Slide 1:BUS/IB 203 International Business Culture Dr. Balbir B. Bhasin Sacred Heart University College of Business


Slide 2:“Management is a form of work that involves coordinating an organization’s resources - human and capital – to accomplish organizational goals.” What is Management?


Slide 3:1. Top management 2. Middle management 3. Supervisory management Levels of Management


Slide 4:Planning Organizing Staffing Leading Controlling Functions of Management


Slide 5:Interpersonal - leader, figurehead, liaison Informational - monitor, disseminate, represent Decisional - allocate resources, negotiate, problem solving Roles of a Manager


Slide 6:Conceptual skills - decision making, planning, organizing Human relations skills - understand people, motivating, collaborating Technical skills - able to get a particular job done Management Skills


Slide 7:“Process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage” What is International Management?


Slide 8:“Profit related activities conducted around national boundaries, ever changing”. What is International Business?


Slide 9:National variables - economic system, legal system, political system Socio-cultural variables - religion, education, language Cultural variables - values, norms, beliefs Attitudes - work, time, individualism, materialism Response - motivation, productivity, ethics, commitment What are the variables affecting the management function?


Slide 10:End


Slide 11:Culture & International Business Chapter 2


Slide 12:Set of commonly held values A way of life of a group of people Includes knowledge, belief, art, morals, law, customs and habits Everything that people have, think and do as members of their society An integrated system of learned behavior patterns that are characteristic of the members of any given society What is Culture?


Slide 13:Myth One: We really are all the same Myth Two: I just need to be myself and everything will be okay Myth Three: I have to adopt the practices Of the other culture to succeed (Adapt rather than adopt) Cross Cultural Myths


Slide 14:Beliefs - control vs. destiny Change - action vs. accept Attitude - practical vs. dreams aspirations Approach/work ethic - hard work vs. luck Promises - keep vs. perhaps Time - depends on priorities Obligation -company or family Employment - short term vs. lifelong Meritocracy - best person vs. Other considerations US Values & Possible Alternatives


Slide 15:Inconsiderate of other people’s cultures Racially prejudices Ignorant of other countries Shallow, immature, naïve Violent, aggressive Generous, forgiving Always in a hurry Outgoing, friendly Informal Loud, rude, boastful Hard working Arrogant, proud, insensitive Innovative Extravagant, wasteful, Confident they have all the answers Stereotypical American (as seen by people of other countries)


Slide 16:“Culture is transmitted through the process of learning and interacting with one’s environment rather than through the generic process” Primary Socialization Cultures and Subcultures Secondary Socialization Culture is Learned


Slide 17:Common problems and common features Economic systems Marriage and family systems Educational systems Social control systems Culture Universals


Slide 18:All cultures experience continued change Cultural change is a selective process Cultural change through borrowing Cultural change through innovations Cultural diffusion Cultural Change


Ethnocentrism :Ethnocentrism Tendency for people to judge behavior by their own standards The belief that own culture is superior All people in all societies are ethnocentric to some degree Ethnocentrism can contribute to prejudice Ethnocentrism


Slide 20:End


Slide 21:Communicating across Cultures Languages Chapter 3


Slide 22:Process of sharing meaning by transmitting messages - words and behavior” Critical factor in cross cultural management Need for effective communication to: give information, share ideas, give orders, and to motivate Interpersonal issues: leadership, motivation, group interaction, negotiation What is Communication?


Slide 23:Semantics - different words have different meaning to different people: fix, fag, shag Jargon - technical terms Acronyms and Abbreviations - culture, military Perception - interpreting information, distortion Emotions - breakdown in communication Barriers to Effective Communications


Slide 24:There is a close relationship between language and culture 2. Language is a precondition to success in international business Languages helps in understanding culture 4. Second language is first step to learning third and fourth language 5. Learning other languages helps us appreciate our own language (and culture) The Need to Understand Language


Slide 25:Language is “a symbolic code of Communications Meanings attached to any word are totally arbitrary Major languages of the world are: Mandarin, Spanish, English, Bengali, Hindi, Portuguese, Russian, Japanese, German, Wu What is Language?


Slide 26:The vocabulary of a language depicts what is considered important in that culture Industrialized societies have more Technological terms Example: 7 words for bamboo in South India but none for snow The Influence of Culture on Language


Slide 27:Language influences perception, categorization and worldview Language reflects values of the group Example “individualism” in the US – so many words pertaining to “self” In Japan. “we” always comes before the “I” indicating the “collectivist” approach The Influence of Language on Culture


Slide 28:The US is the only country where business people don’t think its necessary to learn a foreign language Is it easier to speak or understand a foreign language? Comprehension is a function of speed Is it easier to speak or write a foreign language? Is there an international language of business? Language Key Points for Business


Slide 29:Recognizing the symptoms: blank stares, unnatural stopping points in conversation, feeling of “not connecting” What to do: explain the message in several different ways, use visual aids, slow down, avoid slang and idiomatic expressions, listen to the other person’s entire message…don’t assume anything, keep good notes, follow up Avoiding Misunderstandings Across Language Barriers


