AMITY UNIVERSITY

CROSS CULTURAL MANAGEMENT

MBA INTERNATIONAL BUSINESS

Semester II

To improve cross-cultural management in the corporate should focus on building the capabilities and beliefs of individual employees.

Table of Contents Preface .......................................................................................................................................................... 6

CHAPTER 1 .................................................................................................................................................... 7

1.1 Introduction to Culture ................................................................................................................. 7

1.1 Layers of Culture ........................................................................................................................... 7

1.2 Characteristics of Culture .............................................................................................................. 9

1.3 Comparative Management ......................................................................................................... 12

1.4 Impact of culture on Business ..................................................................................................... 13

References: ............................................................................................................................................. 16

CHAPTER 2 .................................................................................................................................................. 17

2.1 Leadership ................................................................................................................................... 21

2.2 Approaches to Leadership .......................................................................................................... 22

2.3 The Ohio State University Studies............................................................................................... 23

References: ............................................................................................................................................. 27

CHAPTER 3 .................................................................................................................................................. 28

3.1 CROSS CULTURAL NEGOTIATIONS .............................................................................................. 29

3.2 Importance Of Negotiations ....................................................................................................... 29

3.3 How Culture Impacts Negotiation .............................................................................................. 30

3.4 Dimensions of Culture ................................................................................................................. 31

References: ............................................................................................................................................. 35

CHAPTER 4 .................................................................................................................................................. 36

4.1 Hofstede’s Value Dimensions ..................................................................................................... 36

4.2 Trompenaar’s Value Dimensions ............................................................................................... 41

References: ............................................................................................................................................. 49

Journals: .................................................................................................................................................. 49

CHAPTER 5 .................................................................................................................................................. 50

5.1 Hall's cultural factors .................................................................................................................. 50

5.2 Low context ................................................................................................................................. 50

5.3 High-Context versus Low-Context Cultures ................................................................................ 52

5.4 TROMPENAARS' CULTURAL FACTORS ......................................................................................... 52

5.6 One theory of basic human values which has been very influential is that of Kluckhohn and

Strodtbeck (1961). .................................................................................................................................. 59

Chapter 6 ..................................................................................................................................................... 62

6.1 SYMBOLISM ................................................................................................................................. 64

6.2 URBANISM, ARCHITECTURE, AND THE USE OF SPACE ................................................................ 64

6.3 FOOD AND ECONOMY................................................................................................................. 65

6.4 SOCIAL STRATIFICATION ............................................................................................................. 65

6.5 POLITICAL LIFE ............................................................................................................................. 65

6.6 GENDER ROLES AND STATUS ...................................................................................................... 66

6.7 MARRIAGE AND FAMILY ............................................................................................................. 66

6.8 ETIQUETTE ................................................................................................................................... 66

6.9 APPEARNCE ................................................................................................................................. 67

Behavior .................................................................................................................................................. 67

References .............................................................................................................................................. 70

Chapter 7 ..................................................................................................................................................... 71

7.1 About Japan ............................................................................................................................... 71

7.2 Japanese Language ........................................................................................................................ 71

7.3 Japanese Society & Culture ......................................................................................................... 71

7.4 History of Japanese-style management ........................................................................................ 72

7.5 BUSINESS MANAGEMENT STYLE ................................................................................................. 73

7.6 Meeting Etiquette ....................................................................................................................... 73

7.7 Gift Giving Etiquette .................................................................................................................... 73

7.8 Dining Etiquette .......................................................................................................................... 74

7.9 Table Manners ............................................................................................................................ 74

7.10 Dealing with the Foreigners ........................................................................................................ 74

7.11 Associations & Communication .................................................................................................. 74

7.12 Business Meeting Etiquette ........................................................................................................ 75

7.13 Business Negotiation................................................................................................................... 75

7.14 Dress Etiquette ............................................................................................................................ 75

7.15 Business Cards ............................................................................................................................. 75

7.16 Japanese Business Culture: .......................................................................................................... 76

References .............................................................................................................................................. 82

CHAPTER 8 .................................................................................................................................................. 84

8.0 BUSINESS CULTURE IN GERMANY ............................................................................................... 84

8.1 MAKING APPOINTMENTS .............................................................................................................. 85

8.2 BUSINESS DRESS ......................................................................................................................... 86

8.3 COMMUNICATION ...................................................................................................................... 86

8.4 SELECTING AND PRESENTING BUSINESS GIFT ........................................................................... 87

8.5 GERMAN NEGOTIATION STYLE ................................................................................................... 88

GERMAN MEETINGS ............................................................................................................................... 89

8.7 GERMANS ACCEPTABLE PUBLIC CONDUCT ................................................................................ 90

8.8 Case study: IBM Germany ........................................................................................................... 91

References: ............................................................................................................................................... 97

CHAPTER 9 .................................................................................................................................................. 98

9.1 Appearance ................................................................................................................................... 98

9.2 Behavior ...................................................................................................................................... 99

9.3 Communications ......................................................................................................................... 99

9.4 British Culture - Key Concepts and values ........................................................................................ 99

9.5 UK Business Part 1 - Working in the UK ......................................................................................... 100

9.6 UK Business Part 2 - Doing business in the UK............................................................................... 100

9.7 British business etiquette (Do's and Don'ts) .................................................................................... 100

9.8 Geert Hofstede Analysis ............................................................................................................... 101

9.9 Other Findings ........................................................................................................................... 101

References: ........................................................................................................................................... 103

CHAPTER 10 .............................................................................................................................................. 104

10.1 Being a Manager in France ....................................................................................................... 104

10.2 The Role of a Manager .............................................................................................................. 105

10.3 Approach to Change ................................................................................................................. 105

10.4 Approach to Time and Priorities ................................................................................................ 105

10.5 Decision Making ........................................................................................................................ 105

10.6 Boss or Team Player .................................................................................................................. 105

10.7 Communication and Negotiation Styles ................................................................................... 106

10.8 Appearance ................................................................................................................................. 106

10.9 Behavior .................................................................................................................................... 106

10.10 Communications ................................................................................................................... 107

10.11 French culture - Key concepts and values .................................................................................. 107

10.12 France business Part 1 - Working in the France .......................................................................... 107

10.13 France business Part 2 - Doing business in France ..................................................................... 108

10.14 French Society & Culture .......................................................................................................... 108

10.15 Etiquette & Customs ............................................................................................................. 109

10.16 Business Negotiation ................................................................................................................ 111

10.17 Geert Hofstede Analysis ........................................................................................................... 111

References: ........................................................................................................................................... 113

CHAPTER 11 .............................................................................................................................................. 114

11.1 The Company Is Like a Family ................................................................................................... 115

11.2 The Importance of Social Status ............................................................................................... 115

11.3 Teamwork, Subcontracting and Geographical Mobility ........................................................... 117

References: ........................................................................................................................................... 118

Preface Change is permanent and is the need of the time. There is a drastic change in the market and in

the styles of doing business. The importance of cross cultural management lies here where it is

providing global outlook to the business across the global, making it a global village, providing

diversity and speeding the actions taken to meet the competition and the leadership styles to

be implemented and major cross-cultural issues and problems that managers face . The

economic, political and social reforms have brought rapid changes across the countries and

brought liberalization which is changing the entire international business environment. Cross

Cultural Management creates an enduring awareness at all management levels of the need to

be a more global organization. It corroborate the business need for developing and

implementing a global strategy to compete effectively and enhance the value provided to key

customers

The efficiency of cross cultural management basically depends upon the cultural background,

cross cultural experiences, languages and personal experiences which in turn gives an insight on

the information, technology and idea developed in one country or company can be

implemented anywhere else in the world. To improve cross-cultural management in the

corporate should focus on building the capabilities and beliefs of individual employees.

Effective management of national and international boundaries is significant for the success of

business and diversity of workforce within today’s organizations. An intense consciousness and

a high degree of proficiency in cross-cultural management are the key to the success of the

leaders.

Cross-Cultural Management look around the key issues in one of the most testing and

captivating areas of organizational life, and enables you to sharpen your insights and practical

skills. It offers a broad view of traditional and modern thinking on culture and management,

and persuades you to apply theories in practice.

The focus of this book is practical that will help you to appreciate the true significance of cross

cultural management. The various concepts such as Cross-Cultural Concepts, Leadership,

Communication, Negotiation, Different Management Styles of Different Countries etc will give

you the outlook as how to carry out business and take is globally. Case Studies will help you to

see the real problem and how to implement theories in real environment. The purpose of the

course is not country specific but deals with the people of different cultures in work settings.

Thanks are due to our Director General Dr. Gurinder Singh who constantly inspired and guided

me in preparing this study material. I would also like to thanks Mr. Rajan Bhandari for giving

necessary guidance.

CHAPTER 1

CULTURE

1.1 Introduction to Culture Culture is the inevitable part of every living things whether we talk of human beings or of animals. It is the innate

behavior which varies from individual to individual and broadens when the individual lives in family. The evolution of

culture is based on intelligence, reaction to experiences and needs of the individual. For instance the initial stages of

humans behavior were similar to other animals lived in groups. Human intelligence reacted stronger to experiences

and needs that widened cultural status. Each society has norms to follow by individuals in order to retain society

strong and intact.

The development of culture depends on beliefs, faith, practices, customs, way to live, art, intelligence, language, food

habits, economy etc. The growth of culture had given identity to the societies which were named, Christian, Muslim,

Hindu, Jewish, Buddhist etc.

According to Kroeber & Kluckhohn,. (1952),

" Culture consists of patterns, explicit and implicit, of and for behavior acquired and transmitted by symbols,

constituting the distinctive achievements of human groups, including their embodiments in artifacts; the essential core

of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values;

culture systems may, on the one hand, be considered as products of action, and on the other as conditioning

elements of further action."

Hofstede, G. (1984) in his book National cultures and corporate cultures has defined culture as:

"Culture is the collective programming of the mind which distinguishes the members of one category of people from

another." (p. 51).

1.1 Layers of Culture Basically there are three layers of culture which are formed as a part of our learning and

perceptions.

1st Layer: It is the apparent cultural conduct that distinguishes one society specific form the other

society. For example Italian, Chinese, Germans, Samoan, or Japanese have refer to the shared

language, traditions, customs and beliefs that set each of these natives different from the others.

In most cases, those who share your culture do so because they acquired it as they were raised by

parents and other family members who have it.

2nd

Layer: It is the part of our identity and is called as Subculture. In diverse societies people

come from different parts of the world and they preserve much of their original cultural

traditions. This results to making them a part of an identifiable subculture in their new society

which set them apart from the rest of the society. For examples the easily identifiable subcultures

in the United States which include ethnic groups such as Vietnamese Americans, African

Americans, and Mexican Americans who share a common identity, food tradition, dialect or

language, and other cultural traits that come from their common ancestral background and

experience. As the cultural differences between members of a subculture and the dominant

national culture smudge and in due course disappear, the subculture ceases to exist except as a

group of people who claim a common ancestry. This is generally in case of the German

Americans and Irish Americans in the United States today. Most of them identify themselves as

Americans first. They also see themselves as being part of the cultural mainstream of the nation.

3rd

Layer: This layer of culture consists of learned behaviour patterns that are shared by all of

civilization wherever they live in the world. This Universal Cultural traits include:

1. Communicating with a verbal language consisting of a limited set of sounds and grammatical

rules for constructing sentences

2. Using age and gender to classify people (e.g., teenager, senior citizen, woman, man)

3. Classifying people based on marriage and descent relationships and having kinship terms to

refer to them (e.g., wife, mother, uncle, cousin)

4. Raising children in some sort of family setting

5. Having a sexual division of labour (e.g., men's work versus women's work)

6. Having a concept of privacy

7. Having rules to regulate sexual behaviour

8. Distinguishing between good and bad behaviour

9. Having some sort of body ornamentation

10. Making jokes and playing games

11. Having art

12. Having some sort of leadership roles for the implementation of community decisions

While all cultures have possibly many other universal traits, different cultures have developed

their own specific ways of carrying out or expressing them. For instance, people in deaf

subcultures frequently use their hands to communicate with sign language instead of verbal

language. However, sign languages have grammatical rules just as verbal ones do. Differences

of cultures of two societies when clash leads to war and stronger one overpowers the other to

establish own culture that way it broadens its culture. An apparent example we have is western

culture spread in most part of the world.

1.2 Characteristics of Culture Culture is dynamic, it is neither fixed nor static

A continuous and cumulative process

Learned and shared by a people

Behavior and values exhibited by a people

Symbolically represented through language and interactions

That which guides people in their thinking, feeling and acting

Cross Cultural Management

According to Bobst, Cross Cultural Management (CCM) is ―the capability to manage different attitudes, culture, religion and habits to achieve best business results.‖ (Questionnaire, 2004). Funakawa approached CCM in a more general way, in a sense of how people and organizations focus on ‗transcending‘ cultural differences at a global situation (Funakawa, 1997:190-195). Cross Cultural Management is seen as a management style that can give quality to each division of an organization that negotiates internationally. Mead with his indepth study on the subject defined Cross Cultural Management as ―…working with members of the other culture, tolerating differences as far as possible, and recognizing their priorities when developing shared priorities.‖ (Mead, 1994:5). CCM is inevitable, as Evans and Doz found that ―research on multinational enterprises suggests that their future competitive advantage may not reside in their strategy or structure, nor in their technologies or products, but in their organizational capabilities to cope with the multidimensional and complex demands of a global business.‖ (Evans and Doz, 1992:87).

Culture is an aspect which is of much importance and cannot be ignored by the industries when they are talking of globalization and international competition. The more organizations recognize its importance and existence, the more thoughtfully they can relate it not only to their own but also to understand and tolerate others culture. Hofstede defined culture as followed, ―culture is the collective programming of the mind which distinguishes the member of one human group from another. Culture, in this sense, includes systems of values; and values are among the building blocks of culture.‖ (Hofstede, 1984:21). Mead elaborated that culture is a sample of different values, attitudes and beliefs. However, values, beliefs and attitudes can differ from each other. A belief is a strong thought of something that ought to be right. Americans, believes that wisdom come with not only age and experience but also with personal development and education, clashes with the

value held by the Japanese people who believe that wisdom come with age and experience and so elders gain respect due to their age.

Research in the field of cross-cultural management originally evolved around two general lines of inquiry, arguing

either that culture matters, or that culture is largely overruled by other conditions. Since Kluckhohn and Strodtbeck‘s

seminal work (1961), one approach emphasises the importance of culture in cross-cultural interactions. In this

perspective, culture matters because individuals have different values and different preferences with regard to

management and leadership, that are related to their cultural background (see e.g., Hofstede, 2001; House et al.,

2004). Cultural assumptions and values describe the nature of relationships between people and their environment,

and amongst people themselves. Given little or no other information about an individual‘s values and behaviour,

culture provides a good first impression of that person (Maznevski and Peterson, 1997). Research has shown that

national culture influences an individual‘s perceptions, behaviour and beliefs (Harrison and Huntington, 2000;

Hofstede, 2001; Kirkman et al., 2006).

In contrast, the other approach takes the perspective that culture is largely overruled by other conditions. This line of

research argues that even though culture does influence Individual outcomes, such as perceptions, the statistical

significance of this relationship is very weak (e.g. Kirkman and Shapiro, 2001). Thus, other factors, such as

personality, strong leadership, and uniformity of practices (e.g., Maznevski and Chudoba, 2000) are identified as

predictors that overrule the weak effect of culture. The new view represents a dynamic view of culture, leading

towards the emergence of a globalised business environment (Bird and Stevens, 2003). Following Hofstede (2001)

culture has been seen as a very stable concept that changes quite slowly. However, political, economic, and

technical changes in the 21st century create cultural changes across the world. Globalization is leading to significant

cultural cross-pollination. Thus, cultures do not operate as uncorrelated independent variables, even though they are

often treated like this when studying cross-cultural interactions (Bird and Stevens, 2003, p.403). In negotiation

simulations across various countries, Bird (2002) shows that within the world business community an identifiable and

homogenous group is emerging that shares a common set of values, attitudes, norms, and behaviour, which overrule

the diverse cultural backgrounds of the individuals involved. However, a precise and comprehensive understanding

of the questions ‗if‘, ‗how‘, and ‗when‘ culture influences cross-cultural interactions is still lacking in the academic, as

well as the corporate world. Gibson et al. (forthcoming) are among the first to identify a set of conditions, operating

across three different categories –

individual, group, and situational characteristics that serve to moderate the influence of national culture on individual

perceptions, beliefs and behaviour. Among others, moderating conditions include the degree to which an individual

identifies with the culture, the stage of group development, as well as several situational conditions, such as

technological uncertainty. Leung et al. (2005, p.367) argue that cultural differences might be reduced ―if mental

processes associated with national culture are relatively fluid, and can be changed and sustained by appropriate

situational factors‖. Thus, the questions of if and how culture matters are influenced by the situation per se. In social

psychology research, it has long been recognized that the strength of situations has an important influence on

understanding and predicting behavior Mischel, 1977). Mischel (1977) classifies situations along a continuum from

strong to weak. Strong situations are characterized by having salient behavioral cues, i.e. everyone is interpreting the

circumstances similarly, leading towards identical expectations regarding the appropriate response. For example,

one would expect that most people would be serious while attending a funeral. Consequently, strong situations are

characterized by suppressing the expression of individual differences. From a globalize business environment

perspective, one could assume that cultural differences are suppressed as norms and values of individuals in the

business community become more homogenous (Bird and Stevens, 2003). However, to the best of our knowledge

there has been little research that enables us to understand when the impact of culture on interactions is reduced. On

the other hand, given the fact that many researchers still find that culture has an effect, there must be conditions

under which specific cultural differences influence cross-cultural interactions. Mischel‘s (1977) concept of ―weak‖

situations gives a deeper understanding of such conditions. Weak situations are characterized by having highly

ambiguous behavioral cues providing few constraints on behavior, and hence do not induce uniform expectations.

This can be the case in cross-cultural situations, where people with potentially very different expectations meet. In

weak situations, the person has considerable discretion as to how to respond to the circumstances. Thus, weak

situations provide the opportunity for individual differences, such as different cultural backgrounds, to play a greater

role in determining behavior. We argue that to understand when and how culture influences interactions, it is needed

to identify ‗weak situations‘ determining cross-cultural interactions. This leads to the following research question.

1.20 Effectiveness of Cross Cultural Management

We've cultured to live and work in a group of people who have influenced us. When living and working in foreign

destinations, our spontaneous effect is to understand local ways of being through our own cultural references. This

elucidation can be quite misleading, and in certain cases, cause irreparable damage to relationships, relationships

upon which the success of projects rest.

The aim of intercultural effectiveness is to minimize the risk of failure and develop both the individual's and the

organization's chances of success in an international environment.

1.21 The Cross Culturally Effective Person

Cross Culturally effective person is someone who is able to live happily and work productively in another culture. The

Cross Culturally effective person has three main attributes:

1 An ability to communicate with people of another culture in a way that they earn their respect and trust.

2 The capacity to adapt his/her professional skills (both technical and managerial) to fit local conditions and

constraints

3 The capacity to adjust personally so that s/he is content and generally at ease in the host culture

1.3 Comparative Management

The study of management or business practice simultaneously in two or more different cultures, countries,

companies, or department is Comparative Management. It analyzes the degree to which management principles of

one country are applicable to the another. Although the concept of comparative management evolved in the late

sixties, it continues to be the subject of considerable debate.

According to Barry Curnow, the Consulting Editor of European Management Perspectives comparative

management is use to capture how managers get to steal, beg, borrow and use ideas. There is also an academic

field of study called comparative management, often taught in business schools alongside International Business,

and this has been defined as dealing with―differences and similarities of managerial systems and practices in

different cultural settings‖ (definition taken from the Anderson School UCLA Doctoral program course syllabus for

International Business and Comparative Management www. ).

Comparative management entails leaders to understand the Political, Economic, Social, Technological and

Ecological context in which organizations maneuver. (PESTLE). The leaders and the managers of the organizations

must make a conclusion as how things happen, where and why it takes place. (All Certified Management Consultants

must be competent in PESTLE so as to appreciate the requirements of different geographical and cultural settings)

The best management practices have some degree of closeness to the emerging world trends in management. In their study of management practices of best-run American companies Peters and Waterman (1982) observed that, being close to the customer and achieving productivity through people were among the key attributes of excellent American companies.These companies had believed that learning from the customer and exceeding their expectations were critical to organizational success. Similarly, these companies also developed a vast "extended family" atmosphere at work by taking care of the people and developing their capabilities.

For purposes of comparison the research team studied the management practices of a few multinational subsidiaries in Sri Lanka, one of which was SmithKline Beecham, a subsidiary of a British Pharmaceutical multinational which was in partnership with a Sri Lankan company. The management practices adopted by SmithKline Beecham were found to be highly formalized. Even in the area of organization and people interface SmithKline Beecham had precise ways of doing things referred to as "the Simply Better way ". Despite the system orientation associated with the MNC culture, SmithKline Beecham promoted relationships with their local distributor network to a high degree. The company also adopted a policy of taking care of its people and invested about one million rupees annually in developing the core-skills of the employees. Thus, one might find that the best practices of management identified during the study of a sample of successful trading companies in Sri Lanka have some resemblance to emerging global trends in management.

1.4 Impact of culture on Business 1.41 Cultural dimensions impact on management

Gale Prawda member of several philosophical practitioners associations in the US, UK, and France and an active

member of L'école de Daseinanalyze said that Culture and Business practices are in each other's pocket. In

management, culture influences, and sometimes even determines policy, style, structure, etc. of the organization.

When managing a company in a domestic operation with a homogeneous culture everyone seems to speak the

same language, understand the same cues, and have similar values & norms. According to Lauren's survey, the role

of a manager to Americans is considered a 'problem solver' as opposed to his/her French counterpart, who to the

French is considered an 'expert'. Business has so rapidly developed globally, management is no longer restricted to

the domestic territory, but has gone beyond national borders and constantly confronts cultural diversity. The

American manager, in a French subsidiary, may be quite ineffective as a 'problem solver' for the French staff may

consider him/her incompetent, whereas, the French manager managing an American organization might be

considered too directive in his response to staff's questions.

On an organizational level, culture influences the structures as well as the behavior of the different stakeholders.

Depending upon the organization, the response to operating globally varies from :

Ethnocentric approach: our way is the best way

Parochial ―: our way is the only way

Synergetic ―: managing with diversity

Excluding the synergetic approach (which is the most uncommon of the three), the corporate culture doesn't usually

take into account the national culture its operating in. The corporate culture and its norms override the national

culture's norms. However, this universal view of a corporate culture does not erase cultural influences. In fact,

organization culture magnifies cross-cultural differences, rather than minimizing them. Thus, cultural differences in

organizations dealing internationally have their greatest impact mainly in motivation, teamwork, negotiations,

decision-making, and mergers & acquisitions.

1.42 Cultural dimension impact on business strategy

According to Mark Mallinger and Gerry Rossy research published in Graziadio Business Report, 2007, Vol. 10, Issue

2, to be successful over the long term in the business a strategy has to be sound. Jay Barney[6] in describing his

resource-based view of the firm identifies four requirements for defensibility:

Value (in the eyes of the customer),

Rareness, Inimitability, Non-substitutability.

In today‘s global marketplace with its rapid flow of information, these conditions are increasingly difficult to achieve

through the traditional four P‘s of marketing—product, place, price, and promotion. It is important to erect barriers

around its competitive space with a unique fifth P—―culture.‖

Many organizations develop internal organization culture that are unique and support their products, service, and

internal management philosophy. If the organizations what to keep it sustained for the long run and be in competition

they should develop a culture in which customers are integral part of business. By delivering innovative, unique, and

interesting business will be able to differentiate themselves from their closest competitors. As the competition is

intense for every business, being good or even great the execution of the strategy is no longer enough. What Trader

Joe‘s (The Trader Joe‘s Experience) teaches us is that a unique organization culture that is carefully aligned with

both its own competitive business strategy and with the values of the customers can provide an effective defence

against incipient competitors. Such a strong and targeted organization culture takes time to develop and provides

customers with a valuable and difficult to copy experience. It is always more complicated for competitors to imitate

who you are than what you do.

