concept of comparative management

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AIBSMBAIB2nd SemCross Cultural Management : 

1 AIBSMBAIB2nd SemCross Cultural Management

The Concept of International Comparative Management : 

2 The Concept of International Comparative Management

What is Comparative Management : 

3 What is Comparative Management the simultaneous study of management or business practice in two or more different cultures, countries, companies, or departments

Slide 4: 

4 Comparative management analyzes the extent to which management principles are applicable from one country to another. Although the concept of comparative management evolved in the late sixties, it continues to be the subject of considerable debate.

Principles for Studying Other Cultures : 

5 Principles for Studying Other Cultures Individuals may not conform Differences may not be culturally based Understand your own culture first

The Need To Consider International Comparative Management : 

6 The Need To Consider International Comparative Management Some key aspects which shows impact on organizational management approaches which are central to the process of managing business (from Hodgetts R& Luthans R, 1997 ).

Slide 7: 

7 Centralized vs. Decentralized decision making. There is variation across national culture in the extent to which important organizational decisions are made by senior managers, or whether decisions are made down the line with authority devolved.

Slide 8: 

8 Safety vs. risk. In some cultures, managers have a very low tolerance of uncertainty and manage in ways to control this. In others, there is a much greater tolerance of uncertainty and much greater risk-taking.

Slide 9: 

9 Individual vs. group rewards. In some cultures, there is emphasis on rewarding individual achievement. In other cultures the emphasis is on rewarding the group collectively. Informal vs. formal procedures. In some cultures, there is considerable use of informal procedures. In others, formal procedures are very important.

Slide 10: 

10 High vs. low organizational loyalty. In some cultures, people identify less with their organization or employer and more with their occupational group or profession. Co-operation vs. competition. Some cultures emphasize co-operation in the organization, others foster competition.

DEVELOPMENT OF COMPARATIVE MANAGEMENT : 

11 DEVELOPMENT OF COMPARATIVE MANAGEMENT For international business up to what extent can principles, practices and general know-how be transferred effectively to other countries, at what cost, and to what degree and extent is the overall process and effectiveness of management constrained by cultural variables? RICHMAN, B. (1965: 294), «Significance of cultural variables»

Results of comparative management researchaccording to Negandhi[1975:334] : 

12 Results of comparative management researchaccording to Negandhi[1975:334] There is no one way of doing things. 2. There is no universal applicability of either authoritarian or participating-democratic management styles.

Slide 13: 

13 3. More objective measures are brought to bear in making managerial decisions. 4. There are similarities and differences among the managers around the world.

Slide 14: 

14 What is Culture?

What Culture Is : 

15 What Culture Is Dynamic, 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

Slide 16: 

16 The Cultural Iceberg Life Experiences What is done? What is good/best? What is true? What is real? Behavior Values Beliefs World View

Slide 17: 

17 Element of Culture A. Language Spoken Language Written Language Official Language Body Language International Language B. Religion Beliefs and Norms Sacred Objects Philosophical Systems Prayer/ Rituals Leading Religious of the World

Slide 18: 

18 C. Values and Attitudes Toward Time (Monochronic (V.S) Polychronic) Achievement Work Change Risk Taking D. Education Literacy Level Formal Education Vocational Training Human Resource Planning Primary / Secondary / High education

Slide 19: 

19 E. Social Organization Social Institutions Authority Structure Interest Groups Status Systems Social Mobility F. Technology and Material Culture Science Invention Energy Systems Communications Tools and Objects Urbanization

Slide 20: 

20 G. Politics Nationalism National Interests Power Ideologies Political Risks Sovereignty H. Law Common Law Code Law Foreign law Home / Host Country Law Regulation / Antitrust Policy International Law

Impact of the culture on International Business : 

21 Impact of the culture on International Business When an MNC puts up its base in another country it needs to oblige to the local traditions and customs. It can't have the same rules and laws as it has in its own country.

Slide 22: 

22 Mc Donald's when it entered the Indian market did not show any positive trends. Major merger and acquisition stories of Mittal taking over Arcelor, Tata taking over Jaguar, AT&T taking over Cingular shows that the major aspect considered in these deals is the economic factor of the companies.

