social justice, a world free of conflict benevolence: close friendships, forgiveness/loyalty in relationships

Trompenaars cultural framework

Relation to others: 1. universalism vs particularism 2. individualism vs collectivism 3. neutral vs affective relationships 4. specific vs diffuse relationships 5. achievement versus ascription Relation to time: sequential/synchronic relation to the environment: inner vs, outer directed

prototype

central tendency acknowledges that there may be a norm in a given culture but there is variation from that norm in a society

affective style

common in collective, high-context cultures and is characterized by language that requires the listener to note what is said and to observe how the message is presented often nonverbal and requires the receiver to use his or her intuitive skills to decipher the message

High Context Cultures

communications have multiple meanings interpreted by reading the situation what is said and how or where it is said are significant influenced by closeness of human relationships speaker is rarely interrupted greater confidence is placed in the non-verbal aspects of communication than the verbal aspects interprets the deeper meaning EX may fate bring us together again = see you later

geocentric strategic orientation

company tries to integrate a global systems approach to decision making mission is profitability and public acceptance strategy is GLOBAL INTEGRATION and national responsiveness negotiated among subsidiaries, regions, and headquarters GLOBAL product with LOCAL variations (only) The BEST managers (regardless of their home country) are developed for key positions anywhere in the world EX: if it is a good idea in Germany, lets take it and put it in Malaysia EX: if China has a good manager, let's take him and put him in Canada

Culture

defines the personality of the group

Sequential vs. Synchronic (Trompenaars) (part of past vs present vs future)

do we do things one at a time or several things at once

Individualism vs communitarianism (Trompenaars)

do we function as individuals or as a group? individualism: people stress personal matters, achieve things alone Communitarianism: people regard themselves as part of a group, joint responsibility, achieve things in groups

Global strategy

expansion into foreign operations that champions worldwide consistency, standardization, and cost competitiveness. activities are dispersed to most favorable global location BUT decision making lies at top(headquarters)

Transnational Strategy

expansion into foreign operations that exploit location economies, leverages core competencies, and responds to key local conditions associated with a regiocentric and geocentric

multidomestic strategy

expansion into foreign operations that grants decision- making authority to local managers and emphasizes responsiveness to local conditions decision making is decentralized polycentric view

International Strategy:

expansion into foreign operations that leverages the firms core (domestic) competencies. control and decision-making reside at headquarters headquarters ethnocentric orientation may lead to significant missed market opportunities

Power Distance (Hofstede)

expectations of equality/acceptance of unequal power dimensions. HIGH = less powerful members accept that power is distributed unequally (accept hierarchy) LOW = ppl want to equalize distribution and want reasonings for inequalities of power

exacting

focused on precision and the use of the right amount of words to convey the message and is more common in low-context, low uncertainty-avoidance cultures

contextual style

focuses on speaker and relationship of parties; often associated with high power distance, collective, high-context cultures

personal style

focuses on the speaker and the reduction of barriers between the parties more popular in low power distance, individualistic, low-context cultures

Global manager skills

global mindset: beyond learning culture and language ability to: 1. develop and use global strategic skills 2. manage change and transition 3. manage cultural diversity 4. design and function in flexible org structure 5. work with others and in multicultural teams 6. communicate well across cultures 7. learn and transfer knowledge in an organization

instrumental style:

goal oriented and focuses on the sender who clearly lets the other party know what he or she wants the other party to know found in individualistic, low-context cultures

Legal Environment

local laws and legal systems of those countries in which an international company operates, international law which governs relationships between sovereign countries. TYPES OF LEGAL SYSTEMS - common law: uses past court decisions as precedent (example) - civil law: laws organized into code - islamic law (derived from both koran, islams central text, and fatwas, the ruling of islamic scholars APPROACHES TO CONTRACT LAW - common law: details must be written in the contract to be enforced - civil law: assumes promises will be enforced without specifying the details - Islamic law: prohibition against investment in alcohol and tobacco related businesses and against collecting interest

What lead to globalization

many "players" (developed countries, developing countries, transition economies, and least developed countries) trading blocks (500+) - (different unions like EU, NAFTA, WTO & tariff's) FDI's doubles between 1997 and 2014) technology (internet, transportation) global products/customers new competitors privatization global standards

Indulgence vs Restraint

measures gratification vs control of basic human desires related to enjoying life and having fun - correlated with happiness the extent to which people try to control their desires and impulses, based on the way they were raised Low control (INDULGENCE) societies that allow free gratification and efforts in modern education as a way to prepare for the future strong control (RESTRAINT): do not put much emphasis on leisure time suppress gratification of needs and regulate it by means of strict social norms

High Context Cultures (indirect)

messages are implicit and INDIRECT - voice connotation, timing, and facial expressions play important roles in conveying info

succinct style

more common in high-context cultures with considerable uncertainty avoidance where people say few words and allow understatements, pauses, and silence to convey meaning

Elaborating style

more popular in HIGH context cultures that have a degree of uncertainty avoidance

Issues one may encounter in communication

opening a conversation: who should speak first? be passive or aggressive? ending a conversation: who ends? is there a formal ending or do you walk off? presenting ideas or proposals: present all at once, or piece by piece? interruptions and silence: acceptable to interrupt? vocal characteristics: speak loud, soft, fast, slow apologies: when should you accept blame? disagreements: how should you express your disagreements? emotional displays: ok to yell or cry? feedback: how and when should you provide feedback requests: how do you make a request

low-context culture (direct)

people often meet only to accomplish objectives and tend to be DIRECT and focused in their communications