1.43 Cultural dimension impact on Negotiation

The impact of culture on the negotiating process has intrigued both scholars and practitioners. (e.g. Weiss 1994,

Faure and Sjostedt 1993; Binnendijk 1987; Fisher 1980; Graham, J. L. et. al. 1988; Campbell et al. 1988). Jeswald

W. Salacuse said that for the impact of culture on negotiation, culture is defined as the socially transmitted behavior

patterns, norms, beliefs and values of a given community. Persons from the particular community use the elements

of their culture to interpret their surroundings and guide their interactions with other persons. So when an executive

from a corporation in Dallas, Texas, sits down to negotiate a business deal with a manager from a Houston company,

the two negotiators rely on their common culture to interpret each other's statements and actions. But when persons

from two different cultures-- for example an executive from Texas and a manager from Japan -- meet for the first

time, they usually do not share a common pool of information and assumptions to interpret each others' statements,

actions, and intentions. Culture can therefore be seen as a language, a "silent language" which the parties need in

addition to the language they are speaking if they are truly to communicate and arrive at a genuine understanding.

(Hall 1959) Culture also serves as a kind of glue -- a social adhesive -- that binds a group of people together and

gives them a distinct identity as a community. It may also give them a sense that they are a community different and

separate from other communities.

(Salacuse 1991) identified ten factors that have an impact on the negotiating process and are influenced by a

person's culture. The ten factors, each of which forms a continuum between two poles, consisted of the following:

1. negotiating goals (contract or relationship?);

2. attitudes to the negotiating process (win/win or win/lose?);

3. personal styles (formal or informal?);

4. styles of communication (direct or indirect?);

5. time sensitivity (high or low?);

6. emotionalism (high or low?);

7. agreement form (specific or general?);

8 agreement building process (bottom up or top down?);

9. negotiating team organization (one leader or consensus?); and

10. risk taking (high or low?).

1.44 Cultural dimension impact on Decision Making

An understanding of structure, therefore, requires reference not only to such dimensions as centralization,

specialization and formalization, but also to the relationships, processes and actions which lie behind these

dimensions. These relationships and processes are power and authority relationships, coping with uncertainty and

risk-taking, interpersonal trust, loyalty and commitment, motivation, control and discipline, coordination and

integration, communication, consultation and participation.

1.46 Cultural dimension impact on Leadership

In the field of cross-cultural study of leadership styles, the distinction between general measures of leader style and

the culturally-specific ones is explored in Misumi's (1985) theory. Here he argues that behaviour must be understood

in terms of genotypes and phenotypes: the core intention of an action and the manner in which that intention is

expressed in a particular cultural context. To cite an illustrative example, close attention to time-keeping might be

construed in one culture as authoritarian leadership and in another as indicative of strong commitment to the goals of

the workgroup.

Thus what emerges broadly from the study is that the ability of the organizations to balance different interests by being flexible, understanding and innovative had given rise to effective management practices which are dynamic and adaptable to changing environments.

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Cameron, K.S. (1984). Organizational adaptation and higher education. Journal of Higher Education 55(2), 123.

Ellingboe, B.J. (1998). Divisional strategies to internationalize a campus portrait: Results, resistance, and

recommendations from a case study at a U.S. university, in Mestenhauser, J.A. and Elllingboe, B.J (eds.), Reforming

the Higher Education Curriculum: Internationalizing the Campus. Phoenix, AZ: American Council on Education and

Oryx Press, 199.

Bartell, M. (2003). Internationalization of universities: A university culture-based framework. Higher Education, 45(1),

48.

CHAPTER 2

Cross Cultural Leadership

The concept of ‗globalization‘ was apparent before this word became popular and the industries in most countries

became ripe in cross-border business activities. However, socio-economic and cultural changes during the last few

decades have influenced the internationalization of business activities as being said by Chan et al., 2001. This gave

rise to several challenges to be faced by the players. Cross-cultural interactions play a significant role in negotiations,

decision making, problem solving, and other aspects of business and technical operations. Leadership is a crucial

component in the success or failure of all organizations. According to Fiedler (1967:11), leadership is "an

interpersonal relation in which power and influence are unevenly distributed so that one person is able to direct and

control actions and behaviors of others to a greater extent than they direct and control his". One of the most

significant aspects of leadership is the style of the leader. The best style of leadership is that which varies with the

circumstances (Mainiero & Tromley, 1989), and maximizes a firm's productivity, satisfaction, growth and

development in all situations (Hersey & Blanchard, 1993).

Cultural differences account for the various management and leadership methods which are practiced in different

cultures. According to Fellows et al., 1994, research had shown that failure to understand the cultural differences

between the participating can result into undesirable circumstances. Norwood and Mansfield (1999) found that the

differences within Asian and Western cultures led to several problems. For example of doing business in China,

Dahles and Wels (2002) observed that one must be able to deal with tensions and conflicts, uncertainties and

frustrations while negotiating and managing various national cultures, corporates identities, and business pressures

and objectives. They highlighted the importance of cultural norms and values as the bases of personal networks.

Therefore, it is suggested that international firms should have managers who are culturally intelligent and have the

‗capacity to adapt to varying cultural settings based on the facets of cognitive and meta cognitive

processing, motivational mechanism and behavioral adaptation‘ (Earley, 2006, p. 929). Others note that managers of

global firms should have the reflexive capability (London and Chen, 2007) and ability to communicate effectively

within culturally diverse teams—teams comprising members who come from two or more different cultures. Selmer

(2001) suggests that managers with these attributes can be used in a strategic way to develop business across

borders. There have not been many studies of issues related to cross-cultural management in the construction

industry. The existing works in construction management literature tend to have deficiencies in the frameworks they

adopted, and mostly focus on exploring the dimensions of culture. Moreover, much of the research has been based

on the work of Hofstede although many other authors have criticized key aspects of Hofstede‘s research (see, for

example, points made by Schwartz, 1994; McSweeney, 2002; Kirkman et al., 2006 as discussed below).

Furthermore, others have suggested that cultural studies should be advanced beyond Hofstede‘s five-dimensional

model, and more complex approaches anchored in sound theory and empiricism employed (Javidan et al., 2006).

Many researchers have proposed frameworks for studying and measuring ‗culture‘. In his work that originated from a

study at IBM, Hofstede (2001) argues that cultural dimensions such as power distance (PDI), individualism (IDV),

masculinity (MAS), uncertainty avoidance (UAI) and long-term orientation (LTO) differ between Eastern and Western

cultures. Attributes of Eastern cultures are high in peopleorientation, collectivism, long-term orientation, and also

have high power distance. On the other hand, Western societies are more task-oriented, with relatively low power

distance, individualistic, and uncertainty avoidant. Following the work of Hofstede (1980, 1991), many researchers

have presented similar frameworks and models. For example, Trompenaars (1993), from his study of organizations

in 50 countries, proposed seven dimensions of culture: universalism versus particularism; individualism versus

communitarianism; neutral versus emotional; specific versus diffuse; achievement versus ascription; attitudes to time;

and attitudes to the environment. Schwartz (1994), in the individual-level study of the content and structure of values,

identified seven culture-level dimensions, namely, conservatism; intellectual autonomy; affective autonomy;

hierarchy; egalitarian commitment; mastery; harmony. Smith

et al. (1996) identified two main dimensions: egalitarian commitment versus conservatism; and utilitarian involvement

versus loyal involvement.In their Global Leadership and Organizational Behavior ffectiveness (GLOBE) project which

covered 62 countries, House et al. (2003) identified nine dimensions, each easured twice, isometrically, as practices

and respective values. These dimensions are: performance orientation; assertiveness orientation; future orientation;

humane orientation; institutional collectivism; family (now in-group) collectivism; gender egalitarianism; power

distance; and uncertainty avoidance. These dimensions, although derived in the context of leadership, are similar to

those proposed by Hofstede (1991).

In recent studies, researchers have considered concepts of general beliefs, or ‗social axioms‘, which are basic

premises that people endorse and use to guide their behaviour in their daily living (Bond and Leung, 2004, p. 552).

Leung et al. (2002) introduced a five dimensional structure of social axioms from a survey covering five countries.

their classification of social axioms comprises: cynicism; social complexity; reward for application; spirituality or

religiosity; and fate control. In a study of 41 nations, Bond and Leung (2004) attempted to reveal the culture-level

factor structure of social axioms, and extracted two factors:

dynamic externality (related to power distance, conservatism and collectivism); and societal cynicism (relating to a

lower emphasis on striving for high performance, a pertinent outcome if there is a general suspicion of the social

system, and a general expectation of negative outcomes).

International Air Transport Association (IATA) embodies 230 airlines and has employed 1,600 staff of 140

ethnic group in 74 countries. It has its headquarters in Geneva and Montreal. Traditionally the corporate

thinking has been biased towards western ideas and practices, with little appreciation to the important fast

growing markets, particularly those of India, China and other parts of Asia. IATA faces the same problems

as many other organizations around the world:

How to acquire leaders who can enhance local business by effectively interacting with the local team and

implementing global HR processes and also maintaining effective communication with headquarter?

How to do business in the unfamiliar market?

There are two characteristic approaches to these problems.

1. Use of expatriates- sending ―experts‖ from the company‘s HQ or another branch office.

2. bi-cultural intermediaries – people who have lived in different countries and have first-hand experience of at

least two cultures. In the case of China, western companies often fill executive roles with Chinese from

Taiwan, Hong Kong or Singapore or Chinese nationals who have studied and worked abroad.

Guido Gianasso, the vice-president for human capital, IATA believes that none of the approach is perfect.

The cultural differences often make the western expatriate unable to operate and the ‗cultural translators‘

who are educated or trained abroad work well but are in very high demand and not always loyal to their

employer. He says that we should go for the leadership, paying attention to the critical issue of culture.‖

The cross-cultural leadership should aim at the following steps that can help organizations tackle the

important but difficult task of integrating different cultures:

1. Identify two cultures that need to collaborate

For the global organizations the cultural sense and potential gaps between the ―home‖ and ―target‖ cultures

should be identified.

2. Identify leaders and leadership talent from each culture

Leaders should be culturally intelligent to develop cross-cultural integration and collaboration.

3. Identify appropriate pairs of co-leaders

Team-players, high growth potential, open-minded and empathetic nature should be given preference.

4. Identify real projects

Simulation assignments which can enhance the learning experience during an intercultural program.

5. Identify a realistic time frame

A minimum of three to six months is a reasonable time-frame for start-up activities, content delivery and

evaluation.

6. Share practices

Share with the people who are working closely together and adopting an enquiring rather than judgmental

mindset.

7. Adapt for the next cross-cultural challenge

Cultural programs should not be replicated in their entirety because markets and cultures differ

The difference in the culture, patterns of life, philosophy and value systems influences the behavior of the individual

and their leadership styles. The experiments carry out by various researchers and scientists have shown how widely

these leadership styles vary from country to country, and from culture to culture (Trompenaars, 1993). In order to

lead effectively in another culture, a leader must understand the social values, customs, norms, leadership behavior

and work-related cultural values of the host country's workforce (Fatehi, 1996).

Cultural differences influence leadership styles, norms, role expectations, and traditions governing the relationship

among various members of society. These are strong determinants of effective leadership behavior in a society

(Fatehi, 1996). Fatehi argues that what constitutes a good leader in one culture may not constitute a good leader in

other cultures. He stated that in the United States of America, for example, people would prefer democratic leaders

who seek input from subordinates before making decisions. In other cultures, such would be regarded as

incompetence or lack of knowledge on the part of the leader. He emphasizes that these other cultures might prefer a

leader who takes charge of the situation without consulting subordinates prior to decision-making. Besides having

technical expertise, international managers must possess the ability to organize, and lead a workforce of diverse

cultures (Fatehi, 1996).

The historic trip of President Clinton to Africa in March 1998 had developed confidence American business leaders to

hunt for business undertaking in the African continent. During the course of his diplomatic mission, President Clinton

emphasized the need for the United States to build closer diplomatic and economic ties with the countries of Sub-

Saharan Africa. Two bills (H.R. 434 & S. 666) in support of economic development in Sub-Saharan Africa (African

Growth and Opportunity Act, 1999) have been approved by the U.S. Congress and signed by the president. Among

U.S. investors who accompanied him to Africa were several African-American business leaders, who enthusiastically

applauded the notion of U.S. investments in Africa (Coleman, 1998). As the desire for U.S. investments in Africa

gathers momentum, the need to learn and understand the leadership behavior of these African countries will begin to

emerge. Foreign investors need to know the cultural work values of the African workforce in order to prepare their

expatriate employees for assignments in these countries (Osuoha, 2000). Since most U.S. firms send their most

talented managers to these overseas assignments, failure of these managers to perform effectively will result in both

monetary and business losses.

One of the most politically significant countries in Africa that may likely attract a lot of foreign investors is Nigeria.

Nigeria is Africa's most populous country (has about one-fourth the population of the entire continent) and has an

abundance of mineral resources (Compton's Encyclopedia, 1999). Foreign Direct Investment (FDI) in Nigeria is

estimated at about US $50 billion, with the U.S. share of this amount at about 26% (Maps N' Facts, 1995). Nigeria

has the potential to become the largest market in Africa for foreign goods and services. There is the probability that

foreign industrialists would rush into Nigeria to establish businesses, and take advantage of the cheap labor

prevalent in the country since the military dictatorship, which governed the country for the past two decades, has

handed over power to an elected civilian government (Osuoha, 2000).

2.1 Leadership Leadership is the ability of an individual to inspire and influence the thinking, attitude, and behavior of other people

(Bennis & Nanus, 1985; Yukl, 1989). A leader's principal objective is to assure synergy in his or her organization, and

draw from the joint efforts of people working together a result that is more than the sum of the individual efforts put

together (Koontz & Fulmer, 1975). In the words of Bennis and Nanus (1985: 3):

Leadership is like beauty, it is hard to define, but you know it when you see it. the new leader is one who commits

people to action, and who converts followers into leaders, and who may convert leaders into agents of change.

Bennis and Nanus studied ninety successful business leaders, mostly from top Fortune 200 companies. Through

intensive interviewing, these leaders revealed how they viewed their roles in their various organizations. Bennis and

Nanus developed four areas of competence shared by all these successful leaders which include the following: 1)

Attention through vision-all the leaders studied were agenda driven and unparalleled results oriented. Their vision

and intensity were magnetic and attracted followers towards them. 2) Meaning Through Communication-effectively

communicating one's leadership vision induces enthusiasm and commitment from followers. 3) Trust Through

Positioning-positioning is the set of actions necessary for implementing the leader's vision. A leader must establish

reliability, demonstrate predictability and accountability in order to be trusted by followers. 4) Deployment of Self-

leaders must recognize their strengths and weaknesses. While leaders continue to develop their strengths, they must

compensate for their weaknesses through competent staff.

To some people, leadership may mean power, authority and control (Adizes, 1988; Earley & Erez, 1997), while to

others, it means motivating subordinates to act by non-coercive means. Mainiero and Tromley (1989, p.159) stated

that "a leader is someone who is able to size up a situation quickly (often in the absence of information), define a

direction to pursue, and mobilize subordinates' energies towards the achievement of a particular goal".

Hersey and Blanchard (1993) view the leadership process as a function of the leader, the follower, and the situational

variables. They emphasized that "the style of the leader" is the key to effective leadership, and that the best style of

leadership is one that maximizes productivity, satisfaction, growth and development in all situations.

2.2 Approaches to Leadership

The major approaches of leadership includes the Trait theory of leadership, the Behavioral, Situational or

Contingency, Transformational, and the Cultural Contingency approaches. The Cultural Contingency approach

targets on the effect of cultural values and beliefs on the leadership style of a leader.

The Trait Approach: This approach is characterized by the certain unique qualities of the persons that made them

great leaders, for example Winston Churchill, Mahatma Gandhi, George Washington, and Franklin Roosevelt were

among great leaders who used their leadership skills in the building of their nations, while Thomas Watson, Edwin

Land, Alfred Sloan, Lee Iaccoca etc. will always be remembered for their leadership skills in building successful

business organizations. The trait approach claimed that leadership attributes were inherited, and limited to individuals

who possessed extraordinary abilities, such as tireless energy, great intuition and extraordinary persuasive ability.

The Behavioral Approach: The behavioral approach focused on what leaders can do but not what leaders are. The

behavioral study examines a leader's behavior and its impact on subordinate performance and satisfaction. The

behavioral approach became a major research activity at the Ohio State University (Fleishman 1953a; Fleishman,

Harris, & Burt 1955) and the University of Michigan (Bowers & Seashore, 1966; Likert, 1961, 1967). The Ohio State

University studies will be reviewed in detail later in this paper.

Situational Contingency Approach: The situational contingency approach specifies situational factors that make

certain leader behavior more effective. Fiedler (1967) provided a framework for effectively matching the leader's

behavior with the situation to determine leadership effectiveness. After studying the leadership styles of hundreds of

leaders who worked in different contexts, mainly in the military, the situation in which they worked, and their

leadership effectiveness, Fiedler empirically determined leadership styles that were good and bad within the

organizational context. He used the Least Preferred Co-worker (LPC) scale, which measured leaders' attitudes

toward their least-preferred co-worker to evaluate leadership styles of managers. Leaders with high scores were

rated relationship-oriented and those with low scores were rated task-oriented. The conditions that influenced the

effectiveness of the leadership behavior depended on a combination of: (a) leader-member liking, (b) the degree of

task structure, and (c) the position power of the leader.

Transformational Leadership Approach: Transformational leadership is part of the "New Leadership" paradigm

(Bryman, 1992), a process that changes the attitude of individuals in organizations towards commitment to

organizational missions, objectives and strategies (Bass, 1985; Yukl, 1989). It focuses on values, long-term goals

and vision. Transformational leadership uses vision, charisma, inspirational motivation, intellectual stimulation or

individualized consideration to inspire followers to go beyond the call of duty in discharging their responsibilities, and

achieving organizational goals.

2.3 The Ohio State University Studies

An extensive research program, which focused on what leaders can do but not what leaders are started at the Ohio

State University (Fleishman, 1953a; Fleishman, Harris $ Burtt, 1955) and the University of Michigan (Bowers &

Seashore 1966; Likert 1961, 1967) in the 1960s to investigate the behavioral approach to leadership. The Ohio State

University researchers, (Fleishman, 1953a; Fleishman & Harris, 1962; Fleishman & Peters, 1962), defining

leadership as the behavior of individuals when influencing a group of followers towards goal attainment described

leader behavior in two dimensions: Initiating Structure and Consideration. Fleishman and Peters (1962: 127) defined

these two factors of leadership as follows:

President Barack Obama: Transformational Leader

Management Theories Demonstrated in Obama's First 100 Days

During his first 100 days, President Obama showcased several models of leadership theory; not the least of which

was transformational and charismatic leadership

Since he took the oath of office, President Barack Hussein Obama has embodied several models of

leadership theory; one of those leadership theories is transformational-charismatic leadership. Arianna

Huffington (2009) wrote: ―…any list of the most impressive achievements of Obama's first 100 days should

start with the intangible qualities of transformational leadership.‖

Characteristics of Transformational and Charismatic Leadership

Peter Northouse (2004) wrote that transformational leadership is ―the process whereby an individual

engages with others and creates a connection that raises the level of motivation and morality in both the

leader and the follower." Additionally, transformational leadership is often seen as synonymous with

charismatic leadership. First identified by German sociologist Max Weber, charismatic leadership is ―a

special personality characteristic that gives a person…exceptional powers that result in the person being

treated as a leader‖ and according to Robert House (1976) displays characteristics of ―being dominant,

having a strong desire to influence others, being self-confident, and having a strong sense of one‘s own

moral values." The same type of intangible qualities that Huffington attributed to President Obama.

President Obama Benefits from Personal Charm and Charisma

John T. Woolley and Gerhard Peters (2009) are currently involved in a special research project regarding

the American Presidency called An American President Project Exclusive Analysis sponsored by the

University of California, Santa Barbara (UCSB). In their analysis of Obama's first 100 days, they observed

that President Obama excelled in how he communicated with the American people, they wrote:

"Obama has benefited from skillful oratory, personal charm and charisma…He has mixed old and new

media strategies to sustain and build popular support…Obama and his communications team have been

clever at devising novel ways to present Obama in a sympathetic light. In confronting the contemporary era

of fragmented media of communication, the president has shown a savvy ability to 'find the audience,' as

opposed to expecting the audience to come to him. Obama has appeared on the 'Tonight Show' with Jay

Leno. He publicly chose his NCAA basketball tournament picks on ESPN. He reached out to the Latino

community by appearing on Spanish language television." President Obama stays accessible through New

Media Technologies

Furthermore, Woolley and Peters show how President Obama attempted to stay accessible to the

American people and others by (a) actively engaging the Internet generation through media technologies

like YouTube and MySpace; (b) traveling abroad more than any preceding president; and (c) attending 87

public events, all of which happened during his first 100 days in office

In his acceptance speech delivered in Chicago's Grant Park, newly chosen President-elect Barack Hussein

Obama threw down the gauntlet and declared, "A new dawn of American leadership is at hand" (DeFrank,

2008). Indeed, with expectations for his incoming administration at a historic high (Ruggeri, 2009), the

unprecedented election of Barack Obama as the 44th President of the United States of America was met

with heightened euphoria and emphatic hallelujahs (DeFrank). Undoubtedly some wondered, "Can he truly

live up to all the hype and handle well the monumental task at hand?" From day one, the ills of the nation

and the planet called all his leadership skills into practice; putting his bold promise of "a new kind of

American leadership" clearly on the line.

President Obama Active from Day One in Office

For the most part (whether one agrees or disagrees with his policies or accomplishments) President

Obama attempted to fulfill his pledge to be that new kind of presidential leader (Conrad & Holder, 2009).

From the first day he sat down in the Oval Office, Obama's works were characterized by an ambitious

agenda and decisive action through which he showed evidence that the office of the American presidency

requires carefully formulated combinations of leadership approaches (Conrad & Holder). Consequently, in

his first 100 days, President Obama demonstrated a number of well-recognized leadership models

including the five highlighted below:

Charismatic/Transformational Leadership Theory

Charismatic/Transformational Leadership Theory demonstrated in just about everything "from the

president's personal equanimity …to his masterful use of the bully pulpit" (Huffington, 2009). "Charismatic

leadership is a unique personality characteristic that gives a person...exceptional powers that result in the

person being treated as a leader" (Weber as cited in Northouse, 2008).

Contingency Leadership Theory

Contingency Theory in so far as he showed a knack "of capturing the essence of a moment and delivering

exactly what it demands" (Conrad & Holder; Winston, 2009) e.g. seizing the moment to force GM and

Chrysler (which received substantial amounts of federal aid to keep operating) to endorse part of his

environmental policy by accepting an accelerated time table for new MPG standards (Garrett, 2009).

Leader-Member Exchange Theory

Leader-Member Exchange Theory (LMX) in that he worked with individual staff members including Vice

President Joseph Biden and White House Chief of Staff Emmanuel Rohm.

Team Leadership Theory

Team Leadership Theory in that he worked with (a) the ordinary teams of the presidency including his

White House staff, his appointed Cabinet, the National Security Council and (b) specialized task forces like

his team of economic advisors (which actually began working before the president the president took the

oath of office) (Sahadi, 2008).

Cross-cultural Leadership Theory

Cross-cultural Leadership Theory demonstrated (a) in his inaugural speech through which he spoke directly

to enemies of Western values and made promises to "the poor nations of the world"(Obama, 2009;

Lawson, 2009), (b) in his first appearance at the G20 summit where he attempted to begin "healing bruised

relations with American allies" (Parsons, 2009), and (c) in receiving of heads of state representing various

countries and cultures around the world e.g. Israeli Prime Minister Netanyahu (Mitnick, 2009).

Global Consciousness

One aspect of leadership at a global level is an understanding of the larger system implications of our

actions. Corporate leaders are having as much impact across countries as our political systems, and in

many cases, far more. How one develops the large system sensitivity to begin to understand the economic,

social, and environmental implications of the work you do at a global level?

The one thing one must find is the positive global intention that is carried during the planning of global

activities. Because of the size and scope of the potential impacts and subsequent changes of our actions, it

is probably impossible for one person to imagine the overall consequences. This is further limited by the

fact that individually, all the predictions are based on the unique worldview, filled with own cultural

experience. The challenge of a global leader is to hold the multiple interests at heart and begin to see the

possibilities of how groups of people who are seemingly very different can work together to accomplish an

overall higher goal.

References:

Conrad, J. and Holder, G. (2009). President Obama: A New Kind of Leader. TheFragileMind.org.