Slide 30:Low context cultures: task oriented, communication is specific, elaborate, direct and unambiguous. Swiss, German, American, French, British High context cultures: based on relationships, rely on communication that is: indirect, ambiguous, nonverbal, and the context. Japanese, Chinese, Arab In between: Italian, Spanish, Greek High Context vs. Low Context Cultures


Slide 31:End


Slide 32:Communicating across Cultures The Nonverbal Dimension Chapter 4


Slide 33:Helps convey feelings and emotional states Elaborates on verbal messages Governs the timing and turn taking between communicators Concerns: 1, Same nonverbal cue carries different meanings in different cultures Different nonverbal cues carry the same meaning in different cultures Function of Nonverbal Communication


Slide 34:Facial expressions (smiles, frowns) Hand gestures Posture Touching Scents or smells (perfume) Color symbolism Clothing, hairstyles, cosmetics Artifacts (jewelry, fly whisks) Graphic symbols Silence Nonverbal Cues


Slide 35:Touching – U.S. vs. Latin America Space – U.S. vs. Japan Queues: U.S. vs. China vs. Britain vs. Japan Dress – U.S. vs. Europe vs. Japan Silence – U.S.: a gap that must be filled - Japan – preferable to conversation Non- verbal Language


Slide 36:Eye Contact: intermittent in U.S., Intense, Unbroken in Arab countries, Very little in Japan Para Language: um, er, ah, hai Smiling, Head movements: Bulgaria, India Arm Movements: Italy vs. Japan Posture: U.S. vs. China Handshakes Nonverbal Language


Slide 37:Stereotyping - assuming that all have same attributes Language - literal or poor understanding Kinesic behavior - posture, gesture, facial expression, eye contact Oculesics - behavior of the eye during communication Proxemics - effect of proximity and space Paralanguage - how something is said Time – mono-chronic or poly-chronic Context - in which the communication takes place Cultural Variables


Slide 38:Distance preferred by middle class US: Intimate distance - body contact to 18” Personal distance -18” to 4 feet Social distance - 4 feet to 12 feet Public distance- 12 to 20 feet Proxemics


Slide 39:Develop cultural sensitivity - be aware of self and the other! Careful encoding - use proper words, gestures Selective transmission - use proper medium Careful decoding of feedback - careful interpretation of message Seek feedback - ask, verify, follow-up How to Manage Communication Effectively


Slide 40:“When you shake hands, look them straight In the eye and give ‘em a good firm grip” Asia Mid East: gentle handshake Mexico/Latin America: palm slip/grasp thumb Never shake hands with a woman in the Middle East and parts of India Staring at someone is intimidating and disrespectful in many areas of the world, especially Japan Slight bows are appreciated in Asia Presenting business cards? Greetings


Slide 41:Touch: Middle East, Latin America, Italy, Greece, Spain/Portugal, Russia Don’t Touch: Japan, U.S., England, Scandinavia, Northern Europe, Australia Middle Ground: France, China, India Touching


Slide 42:Where to place hands when eating? US: Beneath table Europe: On top of table Eyes: “Closed” in Japan indicates concentration Eyelid pull in France and England Arms: Folded arms – universal defensive posture Hands on hip – aggressiveness in Asia, along with finger pointing Feet: Remove shoes in Japan, India, Asia Do not show the soles of shoes in the Middle East Hands/Eyes/Arms/Feet


Slide 43:End


Slide 44:Contrasting Cultural Values Chapter 5


Slide 45:Power distance - extent to which subordinates accept authority Uncertainty avoidance - threatened by ambiguous situations, prefer formal structure, feel safe and secure Individualism vs collectivism Masculinity - assertiveness, materialism Femininity - concern for society, others Hofstede’s Value Dimensions (IBM data collected on 100,000 individuals in 40 countries)


Slide 46:Obligation - universalism, pluralism Emotional in relationship - neutral, affective Involvement in relationship - specific, diffuse Legitimization of power and status – based on achievement and competency or based on position, age or education Trompenaar’s Findings


Slide 47:Human nature orientation: innately good or bad? 2. Man-nature orientations: mastery or harmony? 3. Time orientation: past, present or future> 4. Activity orientation: individual’s accomplishment or personal traits? 5. Relational orientation: individualism or collectivism? Five Universal Problems


Slide 48:Individual-Collective dimension: the self first or the community? 2. Equality-Hierarchy dimension: differences in power or status or equality? Tough-Tender dimension: what is success- material comforts or relationships? Uncertainty-Avoidance dimension: the need for un-ambiguity and predictability of the future? 5. Time dimension: tight or loose? Cultural Dimensions


Slide 49:Single Focus (American Western Europe, Industrialized Asia): one task at a time; meet deadlines, “Let’s get to work”, “Time is money” Multi Focus (Southern Europe, Latin America, Middle East): Simultaneous tasks, completion \ of task based on strength of relationship, delays are expected, commitments are not Written in stone Time Dimension


Slide 50:Control Cultures (Western Societies): “Go for it”, “Life is what you make it”, “The future can be planned for” Harmony Cultures (Asian Cultures): “Don’t rock the boat”, “Go with the flow” Constraint Culture (Latin America, Middle East): “It’s a matter of fate”, “You take what life gives you” Environment Dimension