Slide 23: 

23 Required Adaptation Adaptation is a key concept in international marketing To successfully deal with individuals, firms, or authorities in foreign countries, managers should exhibit: open tolerance, flexibility, humility, justice/fairness, ability to adjust to varying tempos, curiosity/interest, knowledge of the country, liking for others, ability to command respect, and ability to integrate oneself into the environment

Slide 24: 

24 The Impact of American Culture Ways in which U.S. culture has influenced management style include, but are not limited to, the following: “Master of destiny” viewpoint Independent enterprise as the instrument of social action Personnel selection and reward based on merit Decisions based on objective analysis Wide sharing in decision making Never-ending quest for improvement Competition yielding efficiency

Slide 25: 

25 Management Styles Around the World Management values, and behaviors vary around the world. Differences in the contact level, communications emphasis, tempo, and formality of foreign businesses are encountered from culture to culture. Ethical standards and sales interactions and negotiation styles differ substantially.

Slide 26: 

26 Management Styles Around the World Cross-cultural differences influence management styles in the following areas: Authority and Decision Making Management Objectives and Aspirations Communication Styles Formality and Tempo P-Time versus M-Time Negotiations Emphasis

Slide 27: 

27 Three typical patterns exist: top-level management decisions, decentralized decisions, and committee or group decisions Differences in Authority and Decision Making In high-PDI countries subordinates are not likely to contradict bosses, but in low-PDI countries they often do Differences in Management Styles Around the World

Slide 28: 

28 Security especially of lifetime employment Affiliation and Social Acceptance by neighbors and fellow workers Power and Achievement Orientation sought by managers Importance of personal/family life over work and profit

Slide 29: 

29 Differences in Management Styles Around the World According to Edward T. Hall, the symbolic meanings of time, space, things, friendships, and agreements, vary across cultures “In some cultures, messages are explicit; the words carry most of the information. In other cultures ... less information is contained in the verbal part of the message since more is in the context”

Slide 30: 

30 Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or nonverbal aspects of communication Communication in a low-context culture depends more on explicit, verbally expressed communications Hall places eleven cultures along a high-context/low-context continuum

Slide 31: 

31 Differences in Management Styles Around the World Level of formality in addressing business clients by first name Level of formality in addressing your boss by first name Tempo or speed in getting “down to business” Perception of time varies in many cultures

Slide 32: 

32 Differences in Management Styles Around the World M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians Most low-context cultures operate on M-time concentrating on one thing at a time P-time, or polychronic time, is more dominant in high-context cultures P-time is characterized by multi-tasking and by “a great involvement with people”

Slide 33: 

33 Gender Bias in International Business The gender bias against women managers exists in some countries Gender bias poses significant challenges in cross-cultural negotiations

Slide 34: 

34 Business Ethics Business ethics is complex in the international marketplace because value judgments differ widely among culturally diverse groups The Foreign Corrupt Practices Act 1997: Imprisonment for bribery Existence of different levels of corruption, bribery, and fraud Corruption varyingly defined from culture to culture Bribery creates a major conflict between ethics and profitability

Slide 35: 

35 Ethical and Socially Responsible Decisions Areas of decision making where ethical issues arise: employment practices and policies, consumer protection, environmental protection, political payments and involvement in political affairs of the country, and basic human rights and fundamental freedoms

Slide 36: 

36 A Framework for Ethical Precepts Three ethical principles that provide a framework for distinguishing between right and wrong: (1) Utilitarian ethics (2) Rights of the parties (3) Justice or fairness Does the action optimize the “common good” or benefits of all constituencies? And, who are the pertinent constituencies? Does the action respect the rights of the individuals involved? Does the action respect the canons of justice or fairness to all parties involved?

Slide 37: 

37 Culture’s Influence on Strategic Thinking Culture influences managers’ thinking about business strategy The British-American “individualistic” view of capitalism typifies adversarial relationships among labor, management, and government The “communitarian” form of capitalism in Japan and Germany are typified by cooperation among government, management, and labor, particularly in Japan The Chinese emphasis on guanxi (one’s network of personal connections) is a kind of capitalism manifested by culture

Power Distance Comparisons : 

38 Power Distance Comparisons High Low Average = 51

Uncertainty AvoidanceAverage=64 : 

39 Uncertainty AvoidanceAverage=64 High avoidance of risk Willing to take risks

Individualistic Collective Average =51 : 

40 Individualistic Collective Average =51

Slide 41: 

41 Masculine Feminine Average = 51