DeFrank, T. (2008). Democrat Barack Obama wins historic presidential election over Republican John McCain. NyDailyNews.com.

Huffington, A. (2009). Obama‘s First 100 Days: The Good, the Bad, and the Geithner. HuffingtonPost.com.

Mitnick, (2009). Obama demands that Israel stop settlements. How feasible is that? Christian Science Monitor.

Northouse, P. G. (2004). Leadership: Theory and Practice – 3rd Edition. Thousand Oaks, California: Sage Publications.

Obama, B. H. (2009). Inaugural Address.

Parsons, C. (2009). Obama at G-20 summit: Popular president, unpopular plan. Los Angeles Times: World.

Ruggeri, A. (2009). Barack Obama Faces Historically High Expectations As President. U.S. News & World Report.

Sahadi, J. (2008). Obama names his economic team. CNNMoney.com.

CHAPTER 3 CROSS CULTURAL NEGOTIATION

The word ―negotiation‖ has originated from the Roman word negotiari meaning ―to carry on business‖ and is derived

from the Latin root words neg (not) and otium (ease or leisure). A modern definition of negotiation is two or more

parties with common (and conflicting) interests who enter into a process of interaction with the goal of reaching an

agreement (preferably of mutual benefit). John Kenneth Galbraith said ―Sex apart, negotiation is the most common

and problematic involvement of one person with another, and the two activities are not unrelated.‖ negotiations is a

decision making process that provides opportunities for the parties to exchange commitments or promises through

which they will resolve their disagreements and reach a settlement. Negotiation consists of two distinct processes:

Creating value and claiming value.

Creating value is a cooperative process in which the parties in the negotiation seek to realize the full potential benefit

of the relationship. Claiming value is essentially a competitive process. The key to create value is finding interests

that the parties have in common or that complement each other, then reconciling and expanding upon these interests

to create a win-win situation. Parties at the negotiating table are interdependent. Their goals are locked together. A

seller cannot exist without a buyer. The purpose of a negotiation is a joint decision-making process through which the

parties create a mutually acceptable settlement. The objective is to pursue a win-win situation for both parties.

Negotiations Take Place within the context of the four Cs: Common interest, conflicting interests, compromise,

andcriteria (Moran and Stripp, 1991). Common interest considers the fact that each party in the negotiation shares,

has, or wants something that the other party has or does. Without a common goal, there would be no need for

negotiation. Conflict occurs when people have separate but conflicting interests. Areas of conflicting interests could

include payment, distribution, profits, contractual responsibilities, and quality. Compromise involves resolving areas

of disagreement. Although a win-win negotiated settlement would be best for both parties, the compromises that are

negotiated may not produce the result. The criteria include the conditions under which the negotiations take place.

The negotiation process has few rules of procedure. Rules of procedure are as much a product of negotiation as the

issues. Over time, the four Cs change and the information, know-how, and alternatives available to the negotiating

international company and the host country also change, resulting in a fresh interpretation of the four Cs, the

environment, and the perspective. In essence, negotiation takes place within the context of the political, economic,

social, and cultural systems of a country.

The theory of the negotiation process includes the following dimensions:

1. Bargainer characteristics,

2. Situational constraints

3. The process of bargaining, and

4. Negotiation outcomes.

These theories are based on parties who share certain values and beliefs based on their culture. These factors

operates in business and economic situations that have cultural influences, and they act in certain culturally

emblazoned ways. We bargain when:

1. A conflict of interest exists between two or more parties; that is, what one wants is not necessarily what the other

one wants.

2. A fixed or set of rules or procedures for resolving the conflict does not exist, or the parties prefer to work outside of

a set of rules to invent their own solution to the conflict.

3. The parties, at least for the moment, prefer to search for agreement rather than to fight openly, to have one side

capitulate, to permanently break off contact, or to take their dispute to a higher authority to resolve it.

3.1 CROSS CULTURAL NEGOTIATIONS In summary, negotiations primarily consists of five aspects:

1. Goals: motivating the parties to enter;

2. The process of negotiating that involves communications and actions;

3. Preexisting background factors of cultural traditions and relations; and

4. Specific situational conditions under which the negotiation is conducted.

3.2 Importance Of Negotiations

The importance of negotiation can be understood by an example of Rolls Royce. The two parties to a great extent

wanted the engine contract for Lockheed‘s L-1011 airliner. Despite repeated warnings from their own engineers, they

made concession after concession. They ended up with a contract that any rational engineer would have known was

ridiculous. They agreed to go well beyond the existing state-of-the-art on a low-margin, fixed-price contract. When the

nearly inevitable cost overruns occurred, they found that they were selling each engine for substantially less than it

cost to build. This contract (and various other mistakes) literally drove Rolls Royce, a famous name and a fine

engineering firm, into bankruptcy. The Lockheed negotiators naturally felt they had negotiated very well. However,

they had actually made an extremely costly mistake. By driving the price so low, they bankrupted a key supplier,

could not meet their commitments to their own customers, and ultimately lost $2.5 billion on the L-1011. The moral is

quite clear–if a deal is too good for any side, it is probably bad for both of them. Experience by itself is insufficient

unless it is transformed into expertise. Arbitration is another form of negotiation and one of the most widely used

methods of settling disputes. It is basically a process where two groups or persons agree to submit the dispute to a

non-aligned third person and further agree that they will carry out that third person‘s decisions. Arbitration avoids

going to court and the uncertainties of an unknown legal system. International arbitration has a time-tested set of

rules and procedures to govern the arbitration, the organization to manage the proceedings, and an established

group of experienced arbitrators.

3.21 Cultural Influences in Negotiations

Inter cultural is when two individual interact. In some countries, negotiating is seen in practically every transaction,

whether it is buying fruits or buying industries. Intercultural negotiations exist because people think, feel, and behave

differently reaches agreements on practical matters. In every negotiation the participants have different points of view

and different objectives. When the negotiation is done in the home country it is accelerated communications by

making logical cultural assumptions. The situation reverses when two cultures are involved in negotiation leading to

misunderstandings and miscommunications. The international negotiator must be careful about cultural stereotypes

Needs, values, interests and expectations may differ radically. Some cultures are likely to search for compromise

while others will strive for consensus and still others will fight until surrender is achieved. Some cultures prefer a

deductive approach: first agree on principles and later these principles can be applied to particular issues. Other

cultures think inductively: deal with problems at hand and principles will develop.

3.3 How Culture Impacts Negotiation · By conditioning one‘s perception of reality

· By blocking out information inconsistent or unfamiliar with culturally grounded assumptions

· By projecting meaning onto the other party‘s words and actions

· By impelling the ethnocentric observer to an incorrect attribution of motive

Culture influences negotiation through its effects on communications and through their conceptualizations of the

process, the ends they target, the means they use, and the expectations they hold of counterparts‘ behavior. Culture

affects the range of strategies that negotiators develop as well as the many ways they are tactically implemented. In

an international negotiations, you bring to the negotiating table the values, beliefs and background interference of

your culture and normally will unconsciously use those elements in both the presentation and interpretation of the

data, interpreting and judging the other culture by your own standards. Nations tend to have a national character that

influences the types of goals and processes pursued in negotiations. Israeli preference for direct forms of

communication and the Egyptian preference for indirect forms exacerbate relations between the two countries. The

Egyptians interpreted Israeli directness as aggression and were insulted; the Israelis viewed Egyptian indirectness

with impatience and viewed it as insincere. Thus, negotiation rules and practices often vary widely across cultures.

Thus cross-cultural negotiators bring into contact unfamiliar and potentially conflicting sets of categories, rules, plans,

and behaviors. The cross-cultural negotiator cannot take common knowledge and practices for granted. Difficulties

sometimes arise from the different expectations negotiators have regarding the social setting of the negotiation.

These patterns can extend to styles of decision making (the way officials and executives structure their negotiation

communication systems and reach institutional decisions) and logical reasoning (way issues are conceptualized, the

way evidence and new information are used or the way one point seems to lead to the next, paying more attention to

some arguments than others, different weight to legal, technical, or personal relations).

3.4 Dimensions of Culture Hofstede1 devised four cultural dimensions which could explain much of the differences between cultures:

masculinity, uncertainty avoidance, power distance and individualism. Masculine cultures value assertiveness,

independence, task orientation and self achievement (traditional ‗masculine‘ characteristics) while feminine cultures

value cooperation, nurturing, relationships solidarity with the less fortunate, modesty and quality of life (traditional

‗feminine‘ characteristics). Masculine societies tend to have more rigid division of sex roles. Masculine cultures

subscribe to ‗live-to-work‘ while feminine societies subscribe to ‗work-to-live.‘ The competitiveness and assertiveness

embedded in masculinity may result in individuals perceiving the negotiation situation in win-lose terms. Masculinity is

related to assertiveness and competitiveness while femininity is related to empathy and social relations; a more

distributive process is expected in masculine societies where the party with the most competitive behavior is likely to

gain more. The most masculine country is Japan, followed by Latin American countries. The most feminine societies

are the Nordic countries. Uncertainty avoidance refers to the degree to which one feels uncomfortable in risky and

ambiguous (uncertain, unpredictable) situations, favors conformity and safe behavior, and tolerates deviant ideas. In

high uncertainty avoidance cultures, people tend to avoid uncertain situations while in low uncertainty avoidance

cultures, people are generally more comfortable with ambiguous uncertain situations and are more accepting of risk.

Low risk-avoiders require much less information, have fewer people involved in the decision-making, and can act

quickly. High risk-avoidance cultures tend to have lots of formal bureaucratic rules, rely on rituals, standards and

formulas and trust only family and friends. People in low uncertainty avoidance societies dislike hierarchy and

typically find it inefficient and destructive. In weak uncertainty avoidance cultures, deviance and new ideas are more

highly tolerated. Uncertainty avoidance may lead to focus on the obvious competitive and positional aspects of

negotiation and may hinder the exchange of information on interests and development of creative proposals. A

problem solving orientation is likely to be found in cultures characterized by low uncertainty avoidance and low power

distance. The United States, the Nordic nations, Hong Kong, and Singapore all have low uncertainty avoidance.

Power distance refers to the acceptance of authority differences between people; the difference between those who

hold power and those affected by power. In low power distance one strives for power equalization and justice while

high power distance cultures are status conscious, respectful of age and seniority. In high power cultures, outward

forms of status such as protocol, formality, and hierarchy are considered important. Decisions regarding reward and

redress of grievances are usually based on personal judgments made by powerholders. Power distance implies a

willingness to accept that the party which comes out most forcefully gets a larger share of the benefit than the other

party. A low power distance culture values competence over seniority with resulting consultative management style.

Low power distance cultures include the Anglo-American, Nordic, and Germanic cultures. High power distance

cultures are Latin America, South Asia, and Arabic cultures. Low masculinity and low power distance may be related

to the sharing of information and the offering of multiple proposals as well as more cooperative and creative behavior.

High masculinity and high power distance may result in competitive behavior, threats, negative reactions.

3.41 Variables Influencing Cross-Cultural Negotiations

Two groups of variables influence he process of international business negotiation:

1. Background factors, which include the parties and their objectives, often categorized as being common, conflicting,

or complementary. Other aspects include third parties involved, such as consultants, agents, and the respective

government. The position of the market (seller‘s vs.buyer‘s) and finally, the skills and experience of the negotiators.

2. Atmosphere is the perceived ―milieu.‖ It can include the perceived cooperation/conflict—that the parties have

something to negotiate for and something to negotiate about; power and dependence— that one of the parties gains

more power in the relationship; and perceived distance—that the parties are unable to understand each other; and

finally, the expectations, long-term expectations of the true deals or benefits and short-term expectations concerning

the prospects of the present deal. Twelve variables in the negotiation process lead to understanding the international

negotiating styles better.

3.42 Intercultural Implications of Negotiations

· A situation.

· The appreciation of cultural differences is essential in cross cultural situations.

· Mutual understanding.

· A conscious endeavor to manage cultural differences is required.

· Communication.

· Both parties must be in a position to communicate clearly and overcome cultural barriers to effective

communication.

· Need satisfaction.

· One must ascertain expectations and then work for their achievements.

· Compromise or settlement.

· One must narrow down differences and emphasize commonalities of interest.

· A deal.

· Both written and unwritten aspects of negotiation are important

· A bargaining process.

· One must be prepared to give and take.

· Anticipation.

· You must familiarize yourself with management styles and assumptions of others to anticipate their moves.

· Persuasion.

· You must establish your credibility and be soft while not losing your grip on the problem.

· Achieving consensus.

· You must reduce differences to reach an agreement.

· Practicing empathy

· You must appreciate the problems and limitations of your ―opponents.‖

· Searching for alternatives.

· You should be systematic and simple

· Conflict management

· It is possible to manage conflicting interests.

· Winning.

· It can create problems and generate bad feelings.

· A means of getting what you

· It also means giving what others want from others. Expect of you.

· Gaining the favor of people

· It is easier to gain favors while acting in a from whom you want nothing, genuine and rational manner.

· Managing power and information.

· You should know in advance the limitations of your power.

· Time and opportunity

· Timely actions based on opportunity management. Analysis provide the needed edge in highly competitive

situations.

· Selling.

· You should create the need first.

· The least troublesome method· The use of intercultural negotiating styles, of settling disputes. modes, and skills is

important.

Effective international negotiators understand that negotiation, first and foremost, is not about numbers or terms or

dates but personal relationships. It is about developing relationships of trust and mutual respect. He or she must

become relationship oriented rather than deal oriented. The problem with deal orientation is that the difficulty of

creating and enforcing a legal agreement across multiple legal and government jurisdictions can be insurmountable.

A deal orientation is essentially static in nature while the world is dynamic. Negotiators who have an effective ongoing

relationship will be able to agree to disagree and not have the disagreement negatively affect their relationship.

Therefore, working on developing solid mutually beneficial relationships is the first step to traveling the road to

success. The effective international negotiator knows how to probe, how to ask questions, and how to listen. He or

she seeks areas where needs are mutual and hence, easiest to satisfy, as well as being the first step towards

establishing trust and relationships. Once mutual needs are established, meeting individual needs can begin to be

accomplished. Sharing of information is crucial towards success. Effective international negotiators have staying

power. They recognize that things take longer to communicate across cultures, that relationship building can be a

time consuming process, that the long-term perspective must be pursued. They must remain calm, not lose sight of

the ultimate objectives of the negotiation, be flexible and willing to accept new conditions, remain on the creative

lookout for needs, and communicate a commitment to the negotiation and the satisfaction of mutual needs.

Experienced international negotiators create agendas in advance and try to get buy-in from the other side on the

agenda before the actual start of the negotiation.

References: Parker B, (2005), Introduction to Globalization and Business, Sage Publications

Hodgetts, Luthans Doh, 2005, International Management, 6th Edition, Tata McGraw Hill

Tayeb, M. (2003). International Management: Theories and Practice. Prentice Hall.

Todaro, M. P. (2000). Economic Development, 7th Edition. Pearson Education Limited. ISBN: 0-201

64858-X.

CHAPTER 4 ROLE OF ETHICS IN CROSS CULTURAL MANAGEMENT

The cultural variables described above result from unique setsof shared values among different groups of people.

Most of the variations stem from underlying value systems, which cause people to behave differently under similar

ircumstances. Values are a society‘s ideas about what is good or bad, right or wrong. Values determine how

individuals will probably respond in any given circumstance. As a powerful component of society‘s culture, values are

Communicated through the cultural values already discussed and are passed on from generation to generation.

These value dimensions can again prove to be a powerful tool for understanding cultural diversity. There are several

value dimensions available from the research work undertaken by the researchers. These are explained:

4.1 Hofstede’s Value Dimensions G. Hofstede has analyzed IBM employees in 53 countries in the world and showed differences in values between

Countries. This is reflected in four dimensions given by him. These value dimensions as proposed by Hofstede

provide a

useful framework for understanding the workforce diversity. The value dimensions proposed by him are:

· Power Distance

· Uncertainty Avoidance

· Individualism

· Masculinity

4.11 Power Distance

It is the level of acceptance by a society of the unequal distribution of power in institutions. The extent to which the

subordinates accept unequal power is societally determined under this dimension. In the countries where people

display high power distance, employees acknowledge the boss‘s authority simply by respecting that individual‘s

formal position in the hierarchy, and they seldom bypass the chain of command. This respectful response results in a

centralized Structure and autocratic leadership. In countries where people display low power distance, superiors and

subordinates are apt to regard one another equal in power, resulting in more harmony and cooperation. Hence, an

autocratic management style is not likely to be well received in low-power distance countries. The characteristics

differences between high power distance and a low power distance countries can be observed as follows:

Countries with low power distance in- Countries with high power distance include India, France, Japan, Pakistan, etc.

clude-USA, UK, Denmark Austria, etc.

Low Power Distance Countries High Power Distance Countries

Lesser inequalities among people. Inequalities among people exist and are desired.

Interdependence between less powerful Dependence of less powerful people on more powerful people

and more powerful people

Emphasis on decentralization. Centralization is popular.

Flatter organization structures. Taller organization structures.

Parents treat children as equals. Parents teach children to be obedient.

Supervisory personnel are lesser in pro- Supervisory personnel constitute large

portion among the workforce proportion.

Countries with low power distance include Countries with high power distance include

USA, UK, Denmark Austria, etc. India, France, Japan, Pakistan, etc

4.12 Uncertainty Avoidance

It refers to the extent to which people in society feel threatened by ambiguous situations. Countries with a high level

of uncertainty avoidance tend to have strict laws and procedures to which people adhere closely, and there is strong

sense of nationalism. In a business context this value results in formal

rules and procedures designed to provide more security and greater career stability. Managers have propensity for

low-risk decisions, employees exhibit little aggressiveness and lifetime employment is common. In countries with

lower levels of uncertainty avoidance nationalism is less pronounced, and

protests and other such activities are tolerated. As a consequence, company activities are less structured and less

formal, some managers take more risks, and there is high job mobility. The differences between countries with low

uncertainty avoidance and high uncertainty avoidance can be studied as under:

Low Uncertainty Avoidance Countries High Uncertainty Avoidance Countries

Less incidence on rules and regulations. High incidence on rules and regulations.

Risk-taking attitude. Risk-averting attitude.

High labour turnover. Low labour turnover.

More ambitious employees. Less ambitious employees.

Encouragement to employees for assuming People shirk responsibilities.

responsibilities.

Flatter organization structure. Taller organization structure.

Countries with low uncertainty avoidance Countries with high uncertainty

UK, etc. avoidance include-India, USA,include-

Japan, Pakistan, Israel, Austria, etc.

4.13 Individualism

This refers to the tendency of people to look after themselves and their immediate family only and neglect the needs

of

society. In the countries that price individualism, democracy, individual initiative and achievement are highly valued;

the

relationship of the individual to organizations is one of independence on emotional level, if not on an economic level.

In the countries where low individualism prevails, there exist a tight social framework, emotional dependence on

belonging to―the organization,‖ and a strong belief in group decisions. People from collectivist countries believe in the

will of the group rather than that of the individual and their pervasive collectivism exerts control over individual

members through social pressure and fear of humiliation. The society values harmony and saving face, whereas

individualistic cultures emphasize self-respect, autonomy and independence. Hiring and promotion practices in

collectivist societies are based on paternalism rather than achievement or personal capabilities, which are valued in

individualistic societies. Other management practices reflect the emphasis on group decision-making processes in

the collectivist societies. Differences in focus in individualism and collectivism are explained in the followingTable.

Individualism

1) Individual take care of self and family.

(2) 'I', consciousness.

(3) Independence of individual from organisation.

(4) Need for selective friends.

(5) Greater individual initiative.

(6) Protestant work ethic.

(7) Tasks take precedence over relationships.

(8) Promotions are based on merit and performance.

(9) Countries include USA, UK, Australia, etc.

Collectivism

(1) Interest of group.

(2) 'We', consciousness.

(3) Dependence on organization.

(4) Social relationships.

(5) Less individual initiative.

(6) Less support for protestant work ethic.

(7) Relationships prevail over task.

(8) Promotions are seniority-based.

(9) Countries include Japan, Taiwan, Pakistan, etc.

4.14 Masculinity

This refers to the degree of traditionally ―masculine‖ values assertiveness, materialism, aggressiveness and a lack of

concern for others -that prevail in society. In comparison, ―femininity‖ emphasizes ―feminine‖ values-a concern for

others, for relationships, nurturing, care for weak and for quality of life. In highly masculine society women are

expected to stay at home and raise family. In organizations, one finds considerable job stress, and organizational

interests generally encroach on employee‘s private lives. In countries with low masculinity, one finds less conflict and

job stress, more women in high-level jobs, and a reduced need for assertiveness. The degree of masculinity affects

in the following characteristic ways:

High Masculinity Low Masculinity

Career is considered as most important. Work needs take precedence.

Individual decision-making Is emphasized. Importance is placed on cooperation and

Achievement is given importance and is Employee security gets precedence.

defined in terms of money and recognition. Group decision-making is emphasized.

Countries with high masculinity include- friendly atmosphere.

India, Japan, USA, UK, etc. Achievement is defined in terms of human

include contacts and living environment.

Countries with low masculinity Denmark,

Norway, Sweden, etc.

These Hofstede‘s values do not operate in isolation; rather, they are interdependent and interactive. Hofstede

provides a framework for understanding cultural diversity across nations. An awareness of the differences on these

important characteristics between cultures can help to develop a strategy for tackling them. Hofstede dimensions

provide a framework for prediction of many kinds of behavior in cross-cultural organizational settings. Some

Examples Are:

(a) Japanese are with less power distance, highly task-oriented, and with low tolerance for uncertainty. The behavior

of Japanese bears this out. They believe in consensus. Cross cultural negotiator must respect different cultures. He

must develop high tolerance for ambiguity and have patience to get clarity.

(b) In France, punctuality in business and social interaction is important. Neatness and taste is the key.

(c) In Middle-East, when interacting with Arabs maintain strong eye contact. Do not gesture with left hand. Do not

point sole of your foot to some one. They are emotional and easily outraged by slightest provocation. Do not make

enquiries about Arab‘s wife or daughters or discuss your own.

(d) Indians are found to have:

(i) Large power distance: Indians look for approval from superior, as have low self-esteem. Boss is

benevolentautocrat and has more privileges.

(ii) Weak uncertainty avoidance: Each day is taken as it comes and not feared from.

(iii) Somewhat collectivitist tendencies but with individualistic streaks, expect protection from organization and

colleagues.

(iv) Indian culture is affected by region, faith, religion, climate, language, and gradations of society, education and

history. Core values of Indian culture are tolerance hallmark of society, faith in respective religions, emphasis on

liberty and equality, respect for elders and religious teachers, faith in superstitions, recognition of achievements and

actions, spiritualism, indifference towards health and cleanliness. Indians also feel that small is good and they care

more for tomorrow than today as compared to- many other cultures.

(e) Americans value directness, openness, independence and informality and hence possess:

(i) Low power distance: They believe in quick decision making and may not consult any superior before taking

decision.

(ii) Individualism: They believe in individual rewards, responsibilities and even the teams have to be designed

keeping in view their individualistic tendencies.

b. Geographic Clusters

Nath and Sadhu categorised the four value dimensions given by Hofstede as well as those given by some other

researchers, by geographic region. The results of their study coincide with the Hofstede‘s value dimensions.

Ronen and Shenkar developed eight country clusters grouped according to the similarities in the attitudes of the

employees.The attitudinal dimensions used by the two were:

· The importance of work goals.

· Need fulfilment and job satisfaction.

· Managerial and organisational variables.

· Work role and interpersonal orientation.

Also GNP of the countries was used to place the countries in the figure, the most developed nations close to the

center. This approach again provided the basis for understanding the individual cultures but did not help much in

comparing and contrasting the various cultures effectively and to the fullest.

4.2 Trompenaar’s Value Dimensions

Trompenaar through his research work gave another set of value dimensions. These 4 dimensions are as follows:

· Universalism versus particularism

· Neutral versus Affective

· Specific versus Diffuse

· Achievement versus Ascription

4.21 Universalism versus Particularism

This dimension deals in type of orientation towards obligation. The two aspects can be characterized as in the

following table:

Universalism Particularism

Rules Relationships

Legal Systems Personal Systems

Contracts Interpersonal Trust

―Higher Obligations‖ Duty to friends, family, etc.