Slide 51:Doing Cultures (American): “God helps those who help themselves” “If at first you don’t succeed, try again” “Who are you?” Answer with job title Being Cultures (Latin America, Africa, Middle East, Southern Europe): “Who are you?” Answer with family description or philosophical outlook Action Dimension


Slide 52:Competitive Cultures (U.S., Western Europe, Hong Kong, Mexico, Argentina, Japan): “Winner takes all” “Predominantly materialistic” “We live to work” Cooperative Cultures (Scandinavian Countries, Some Latin Countries, Some European Countries, Parts of Asia): “We’re in this together” “We work to live” Competitive Dimension


Slide 53:Individualist: USA, UK, Italy, Scandinavia, France, Germany Intermediate: Israel, Spain, Japan, Argentina Collectivist: Brazil, Turkey, Mexico, South America, Much of Asia. Individualistic and Collectivist Cultures


Slide 54:End


Slide 55:Negotiating Across Cultures Chapter 6


Slide 56:“a process between two or more parties aimed at reaching a mutually acceptable agreement” Goal - to bring about a win-win situation where all parties benefit Process: preparation, relationship building, exchange of task related information, persuasion, concession and agreement. Negotiations


Slide 57:Competitive process or problem solving approach? How negotiators are selected - best qualified? How are persuasive arguments presented? Rational or emotional? Motivations? Personal, family, company, country? Ability to take risk? Decision making process - individual or collective? Trust - handshake or legal document? Variables in the Negotiation Process


Slide 58:Concentrate on long term relationships Focus on interest behind the positions Avoid reliance on cultural generalizations Be sensitive to timing Remain flexible Prepare carefully Learn to listen Be patient! Effective Strategies for International Negotiators


Slide 59:Do pre-work with the other side if possible, possibly using cultural go-betweens Develop a strategy to deal with the language barrier Use visual aids extensively, but check with cultural expert Be prepared for long negotiations Decide on strategy for obtaining a written agreement, where acceptable Know your walk away point Avoid ethnocentrism Eight Recommendations for Success In Global Negotiations


Slide 60:Expect less confrontation in high context, collectivist cultural settings But, face is more important within the culture than outside it “Disrespectful” out-of-group behavior does not carry as many social issues as the same behavior within the cultural group Agents or third parties can be helpful when confrontation may be expected Confrontation


Slide 61:End


Slide 62:Coping with Culture Shock Chapter 7


Slide 63:It is the “unpleasant consequences of experiencing a foreign culture” Results in: confusion, surprise, disgust, panic, rejection, loss of self-esteem, and inability to function effectively What is Culture Shock?


Slide 64:Homesickness Boredom Withdrawal Irritability Marital stress Stereotyping Hostility Inefficiency Physical un-wellness Depression Manifestations of Culture Shock


Slide 65:Honeymoon stage: unrealistically positive feelings and approach Irritation and hostility: problems arise and become insurmountable Gradual adjustment: Passing of crisis and gradual recovery Biculturalism: Full recovery and ability to function effectively in both cultures Process of Adjustment: 4 Stages


Slide 66:Choose to stay at home and not enter IB Select the IB arena where adjustment can be made more easily Have a realistic understanding of issues and likely problems Learn cross cultural coping skills – language, religion, history, social environment 5. Approach issues as opportunities to learn and grow Minimizing Culture Shock


Slide 67:Do one thing at a time Concentrate on the job Take time commitments seriously Are low context and need information Show great respect for private property, seldom borrow or lend Are accustomed to short term relationships Monochronic People


Slide 68:Do many things at once Are highly distractible and subject to interruptions Consider time commitments an objective to be achieved, if possible Are high-context and already have info Borrow and lend things often and easily Have tendency to build lifetime relationships Polychronic People


Slide 69:End


Slide 70:Developing Global Managers Chapter 8


Slide 71:Maximize long term retention of international managers so that company can develop a top management team with global experience Understand, value and promote role of women and minorities in order to maximize underutilized resources, and 3. Work effectively within local labor laws Global Management Goals


Slide 72:Difficult to control geographically dispersed operations 2. Need for local decision making independent of home office 3. Suitability of managers from alternative sources The Need to Develop Global Managers


Slide 73:Ethnocentric staffing - fill staff position from HQ 2. Polycentric staffing - local managers, host country nationals 3. Global staffing - recruiting the best within and outside the country (transpatriates) 4. Regio-centric staffing - from the region Staffing Alternatives


Slide 74:Area studies - history, geography, politics, economy 2. Language training 3. Sensitivity training 4. Field experiences )host family, immersion) 5. In-country training Training Global Managers


Slide 75:Communications skills Personality traits Motivation Family circumstances Cross cultural training Developing Skills for Global Managers


Slide 76:Preparation Adaptation Repatriation - reverse cultural shock 4. Transition - mentor program Managing Process for Global Managers


Slide 77:Objective - “how to develop and empower intercultural groups and task forces at all levels of an organization to achieve set goals. Synergy advantages: different perspectives, share experiences, share technology Disadvantages: language problems, different management styles, complex decision making process Developing Global Management Teams