The role of a global manager

profile: - develop and use global strategic skills - manage change and transition - manage cultural diversity - design and function in flexible organizational structures - work with others and in teams - communicate - learn and transfer knowledge in orgs

Communications variables: NONVERBAL

proxemics (perception and use of space) EX: intimate zone, personal zone, social zone, public zone EX: high contact: prefer to stand close, touch kinesics: 7 facial expressions (SADFISH): sadness, anger, disgust, fear, interest, surprise, happiness gestures: nonverbal 1. emblems: no words 2. illustrators: hand gestures that imitate spoken words 3. regulators: used to regulate flow of conversation 4. adaptors: unintentional habits to fulfill need (scratching) chronemics (perception and use of time): two patterns of time (they are opposite and govern diff cultures) 1. monochromatic-time schedule (MT): schedule time to concentrate on 1 thing at a time (mono = 1) 2. polychronic-time schedule (PT): completing human transactions prioritized over time schedules paralanguage: how something is said - accent - pitch range - volume - articulation - rate physical appearance olfactics: perception and use of smell haptics: study of perceptions and meanings of touch behavior - high contrast: direct eye contact, loud noises, kissing, direct facing -low contrast: indirect eye contact, little touching, soft voice moderate: US - mix of both **WHEN NONVERBAL CONFLICTS WITH VERBAL, NONVERBAL WINS

Culture

society's system of shared values and norms, set of characteristics common to a particular group of people patterned way of thinking, feeling and behaving, acquired and transmitted mainly by symbols the core values, norms and beliefs of individuals within a society that are formed in complex knowledge during childhood and reinforced through life Hofstede: collective mental programming of people - the "software of the mind" or how we think and reason INCLUDES OBJECTIVE AND SUBJECTIVE ELEMENTS objective aspects: tools, television, programming, architecture, and other PHYSICAL artifacts subjective or INTANGIBLE aspects: norms, values, ideas, customs, and meaningful symbols

development of cultural intelligence

stage 1. reactivity to external stimuli stage 2. recognition of other cultural norms and motivation to learn more about them stage 3. accommodation of other cultural norms and rules in one's own mind stage 4. assimilation of diverse cultural norms into alternative behaviors stage 5. proactivity in cultural behavior based on recognition of changing cues that others do not perceive they see it, react to it, adjust in their mind, intigrate, recognize and change

Polycentric strategic orientation

strategic decisions are tailored to suit the decultures of the countries where the company operates decisions are changed/adapted to fit each country - bottom up: each subsidiary decides on local objectives mission is public acceptance (legitimacy) products are based on HOST COUNTRY needs local citizens are trained for key positions at the subsidiary level POLY = many poly because we do not have one center making decisions

The Technological Environment

technology facilitates global trade and business transactions the APPROPRIABILITY OF TECHNOLOGY is the ability of the innovating firm to benefit from its own technology by protecting it (patents, copyrights, trade secrets) gov uses law to control flow of technology exposure of risk by inappropriate use of technology by other partners appropriateness of technology for the local environment

Masculinity - Femininity (Hofstede)

tendency to support "masculine" values of achievement, advancement HIGH (masculine)= stress earnings, recognition, advancement, challenge, wealth, high stress job, assertiveness LOW (feminine) = dominant values in society are caring for others and quality of life; quality of life is the sign of success and standing out from the crowd is not admirable.

ethnocentrism

the belief that one's own culture or ethnic group is superior to all others stereotypes are destructive when combined with an ethnocentric attitude

regiocentric strategic orientation

the firm tries to BLEND its own interests with those of its subsidiaries on a regional basis mission is profitability and public acceptance strategy is based on REGIONAL integration and NATIONAL responsiveness strategic objectives are negotiated between regional headquarters and subsidiaries REGIONAL product with adaptations managers are trained for key positions anywhere in the region!!! BETWEEN polycentric and geocentric instead of "tell me how to sell it" - it's we are trying to sell this product and maybe improve it - take what the headquarters do managers can go learn anywhere and then come back and offer ideas regio - revise

universalism vs. particularism (trompenaars)

the importance of rules versus relationships what is more important, rules or relationship? EX: friend asks you to testify and say he was driving slower than he was rules = universalism - there doesn't need to be modification to the rules *universe should follow the rules / should apply the same everywhere relationships = particularism - circumstances dictate how ideas and practices should be applied and something cannot be done the same everywhere * rules should be based on the particular circumstances

Ethnocentric Strategic Orientation

the values and interests of the PARENT COMPANY (headquarters) guide strategic decisions mission is profitability TOP DOWN decision making - major decisions are made at headquarters and then filtered town GLOBAL strategy & global product (standardization) parent country (headquarters) hold key positions everywhere EX: US think ethnic = lots of ethnicities everywhere (global product and strategy)

Uncertainty Avoidance (Hofstede)

tolerance for ambiguity (open to more than one interpretation) and use of structures to make things predictable. HIGH = high need for security, strong belief in experts and their knowledge, structured organizational activities, more written rules, less managerial risk taking LOW = society maintains more relaxed attitude in which practice counts more than principles

internal vs external control (human environment relationship) (Trompenaars)

what happens to me is my own doing or is beyond my control inner-directed: people believe in controlling outcomes outer directed: people believe on letting things take their own course