―Objectivity‖ Relativity

One right way Many ways.

Oriented towards personal obligations Oriented towards societal obligation

4.22 Neutral versus Affective

This dimension focuses on emotional orientation of relationships.The following table shows the comparison between

the two aspects:

Neutral Affective

Physical contact reserved for close friends and family Physical contact more open and free

Subtle communication Expressive; vocal

―Hard to read‖ Strong body language

4.23 Specific versus Diffuse

This dimension relates to the people‘s involvement in relationships. The table below contrasts the two aspects:

Specific Diffuse

Direct Indirect

Confrontational Avoid direct confrontation

Open; extrovert More closed; introvert

Separate work and private life Link private and work life

4.24 Achievement versus Ascription

This dimension examines the source of power and status in the society. The two aspects differ in the following

manner:

Achievement Ascription

Status based on competency and achievements Status based on position, age, schooling or other criteria

Other Factors Affecting Cross-culture Differences

Besides values dimensions another way to study and understand cultural diversity is on the basis of certain culturally

based variables that cause frequent problems for the people in international management. These factors are:

Temporal Factors

This relates to the degree to which the various nations believe in ―Time is money‖ concept. Two diverse approaches

to time exist are:

· Monochromic

· Polychromic

Monochromic time represents the ordered, precise, schedule driven view of time. Such cultures are characterized by

precise appointments, tight calendar and promptness. They stick to the schedule and never waste time.

Polychromic time is the view that the time is a vague element that is caught up in the multiple, cyclical, and

concurrent involvement of different people. Such cultures lack precision in time, linger on the jobs, waste lot of time

and never stick to schedule.

Material Factors

The material elements of the culture are composed of those things used to organize its economic activities. It

involves these things and objects people love using. These at the same time may include various infrastructural

facilities, natural resources and so on. The attitude of various nations towards the usage of these resources varies.

Such differences have implications for management functions, such as motivation and reward systems.

Aesthetics

Aesthetics deals with the culture‘s sense of beauty, which is depicted through folklore, myth, legends and

expressions of arts, etc.

Change

This refers to the attitude of the culture towards change. The values regarding acceptance of change and pace of

change may vary across cultures. Cultures with internal locus of control, that is which believe that they themselves

can control the future, tend to take the change easily and with speed but it is not the case with cultures having

external locus of control.

Language

The language not only relates to the spoken language but also unspoken language which includes facial expression,

walking, posture, hand gestures, color symbolism, proxemics, touching, eye contact, artifacts, clothing, hairstyle;

cosmetics and silence.

Value Systems of Some Countries

Most of the life‘s actions and interactions, whether they may be for business purpose or for personal needs, are

based on several sets of cultural values developed since childhood., These sets of values have been accumulated,

rewarded and enforced by the family, community, company, and country. These values differ from country to country

and even within the country. The value differences playa major role in creating cultural diversity. For this reason, in

the proceeding pages we have made an attempt to develop brief cultural profiles or the countries based on value

systems of:

1. America;

2. Japan;

3. Middle-Eastern countries; and

4. Russia.

The value systems of these countries are also summarized.

The analysis of following situations in order to point out the differences in values across cultures and their influence

on daily business interactions:

I. American Value System

The American value system in the decreasing order of importance or priority of values can be highlighted as follows:

· Equality

· Freedom

· Openness

· Self-reliance

· Cooperation

· Family Security

· Relationship

· Privacy

· Group Harmony

· Reputation

· Time

· Competition

· Group Achievement

· Spirituality

· Risk-taking

· Authority

· Material Possessions

· Formality

· Group Consensus

II.. Japanese Value System

The Japanese values, in the decreasing order of priority, can be listed as follows:

· Relationship

· Group Harmony

· Family Security

· Freedom

· Cooperation

· Group Consensus

· Group Achievement

· Privacy

· Equality

· Formality

· Spirituality

· Competition

· Seniority

· Material Possessions

· Self-reliance

· Authority

· Time

· Openness

· Risk-taking

· Reputation

III. Russian Value System

The Russian values, in the decreasing order of priority, can be listed as follows: -

· Family Security-

· Freedom

· Self-reliance

· Openness

· Material Possessions

· Cooperation

· Spirituality

· Equality

· Time

· Relationship

· Reputation

· Authority

· Formality

· Group Harmony

· Group Achievement

· Risk-taking

· Seniority

· Competition

· Privacy

· Group Consensus

IV. Middle-Eastern Value System

The priority-wise list of middle-eastern values, in the decreasing order of priority, can be listed as follows:

· Family Security

· Family Harmony

· Parental guidance

· Age

· Authority

· Compromise

· Devotion

· Very Patient

· Indirectness

· Hospitality

· Friendship

· Formality/Admiration

· Past and Present

· Religious Belief

· Tradition

· Social Recognition

· Reputation

· Friendship

· Belongingness

· Family Network

As culture has been described as a set of beliefs, values,attitudes and behavior which community adopts, these

values playa major role in affecting an individual motivations, expectation or work and group relations. These values

in turn also exercise influence at the organizational level.

References: Adler, N. (2008) International Dimensions of Organizational Behavior (5th edition) Prentice Hall

Browaeys, M-J and Price, R. (2008) Understanding Cross-cultural Management FT Prentice Hall

French, R. (2007) Cross-Cultural Management in Work Organisations CIPD

Gannon, M, and Newman, K. (2002) The Blackwell Handbook of Cross-cultural Management Blackwell

Guirdham, M (2005) Communicating across cultures at work (2nd edition) Palgrave Macmillan

Hofstede, G. (2001) Culture‘s Consequences: International Differences in Work Related Values Sage

Hofstede, G. (2005) Cultures and Organizations McGraw Hill

Jandt, F. (2004) An Introduction to Intercultural Communication: Identities in a Global Community Sage

Mead, R. (2005) International Management: Cross-cultural Dimensions (3rd edition) Blackwell

Perkins, S. & Shortland, S. (2006) Strategic International HRM - choices and consequences in multinational people

management London: Kogan Page.

Schneider, S. and Barsoux, J-L (2003) Managing Across Cultures (2nd edition) Prentice Hall

Smith, P.B. Bond, M.H. and and Kâgitçibasi, Ç. (2006) Understanding social psychology across cultures: living and

working in a changing world Sage

Trompenaars, F. and Hampden-Turner, C. (1997) Riding the Waves of Culture; Understanding cultural diversity in

Business (2nd edition) Nicholas Brealey

Ward, C., Bochner, S. and Furnham, A. (2001) The Psychology of Culture Shock Routledge.

Schneider, S. and Barsoux, J-L (2002) Managing Across Cultures (2nd edition) Prentice Hall

Journals: Cross-cultural Management

International Journal of Human Resource Management

International Journal of Cross-cultural Management

CHAPTER 5 MODELS OF CROSS CULTURAL MANAGEMENT

Leaders of Multi National Organizations today encounter cultural differences, which affects the smooth functioning

and the success of the organization. Many researchers have conducted the study on Cross Cultural Management.

They developed the approaches of Cultural Dimensions along with the dominant value system. The cultural

dimensions reflect the basic of the society, the way they handle the problem which differs from culture to culture.

They are similar in some respect and different in others.

These approaches can be summarized as the various works of thinkers and researchers.

5.1 Hall's cultural factors

Edward T. Hall was an anthropologist who worked on the key cultural factors. During World War II the foundation for

his research on cultural perceptions was laid when he served the U.S. Army in Europe and Philippines. He is known

for high context cultural factors and low context cultural factors.

Context

5.11 High context

High-context culture has many related elements for people to understand the rule which otherwise can be very

perplexing for people who does not understand the 'unwritten rules' of the culture.

5.12 High context depends heavily upon:

1. external environment 2. situational context 3. non-verbal behavior 4. meaning indirectly conveyed 5. relationships are long-lasting 6. agreements may be verbal & changeable

5.2 Low context In a low-context culture, very little is taken for granted. Whilst this means that more explanation is needed, it also

means there is less chance of misunderstanding particularly when visitors are present.

5.21 Low context depends heavily upon:

1 External environment less important 2 Direct, often blunt communication 3 Non-verbal behavior less important 4 Explicit information given, ambiguity avoided

5 Meaning directly conveyed 6 relationships are shorter-term

Low context and High context.

Factor High-context culture

Low-context culture

Overtness of messages

Many covert and implicit messages, with

use of metaphor and reading between

the lines.

Many overt and explicit messages

that are simple and clear.

Locus of control and

attribution for failure

Inner locus of control and personal

acceptance for

failure

Outer locus of control and blame

of others for failure

Use of non-verbal

communication

Much nonverbal communication More focus on verbal

communication than body language

Expression of reaction Reserved, inward reactions Visible, external, outward reaction

Cohesion and

separation of groups

Strong diistinction between ingroup and

outgroup. Strong sense of family.

Flexible and open grouping

patterns, changing as needed

People bonds Strong people bonds with affiliation to

family and community

Fragile bonds between people with

little sense of loyalty.

Level of commitment to

relationships

High commitment to long-term

relationships.

Relationship more important than task.

Low commitment to relationship.

Task more important than

relationships.

Flexibility of time

Time is open and flexible.

Process is more important than product

Time is highly organized.

Product is more important than

process

5.3 High-Context versus Low-Context Cultures

Hall affirmed high-context and low-context cultures where the high and low context conception is chiefly concerned

with the way information is transmitted (communicated) and where context has to do with how much you need to

know before you can communicate effectively (Dahl, 2006 and www.via-web.de). All cultures are to be found in

relation with one another through their communication style. ( Wurtz, 2005).

Low-context communication is primarily through verbal communication that is in written and oral – most of the

information is in the in the plain code. Cultures, such as Scandinavians, Germans, and the Swiss, are predominantly

low-context communicators (Wurtz, 2005).

High-context communication involves implying a message through non verbal communication, that involves

communication through body language, eye movement, para-verbal cues, and the use of silence (Wurtz, 2005).

These transactions feature pre-programmed information that is in the receiver and in the setting, with only minimal

information in the transmitted message (Hall, 1976 as presented in Dahl, 2006). Japan and Arab countries have high-

context communication culture.

This is the easiest concept to define culture and intercultural encounters.Hall posits, ―meaning and context are

inextricably bound up with each other‖ (Hall, 2000, p. 36 as presented in Wurtz, 2005).

5.4 TROMPENAARS' CULTURAL FACTORS

―It is still amazing how reluctant leaders are to tackle the whole issue of the intercultural realities of their organization.

Deep inside, most very well understand that it is a very important, if not the most important, process in their

organization.‖

Fons Trompenaars is one of the 50 most influential management thinkers alive. A Dutch culturalist has done his

intensive study into international culture. He teamed with Charles Hampden-Turner (a dilemma enthusiast), to

understand individuals. Professor Trompenaars premeditated and analyzed the problem resolution behaviour of the

people of different culture in their specific countries and identified 7 basic dimensions for culture.

When designing sales strategies International trade consultants and lawyers consider these cultural dimensions,

where buyers and sellers are from different cultures. This is predominantly factual for up-and-coming markets

unacquainted to deal with people from more developed countries.

5.41 Achievement vs. Ascription

Achievement culture is based on performance. High achievers are given status in Achievers and they must continue

to prove their worth, as status is accorded based on their actions.Achievement-oriented countries include Austria,

Switzerland, the United Kingdom and the United States.

Ascription culture is based on the assumption that status is through other means as is acquired by right rather than

daily performance, which may be as much luck as judgment.

Status is attributed to who or what a person is. This is based on age, gender and social connections.

5.42 Individualism vs. Communitarianism

Individualism culture is when people make their own decisions and they work for individual success. It is about the

rights of the individual which seeks to let each person grow or fail on their own, and team work is seen as denuding

the individual of their inalienable rights. Highly individualistic countries include Canada, the United States, the United

Kingdom and France. The emphasis is on individual responsibility and decision-making, and negotiations are made

on the spot.

Communitarianism culture is about the rights of the group or society. It put the family, group, company and country

before the individual. It sees Communitarianism as selfless and far-sighted. Communitarianism culture prevails in the

country like Japan that gives importance to the group before the individual. Success is achieved in groups, decisions

are referred to committees and groups jointly assume responsibilities.

5.43. Internal vs. External

Internalistic culture people believe that what happens to them is their own doing. It is about thinking and personal

judgement, ‗in our heads‘. It assumes that thinking is the most powerful tool and that considered ideas and intuitive

approaches are the best way.

Externalist culture refers to the outer world. It assumes that we live in the 'real world' and that is where we should

look for our information and decisions, like the United States, Many Asian countries have an external culture in which

the environment shapes their destiny. Because they don‘t believe they are in full control of their destinies.

5.44. Neutral vs. Emotional

In neutral cultures emotions are held in check, countries like Japan and the United Kingdom where people do not

show their feelings.

In an emotional culture, people profusely express their feelings naturally and openly. They smile a lot while they

interact, during excitement they talk loudly and show great enthusiasm while greeting people. Mexico, Netherlands

and Switzerland are high-emotion countries.

5.45 Specific vs. Diffuse

People from specific cultures take specific elements into consideration. They analyze the issues separately, and then

they put them back together again. In specific cultures, the whole is the sum of its parts. Interactions between people

are highly purposeful and well-defined. The public space of specific individuals is much larger than their private

space. People are easily accepted into the public space, but it is very difficult to get into the private space. Specific

individuals concentrate on hard facts, standards, and contracts. Countries like Austria, Switzerland, the United

Kingdom and the United States show a strong severance between public and private life.

People from diffusely oriented cultures start with the whole and see each element in perspective of the total. All

elements are related to each other. Like most introverts, diffuse culture people guard both spaces carefully Diffuse

individuals have a large private space and a small public one. The qualities that are cherished by diffuse cultures are

style, demeanor, ambiance, trust, understanding, etc. China, Spain and Venezuela are examples of diffuse cultures

where work and private life are closely linked but intensely protected.

5.46. Sequence vs. Synchronization

Time as sequence sees events as separate items in time, sequence one after another. It finds order in a actions that

happen one after the other. People with sequence culture will like to do one work at a time. Example USA.

Time as synchronization sees events in parallel, synchronized together. It finds order in coordination of multiple

efforts. In other words people of synchronized culture will like to take multiple tasks together and they juggle with

them for their completion for example in the cultures like France and Mexico.

5.47 Universalism vs. Particularism Universalism is about finding broad and general rules. When no rules fit, it finds the best rule. Universalistic countries

focus more on formal rules than relationships. Australia, Germany, Sweden and the United Kingdom are

universalistic countries. America is highly universalistic

Particularism is about finding exceptions. When no rules fit, it changes according to the requirements and culture,

rather than trying to force-fit an existing rule. The culture place more emphasis on relationships than rules. Countries

that practise high particularism include China, Indonesia and Venezuela. Particularistic peoples believe that

circumstances dictate how ideas and practices are applied. Therefore, ideas and practices cannot be applied the

same everywhere.

5.48 Geert Hofstede’s Cultural Factor

During 1978-83, the Dutch cultural anthropologist Geert Hofstede conducted detailed interviews with 1lakh 16

thousand employees of IBM in 53 countries. Through standard statistical analysis he formulated his theory that world

cultures vary along consistent, fundamental dimensions. (One weakness is that he maintained that each country has

just one dominant culture.) His focus was not on defining culture as refinement of the mind (or "highly civilized"

attitudes and behavior) but rather on highlighting essential patterns of thinking, feeling, and acting that are well-

established by late childhood. Hofstede identified five dimensions and rated 53 countries on indices for each

dimension. His five dimensions of culture are the following:

• Power-distance

• Collectivism vs. individualism

• Femininity vs. masculinity

• Uncertainty avoidance

• Long- vs. short-term orientation

5.49 Power Distance (PD):

Power distance is the extent to which people with less power expect and accept people with higher power within a

culture. It tends to have centralized power and reveal tall hierarchies in organizations with large differences in salary

and status. Subordinates view their boss as a benevolent autocrat and they follow him blindly. Countries with low PD

are apt to view subordinates and supervisors as closer together and more compatible, with flatter hierarchies in

organizations and less difference in salaries and status. Power distance may influence the following aspects

• Hierarchies in mental models: tall vs. shallow.

• Emphasis on the social and moral order (e.g., nationalism or religion) and its symbols: significant/frequent vs.

minor/infrequent use.

• Focus on expertise, authority, experts, certifications, official stamps, or logos: strong vs. weak.

• Prominence given to leaders vs. citizens, customers, or employees.

• Importance of security and restrictions or barriers to access: explicit, enforced, frequent restrictions on users vs.

transparent, integrated, implicit freedom to roam.

• Social roles used to organize information (e.g., a managers‘ section obvious to all but sealed off from non-

managers): frequent vs. infrequent

5.50 Individualism vs. Collectivism (IC):

Individualism in cultures is when individual is anticipated to look only after one‘s self or immediate family but no one

else. Collectivism implies that people are social well beings and are incorporated since birth into strong,

interconnected groups. At work, collectivist cultures give significance to learning, physical environment, skills, and the

intrinsic rewards of expertise. In personal life, they emphasis more on harmony and integrity, will give their best to

achieve behavioral goals, and strive to maintain the relationship.

Individualism and collectivism may influence the following aspects of individual‘s working behaviors.

• Motivation : For individualist cultures, is based on personal achievement and for collectivist cultures it is in favor of

group achievement

• Images of success: For individualist cultures, it is demonstrated all the way through materialism and consumerism

and for collectivist cultures it is of social-political agendas.

• Rhetorical style: For individualist cultures it includes controversial or argumentative Speech and for collectivist

cultures it comprises of official slogans and submissive exaggeration and controversy

• Prominence: For individualist cultures prominence is given to youth whereas in collectivist cultures aged,

experienced, wise leaders are given importance.

5.51 Masculinity vs. Femininity (MAS):

Masculinity and femininity submit to the gender roles. Hofstede focuses on the traditional obligation of audacity,

rivalry, and sturdiness to masculinity and roles such as looking after home and children, people, and empathy to

Femininity. Traditional masculine work includes earnings, recognition, advancement, and challenge. Traditional

feminine work includes building relationships with supervisors, peers, and subordinates; look to provide good living

and working conditions; and employment security to the employees.

Culture with high-masculinity index would focus on the following elements:

• Traditional gender/family/age distinctions

• Work tasks, roles, and mastery, with quick results for limited tasks

• Attention gained through games and competitions

Feminine cultures would emphasize the following:

• Blurring of gender roles

• Mutual cooperation, exchange, and relational support (rather than mastery and winning)

• Attention gained through poetry, visual aesthetics, and appeals to unifying values

5.52 Uncertainty Avoidance (UA):

Uncertainty Avoidance is the extent to which people differ in the degree to which they feel angst about uncertainty or

unknown situations. Cultures differ in their tolerance to uncertainty, creating different rituals and having different

values regarding formality, punctuality, legal-religious-social requirements, and tolerance for uncertainty.

Hofstede noted that cultures with high uncertainty avoidance tend to have more formal rules, require longer career

commitments, and focus on tactical operations rather than strategy. These cultures tend to be expressive; people talk

with their hands, raise their voices, and show emotions. People seem active, emotional, and aggressive and avoid

uncertain situations; and expect structure in organizations, institutions, and relationships and help to make events

clearly interpretable and conventional.

The low UA cultures businesses may be more informal and focus more on long-range strategic matters than day-to-

day operations. These cultures tend to be less expressive and less openly anxious; people behave quietly without

showing aggression or strong emotions People appear easy-going, and relaxed.

High-UA cultures would put emphasis on the following:

• Simplicity, with clear metaphors, limited choices, and restricted amounts of data

• Attempts to reveal or forecast the results or implications of actions before users act

Cultures with Low UA would emphasize on the following

• Complexity with maximal content and choices

• Acceptance (even encouragement) of wandering and risk, with a stigma on ―over-protection‖

• Mental models and help systems might focus on understanding underlying concepts rather than narrow tasks

• Coding of color, typography, and sound to maximize information(multiple links without redundant cueing.)

5.53 Long- vs. Short-Term Time Orientation (LTO)

In the early 1980s, Michael Bond convinced Hofstede that a fifth dimension Long- vs. Short-Term Time Orientation is

needed to be added to the cultural dimensions. Long-Term Orientation plays an important role in Asian countries that

had been influenced by Confucian philosophy over many thousands of years. Hofstede and Bond found such

countries shared the following beliefs:

• A stable society requires unequal relations.

• The family is the prototype of all social organizations; consequently, older people (parents) have more authority

than younger people (and men more than women).

• Virtuous behavior to others means not treating them as one would not like to be treated.

• Virtuous behavior in work means trying to acquire skills and education, working hard, and being frugal, patient, and

persevering.

Western countries, by contrast, were more likely to promote equal relationships, emphasize individualism, focus on

treating others as you would like to be treated, and find fulfillment through creativity and self actualization. Hofstede

and Bond concluded that Asian countries are oriented to practice and the search for virtuous behavior while Western

countries are oriented to belief and the search for truth. Of the 23 countries compared, the following showed the most

extreme values:

China (ranked 1)

Japan (4)

USA (17)

Pakistan (23)

Based on this definition,

Countries with high LTO cultures would emphasize on the following aspects

• Content focused on practice and practical value

• Relationships as a source of information and credibility

• Patience in achieving results and goals

Countries with low LTO countries would emphasize on the following

• Content focused on truth and certainty of beliefs

• Rules as a source of information and credibility

• Desire for immediate results and achievement of goals

Hofstede notes that some cultural relativism is necessary: it is difficult to establish absolute

criteria for what is noble and what is disgusting. There is no escaping bias; all people develop

cultural values based on their environment and early training as children. Not everyone in a

society fits the cultural pattern precisely, but there is enough statistical regularity to identify

trends and tendencies. These trends and tendencies should not be treated as defective or used to

create negative stereotypes but recognized as different patterns of values and thought. In a multi-

cultural world, it is necessary to cooperate to achieve practical goals without requiring everyone

to think, act, and believe identically.

Cross-cultural psychology has two broad aims: to understand the differences between human beings who come from

different cultural backgrounds, and to understand the similarities between all human beings. The similarities may be

sought at all levels - from the physiological (our eyes are able to perceive colour) through the cognitive (we are also

able to perceive perspective, or relative distance), to the personal (we can be both happy and sad, gentle or

aggressive) to the social (we all relate to our parents and siblings), to the cultural (we all share cultural norms with

others of the same cultural background).

5.6 One theory of basic human values which has been very influential is that

of Kluckhohn and Strodtbeck (1961).

Florence Kluckhohn and Fred Strodtbeck set out to operationalise a theoretical approach to the values concept

developed by Florence's husband, Clyde Kluckhohn (1949, 1952). He argued that humans share biological traits and

characteristics which form the basis for the development of culture, and that people typically feel their own cultural

beliefs and practices are normal and natural, and those of others are strange, or even inferior or abnormal. He

defined a value as: "A conception, explicit or implicit, distinctive of an individual or characteristic of a group, of the

desirable which influences the selection from available modes, means and ends of action." (Kluckhohn, 1951, p 395).

5.61 Florence Kluckhohn and Fred Strodtbeck developed a theory which put these principles into action. They

started with three basic assumptions:

1. "There is a limited number of common human problems for which all peoples must at all times find some solution". 2. "While there is variability in solutions of all the problems, it is neither limitless nor random but is definitely variable

within a range of possible solutions". 3. "All alternatives of all solutions are present in all societies at all times but are differentially preferred".

They suggested that the solutions for these problems preferred by a given society reflects that society's values.

Consequently, measurement of the preferred solutions would indicate the values espoused by that society. They

suggested five basic types of problem to be solved by every society:

1. On what aspect of time should we primarily focus - past, present or future? 2. What is the relationship between Humanity and its natural environment - mastery, submission or harmony? 3. How should individuals relate with others - hierarchically (which they called "Lineal"), as equals ("Collateral"), or

according to their individual merit? 4. What is the prime motivation for behaviour - to express one's self ("Being"), to grow ("Being-in-becoming"), or to

achieve? 5. What is the nature of human nature - good, bad ("Evil") or a mixture?

Kluckhohn and Strodtbeck also suggested a sixth value dimension of Space (Here, There, or Far Away) but did not

explore it further. They then speled out the possible answers to each of the questions, arguing that the preferred

answer in any society reflects the basic orientation of the society to that aspect of its environment. The orientations to

each question are shown in Table 1.

