Culture, Management Style, and Business Systems

Chapter 5

Adaptation to customs

Global Perspective“Do Blonds Have More Fun in Japan” pg. 123

Adaptation The willingness to adapt to other customs is essential in international marketingDegree of Adaptation:

• This does not mean that businesses discard their methods of conducting business, rather that executives need to be aware of differences and willing to adapt to the differing customs

Types of Customs

3 Types of Customs1. Cultural Imperatives

• Business customs and expectations that MUST be met in order to conduct successful business transactions in other countries/cultures

2. Cultural Electives• Business customs and expectations that are

OPTIONAL, in which business executives may participate/conform in, but is not required.

• May help to establish rapport and respect when participation occurs

• Majority of customs fall into this category

Types of Customs

3. Cultural Exclusives• Customs that are reserved exclusively for

the locals, where foreign participation is EXCLUDED

– Example: Foreign business people criticizing local politicians, business practices where it is acceptable for the local to do so

The Impact of American Culture on Management Style

Most widely accepted views regarding U.S. culture:

“Master of destiny” viewpoint Independent enterprise as the instrument of social actionPersonnel selection and reward based on meritDecisions based on objective analysisWide sharing in decision makingNever-ending quest for improvementCompetition yielding efficiency

Management Styles around the World

Types of Decision Making Approaches1. The authoritative approach

• Top level management decision making is usually found in smaller businesses where centralized decision-making is possible

2. The delegated approach• Decentralized decision making is usually found in large

size businesses with highly developed management systems (U.S.)

• Allows executives at different levels to exercise authority over their own functions

3. The committee approach• Decisions are made by consensus or in a group (Japan)

Management Objectives & Aspirations

Understanding how managers’ objectives and aspirations affect their business outlook is critical4 Important areas to understand:

1. Security and mobility• Importance of security and definition

differ in many countries (can mean good wages and training; maybe lifetime employment…)

Management Objectives and Aspirations

2. Personal life• Personal life takes precedent over other

motivators (wages, status)

3. Affiliation and Social acceptance• Accepted by peers

– Important element of the group decision making process

4. Power & Achievement

Communication StylesEdward T. Hall ideas on Communication Styles:

Crossing Borders 5.2 pg. 133 – “A Classic – Edward T. Hall’s Language (Symbolism) of Space”Exhibit 5.2 pg. 135 “Contextual Background of Various Countries”

• Face-to-face communications– Low Context: depends heavily on verbal communication

(Swiss, Germany, U.S.)– High Context: depends heavily on nonverbal

communications – See Crossing Borders 5.3 pg. 136 “When Yes Means

No…”

Importance of Communication when adapting to business customs

CommunicationTranslation and interpretation

• (See Crossing Borders 5.4 pg. 137 “You Say You Speak English”)

Formality and tempoP-time vs. M-time

• M-time (monochronic) – concentrate on one thing at a time

• P-time (polychronic) – completion of a transaction is more important than sticking to a schedule

Gender Bias in International Business

Is there a gender bias against women managers when operating in International arenas?

Most evidence indicates that when women are trained and backed by their corporation, resistance from other cultures is either minimized or negated completelyComparative statistics of women in managerial positions worldwide (approximations):

• U.S. – 43%• Britain – 33%• Switzerland – 28%• Germany – 9.2%

Business EthicsBribery & Extortion

Bribery• Voluntary payment offered by individual(s) seeking an

unlawful advantage– SEC regulates U.S. Companies domestically and

internationally– “Transparency International” – organization dedicated

to curbing corruptions worldwide– See Exhibits 5.4 and 5.5 pg. 145

Extortion• Payments are extracted under duress by someone in

an authoritative position (host country)– See Crossing Borders 5.6 pg. 146 “Bangladesh at

the bottom…”

Business Ethics

Subordination & LubricationSubordination

• Involves giving large sums of money

Lubrication• Involves giving small amounts of money, or

gifts…

Foreign Corrupt Practices Act (FCPA)• Important act that prohibits U.S. businesses from

paying bribes openly or using middlemen or agents to bribe on behalf of the U.S. business

Relationship-Oriented vs. Information-Oriented Cultures

Relationship OrientationJapan and other Asian countries

Information OrientationU.S., Great Britain

See Exhibit 5.6 pg. 151 “Dimensions of Culture, A Synthesis”

Business Customs on the Internet

Points to be aware of:A message on a company’s website is viewed as an “extension” of that companyMajority of websites are seen worldwide and translation can often convey incorrect meaning or offend other cultures

• Approximately 78% of website is written in English

Companies must pay attention to symbols, icons or any non-verbal messages on their websites