5.62 Four basic questions and the value orientations reflected in their answers.

Question Orientation Description

Time Past We focus on the past (the time before now), and on

preserving and maintaining traditional teachings and

beliefs.

Present We focus on the present (what is now), and on

accommodating changes in beliefs and traditions.

Future We focus on the future (the time to come), planning

ahead, and seeking new ways to replace the old.

Humanity and Natural

Environment

Mastery We can and should exercise total control over the forces

of, and in, nature and the super-natural

Harmonious We can and should exercise partial but not total control by

living in a balance with the natural forces

Submissive We cannot and should not exercise control over natural

forces but, rather, are subject to the higher power of these

forces.

Relating to other people Hierarchical (―Lineal‖) Emphasis on hierarchical principles and deferring to

higher authority or authorities within the group

As equals (―Collateral‖) Emphasis on consensus within the extended group of

equals

Individualistic Emphasis on the individual or individual families within the

group who make decisions independently from others

Motive for behaving Being Our motivation is internal, emphasising activity valued by

our self but not necessarily by others in the group

Being-in-becoming Motivation is to develop and grow in abilities which are

valued by us, although not necessarily by others

Achievement (―Doing‖) Our motivation is external to us, emphasising activity that

is both valued by ourselves

and is approved by others in our group.

In proposing orientations to the Nature of Human nature question, Kluckhohn and Strodtbeck suggested that there

are two dimensions involved - good, bad or mixed, and that of mutability, or whether we are born the way we are and

cannot change, or can learn to change (in either direction). Moreover they suggested that "mixed" may mean either

both good and bad, or neutral. To test their theory out, Kluckhohn & Strodtbeck interviewed members of five different

cultural groups in the South-West USA. These included itinerant Navaho, Mexican-Americans, Texan homesteaders,

Mormon villagers, and Zuni pueblo dwellers. In doing so, however, they did not attempt to develop measures of the

Nature of Human Nature orientations, finding them too complex. For the remaining four dimensions, however they

were able to develop real-life situations relevant to all five cultural groups, and questions to probe the value

orientations used by members of those cultures in dealing with the situations involved. They were then able to draw

value profiles of each group, showing the ways in which they differed from each other, and the ways in which they

were similar. All of this work was published in their 1961 book, and immediately made a strong impact on cross-

cultural psychologists.

Since then other theorists have also developed theories of universal values - notably Rokeach (1979), Hofstede

(1980, 2001) and Schwartz (1992). However the theory developed by Kluckhohn & Strodtbeck remains widely used

and has sparked a good deal of research - as any good theory should. A conference of users of the theory in 1998

(Russo, 2000), for instance, attracted over 400 delegates.

Although the Kluckhohn and Strodtbeck theory was derived half-way though last century it has generated much

further research, which has in turn generated new theories. Though their work our understanding of ourselves as

human beings has been increased.

Chapter 6

MNANGEMNT STYLE OF UNITED STATES OF AMERICA

Until the political formation of the United States, the name "America" was used to refer and after the Revolutionary

War, this was referred to South America. Modern uses of the term United States emphasize the country's political

and economic dominance in the western region. The country has political and economic dominance of Anglo. The

inheritance of slavery and the persistence of economic and social inequalities based on race is the defining

characteristic of this country. The Americans are sentient of the differences in spite of the fact that they have

experienced economic revolution. The people are mobile and often leave their regions of origin.

The Northeast part of United States is densely populated. Its widespread strip of urbanization is called as national

"megalopolis." Northeast region has been overtaken by California‘s Silicon Valley which once upon a time was the

leader in technology and industry. The Midwest is the abode of the family farm and is the "corn belt" and

"breadbasket" of the nation and is both rural and industrial. With the decline in the automobile and steel industries

which were central to community and economy the Great Lakes area of the upper Midwest, is now known as the rust

belt.

The South region are known as the sunshine states, retirement havens, and new economic frontiers.

The West has the nation's most open landscape and unlimited opportunity and individualism. The United States is

the world's fourth largest country, with an area of 3,679,192 square miles (9,529,107 square kilometers). It includes

fifty states and one federal district, where the capital, Washington, D.C., is located. Its forty-eight contiguous states

are situated in the middle of North America. The mainland United States borders Canada to the north and Mexico,

the Gulf of Mexico, and the Straits of Florida to the south. The western border meets the Pacific Ocean, and to the

east lie the Atlantic Ocean.

Exterior facade of United States capital in

Washington DC

Americans are expected to speak Standard English. However, most Americans do not speak Standard English;

instead, they speak a range of class, ethnic, and regional variants. Spoken English has many dialects which are been

influenced by Native Americans, immigrants, and slaves. These languages include Dutch, German, Scandinavian,

Asian, African languages and less widely spoken languages such as Basque, Yiddish, and Greek. Thus, spoken

English reflects the nation's immigration and history. Spanish has become more widely spoken, language has

become an important aspect of the debate over the meaning or nature of American culture.

6.1 SYMBOLISM- The flag of United States is the powerful national symbol. It is made up of stripes

symbolizing the original thirteen colonies and fifty stars representing the fifty states.

When there is any reason to protest in US they represent flag. In the nineteenth century, northern abolitionists

hoisted the flag upside down to protest the return of an escaped slave to his southern owner, and upside-down flags

continue to be used as a sign of protest.

6.2 URBANISM, ARCHITECTURE, AND THE USE OF SPACE The United States has numerous states which are either urban or suburban, each having its own history of economic

development. For example New York was founded by the Dutch which was the hunting and fishing grounds of Native

Americans. It became an important industrial center in the nineteenth century, but by the mid-twentieth century its

industries had declined and much of its middle class population had relocated to the suburbs. As the twenty-first

century begins, New York is a "global" city resurrected from decline by its role as a center of finance in the world

economy. Like New York, Chicago and Los Angeles have emerged as important cities in connected world.

6.3 FOOD AND ECONOMY Americans eat large amounts of processed, convenience, and fast foods. The average diet is high in salt, fat, and

refined carbohydrates. It is estimated that 60 percent of Americans are obese. Americans as a whole enjoy the taste

of hamburgers, hot dogs, and junk foods..

Industrial food producers use advertising to associate processed foods with the desirable modern and industrial

qualities of speed, cleanliness, and efficiency. Speed of preparation was essential in a nation of nuclear family and

therefore, gourmet, regional, and alternative styles of eating are highly influential. Gourmet foods, including high

quality fresh and local produce, imported cheeses, fine coffees, and European kinds of bread, are available in every

city and in many towns.

Basic Economy. The United States has highly mechanized industrial economy which is very advanced. The gross

national product is the largest in the world. The country produce more than it requires in the country and therefore it‘s

the world's leading exporter of food.

6.4 SOCIAL STRATIFICATION

Americans do not believe in caste or class rather they believe in equal opportunity. Gambling and lotteries are very

popular in America. However only the top 1 percent of the population has made significant gains in wealth in the last

few years. Similar gains have not been made by the poorest sectors. In general, it appears that the gap between rich

and poor is growing.

Stratification is in evidence in many aspect of daily life. The social segregation of blacks and whites in cities mirrors

their separation. The degenerating houses of blacks in the inner cities are contrasts with giant homes of whites in the

suburbs all across the country is the mark of demarcation. With some exceptions, strong regional or Spanish accents

are associated with working-class status.

6.5 POLITICAL LIFE The United States is a federal republic composed of a national government and fifty state governments. The political

system is dominated by two parties: the Republicans and the Democrats. The powers and responsibilities of the

Federal government are set out in the Constitution, which was adopted in 1789. The national government consists of

three branches viz-a- viz the executive, the legislative and the judicial that are intended to provide "checks and

balances" against abuses of power. The executive branch includes the President and federal agencies that regulate

everything from agriculture to the military. The legislative branch includes members elected to the upper and lower

houses of Congress: the Senate and the House of Representatives. The judicial branch consists of the Supreme

Court and the U.S. Court of Appeals. Leadership and Public Officials. With the exception of local-level offices, politics

is highly professionalized: most people who run for political offices are lifelong politicians.

6.6 GENDER ROLES AND STATUS

W omen are paid less as compared to women though they say they give equal opportunity to males and females as

women are paid seventy cents to every dollar what male earns for the same or comparable job. Secretarial or low-

level administrative jobs are called as pink collar jobs as they are predominantly occupied by females. In the white-

collar world, women are often up to middle-management positions. With a few exceptions, the "glass ceiling" keeps

women out of high management positions.

6.7 MARRIAGE AND FAMILY Marriage is formally a civil institution but is commonly performed in a church. Statistically, marriage appears to be on

the decline. Half of all adults are unmarried, including those who have never married and those who are divorced.

Rates of marriage are higher among whites than among blacks.

With the exception of Vermont, civil unions are legal only between heterosexual adults. However, gay marriages are

increasingly common whether or not they are formally recognized by the state. Some religious denominations and

churches recognize and perform gay marriages. The high rate of divorce and remarriage has also increased the

importance of stepfamilies.

The typical model of the family is the nuclear family consisting of two parents and their children.

6.8 ETIQUETTE Personal posture appears to be insensitive, loud, and demonstrative to people from other cultures, but Americans

value emotional and bodily restraint. The permanent smile and unrelenting enthusiasm of the stereotypical American

may mask strong emotions whose expression is not acceptable. Bodily restraint is expressed through the relatively

large physical distance people maintain with each other, especially men.

6.9 APPEARNCE

Business suit and tie are apt every part of Unites States of America. It includes dark coloured business suits in

typical colors of gray and navy. For an important formal meetings, they prefer to wear a white shirt and for less formal

meetings a light blue shirt can do.

Attires of women includes a suit or dress with jacket. Classic clothing with typical colours of navy, gray, ivory, and

white gives a confident and conservative appearance.

But the part of the country where it is extremely warm summer women use to dress up in business dress, or skirt

and blouse.

Men may conduct business without wearing a jacket and/or tie.

Casual clothing is appropriate when not attending a work related meeting/dinner.

Behavior

Business discussion may take place during meals. However, many times more social discussion happens during the

actual meal.

Business meetings may be arranged as breakfast meetings, luncheon meetings, or dinner meetings depending on

time schedules and necessity. Generally a dinner, even though for business purposes, is treated as a social meal

and a time to build rapport.

Gift giving is discouraged or limited by many US companies. A gracious written note is always appropriate and

acceptable. If gift is given it should not appear to be a bribe.

An invitation for a meal or a modest gift is usually acceptable. People stand in a queue and wait for their turn.

Chewing of toothpick in public is not considered as good. Many public places and private homes do not allow

smoking. In some areas laws have been passed to prevent smoking in public places.

6.71 Communications

People of USA offers firm handshake lasting for 3-5 seconds when they greet or at the time of leaving. It is important

to have a good eye contact during handshake. If they are meeting several people at one time, they will maintain eye

contact with the person with whom they are shaking hands , until they move to the next person.

Good eye contact during business and social discussion shows interest, sincerity and confidence. Good friends may

give a brief embrace, The larger the city, more formal is their behavior.

They use the prefixes such as Mr., Ms., or Mrs., and their full name when they introduce themselves. They generally

exchange business cards during introduction. A smile is a sign of friendliness. They seek permission if they need to

smoke.

6.72 Business hours

The normal business hours are Monday to Friday from 8.30 or 9.00 a.m. to 5 or 6 pm, with a 30 to 60 minute lunch

break.

6.73 Punctuality

Punctuality is a very important rule of business etiquette. Every effort is being made to arrive on time to any

scheduled meetings or appointments. If the person is late for the meeting or an appointment, a call should be given

proclaiming the expected delay.

.

6.74 Etiquettes of Gift Giving

In general, gifts are given on the occasion of birthdays, anniversaries and on Christmas.

It can include a simple card with a personal note written on it. If the person is invited to someone's home for dinner, it

is polite to take a small box of good chocolates or a bottle of wine or a potted plant or flowers for the hostess. They

generally open the gift in public.

6.75 Etiquettes of Dining

It is important to arrive on time if invited for dinner; no more than 10 minutes late if invited to a small party. If the

party is large late upto 30 min is acceptable.

Table manners are more relaxed in the U.S. than in many other countries.

The fork is always held in the right hand and is used for eating. The fork is held tines down. The knife is used to cut

or spread something. To use the knife, the fork is switched to the left hand. To continue eating, the fork is switched

back to the right hand.

A cross with knife and fork on the plate indicated the person is not through with his meals. But if the fork and knife is

laid parallel to each other on the right side of the plate it indicates the meal is over. They can refuse to the specific

foods or drinks without offering an explanation. There are many foods which can be eaten by hand. They generally

serve the food in large serving dishes and are passed around the table for everyone to serve themselves. It is not

advisable to start eating until the host starts or says to begin. It is against the dinning etiquette to put the napkin in the

lap as soon as one sits down. They always leave a small amount of food in the plate when finished eating.

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Chapter 7 JAPANESE STYLE OF MANAGEMENT

―I do not want my house to be walled in on all sides and my windows to be stuffed. I want the cultures of all the lands

to be blown about my house as freely as possible. But I refuse to be blown off my feet by any.‖ - (Mahatma Gandhi )

7.1 About Japan Japan is located in Eastern Asia, island chain between the North Pacific Ocean and the Sea of Japan , east of the

Korean Peninsula. Its capital is Tokyo. It has the population of 127,288,416 (July 2008). They follow both Shinto and

Buddhism including Christianity

7.2 Japanese Language

In Japan almost 99% of country‘s population speak Japanese making it the most spoken language of the world. The

origin of the Japanese language has been predicted and approved to be close in syntax to the Korean language.

Colloquial languages are used in areas, particularly in Kyoto and Osaka.

7.3 Japanese Society & Culture

Japanese culture does not turn down anyone‘s requests as they believe that this gesticulation can cause

embarrassment and loss of face to the other person. But if they do not agree on the request they will say, 'it's

inconvenient' or 'it's under consideration'. Japanese people do not criticize, insult or put anyone on the spot openly.

They believe in harmony which is the guiding philosophy for the family, business settings and society as a whole. The

education system of Japan accentuates the mutual dependency of people, and therefore children of Japan are taught

to work in a group.

Japanese people are very polite and take personal responsibility. They work together for the whole, rather than the

individual.

7.4 History of Japanese-style management

Tokyo Photos

Tokyo Otemachi Business District

An economic historian, Yasuoka Shigeaki, has cut off the three areas of industry where the Japanese style of

management was first recognized subsequent the changes brought about by the Meiji Restoration.

1. The areas that were giving benefit in the beginning like silk and tea, which were the good products for export.

2. Those industries and products that were not affected by the international economy such as salt, soya-bean paste,

soy sauce, and shake and fuels such as coal and charcoal; materials for housing such as straw floor mats and wood;

and indigenous clothing.

3. Those areas and their products that has a intricacy in the beginning, for example, cotton and wool, which suffered

strong external competition (Yasuoka 1981).

This procedure was most evident in the last group, where, in the transition to import swapping and expansion of

exports, Japanese-style management became firmly institutionalized.

7.5 BUSINESS MANAGEMENT STYLE

Japanese Non-Verbal Communication

1. Japanese rely on facial expression, tone of voice and posture. Non verbal communication is also being given

due importance.

2. Making frowning faces when someone is speaking is understood as a sign of

incongruity.

3. It is also considered as disrespectful to stare into the person's eyes, especially who is senior in age or status.

4. In crowded state of affairs the Japanese avoid eye contact to give themselves private space.

Japanese Hierarchy.

5. Japanese are cognizant of age and status and they follow it religiously.

6. Every person has a distinctive position in the hierarchy, whether it‘s a family unit, the extended family, a social

or a business situation. Even at school children are made to learn to call the senior students as senpai and

junior as kohai.

7. The eldest person in a group is always honored. In a party they will be served first.

7.6 Meeting Etiquette 1. In Japan they greet each other in very formal and ritualized way.

2. People show great deal of reverence and regard to somebody who is higher in status or in the age.

3. Japanese traditional form of greeting people is the bow. How much one bows is based on the relationship.

7.7 Gift Giving Etiquette 1. People of Japan love to give and receive gift, it is highly ritualistic and significant and the way it is wrapped is

also very important. Gifts are always wrapped in Japan and is never opened in public.

2. Gifts are given for many occasions which can be a good quality chocolates or small cakes.

3. Lilies, camellias or lotus are not given as the gift as they are associated with funerals. Even white flowers of

any kind are also associated with funerals.

4. Japanese do not give potted plants as they are considered as encouraging sickness, but a bonsai tree can be

given.

5. Never give anything in the number of nine.

7.8 Dining Etiquette Japanese rarely invite anyone to their house.

1. One is supposed to remove their shoes pointing away from the doorway before

entering the house.

2. It is not appreciated if one arrives late for more than 5 minutes late if invited for dinner, but if it‘s a large

social assembly arriving bit late can be accepted

3. People always dress in formal unless being told that the occasion is informal.

7.9 Table Manners 1. People in Japan follow the protocol very religiously, so one wait unless they are being said where to sit.

2. The eldest person or the honored guest is made to sit in the center of the table and he starts with the eating

first.

3. People in Japan do not like if they pierce food with chopsticks, or if it‘s pointed towards the person or

crossed when putting them on the chopstick rest, therefore they learn how to use the chopsticks. Its always

advisable to return the chopsticks in its rest after every few bites or when speaking or drinking.

4. It is always advisable to put bones on the side of the plate, and leave a small amount of food on the plate

when finished eating.

5. Generally they do not like any discussion at the table as they like to relish their food.

7.10 Dealing with the Foreigners

1. People of Japan realize that foreigners cannot work in Japan.

2. They can tolerate mistakes till the time they show respect.

7.11 Associations & Communication 1. Personal relationship is very important and Japanese like to do business with people with whom they have

the relationship.

2. It is good to give greetings cards or seasonal cards to maintain relationship.

7.12 Business Meeting Etiquette 1. It is require to take appointments and preferably one week in advance for meetings.

2. It is important to arrive on time for meetings. Punctuality is important.

3. Hierarchy is followed, and they respect people who are higher in status, position, and age. The most senior

Japanese person will be seated furthest from the door, with the rest of the people in descending rank until

the most junior person is seated closest to the door.

4. It is desirable to accept the request, how so ever difficult or non- profitable it may appear as they look for

long-term relationship.

7.13 Business Negotiation 1. Japanese do not confront and do not say ‗no‘ and give importance to non verbal communication.

2. They have a difficult time saying 'no', so you must be vigilant at observing their non-verbal communication.

3. Group decision-making and consensus are important. They prefer board agreements and mutual

understanding so that when problems arise they can be handled flexibly.

4. They believe in written contracts.

5. During negotiation with the Japanese, it is not acceptable to raise voice or loose temper, one may loose the

deal. Be patient and try to work out as Japanese remain silent for long period of time. They even close their

eyes if they are listening attentively.

6. Japanese rarely compromise, they want that both the parties to come with their best offers. They keep the

room open for re-negotiation as they not take the contracts as final agreements.

7.14 Dress Etiquette 1. Japanese go for conventional business attire.

2. Men prefer to wear dark-coloured, business suits and women dress up conventionally.

7.15 Business Cards 1. The Japanese exchange business cards when they meet people. The card is in Japanese. So it is advised

to have one side of the business card translated into Japanese.

2. They keep quality cards with them and keep their cards in immaculate condition.

3. They give their business card facing Japanese side to the beneficiary.

4. It is compulsory that the business card should include the title of the person, to make them aware of the

status the person is holding in the organization and during the meeting it has to be placed in front of the

person owning the card on the table which can be kept in the business card case at the end of the meeting.

7.16 Japanese Business Culture: Soichiro Honda, manager and entrepreneur

The romantic image of the founder-millionaire wearing overalls. tinkering visibly with some mechanical marvel in

workshop or lab, is often reality. So it was with Soichiro Honda, in many ways the least typical of the post-war

Japanese economic victors: but simultaneously the most visible archetype of the success of Japanese business

culture, though an eccentric one. 'Mr Honda', said one baffled journalist, ' is a management executive who always

wears red shirts and tells naughty stories when drinking.'

The drinking was important to Honda. In his early sixties, the great man admitted that he didn't understand

computers. The fact that he couldn't keep up with the technology, though, was only one factor in his decision to take

relatively early retirement. He also couldn't drink so much sake as before, while in sex his 'powers of doing and

recovery' weren't what they had been...' and 'without sex and sake, I should quit the life of an entrepreneur.'

In contrast to Honda, Henry Ford I didn't totally surrender power until death took over the decision, and he was

notably abstemious in both wine and women. Yet Honda was known as 'the oriental Henry Ford', and deserved the

description. Like Ford, whose first business efforts were littered with failures and false starts, Honda learmt the

principles of efficient production quality the hard way. Out of 50 piston rings tested in Honda's first manufacturing

venture, only three passed. Not surprisingly, the business failed.

His 1947 notion, to make motorized bicycles with two-stroke engines adapted to run on pine-root extract, was no

more promising. Five years later, however, Honda came of technological age. With the Japanese market in

recession, Honda invested $450,000 in German, Swiss and American machine tools, reckoning that they were the

best in the world. He then 'reverse-engineered' the European bikes he was copying - taking them apart to see how

they were made: and discovering that their best was simply not good enough.

European manufacturers believed it was impossible to run motorcycle engines at 15,000 rpm, with even faster bursts.

Honda not only proved that you could, but also started to win Grand Prix races all over the world. Super-design went

with super-efficiency in production engineering. At Honda's motorcycle plants not a single storeroom existed for

parts, raw materials, or finished machines; deliveries went in at one end, and finished bikes, up to one every seven

seconds, moved straight on to double-decker trucks at the other.

Building the world's 24th largest company (1993 sales, $35.8 billion) on the pillion of the motorbike is not only a prime

economic achievement. It's one that, before Honda demonstrated the method, would have been disbelieved -

especially by the established British companies, bearing once-proud names such as Norton, Matchless, and BSA. In

the Honda era, their decline and fall ended in pathos, with workers at the once-famous Triumph factory fruitlessly

defying the management's efforts to close the works down forever.

Like those benighted British firms, the Japanese car establishment refused to take Honda's car plans seriously -

especially when they saw his first, doomed model: little more than a covered motorbike. His vault, from a standing

start, to number three in Japan (and number one in America) is all the more remarkable - given that the opposition in

Japanese cars was infinitely tougher than the biking Brits. Honda recovered from his false start to build, very

deliberately, a 'world car': he undertook deep global research, wrote Robert Shook, into 'everything from road

conditions to driving habits.' The result was the Civic.

As in bikes, so in cars. Honda's strength was to be ahead or abreast in all the improvements to the car in his time,

from fascias and four-wheel steering to engine and braking systems - even though, atypically for a Japanese

company, Honda would not buy in technology. As a top Honda man later explained, 'There are some technologies

that we didn't have...But when you buy technology it remains frozen, a foreign thing that is not part of yourself, and in

the end you don't know where to go with it.'

It's hard not to see in this philosophy the highly visible example of Soichiro Honda writ large. There's the indefatigable

inventor who (as with the non-polluting engine) prefers to create his own technology because, if he leaves tasks to

other companies, there will be fewer fields to conquer. The whole secret of Honda was his direct participation in the

life of the firm and its employees - much too direct in the early days, to judge by one anecdote.

'A bolt that had been tightened by a young worker made a few more turns when Honda did it himself. "You damned

fool. This is how you're supposed to tighten bolts," shouted Honda, as he hit his employee over the head with a

wrench.'

While definitely visible, that intervention isn't how the West pictures Japanese management. Honda's partner, Takeo

Fujisawa, fitted the pattern better when asked this question by the head union negotiator. 'What do you think of the

pay offer you're making to us?' According to author Tetsuo Sakiya, Fujisawa replied that 'The offer is so low, I think

it's ridiculous.' The boss went on to admit that 'It is our (management's) fault that the situation has become such that

we had to make such a low offer'; predicted that sales would pick up in March; proposed a new pay negotiation at

that time; and received thunderous applause.

Honda himself stayed clear of industrial relations (wisely, no doubt, in view of his penchant for hitting workers with

wrenches); yet it was he who stumbled on the management style which eventually got the company out of manpower

messes for keeps. Honda got angry with 'workers who played baseball on the plant grounds', saying to himself, 'In

collective bargaining, they complain about having to work too hard. But when it comes to playing baseball, they do it

until they become completely exhausted, even though baseball does not bring a single yen to them. What kind of

men are they?'

But then he thought, 'I must recognize that man achieves the highest degree of efficiency when he plays. If someone

says he works out of loyalty to the company, he is a damned liar. Everyone must work for himself. Even I work

because I like working. I must create a workshop where everybody will enjoy working.' Which is what Honda

proceeded to do, not only leading his men by example, but changing the example to one that suited both them and

the company.

Visibility isn't only a matter of contact and example between management and men. That between managers and

managers is also crucial. One of Honda's successors decided to move the executive suite from the customary top

floor to mid-building (so that senior management would spend the minimum time elevating up or down). On that

executive floor, there are no separate offices - not even for the chief executive. He sits in a corner at a round desk.

The other executives are scattered about the enormous room, also at round desks.

Why round? So that anybody who wants can sit down for a discussion at will. That's eminently practical. But you can't

ignore the high and highly visible symbolism of this office layout. Taking the executive suite off the top foor signals

that there is no exclusive, literally higher authority. Putting the emphasis on easy access to colleagues signals that

involvement figures high in the corporate values.

Then, placing top executives in an open office signifies the intention to have an open style, in which rank and status

have no practical importance. The round tables indicate that decisions are only to be taken after full discussion

among colleagues who are always on tap. The proximity of the desks establishes that lines of communication are to

be short and easily opened. The classic Western office layout, based on the 'behind closed doors' principle, is the

antithesis of visibility and delivers an utterly contrasting message.

The Honda message is entiely consistent with the visible example of the founder. In the 'sex and sake' valedictory

quoted earlier, Honda revealed that neither he nor Fujisawa had seen any operational papers or attended any

operational meetings for the previous ten years. By playing no part in operational management, despite their

enormous success and prestige, the two men enabled their successors to go beyond them. That was always their

intention, as a banker discovered when he once addressed the pair as follows:

I think you have an outstanding business going for you. I presume, of course, that you will eventually hand over the

company to your sons.' They replied as one man, 'We have no such thought whatsoever.' As Honda explained, with

a rhetorical quote, 'If the company belonged to the... family, who would have the motivation to work for the

company?'. The unanimity of the partners, on this and other issues, was a powerful force in Honda's success and

dates back to a 1949 conversation between Honda and Fujisawa.

Honda was then forty-two; and Fujisawa, four years younger, informed Honda, already known as a brilliant inventor,

that 'I will work with you as a businessman. But when we part I am not going to end up with a loss. I'm not talking only

about money. What I mean is that when we part, I hope I will have gained a sense of satisfaction and achievement.'

A very Japanese wish, but a perfect expression of what business friendship means. They never did part - retiring by

mutual agreement on the same day twenty-two years later.

You can get the flavour of their creation from a story about the initial build-up of Honda. It was based on a little, low-

powered bike called 'Dream Type D.' The name arose when somebody, at a sake and sardine party to celebrate the

prototype, remarked that it was 'like a dream.' At which point, Honda yelled out, 'That's it! Dream!' The story comes

form an excellent book entitled Honda Motor: The Men, the Management, the Machines, by Tetsuo Sakiya.

Honda, though, made plenty of mistakes on the road from the Dream to the Civic and beyond. 'Success', he wrote,

'can be achieved only through repeated failure and introspection. In fact, success represents 1% of your work, which

results only from the 99% that is called failure.' The errors occurred even in the technology where he was most

triumphant, engines. He obstinately insisted, against all contrary opinion in the company, that air-cooled engines, not

water-cooled, held the future for cars. Finally, Fujisawa resolved the issue at dinner with his long-time partner. Here's

Sakiya's fascinating account of the proceedings:

'They had not seen each other for quite some time and Fujisawa's mind was made up: "If Mr Honda refuses a water

cooled engine, this would mean he is following a path different from mine. If the two of us cannot go in the same

direction, our teamwork will not function." At the dinner, Honda told Fujisawa, "The same thing can be achieved with

an air-cooled engine, but I guess that's difficult for a man like you to understand." Fujisawa replied, "You can do one

of two things. You can continue to serve as the president of our company, or you can join the engineers at Honda

Motor. I think you should choose now."

'Honda looked unhappy to have to make such a decision, but replied, "I'm sure I should continue to be the president."

"Then," said Fujisawa, "you will permit your engineers to work on water-cooled engines, too, won't you?" "I will,"

Honda agreed. Their conversation had lasted no more than a few minutes, after which the meeting turned into a party

with both of them drinking sake and singing old folk songs together. The next day Honda went to the R & D centre

and told the engineers, "Okay, now you can work on water-cooled engines."'

Although Honda was never seen to smile when anybody talked about water-cooling thereafter, his surrender was

another marvellously visible example to everybody else. Remember, this was a highly combative, competitive man,

who hated to give in to anybody or anything, especially a rival. That characteristic, highly developed in the Japanese

economy as a whole, has been a major factor behind the national success. In Honda's saga, the greatest example

came in the motorcycle wars of the early 1980s.

This domestic Japanese bloodbath began with near-defeat. Yamaha's motorbike sales had pulled tantalizingly close

to Honda's: 37% of the domestic market against 38% - and you can't get much closer than that. There was a reason

for the rise, as Yamaha's president shrewdly spotted. His words were reported by James Abegglen, a veteran Japan

watcher and resident, and George Stalk, Jr., in their book Kaisha: 'At Honda, sales attention is focused on four-wheel

vehicles. Most of the best people have been transferred (into cars). Compared to them, our specialty at Yamaha is

mainly motorcycle production... If only we had enough capacity, we could beat Honda.'

Suiting the action to the words, Yamaha decided to match Honda new model for new model; then it went for the

supreme prize. In 1981 Yamaha announced a new factory that would inside one year take the domestic lead; within

two years the upstart would be 'number one in the world.' This was not a threat that Honda could brush aside. Its

reading of the situation was as clear as Yamaha's: 'Yamaha has not only stepped on the tail of a tiger, it has ground it

into the earth.' Honda adopted a new battle cry: 'Yamaha wo tsubusu,' translated as 'We will

crush/break/smash/butcher/ slaughter/or destroy Yamaha.'

The message got across. Whatever Yamaha produced, Honda produced more, until the Japanese islands seemed in

some danger of sinking under the weight of unsold motorbikes.In innovation, the counterattack was even more

dramatic. In eighteen months, Honda introduced 81 new models, against only 34 from Yamaha. That understated the

full impact of Honda's devestating response. Its 81 new models were accompanied by 32 discontinuations. Since

Yamaha could only manage three withdrawals, it was outgunned by 113 changes to 37. 'The customer,' says Kaisha,

'was seeing fresh Hondas and increasingly stale Yamahas.'

After a year of blood, sweat and tears, the story had a happy ending - for Honda. The group chairman at Yamaha

observed the wreckage and said, 'We plunged like a diving jet. My ignorance is to blame.' The Yamaha motorcycle

boss, who had started the wars, now saw reality: 'We can't match Honda's product development and sales strength.

From now on I want to move cautiously and ensure Yamaha's relative position.' Personally, he didn't have the

chance to pursue this more sensible strategy: he was out, and the great motorbike wars were over.

Those victorious product development strengths are no accident. At Honda, the production of new models and new

ideas is thought so important that it's a young man's job. Development teams are selected to match the age group at

which the new model is targeted, and engineers in R&D who haven't reached top status by forty are packed off

elsewhere - just as Honda packed himself off when he considered that his prime usefulness was over. His successor,

a mere 43-year old, in turn made way for a younger man ten years later.

As Rosabeth Moss Kanter has pointed out, a key to Honda's success was that its resident genius used to work

directly on new products with the engineers. That was only posible because, as noted above, he and Fujisawa had

delegated all operational responsibility. Honda was thus free to concentrate on his vision of the future and to share it

visibly with others. The corporate vision statement is like the founder himself, enormously practical:

1. Quality in all jobs - learn, think, analyse, evaluate and improve.

2. Reliable products - on time, with excellence and consistency.

3. Better communication - listen, ask and speak up.

Developing a philosophy built on the experience of a practical engineer, the founding father had created a corporate

culture that would go on working towards his objective - nothing less than becoming and remaining the world's best

motor manufacturer - long after his own active day. His influence, like the man himself, is still highly visible. And the

visibility is inseparable from the success.

Source:- By Edward De Bono and Robert Heller

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CHAPTER 8

GERMAN STYLE OF MANAGEMENT

Germany is located in Central Europe, bordering Austria 784 km, Belgium 167 km, Czech Republic 646 km, Denmark 68 km, France 451 km, Luxembourg 138 km, Netherlands 577 km, Poland 456 km and Switzerland 334 km. Its capital is Berlin. It has temperate and marine climate with cool, cloudy and wet winters. Summers are occasionally warm.

Germany has Population of about 82,424,609 as per the census report of July 2008 and as per the ethnic make up is concerned the country has 91.5% German, 2.4% Turkish, and 6.1% others made up largely of Greek, Italian, Polish, Russian, Serbo-Croatian and Spanish. As far as religion is concerned it has 34% Protestant, 34% Roman Catholic 3.7% Muslim and 28.3% unaffiliated or others.

German is the official language of Germany. 95% people speak German. The other language that are spoken in Germany are Sorbian, Danish, Roman, Turkish and Kurdish.

German culture is a planning culture. They are the masters in planning so that they can take precautions in their activities or in the decisions that they take. These people are very particular about the rules and regulations. They segregate work life and personal life. They use their time in most effective and efficient way at the work place ad try to leave the office at time indicating that they have planned their work and time well.

Germans are very fond of their homes and keep every part of their home very clean and in order and only close relatives and friends are invited to the home.

8.0 BUSINESS CULTURE IN GERMANY

An overview

Germany has established its management style after World War II with the sense of pro activeness and long term goals. Germans style of management is very rigorous. They believe in competition. They work as a team to win over the competition. They might compete for the same market but they believe in market dominance rather than market share. E.g. Daimler-Benz and BMW competing for a specific niche. Germans companies deride price competition as far as possible. They compete for excellence in their products and services

Germans do not compromise on product quality and product service. For them the customer satisfaction is the most

important and hence they even are ready to customize the product according to the customers‘ requirement. They

work on four watchwords

1 Quality 2 Responsiveness

3 Dedication 4 Followup

German managers are very much production oriented and hence they intimately know their production line and floor.

Even the top managers are aware of their floor and working. They are the strong followers of rules and regulations.

They work in accordance with the government standards, policies and regulations. All German products are subject

to norms--the German Industrial Norms ―Deutsche Industrie Normen‖-DIN established through consultation between

industry and government. This is done by deriving the strong inputs from the management associations, chambers of

commerce, and trade unions.

In Germany they do not prefer any type of litigation. Therefore the commercial groups do not have many legal staffs; even the number of lawyers in Germany is also not much. They believe in open discussion on any type of misunderstandings or disagreement caused over the meeting, sometimes over a beer, or sometimes in a get-together called by a chamber of commerce or an industrial association. They try to resolve the differences with pacification.

8.1 MAKING APPOINTMENTS

1. Punctuality is very important in German business culture. Arriving even five to ten minutes late

than the specific time is alleged as late particularly for the subordinate.

2. Germans do not entertain without appointment. It is important to take appointment well in

advance preferably 1-2 weeks. If by any reason the person is coming late, it is expected out of

him to inform his delay and the cause of it.

3. Letters should be addressed to the top person in the functional area, including the person's name as

well as their proper business title.

4. If the appointment is taken through letter it should address to the top person in the functional area

clearly indicating the person's name and the business title. The letter should be written in German.

5. The ideal times for business are between 10:00 a.m. and 1:00 p.m. or between 3:00 p.m. and 5:00 p.m.

6. Avoid scheduling appointments on Friday afternoons, as some offices close by 2:00 p.m. or 3:00 p.m.

on Fridays.

7. Making changes in the time and place of appointment is not acceptable.

8. If you write to schedule an appointment, the letter should be written in German.

8.2 BUSINESS DRESS

1. Business dress is formal with dark and conventional suits for both men and women.

2. Casual outfits like pants with a jacket or blazer will not be appropriate for the meeting

especially if the person is meeting for the first time.

3. In East Germany female employees should not wear excess flamboyant ornaments as the

standard of living in this part is lower than the west part of Germany part as it can cause

resentment.

4. For social gathering informal dress can be worn, but not very informal clothes. Men can

attend without jacket and tie. But formal invitation means formal.

8.3 COMMUNICATION

1. The newcomer should introduce first to the group. German culture is highly fact oriented and

hence do not facilitate emotional comfort or social networking to the new comers.

2. The Germans are not in the notion where they mingle with the strangers. The rationale behind this

is that they have the ―village community‖ mentality against the ―settlement community‖ of the

Europeans and Australians. Therefore if one sees the party of Germany one can find that the

people who are acquainted with each other are found interacting and hanging out together and

they do not give chance to the strangers to meet and interact.

3. Germans are interested in the academic credentials of the person to do the business.

4. German‘s are very formal in communication. They do not have believed in the concept of an open-

door policy. They keep the doors of their workplace closed. They believe in written communication

so that they can have back up to make the decisions and to maintain a record of decisions and

discussions.

5. In German business protocol compliment giving is not the part of business, especially if its given in

a very casual acquaintances then it is taken with suspicion.

6. In Germany it is considered bizarre and irritating to ask question while moving without waiting for

the answer. Most people will love to give the detail reply of the question asked.

7. While conversation there are certain topics that they love to talk about such as

Sports, particularly soccer , travel, recent holidays, current events, politics, Work and professions,

previous experiences and travels in Germany and other parts of Europe, beer is over and over

again a good topic of conversation.

8. Germans do not feel comfortable in discussing about topics of World War II, personal questions

viz-a- viz salary, cost of personal objects, work and family life.

9. Prefixes are used before the name to call a person. Only family members and friends are called by

the first name.

8.4 SELECTING AND PRESENTING BUSINESS GIFT

1. In German culture offering a small gift at the time of first meeting is courteous, preferably pens,

classy office stuff, or imported liquor.

2. Extensive and significant gifts should be given in more official and public environment.

3. Gifts are generally offered when invited for social occasions such as dinner and it should not

be very expensive. Gifts can include a bunch of roses, fine chocolates or a good wine. Gifts

should be properly wrapped.

4. Avoid giving lilies as it is used in funerals. Dresses, perfumes etc has to be avoided as it can

be considered as too personal.

5. Beer is not considered as a good gift, as Germany itself is the producer of finest brands of the

world.

8.5 GERMAN NEGOTIATION STYLE

1. One should carry enough business cards if dealing with the Germans. The business card

should be detailed carrying all the information like the first name, title or position that the

person is holding and also the degree earned from the university.

2. Meetings are always formal presided by the chairperson. Germans are very straightforward in

their communication so if the person is new should clarify all the doubts to prevent any type of

misunderstandings or complications.

3. German meetings are agenda based as they are very schedule-oriented. The discussions are

based on facts and information. They are very analytical and work on the facts to come up with

the decision.

4. Once the contract is signed any amendments or manipulation is not possible unless both the

parties agree on it.

5. Germans see all the details while dealing so it is required to do detailed planning and

preferably schedule few informal initial mini-meetings so as to make the party aware of the

issues or rules and regulations.

6. Germans don‘t get impressed by ostentatious presentations. Presentations should be

substantial and should have more technical data and fact.

7. Germans are very direct in disagreement and criticism. They can say no directly.

8. Germans will not compromise easily rather they will like to look for common ground. This may

become the best route to make progress when negotiations reach a deadlock. Any attempt of

assertiveness and confrontational with a significant German company are usually

counterproductive.

9. Germans are generally very formal but they become very emotional if their sense of order and

routine becomes challenged.

GERMAN MEETINGS

1. Germans are generally very private people. They don‘t like to discuss personal matters during

business negotiations.

2. Germans need more time to form relationships on a personal level. At the beginning of a new

relationship, an excessive efforts to force a personal level of contact can leave the other with an

uncomfortable feeling of obligation to you.

3. Decision-making in German business culture is slow, long-drawn-out, and every detail relating to

the proposal will be conscientiously examined. So it should not be expected that substantial

decisions can be made spontaneously at the table. However, once a decision is finally made, it is

extremely difficult to change.

4. In German culture, rules of any kind are meant to be taken seriously.

5. At the end of a meeting or presentation, Germans often signal their approval or thanks by gently

rapping their knuckles on the tabletop instead of applauding.

6. Germans look for a very detailed agenda for the meeting and will work efficiently point by point

with very little time given to small talk or other secondary points which they considered

unimportant. This efficient and time-managed way of conducting meetings result in very typical

communication patterns, especially if the intercultural communication language is German.

7. Questions are often very hard and fast after a brief introduction of persons. One may often be

interrupted in the middle of the answer, once the other party has received a satisfactory answer to

his question, and he will move on to the next question.

8. Interruptions are also quite common if the other person is getting off topic. They focused on the

logic and integrity of the facts of an argument and feel no restraint in carrying out his or her point.

Persons from highly relationship-oriented cultures, where emotional comfort and the preservation

of ―face‖ has priority over truth-based issues, must therefore be careful of being ―run over‖ in

meetings and discussions with fact-oriented communicators.

9. Though interruptions are effective tactics in a discussion, but Germans will continue to speak, or

even louder in order to avoid being interrupted by someone else. In such cases, one continues to

speak until the other simply gives way.

8.7 GERMANS ACCEPTABLE PUBLIC CONDUCT

1. In German one has to be careful in addressing a person in English. Though they speak very

good English but may well feel affronted at the presumption especially among the age group of

45 to 60.

2. Germans do not accept the greetings of the strangers in the formal official environment even

though they make an eye contact with each other. The reason is that they believe that, ―since I

don't know this person, there is no relationship, so there is no need to get into superficial

pleasantries‖.

3. Germans rather prefer to have a third-party introduction. This communication behavior has

evolved from the historical ―village mentality‖ as they do not expect to be greeted by a stranger

and even they will not greet the strangers. Small talk is hard to get hold of for Germans. They

talk so affectionately when they get to know each other well which is generally reserved for a

close circle of family and friends.

4. In Germany the organizational culture is known as a ―middle hierarchical‖ culture as there is

well defined organizational hierarchy which they observe very strictly.

5. At the time of arrival and departure they go for firm and brief handshakes in both business and

social relationships. But when it is among good friends and family members hugging and

kissing on both cheeks are common (hand-shaking between parents and grown children, or

between adult siblings is not at all uncommon).

6. When the person is interacting or talking eye contact during the introduction is taken as very

important and it should be maintained as long as the person is addressing.

7. Germans despite of having high value of rules and social conduct do not have that trait in

public life like, queuing or waiting for the turn.

8.8 Case study: IBM Germany (Gaby Spaeker/Hans-Juergen Weissbach)

Introductory

IBM was awarded with the "Innnovationspreis der deutschen Wirtschaft 1991" (German business prize for innovation)

for its plant agreement concerning the introduction of "Außerbetriebliche Arbeitsstätten" (off-site working places).

Off-site working-places enable the employees to work partly at home. The IBM case can be regarded as a typical

kind of 'alternating' telework (in other words, a combination between work at home and at the company's working

place). Thus, the characteristic for this type of work is not so much the technology used but rather the place where

the tasks are fulfilled. IBM categorises this type of work consciously against the traditional terms of "homework" and

"telework", because the first one suggests an unqualified type of working at home, whereas the second is often used

to refer to sales representatives equipped with a laptop.

Arrangements for off-site working have existed since 1988, when IBM started to test the possibilities by means of

three pilot projects, in the areas of development, management and monitoring of the computer centre. Evaluation

studies concerning the pilot projects came to the conclusion that this way of working could positively benefit the

company, its clients and also the employees themselves.

The plant agreement was initially limited to a two year period. However, in the light of first experiences it became

clear in 1993 that further negotiations were necessary, as new ways of working off-site began to develop which were

not covered by the original agreement, and the plant agreement was subsequently extended. Nevertheless the

official number of participants dropped from about 180 in 1992 to less than 140 by June 1993).

Why was the off-site working places agreement introduced in 1991? According to one early participant: "The time

was ready for innovation. It was obvious that certain tasks can be undertaken at home. For example, it doesn't make

sense to be on call at work for a whole night, and have to travel to and from work as well, if problems which crop up

can easily be solved at home during a few minutes." The organisational implications of off-site working were

researched by the company's personnel department, in advance of a decision by management to proceed.

One major reason given for the policy's introduction by IBM was the company's desire to ensure that it was attractive

as an employer to potential new employees. This might seem paradoxical, given that the company began a process

of shedding several thousand jobs over a period of years only a short time after the introduction of this type of

telework. But IBM's plan is to maintain a commitment to full employment practices, albeit at an overall lower basis,

once it has reduced the number of employees by early retirement arrangements.

Another company motive for off-site working was stated as the need for increasing productivity. Increased personnel

costs should be compensated by increases in creativity and motivation.

The company is engaged in a business sector which is subject to permanent change, and which as a consequence

requires new training initiatives and new qualifications from its employees. Recently, there has been a shift of

emphasis from production to information services, so that system software knowledge and user programming

becomes more and more important.

This has meant that the importance of off-site working arrangements should be enhanced:

The percentage of jobs which include data processing tasks will increase to nearly 60 % until the year 2000 according to cautious estimates. These are jobs which are suited for working at home.

The technical possibilities of working at home have improved as well. Faster PCs and communications links mean that tasks can be performed quicker and cheaper.

Organisational aspects

Looking at the expected increase in productivity in conjunction with the extra costs of providing equipment for home

workplaces meant that there have been restrictions imposed on the types of work considered suitable for this sort of

working. In practice, it has primarily been highly qualified staff who have been able to benefit from this form of

teleworking. Though the plant agreement explicitly covers all employees (in contrast to IBM agreements in other

countries), clearly the opportunity to undertake work tasks at home is much greater in the service and software

development departments than in the production division.

The most relevant factor remains the potential increase of productivity brought about by home-based working, and

this is more likely to be possible for highly qualified creative staff than for an employee engaged, say, in typing work.

The use of home-based teleworking developed slowly and step by step, because IBM wanted to adopt innovations

cautiously, and to meet the company's real needs of the time. By October 1992, a year after the agreement had

been concluded, 180 homes of employees had been equipped as working places. This process was under the

responsibility of a number of separate departments, which had to finance off-site working out of their budgets. Each

equipped home cost (depending on the hardware installed) between DM 6.000 and DM 30.000 per year, a figure

which includes the monthly telecommunication charges and a small reimbursement of DM 40 to the employee for

electricity expenses and for the use of private accommodation for work.

It is not only the financial arrangements for teleworking which have been decentralised within the company. The

decision to allow an employee to telework is taken by that person's immediate line manager, who considers both the

individual's aptitude to work in this way and the nature of the jobs they are undertaking. Both the employee and the

manager can initiate a proposal to telework. Two central principles of the plant agreement are that teleworking is

only to be undertaken voluntarily and that there is a right to return to the company workplace at any time. This means

that the company maintains the previous working site of the teleworking employee; in the longer term, IBM hopes to

save office space, but this is not currently an explicit objective of the off-site working agreement.

At least once a week the teleworker is expected to visit the company's office, in order to stay in contact with

colleagues and to discuss arrangements with their line manager. The manager is supported by a co-ordinating

person (one for each sector), who has the particular task of handling the administrative aspects of the maintenance

of the off-company working places. This person serves as a connecting link between the department, with its 10-20

teleworking employees, and the administration.

The decentralisation process introduced for off-site working means that it is the line manager who has the key role in

ensuring its success. IBM does not plan to monitor the programme at a higher level within the company. An external

evaluation study - carried out by the University of Tuebingen in co-operation with the Fraunhofer-Institut fuer

Arbeitswirtschaft und Organization (IAO) - has been undertaken but its findings are not fully published. Therefore an

assessment of cost savings and levels of satisfaction by participants engaged in off-company work is not available.

Some indication of the scheme's success with employees can be gauged from the fact that no-one has yet asked to

leave off-site working to return to the workplace.

Technological background

An online-connection is available for all home-based workers. This is not necessarily a dedicated data line, but

(depending on the requirements and cost) may be a standard phone line or ISDN line. Some employees (for example

those engaged in word processing) manage without an on-line connection, simply using their PC for their work.

All the technical equipment necessary (hardware, software and data links) and furniture was provided by IBM. An

external company carried out a security check, and undertook to arrange for new telecoms links to be installed, if

required. IBM employees were already familiar with e-mail, which has been available for several years and since

working processes did not change with the introduction of off-site working, training for employees beginning the

programme was not considered necessary.

Control and management

"Management by objectives" has been part of the entrepreneurial culture at IBM Germany for some years, combined

with the decentralisation of responsibility and the long established principle of time management based on flexitime

working models. As one staff member put it, "The employees of IBM are not paid for presence, but for the individual

performance."

Supervision focused on success in meeting set objectives has been the basis for individual agreements between

employees and line managers by which aims and standards of performance are fixed and monitored by an

assessment process. Within a yearly framework of individual performance objectives which are defined "in dialogue"

between employee and manager, shorter-term objectives are monitored through a monthly report. This system of

management control is as applicable to part-time work at home and work at the office. Off-site working has not

altered this procedure, except to the extent that the monitoring of working hours is now undertaken at home by

means of a diary.

However, the company is monitoring the experience of off-site working, to see if any modification of management

style will be necessary. "Although leading by objectives already has a certain tradition, it makes a great difference

whether the employee is permanently available in the office or not. A high degree of sensitivity is needed if the line

manager has to assess the employee's ability for autonomous self-management, and his or her individual needs for

contact and communication. But these features correspond to the conditions within the company. There are some

colleagues who are known as self-managed workers and others who obviously need more direct supervision," said

one member of IBM.

Clearly line manager and home-based employee have to trust in each other. "Control is good, trust is better" is the

motto pursued. This trust is based on the assumption that the person who asks for greater freedom and autonomy in

performing their work is aware of the need of reliability. "The more the line manager can trust the employee, the

higher is the degree of independence he can offer him".

Selection of teleworkers

The aims and objectives of the company, and procedures for selecting teleworking employees, have already been

considered above. Although covered in the preamble to the plant agreement, the scheme is not primarily intended for

parents with little children. However, in many cases employees have requested off-company working for personal

reasons and in these situations the economic case for or against home-working is not considered by their line

manager. For example a parent who has worked reduced hours since the birth of a child could ask to telework.

However, if there are no good social reasons for beginning off-site working, the economics of the proposed working

arrangement will be considered. This often means that part-time working off-site proves unrealistic. "If high

investment is necessary, a part- time working place will not be economic".

Communication

Communication within the company has changed considerably through the use of technology. This is not true only of

teleworked jobs. For example, e-mail has replaced the need to see colleagues as frequently as in the past. But

differences cannot be denied between the style of communication between colleagues of the same team working

within the office and working off-site. However, a general evaluation of this area is not yet possible.

The need for close personal communication can set a limit to the amount of off-site working possible. "Sometime we

will perhaps learn to perform teamwork via electronic media, but currently a meeting will be more constructive," said

one IBM staff member. The IBM principle is to establish organisational innovations such as off-site working only if

effective communication within a team or office is guaranteed. According to the IBM experts, the risk of the increasing

isolation of domestic workers should be reduced with a consciously flexible time management system. The weekly

attendance in the office is a minimum requirement, and it is up to line managers to decide if more regular

communication and contact is considered appropriate.

Evaluation

The introduction of off-site home-based working has not, in itself, led to wider changes in management (the reduction

of hierarchies at IBM has already come about for other reasons, and is the subject of a separate 1992 works

agreement). However, the way in which work is divided between work colleagues has changed.

Employees off-site deal with their own letters, telephone calls and similar administrative tasks, which are no longer

passed to a secretary to be undertaken. It is typical to find that, say, three employees have distributed their work

between them in such a way that two are able to work partly from home, whilst their colleague deals with matters

which need attention in the office.

Off-site working has not affected the employment status of employees. Under other collective agreements, home-

based workers have the same rights to training as workplace based staff. The company requires initiative in this area,

especially from highly qualified staff who are expected to decide their own training needs, but the study could find no

evidence that teleworking staff were disadvantaged in this area.

The same career development opportunities are guaranteed for teleworkers as for normal office-workers. It might

even be that they have better chances for promotion, since this depends mainly on the quality of performance, if it is

true that productivity and motivation increase for home-based staff. However career progression could oblige off-site

workers to return to the workplace and abandon their participation in the telework scheme.

No findings are available on the issue of overtime working at present. Further research is being carried out, and

should be available in two years' time. The works council is not allowed to see the working diaries kept by

teleworking staff, and in consequence cannot monitor how well the regulations on working hours are being obeyed.

As a result, there are concerns that individual breaches of current limits will weaken these controls. However, this

trend is as much a feature of office-based working as home-based working and despite the works council's efforts, is

likely to be difficult to prevent in modern daily working life. 0

The question whether the mixing of family life and professional life creates a double burden for employees is not

linked only to the issue of the location of work. "Qualified employees at off-site working places have in the past

developed the ability to switch between profession and family, for many of them performed additional work at home,"

said one staff member. A sufficient degree of separation should be guaranteed, provided that the home-based

location is appropriate and that the employee is competent at time-management: aspects which are considered when

a proposal for off-site working is first approved.

The question of whether home-based working means that employees are less able to be out of reach of their

employer deserves a similar answer. Clearly it is more satisfactory is the company does not call by phone outside

work hours in the evening or weekends, but sends information via e-mail instead, to be received when the PC is next

switched on. Evidence suggests that the on-line link between company and home has not fundamentally changed the

degree to which employees feel they area available to their employer.

From the end of 1992, IBM was engaged in a process of considerable job reduction. In theory, off-site workers

should have been no more or less affected by this process of downsizing than their colleagues on site. However in

practice, nearly 25% of the proposed off-site working arrangements were cancelled or postponed in 1993. It can be

assumed that:

formal arrangements for off-site working were not approved, but employees continued to be able to work from home (the effect of this is that the company is not responsible for meeting equipment costs), and/or

employees may have left the firm formally, but may be continuing to work for IBM as independent contractors, on an outsourcing basis.

Participation of the works council

Though the plant agreement gives employees the right to ask to begin off-site working, it does not give an automatic

right for their requests to be granted. This means that the works council has no powers to intervene in the individual

agreements between line managers and employees. Thus, its influence has been limited to formulating the original

plant agreement, and negotiating the revised, broader agreement of 1993.

Concerning the issue of working time, the works council has been given limited rights of participation and control. The

working hours at the office and at home are registered in a weekly plan in order to ensure the employee's availability,

but otherwise any time not included in the regular contractual working hours is at one's free disposal. However,

because the works council can monitor only the time officially spent working, some members are concerned that

existing working hours agreements will be under threat, and that Sunday working could reemerge as a norm. The

employer's counter-argument is that employees have autonomy and flexibility in fixing their own working hours.

Concerning questions of ergonomic standards and security, the same regulations apply for off-site working as do at

the company's own premises. are used. Without the employee's permission, neither works council representatives

nor management have the right to get access to home accommodation. Any increased risks of data security at

domestic working places is discounted by experts.

The negotiations with the works council and the discussions with trade unions led to the integration of a number of

proposals made by the union into the plant agreement on off-site working. Many trade union concerns and criticisms

of telework do not apply in the case of IBM, because of the preservation of regular employment, the good

communication links and the guaranteed quality of work corresponding with legal and social regulations.

Concluding remarks

In practice, the real number of telework jobs have not come up to the initial expectations held at the time when the

agreement was first signed. The need to attract employees is no longer so acute, given the reduction in the number

of jobs in the company and the IT sector. Furthemore, irregular forms of telework have developed, where the

company has not compensated employees for the costs incurred. Today (1997) the limitations of the pilot project

have been removed and off-site teleworking is regulated under a general plant agreement which includes all types of

remote work including mobile work. In general, this agreement is less favourable for employees. Under the new

agreement, it is believed that at least 4.000 to 5.000 employees are directly affected.

The IUK Institute reported on the project in 1993 (Fischer, Spaeker, Weissbach: Neue Entwicklungen bei der

sozialen Gestaltung von Telearbeit, Dortmund, 1994) and 1995 (Weissbach, Lampe, Spaeker: Telearbeit, Marburg,

1997).

References:

http://www.kwintessential.co.uk/resources/global-etiquette/germany-country-profile.html

http://www.worldbusinessculture.com/German-Management-Style.html

http://www.worldbusinessculture.com/French-Management-Style.html

http://www.kwintessential.co.uk/resources/global-etiquette/france-country-profile.html

International Management, Culture, Strategy and Behavior (6th edition, Hodgetts-Luthans-DOH).

http://international-trade-leaders.suite101.com/article.cfm/german_culture_leadership_style#ixzz0c0qxBBFO

CHAPTER 9

British Style of Management

The United Kingdom is a nation of cultural and ethnic diversity consisting of four countries each with a clear identity: England, Scotland, Wales and Northern Ireland. A thoroughly multicultural society, the UK continues to blend its rich cultural heritage with a modern and innovative outlook. Knowledge and an appreciation of the basic cultural, ethical and business values of the UK is crucial to any organization wanting to conduct business in such a varied yet traditional country.

The people of the UK are mainly Caucasian but in recent years immigrants from England's former colonial

possessions now means people of Indian, African, Caribbean and Asian heritages now comprise ~5% of the

population with about half of those born in the UK. This has led to a multi-cultural society that has seen some

eruptions of race tensions in the poorer parts of society. Racial discrimination although illegal does exist in some

parts of the society as it does in every society.

The heritage of the UK (particularly England) is very rich with world discoveries, colonial possessions, and the

monarchy, civil and European wars and as such, tradition is a very strong component in the culture. The people can

seem to be reserved and formal in interactions, not given to excessive behavior or expression of emotion.

Nevertheless, if you ask people for help they will readily try to oblige. There is also a strong respect for individual

privacy.

The tradition of the English culture has been a class system based on hereditary titles and bloodlines. Cultural

aspects such as manner of speech, accents, educational backgrounds, dress, etc. are still evidence of the class

structure. This culture is partly entrenched by the education system which has very wealthy private (called public)

schools that the wealthier parts of society use. There still appears to be a disproportionate representation of the

educated "elite" in the positions of power in Government and business that is referred to as "the old boy's network".

Britain you will find most people are kinder to you if you behave politely, respecting local people and customs. You may sometimes upset people by things that you say or do, even if these things seem perfectly normal in your own culture.

9.1 Appearance

Business attire rules are somewhat relaxed in England, but conservative dress is still very important for both men and women.

Dark suits, usually black, blue, or gray, are quite acceptable.

Men's shirts should not have pockets; if they do, the pockets should always be kept empty. Additionally, men should wear solid or patterned ties, while avoiding striped ties.

Men wear laced shoes, not loafers.

Businesswomen are not as limited to colors and styles as men are, though it is still important to maintain a conservative image.

9.2 Behavior

Always be punctual in England. Arriving a few minutes early for safety is acceptable.

Decision-making is slower in England than in the United States; therefore it is unwise to rush the English into making a decision.

A simple handshake is the standard greeting (for both men and women) for business occasions and for visiting a home.

Privacy is very important to the English. Therefore asking personal questions or intensely staring at another person should be avoided.

Eye contact is seldom kept during British conversations.

To signal that something is to be kept confidential or secret, tap your nose.

Personal space is important in England, and one should maintain a wide physical space when conversing. Furthermore, it is considered inappropriate to touch others in public.

Gifts are generally not part of doing business in England.

A business lunch will often be conducted in a pub and will consist of a light meal and perhaps a pint of ale.

When socializing after work hours, do not bring up the subject of work.

When dining out, it is not considered polite to toast those who are older than yourself.

9.3 Communications

In England, English is the official language, but it should be noted that Queen‘s English and American English are very different.

Often times ordinary vocabulary can differ between the two countries.

Loud talking and disruptive behavior should be avoided.

One gesture to avoid is the V for Victory sign, done with the palm facing yourself. This is a very offensive gesture.

If a man has been knighted, he is addressed as "Sir and his first name" example: Sir

9.4 British Culture - Key Concepts and values

Indirectness - The British, in particular the English, are renowned for their politeness and courtesy. This is a key element of British culture and is a fundamental aspect of British communication style. When doing business in the UK you generally find that direct questions often receive evasive responses and conversations may be ambiguous and full of subtleties. Consequently, it is important to pay attention to tone of voice and facial expression, as this may be an indication of what is really meant.

'Stiff upper lip' - This is a term often used to describe the traditionally British portrayal of reserve and restraint when faced with difficult situations. In British culture open displays of emotion, positive or negative are rare and should be avoided. During meetings, this means your British colleagues will approach business with an air of formality and detachment.

Humour - A vital element in all aspects of British life and culture is the renowned British sense of humour. The importance of humour in all situations, including business contexts, cannot be overestimated. Humour

is frequently used as a defense mechanism, often in the form of self-depreciation or irony. It can be highly implicit and in this sense is related to the British indirect communication style.

The United Kingdom is renowned for its colorful history and strong sense of tradition that has been shaped by a colonial empire, both civil and European wars and an constitutional monarchy. The fourth largest trading nation, the UK is fast becoming Europe's leading business centre. Supported by a long-established system of government and economic stability, the UK is an attractive base for overseas business, offering skills in areas such as research, development and technology. However, in order to operate successfully in the UK business environment, there are a number of important issues to take into consideration both before and during your time there.

9.5 UK Business Part 1 - Working in the UK

Working practices in the UK o In accordance with British business protocol, punctuality is essential at any business meeting or

social event. o When making business appointments it is best practice to do so several days in advance. o The British are inclined to follow established rules and practices; therefore decision-making is often

a slow and systematic process. Structure and hierarchy in UK companies

o Today, UK businesses maintain relatively "flat" organisational hierarchies. The principal divide is between managers and other ranks.

o In general, the board of directors is the principal decision-making unit. Major decisions are made at the very top.

o The British prefer to work in the security of a group-established order with which they can identify. Working relationships in the UK

o UK managers generally favour the establishment of good working relationships with their subordinates.

o The boss often takes the role of a coach, creating an atmosphere of support and encouragement.

o Teamwork is very important, however there exists a strong feeling of individual accountability for implementation and error.

9.6 UK Business Part 2 - Doing business in the UK

Business practices in the UK

o Business meetings in the UK are often structured but not too formal and begin and end with social conversation.

o First names are used almost immediately with all colleagues. Exceptions are very senior managers. However, you should always wait to be invited to use first names before doing so yourself.

o Business cards are an essential prop and are usually exchanged.

o Negotiations and decisions are usually open and flexible. Your British counterparts will favour a win/win approach.

9.7 British business etiquette (Do's and Don'ts)

DO respect personal space. The British value their space and keeping an acceptable distance is advised. DO remember to shake hands on first meetings. It is considered polite to do so.

DO make direct eye-contact with your British counterpart, however remember to keep it to a minimum or it could be considered impolite or rude.

DON'T ask personal questions regarding your British counterpart's background, occupation or income. DON'T underestimate the importance of humour in all aspects of business in the UK. DON'T forget that instructions are often disguised as polite requests.

In accordance with British business etiquette, when entering a room allow those of a higher rank to enter first.

In the UK, the number 13 is considered extremely unlucky.

Sitting with folded arms during a business meeting is a sign of boredom and that you are uninterested.

It is important to respect rank in the UK.

Asking about another's salary in the UK is particularly offensive and should never be done. Never arrive early. It is advised to arrive 10-20 minutes after the stated time when visiting someone's home.

9.8 Geert Hofstede Analysis

The Geert Hofstede analysis for England illustrates their strong feelings towards individualism and masculinity. The power distance and uncertainty avoidance are ranked considerably lower than the first two. Long-term orientation ranks the lowest, indicating that change in England can be achieved more rapidly than in many other countries

In analyzing Predominantly Christian countries, the primary correlation between religion and the Geert Hofstede Dimensions is a high Individualism (IDV) ranking. This indicates that predominantly Christian countries have a strong belief in individuality, with individual rights being paramount within the society. Individuals in these countries may tend to form a larger number of looser relationships

9.9 Other Findings

'Britain's bosses believe that happy employees mean bigger profits.'

British managers were inclined to be more easy-going, laid back, open, less structured, humorous, risk-taking,

informal, less critical, more accepting, coupled with high patriotic feelings

British managers seem to be characterized by a more liberal, relaxed attitude, coupled with a single-minded

individual-oriented competitive attitude: probably in uncertain situations, more individualistic, risk-taking attitudes are

required to promote novel problem-solving strategies

Judging by my international statistics, the British work more days and longer hours than most other European

countries.

British managers frequently adopt the same set of work and leisure attitudes, that is, if they are assertive and self-

sufficient in their work, the British manager will tend to behave similarly in their private leisure domain.

The Industrial Relations Act came into effect in 1971. This made 'unofficial' strikes illegal and in this way transferred the responsibility for deciding whether to strike or not from the men on the spot that is from their elected shop steward, to the union head office official. Agreements between management and unions became enforceable at law which meant damages could be claimed, it being possible to prosecute unofficial strike leaders.

Management and worker representatives in the United Kingdom are trained to negotiate, form agreements and stick to them. Bargaining may be hard and prolonged but in the end you can only work with people you can trust and that means with people whose word means something. Agreements reached at the end of the bargaining process were on the whole being implemented and maintained unless there was good reason to do otherwise.

British think most problems could be solved if only people would put aside their prejudices and work together.

British take a strong court system for granted, even if they don't use it. British know that if they went into business

and had problems with a customer, partner, or supplier, they could take them to court.

The date comes first: 03.09.39. (And British know what happened on that date.)

A company can fire who it wants - up to a point. There is a reasonable amount of employment protection legislation

both in national law and in EU law, and people are legally entitled, for example, to redundancy pay and to protection

against unfair or discriminatory dismissal

Gambling is very popular in Britain. The British buy more lottery tickets than any other people in the world. It has been estimated that 75% of adults in Britain play the lottery at least once a week

Queuing fairly is important in the UK: if someone was there before you, let him/her be served first

British people don't like to be embarrassed. They fear that they may not be able to make conversation with you, or to

understand what you say to them. They probably don't know much about your country or culture, and fear they might

say something that offends you.

British people like to have a lot of their own personal space. They want their own privacy.

If you are a woman, a British man may worry that you will feel threatened if he starts speaking to you.

If there are several spare seats in a public place, most people will sit away from other people. People don't touch

others very much, and will usually apologise if they touch someone accidentally. It is rare for people to go to

someone's house without having arranged it first.

Do not call Welsh, Scottish or Irish people "English"

There are a number of situations in which it is common to leave a tip (sometimes called a gratuity), although you

should not feel that you have to do this if you cannot afford to do so or if you were not happy with the service

provided.

Which topics are best avoided for small talk?

You may need to be careful when you talk about some topics, especially with people that you've only just met, people

who are older than you, people who appear to have strong religious or political views, or people who may have some

personal problems or sensitivities.

- Age, eg "How old are you?"

- Appearance or weight, eg "You seem to have put on some weight"

- Gossip about somebody (you may be talking about the person's friend or favorite person)

- Jokes that might offend (especially sexist or racist jokes)

- Money, eg "How much do you earn?"

- Complicated subjects, eg philosophy

- Sex (some people have strong religious views about this, or are embarrassed by the subject)

- Previous or current relationships, or marriage ("Do you have a girlfriend?", "Are you married?")

- Politics

- Religion

- Criticisms or complaints

References: 1. http://www.kwintessential.co.uk/resources/global-etiquette/germany-country-profile.html 2. http://www.worldbusinessculture.com/German-Management-Style.html 3. http://www.worldbusinessculture.com/French-Management-Style.html

CHAPTER 10 French Style of Management

France has a rich history of culture and the French take extreme pride in their culture. To some people this may sometimes be seen as arrogance but one must understand the depth of pride they have. The French are a kind and friendly people if you look beyond this pride in their country and its achievements. This warmth is more evident in the country side where the people are more relaxed.

The French enjoy a very high standard of living and they are ranked 2nd out of the top 175 countries in the world in

the Human Development Index. This indicates most of its people share in its economic prosperity and

comprehensive social welfare programs. When the index is adjusted for women it shows that France is 6th amongst

146 countries.

A person will be judged in France on their educational level, family reputation and wealth. They respect privacy, value

politeness and they are generally reserved in their social interactions. They are very patriotic.

A modern and diverse country, France encompasses a wealth of landscapes and identities influenced by an amalgamation of cultural and historical differences. As the largest Western European country, France is a nation that takes immense pride in its history and prominent culture. Such cultural identities play a crucial role in French business culture, where appropriate conduct, mutual trust and understanding are the key to your organisations success.

France has a population of approximately 58 million people and is the largest West European country, approximately 4/5 the size of Texas. France does not have an official religion, but the majority of French citizens are Roman Catholic. France is home to approximately 4.5 million foreigners, many of whom are from other European countries or former Communist countries. Education is of great importance to the French. This is demonstrated by the fact that the educational system is almost free of charge from the primary school through the Ph.D. level, for French citizens

The French are very aware of their presence, and are extremely proud of their heritage. They boast of their long

history and their important roles in world affairs, as well as being known as a world center for culture

10.1 Being a Manager in France

The business set up in France is egalitarian and to ensure successful cross cultural management it is important to

remember to treat each and every person with equal respect and deference.

In other words, in business it is safest to be formal and reserved in your behavior and expect that your French

colleagues will be the same. Communication may be both formal and informal, depending upon the person you are

dealing with and the relationship between you.

10.2 The Role of a Manager

French business behavior emphasizes courtesy and a degree of formality. Chief executives of French companies

often come from a select group of universities and share a similar background. Consequently, it is best to send a

senior executive to initiate the relationship with the French decision-maker, especially if it is someone whose

credentials and experience are comparable.

Newcomers to the French management style should carefully study the corporate culture of specific companies

because they may vary. Consequently, employees will range from feeling empowered to speak out in the

management process, to those who believe it is most important to simply execute the instructions by their leadership.

10.3 Approach to Change

France‘s intercultural adaptability and readiness for change is developing all the time. France is seen to have a

medium tolerance for change and risk. It is important for innovations to have a track record or history noting the

benefits if they are to be accepted and implemented.

The fear of exposure, and the potential of embarrassment that may accompany failure, brings about aversion to risk

and the need to thoroughly examine the potential negative implications. While in risk-tolerant environments, failure is

perceived as a learning process that encourages confidence in future ventures, failure in France causes a long-term

loss of confidence by the individual as well as by others. Because of this attitude, intercultural sensitivity is going to

be required, especially when conducting group meetings and discussing contributions made my participating

individuals.

10.4 Approach to Time and Priorities

France is a controlled-time culture, and adherence to schedules is important and expected. In France missing a

deadline is a sign of poor management and inefficiency, and will shake people‘s confidence. People in controlled-

time cultures tend to have their time highly scheduled, and it‘s generally a good idea to provide and adhere to

performance milestones.

Effective cross cultural management skill will depend on the individual‘s ability to meet deadlines.

10.5 Decision Making

For effective cross cultural management it is important to remember that hierarchy is part of the French business

culture. This is a country where rank has its privilege, often both literally and figuratively. Decision making is done at

the highest levels, often without consultation with subordinates.

10.6 Boss or Team Player

French like working in teams and collaborate quite well. The communication within a team is generally quite collegial,

albeit somewhat direct and blunt. Role allocation within the team is generally quite clearly defined and people will

take greater responsibility for their specific task than for the group as a whole.

Successful cross cultural management will depend on the individual‘s ability to harness the talent of the group

assembled, and develop any resulting synergies. The leader will be deferred to as the final authority in any decisions

that are made, but they do not dominate the discussion or generation of ideas. Praise should be given to the entire

group as well as to individuals.

10.7 Communication and Negotiation Styles

French business emphasizes courtesy and a fair degree of formality. Wait to be told where to sit as there may be a

protocol to be followed. Although English may be spoken, it is a good idea to hire an interpreter so as to avoid any

cross cultural misunderstandings. Business is conducted slowly. You will have to be patient and not appear ruffled by

the strict adherence to protocol. Avoid confrontational behavior or high-pressure tactics as it can be

counterproductive.

The French will carefully analyze every detail of a proposal, regardless of how minute. The French are often

impressed with good debating skills that demonstrate an intellectual grasp of the situation and all the ramifications.

Never attempt to be overly friendly. The French generally compartmentalize their business and personal lives.

10.8 Appearance

The French are very conscientious of their appearance.

Dress conservative and invest in well-tailored clothing.

Patterned fabrics and dark colors are most acceptable, but avoid bright colors.

French businessmen do not loosen their ties or take off their jackets in the office.

Women should also dress conservatively. Avoiding bright or gaudy colors is recommended.

Women should also avoid any glitzy or overpowering objects, such as flashy jewelry

10.9 Behavior

Punctuality is treated very casually in France.

France is a highly stratified society, with strong definition and competition between classes.

The French handshake is brief, and is accompanied by a short span of eye contact.

Always shake hands when meeting someone, as well as when leaving. French handshakes are not as firm as in the United States.

The French have a great respect for privacy. Knock and wait before entering into a room. Additionally, do not "drop in" unannounced. Always give notice before your arrival.

Business can be conducted during any meal, but lunch is best.

Avoid drinking hard liquor before meals or smoking cigars between courses. The French believe this permeates the taste buds, compromising the taste of the meal.

Gift giving is left to the foreigner‘s discretion.

Good gifts to present include books or music, as they demonstrate interest in intellectual pursuits.

10.10 Communications

French is the official language in France.

If you do not speak French, it is very important that you apologize for your lack of knowledge.

Most individuals in business speak English.

The French have a great appreciation for the art of conversation.

The French frequently interrupt each other, as the argument is a form of entertainment.

The French often complain that North Americans lecture rather than converse.

Be sensitive to the volume of your voice. Americans are known to offend everyone in a restaurant, meeting, or on the street with their loud voices and braying laughter.

Eye contact is frequent and intense, and can often be intimidating to North Americans

10.11 French culture - Key concepts and values

Centralization – France has a long and notable history of centralization reflected in its geography, transportation system, Government and business. This outlook originated in the power and authority of the earlier monarchs and despite the democratic society, remains a significant part of the French presidency today. In the world of French business, centralization exists in the concentrated authority that generally lies with one individual.

Individualism and individuality – France‘s distinguished individuality is an important cultural characteristic that describes the French passion for uniqueness and freedom of opinion, both in society and in business. However, individuality should not be confused with the term individualism, which is equally essential in France, but refers to having a separate but equal sense of place in society. Individualism in the French business environment means that a greater concern is placed on social status and being judged as an individual.

Uncertainty avoidance – One aspect of French culture that has a major influence on business in France, is the country‘s attention to rules and regulations. The French have a low tolerance for uncertainty and ambiguity, which, for those wishing to conduct business in France, is significant in their reluctance to take risks.

10.12 France business Part 1 - Working in the France

Working practices o Arriving for business appointments 10-15 minutes after the scheduled time is not considered late

and is therefore acceptable in France. o Generally speaking in French business culture, unless specifically stated, deadlines are open to

negotiation. o Business organisations in France are highly organized and well structured. Consequently, rules

and administrative practices are favoured over effectiveness or flexibility. Structure and hierarchy

o There exists a strong, vertical hierarchy in French business culture. French bosses generally take a dictatorial and authoritative approach.

o It is essential that you work successfully with all levels of the business organization, despite the clear hierarchical structure.

o In French business culture only the highest individual in authority can make the final decision.

Working relationships o The French have an inherent sense of privacy exhibited in their definite distinction between

business and personal life. Respecting this privacy is particularly important when working in France.

o In accordance with French business culture, relationships must be formed first before business can begin.

10.13 France business Part 2 - Doing business in France

Business practices o In French business culture it is customary to only use first names when invited to do so.

Sometimes the French will introduce themselves by saying their surname first, followed by their Christian name.

o Lunch is the best place to forge business relationships in France. The subject of business, however, should only be brought up by the host and at a later stage in the meal.

o A business meeting should begin and end with a brisk handshake accompanied by an appropriate greeting and the exchanging of business cards.

o Despite the formality of French business culture, it is not uncommon practice to stray from the agenda during meetings. Initial meetings are often dedicated to information sharing and discussion, rather than reaching final decisions.

Business etiquette (Do‘s and Don‘ts) o DO maintain a constant air of formality and reserve during all business practices and at all levels

within the business, using titles wherever possible. o DO make direct but moderate eye contact with your French business colleagues. o DO try to learn a few basic French phrases and use them whenever possible. Your efforts will not

go unnoticed. o DON‘T discuss your family or other personal matters during negotiations. o DON‘T be put off by frequent differences in opinion and rigorous debate during business

negotiations. The French will appreciate your ability to defend your position.

o DON‘T rush or display signs of impatience with your French counterparts. The French take their time before arriving at a decision

10.14 French Society & Culture

French Family Values

• The family is the social adhesive of the country and each member has certain duties and responsibilities. • The extended family provides both emotional and financial support. • Despite their reputation as romantics, the French have a practical approach towards marriage. • Families have few children, but parents take their role as guardians and providers very seriously.

Relationships - Public vs. Private

• The French are private people and have different rules of behaviour for people within their social circle and those who are not. • Although the French are generally polite in all dealings, it is only with their close friends and family that they are free to be themselves. • Friendship brings with it a set of roles and responsibilities, including being available should you be needed. Friendship involves frequent, if not daily, contact.

10.15 Etiquette & Customs

Meeting Etiquette

• The handshake is a common form of greeting. • Friends may greet each other by lightly kissing on the cheeks, once on the left cheek and once on the right cheek. • First names are reserved for family and close friends. Wait until invited before using someone's first name. • You are expected to say 'bonjour' or 'bonsoir' (good morning and good evening) with the honorific title Monsieur or Madame when entering a shop and 'au revoir' (good-bye) when leaving. • If you live in an apartment building, it is polite to greet your neighbors with the same appellation.

Gift Giving Etiquette

• Flowers should be given in odd numbers but not 13, which is considered unlucky. • Some older French retain old-style prohibitions against receiving certain flowers: White lilies or chrysanthemums as they are used at funerals; red carnations as they symbolize bad will; any white flowers as they are used at weddings. • Prohibitions about flowers are not generally followed by the young. When in doubt, it is always best to err on the side of conservatism. • If you give wine, make sure it is of the highest quality you can afford. The French appreciate their wines. • Gifts are usually opened when received.

Dining Etiquette

If you are invited to a French house for dinner: • Arrive on time. Under no circumstances should you arrive more than 10 minutes later than invited without telephoning to explain you have been detained. • The further south you go in the country, the more flexible time is. • If invited to a large dinner party, especially in Paris, send flowers the morning of the occasion so that they may be displayed that evening. • Dress well. The French are fashion conscious and their version of casual is not as relaxed as in many western countries.

Table manners:

• Table manners are Continental -- the fork is held in the left hand and the knife in the right while eating. • If there is a seating plan, you may be directed to a particular seat. • Do not begin eating until the hostess says 'bon appetit'. • If you have not finished eating, cross your knife and fork on your plate with the fork over the knife. • Do not rest your elbows on the table, although your hands should be visible and not in your lap. • Finish everything on your plate. • Do not cut salad with a knife and fork. Fold the lettuce on to your fork. • Peel and slice fruit before eating it. • Leave your wineglass nearly full if you do not want more.

Business Etiquette and Protocol

Relationships & Communication

• French business behavior emphasizes courtesy and a degree of formality. • Mutual trust and respect is required to get things done. • Trust is earned through proper behavior. • Creating a wide network of close personal business alliances is very important. • If you do not speak French, an apology for not knowing their language may aid in developing a relationship. • It is always a good idea to learn a few key phrases, since it demonstrates an interest in a long-term relationship. • The way a French person communicates is often predicated by their social status, education level, and which part of the country they were raised. • In business, the French often appear extremely direct because they are not afraid of asking probing questions. • Written communication is formal. Secretaries often schedule meetings and may be used to relay information from your French business colleagues.

Business Meetings Etiquette

• Appointments are necessary and should be made at least 2 weeks in advance. • Appointments may be made in writing or by telephone and, depending upon the level of the person you are meeting, are often handled by the secretary. • Do not try to schedule meetings during July or August, as this is a common vacation period. • If you expect to be delayed, telephone immediately and offer an explanation. • Meetings are to discuss issues, not to make decisions. • Avoid exaggerated claims, as the French do not appreciate hyperbole.

10.16 Business Negotiation

• French business emphasizes courtesy and a fair degree of formality. • Wait to be told where to sit. • Maintain direct eye contact while speaking. • Business is conducted slowly. You will have to be patient and not appear ruffled by the strict adherence to protocol. • Avoid confrontational behavior or high-pressure tactics. It can be counterproductive. • The French will carefully analyze every detail of a proposal, regardless of how minute. • Business is hierarchical. Decisions are generally made at the top of the company. • The French are often impressed with good debating skills that demonstrate an intellectual grasp of the situation and all the ramifications. • Never attempt to be overly friendly. The French generally compartmentalize their business and personal lives. • Discussions may be heated and intense. • High-pressure sales tactics should be avoided. The French are more receptive to a low-key, logical presentation that explains the advantages of a proposal in full. • When an agreement is reached, the French may insist it be formalized in an extremely comprehensive, precisely worded contract.

Business Cards

• Business cards are exchanged after the initial introductions without formal ritual. • Have the other side of your business card translated into French. Although not a business necessity, it demonstrates an attention to detail that will be appreciated. • Include any advanced academic degrees on your business card. • French business cards are often a bit larger than in many other countries.

10.17 Geert Hofstede Analysis

The Geert Hofstede analysis for France illustrates their emphasis on uncertainty avoidance. The high uncertainty

avoidance ranking indicates France‘s concerns for rules, regulations, and issues with career security. In addition to

uncertainty avoidance, both individualism and power distance are also ranked fairly high, with masculinity ranking the

lowest

Corporate Culture

The French do not like clear procedures: they want to maintain some form of "grey zone" and do not believe that it is

right to use always the same and only way to do the same things ; organizational charts and objectives are not clear.

The French do not organize meetings to reach a decision: they meet to exchange information, then the person in

charge takes the decision... If you need to have a serious and/or difficult discussion with someone, you'll invite

him/her for lunch and business lunches are an important part of corporate communication; of course, be ready to

drink wine...

The French are more flexible and creative and they do not feel bound to a previous decision.

Only written commitments are serious: nothing oral is really binding.

The French are much more sentimentally attached and faithful to their company: they like to put corporate relations

on a personal basis.

Top-down management: for the French, the Boss is the Boss and management is very authoritarian.

The French are highly polychromic: they love to do several things at the same time and they are good at that.

Within the company, the French keep the doors closed (open floor offices are not popular), are reluctant to work in a

team and information is often distributed selectively

Within the company, the French are less constrained by social codes such as "you must play golf with your boss", or

"each of us must give $5 for this charity" etc... and they do not like to mix corporate life and personal life ; being

invited at one's boss' home is the worst possible thing that may happen !

In a nutshell it is a different world: for an American and it is hard to conceive that a country operating in the above

way can be the fourth or the fifth world economic power!

As compared to the USA, France is a much more hierarchical culture with, again, a strong emphasis on the relationship, more feminine, valuing long term.

French Business Meetings Etiquette

Appointments are necessary and should be made at least 2 weeks in advance. Appointments may be made in writing or by telephone and, depending upon the level of the person you are

meeting, are often handled by the secretary. Do not try to schedule meetings during July or August, as this is a common vacation period. If you expect to be delayed, telephone immediately and offer an explanation. Meetings are to discuss issues, not to make decisions. Avoid exaggerated claims, as the French do not appreciate hyperbole.

French Negotiation Style

French business emphasizes courtesy and a fair degree of formality. Wait to be told where to sit. Maintain direct eye contact while speaking. Business is conducted slowly. You will have to be patient and not appear ruffled by the strict adherence to

protocol. Avoid confrontational behaviour or high-pressure tactics. It can be counterproductive. The French will carefully analyze every detail of a proposal, regardless of how minute.

Business is hierarchical. Decisions are generally made at the top of the company. The French are often impressed with good debating skills that demonstrate an intellectual grasp of the

situation and all the ramifications. Never attempt to be overly friendly. The French generally compartmentalize their business and personal

lives. Discussions may be heated and intense. High-pressure sales tactics should be avoided. The French are more receptive to a low-key, logical

presentation that explains the advantages of a proposal in full. When an agreement is reached, the French may insist it be formalized in an extremely comprehensive,

precisely worded contract.

French Dress Etiquette

Business dress is understated and stylish. Men should wear dark-coloured, conservative business suits for the initial meeting. How you dress later is

largely dependent upon the personality of the company with which you are conducting business. Women should wear either business suits or elegant dresses in soft colours. The French like the finer things in life, so wear good quality accessories. 4

Conclusion:

Both Germany and France have the different Management style and Business etiquettes but they have similarities in

their Management styles and Business Etiquettes. Some of these similarities in Management styles and business

etiquettes are as follows:

1. Prior appointment should be taken 1. Do sit unless you are asked to sit 2. Maintaining eye contacts while speaking is essential in both the countries. 3. Business in both the countries is hierarchal. 4. In both the countries avoiding confrontational behavior or high- pressure tactics is necessary because it can

be counterproductive.

References: 4. http://www.kwintessential.co.uk/resources/global-etiquette/germany-country-profile.html 5. http://www.worldbusinessculture.com/German-Management-Style.html 6. http://www.worldbusinessculture.com/French-Management-Style.html

CHAPTER 11 LATIN AMERICA

Latin American culture is the formal or informal expression of the peoples of Latin America, and includes both high

culture (literature, high art) and popular culture (music, folk art and dance) as well as religion and other customary

practices.

Definitions of Latin America vary. From a cultural perspective, Latin America generally includes those parts of the

Americas where Spanish, French, or Portuguese prevail: Mexico, most of Central America, South America, and part

of the Caribbean in which Haiti (a non-Hispanic country with some Hispanic cultural influence) is generally included.

There is also an important Latin American cultural presence in the United States of America (e.g. California and the

Southwest, and cities such as New York and Miami). There is also increasing attention to the relations between Latin

America and the Caribbean as a whole. See further discussion of definitions at Latin America.

The richness of Latin American culture is the product of many influences, including:

Pre-Columbian cultures, whose importance is today particularly notable in countries such as Mexico, Guatemala, Ecuador, Peru, Bolivia and Paraguay.

European colonial culture, owing to the region's history of colonization by Spain, Portugal, and France. European influence is particularly marked in so-called high culture, such as literature, painting, and Music. Moreover, this imperial history left an enduring mark of their influence in their languages, which are spoken throughout Central (including the Caribbean), South and North America (Mexico and many parts of the United States).

Nineteenth- and twentieth-century immigration (e.g. from Italy, Germany, and Eastern Europe) also transformed especially countries such as Argentina, Uruguay, Brazil (particular the southeast and southern regions), Chile and Venezuela.

Chinese and Japanese immigration influenced the culture in Brazil, Cuba, Panamá and Peru The introduction of slaves from Africa, which has influenced for instance dance and religion, especially in

countries such as Dominican Republic,Brazil, Panama, Venezuela, Colombia, and Cuba. Language

Spanish is the predominant language in the majority of the countries. Portuguese is spoken primarily in Brazil, where it is both the official and the national language. French is also spoken in smaller countries, in the Caribbean, and French Guiana.

How Culture Affects Work Practices in Latin America

Some global executives would be surprised to learn that many employees in Mexico like to do their jobs in the

presence of such religious images as the Virgin of Guadalupe. Their religious devotion in one example of how local

culture affects the styles and practices of work in Latin America. Anabella Dávila, professor of management theory

and business history at the graduate business school (ITESM) in Monterrey (Mexico), and Marta M. Elvira, academic

director of Lexington College in Chicago, have published a book on this phenomenon, entitled ―Managing Human

Resources in Latin America.‖ In the chapter titled ―Culture and Human Resource Management in Latin America‖, the

two scholars identify the cultural values that determine Human Resources in the region. They show how these factors

can determine the success and failure of a business organization.

11.1 The Company Is Like a Family

The authors define the Latin American business model as a hybrid of globalization and the region‘s historic traditions.

With the exception of Argentina and Costa Rica, those traditions are characterized by large social gaps and a

widespread collectivism that has various manifestations. Dávila and Elvira explain that social differences are

manifested locally through benevolent, paternalistic leadership. ―The senior executive has the personal obligation to

protect subordinates, and even take care of the personal needs of workers and their families.‖

Generally speaking, paternalism involves a ―father‖ who cares for his sons by engaging in permissive practices and

providing moral support, even if his ―sons‖ wind up being too dependent in many respects throughout their working

career. Latin American firms are managed like a family. Latin Americans prefer to depend on someone closer to the

center of the organization, and to accept that this authority leads to behavior that avoids conflict and confrontation

with one‘s superiors. Behaving any other way would be interpreted as an offense against one‘s superiors and

colleagues. Doing so would have disciplinary consequences.

On the other hand, ―Latin Americans value status within a hierarchy because it indicates social distance between the

higher-up and his subordinates,‖ notes the study. Job titles and additional benefits also have a great significance

because of the social status that they bring. In Chilean companies, for example, social discrimination exists on the

basis of appearance, age and gender, all of which are associated with social status. ―Despite this sort of hierarchical

status, Latin American companies try to eliminate the existing power distance between directors and subordinates by

creating committees that symbolize the egalitarian spirit among all members of the organization,‖ notes the study. It

is no easy task to play the role of supervisor, however, because a boss must assume that role without actually

behaving as such.

The collective spirit of the workplace is manifested in several ways. First, there is the importance of personal

relationships. Latin Americans expect to be treated with courtesy and kindness while at work. Second, there is a

sense of loyalty to the primary group. In Mexican companies, ―executives know that the survival of their organizations

depends more on social and governmental relationships than on any support they get from the country‘s financial

system.‖ Third, popular celebrations play a major role in the workplace, including religious behavior, as noted earlier.

This illustrates the hybrid style of management.

11.2 The Importance of Social Status

This is the cultural framework that defines Human Resource practices within the Latin American company, especially

recruitment and personnel management. For example, social relationships and physical appearance ―can explain the

cultural content of the glass ceiling in Latin American companies.‖ In Chilean companies, executive selection and

promotion generally reflect physical appearance, age and sex, in addition to social contacts, birthplace and other

factors.

Companies generally recruit new workers through their current employees and employees‘ family members and

close relatives. This guarantees the trust, loyalty and sense of responsibility that are important to keeping the

organization together. The family is equally important when promotion is involved. Employees generally put the well-

being of their families ahead of their professional careers, especially Latin American women. However, the

researchers said there is insufficient empirical research in that area.

On the other hand, Latin American corporate training and development divisions suffer significant internal conflict

when it comes time to provide more advanced business training. They realize that new management techniques

don‘t always fit in well with local tradition; some practices are rejected by employees. So managers feel obliged to

provide formal basic education and technical training whenever they modernize work procedures. ―The shortage of

technical knowledge, formal education, and skills for analysis and communication represent serious obstacles for

Mexican workers,‖ says the study. Moreover, Latin American companies usually devote only a small part of their

budget to training.

When it comes to compensation and recognition, family also plays a central role. Not surprisingly, the quality of family

life cushions workers from recurrent economic crises. In Mexico, work is considered an obligation and way to enjoy

the important things in life, including family. If Mexicans had a choice, they would not work. However, the research

should be viewed cautiously, the authors warn, because the culture of work varies significantly according to age,

socio-economic level, and educational achievement. Some studies discovered that ―manufacturing plants in Mexico

made major cuts in their expatriate staffs, and found young, bilingual talent with managerial skills and university

degrees [to replace them]. Young managers accepted modern methods of management and production more readily

than older managers did.‖

When it comes to compensation, Dávila and Elvira warn that individual financial compensation can stigmatize a

worker as a ―favorite‖ of management. The worker can wind up being rejected by the group, with grave

consequences. In contrast, highly valued benefits for top executives confer extra status – including luxury cars, and

private-school tuition for their children.

It is also important to recognize the loyalty of employees by establishing ceremonies that honor their seniority. Many

benefits, including vacations and retirement benefits, involved ceremonial recognition. However, Dávila and Elvira

warn about linking compensation to formal evaluation of workers‘ performance. Given the low level of confrontation

between managers and their subordinates, the results of that sort of evaluation are rarely used.

Compensation usually comes in the form of fixed salary. Only multinational companies and large Latin American

firms provide variable compensation based on corporate performance. Fixed salaries are more appropriate in a

hierarchical and individualistic system where more value is placed on the centralization of authority, not on factors

that promote teamwork and organizational flexibility. That kind of approach does not reflect the preferences of Latin

American culture.

11.3 Teamwork, Subcontracting and Geographical Mobility

According to the study, Latin American culture ―tends to favor the development of teamwork.‖ Employees value social

relationships based on personal communication and empathy, concepts that are essential to teamwork.

Nevertheless, it is not easy to make this work, because power sharing and decentralization run against the grain of

such Latin American cultural values as centralization and organizational hierarchy.

The hybrid model of management is clear when it comes to working arrangements. Although employees accept the

idea of getting involved in modern managerial practices, they prefer a managerial style in which one senior executive

makes the decisions. This frees each employee from taking responsibility. Executives who have higher education are

the exception to this rule, however. Sharing responsibility for decision-making has other advantages. It allows

companies to resolve conflicts and confrontations. Latin Americans traditionally accept the sort of manager who acts

as a mediator between parties in a conflict. ―That style may well be necessary, given the dynamics involved when

working in groups,‖ says the study.

Workers feel motivated to share the responsibilities of their team. However, as the authors note, this can also provide

―another way for people to cut their individual risk by sharing decision-making with other individuals in the company.‖

The authors warn that modern approaches to organizing work may wind up failing in Latin America because of

historic rivalries between management and labor during the region‘s industrialization process. Sometimes, managers

have been accused of exploiting workers. However, this situation changes radically when there is a threat coming

from outside and, for example, foreign investment threatens local employment. Whenever that happens, Latin

America‘s sense of nationalism surges, along with its sense of unity that provokes ―the desire to manufacture higher-

quality products and use technology more efficiently,‖ says the study. ―Both those goals force senior management to

learn how to share information with employees.‖

Latin America could benefit from any cut in labor costs that might result from creating more flexible labor contracts.

However, it will be hard to convince workers to accept those sorts of conditions. Although many workers have only

one option when they go looking for work, the most highly valued employees are, logically, those who work full-time.

They receive benefits and promotional opportunities not provided to part-time employees.

The lack of geographical mobility is another challenge for both executives and employees. Some Latin American

executives push for their companies to expand beyond borders, and they take responsible positions outside their

homelands. However, most executives prefer to stay close to their nuclear families. In an interview, a senior

executive of Coca Cola América Latina explained, ―Because of personality and culture, Latin Americans generally

lack the flexibility they need. In the United States, families get together only once a year, at Thanksgiving. In Mexico

and Brazil, families see each other every Sunday.‖

Communication within a typical Latin American organization has a hierarchical and vertical structure in which

―information generally flows from above, down to the bottom,‖ says the study. Managers impose those barriers. Add

the fact that subordinates lack a spirit of confrontation, and it‘s no wonder that communications are less than

adequate. There are fewer horizontal relationships, and authority is rarely delegated.

Their Own Styles of Confrontation

Establishing solid, stable labor relations requires personal contacts as well as friendly, social interaction. According to

the study, ―courtesy and diplomacy are highly valued in labor relations.‖ Each Latin American country has its own

confrontational style in times of conflict. ―For example, Argentines prefer a style that involves mediating between

parties in a conflict. Dominicans prefer autocratic intermediaries. Mexicans like a style that involves concern for

others.‖ Beyond that, ―during times of conflict, Latin Americans tend to identify with their ‗in-group,‘ rather than the

entire organization, because they prefer social networks based on friendship.‖

When multinational managers behave abusively, workers immediately organize unions and confront the company.

In conclusion, the authors make the following proposals: From a social perspective, they recommend putting workers

and their families at the center of any additional benefits that the company provides. They also recommend that the

Human Resources staff try to satisfy workers‘ basic needs, to assure their success. Finally, they argue that HR

systems will become more effective if they support job stability, stronger labor-management relations, and the

sustainable development of the company.

They warn, however, that ―Human Resources departments will not be able to achieve a strategic position in the

companies of the region until they demonstrate their direct contribution to overall organizational performance.‖ The

performance of HR departments must be viewed from a cultural perspective. Their challenge is to learn how to use

culturally determined Human Resources practices – whose manifestations are hard to predict – and base them more

on the organization‘s social structure than on its economics.‖

References: 1. http://www.kwintessential.co.uk/resources/global-etiquette/germany-country-profile.html 2. http://www.worldbusinessculture.com/German-Management-Style.html. 3. http://www.worldbusinessculture.com/French-Management-Style.html