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Cross-Cultural Management

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Conor Hughes

on 19 March 2013

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Transcript of Cross-Cultural Management

Cross-Cultural Management "Japanese and American management is 95 percent the same, and differs in all important respects." - T. Fujisawa, co founder of Honda Motor Corporation Cross Cultural Management - Ethics in Cross Cultural Management Conflict between ethics of Multinational Enterprise and host country
few widely accepted management processes to navigate ethical issues
What to do about "questionable practices"
Home country vs. host country
Industry wide norms Knowledge Management (Holden, 2002) Solutions Integrated Social Contracts theory
Illegitimate Norms
Core Values The HKH Model 6 Heuristic Questions Google in China Censoring the internet
"The Pledge"
Google's core values Do they conflict? "Cross-cultural management studies the behavior of people interacting within and between organizations around the world. It describes and compares organizational behavior across cultures, and, perhaps most important for managers, seeks to understand and improve the effectiveness of people interacting with colleagues from different cultures." -Nancy J. Adler (1986) KM discusses how organizations take advantage of employee knowledge "'Knowledge' is the most important asset in a firm" Communication in Cross Cultural Management Motivation: "If we aren't motivated to communicate with others, it probably doesn't matter what other skills we possess" Cross- cultural Management Participation
across cultures Maintaining equivalence across cultures Knowledge sharing Learning from experience Why are individuals not motivated to communicate across cultures? Explicit knowledge- Easy to explain and share (facts)
Tacit knowledge- More difficult to explain (culture) 1. Incentive
2. Discomfort
3. History "Cross-cultural managers are no longer simply experts about culture. They are, fundamentally, knowledge-management facilitators, able to transform tacit knowledge into explicit knowledge" (Fontaine, 2007). Fons Trompenaars Knowledge: "As an individual component of intercultural communication competence, the quality of knowing about oneself, others, and various aspects of communication." Self-Knowledge: "related to intercultural communication competence, the quality of knowing how one is perceived as a communicator, as well as one's strengths and weaknesses" Other-knowledge: "Related to intercultural communication competence, knowledge about how people from other cultures think and behave that will also help you be a more effective communicator" Universalism vs. Particularism
Individualism vs. Collectivism
Affective vs. Neutral
Specificity vs. Diffuseness
Achievement vs. Ascription
Orientation towards Time
Internal vs. External Control Universalism vs. Particularism
Universalist societies feel strong sense of rules
Particularist societies have stronger sense of bonds than abstract rules
Manager's need to acknowledge that particular events need universal rules
Transnational Specialization- Allowing each nation to specialize in what it does best and be a source of authority and leadership within the corporation Attitudes: "Many attitudes contribute to intercultural communication competence, including tolerance for ambiguity, empathy, and nonjudgementalism" Tolerance for Ambiguity: "Refers to the ease in dealing with situation in which much is unknown" High vs. low uncertainty avoidance cultures Empathy: "Refers to the ability to know what it's like to walk in another person's shoes" Nonjudgmentalism "Free from evaluating according to one's own cultural frame of reference" 1. What is the Questionable Practice (QP) in this situation? 2. Does the QP violate any laws that are enforced? 3. Is the QP simply a cultural difference or is it also a potential ethics problem? Individualism vs. Collectivism
Individualism - prime orientation to the self
Collectivism- prime orientation to common goals
Effective international manager needs to satisfy both
"Individualism finds its fulfillment in service to the group, while group goals are of demonstrable value to individuals" 4. Does the QP violate the firm's core values or code of conduct, or an industry wide or international code to which the firm subscribes, or a firmly established hypernorm? 5. Does the firm have leverage (something of value to offer) in the host country that allows the firm to follow its own practices rather than the QP? 6. Will market practices in the host country improve if the firm follows its own practices rather than the QP in the host country marketplace? We need to avoid conformism and slow decision making, so we must... Encourage individual freedom and responsibility, however... We do not want to degenerate into self-centerdness, so we must... Encourage individuals to work in the interest of the group, although... Give clear team objectives that need individual initiative to succeed ISCT: recognize universally binding ethical practices or "hypernorms" (Donaldson and Dunfee 1994) Practices such as censorship and government monitoring of websites that would violate universal norms and access to information (Donaldson and Dunfee 1999) We do not want to lose our sense of central direction, so we must... Apply rules and procedures universally to ensure consistency although... We do not want to degenerate into rigidity and bureaucracy, so we must... Encourage flexibility by adapting to situations, however... Central guidelines with local adaptations and discretion Businesses should use their firm's core values as a guide while adjusting the firm's values and practices to those reflected in the culture of the host country (Wood 2006) Affective vs. Neutral
Affective cultures seem inconsistent and out of control
Neutral cultures seem ice cold
Managers need to reconcile these differences intuitively
Inventiveness is originally intuitive, but needs to be checked by reasoning to be innovative. We need to ensure that expressing emotions does not hinder us in achieving our objectives so we must... Control the expressions of emotions so issues can be considered objectively, but... We should not be inhibited from expressing ourselves so we must... Be able to express whatever we think or feel openly and freely, but... We need to control our expressions so that we also express when we control Specific vs. Diffuse
Specific- Managers segregate tasks, isolates subordinates from personal life
Diffuse- Relationships affect several levels of personality and permeates to other areas of life.
Managers need to balance relationships between personal and corporate, otherwise paralysis develops
Recognize privacy, but complete separation leads to alienation We need to retain perspective so that privacy and business performance are not compromised, so... It is important to keep business separated from other aspects of life, but... Complete isolation might lead to alienation and superficiality, so we must... Recognize that the different integration of different aspects of the total person can stabilize and deepen relationships, but... By integrating specific aspects of the person we can build stronger affiliations Achievement vs. Ascription
Achievement- Doing, organizations justify hierarchies because authority has "achieved more" for organization
Ascription- Being, naturally attain power, independent of task
Managers must be able to recognize limitations of both and find ways to balance the orientations We do not want to be hindered in our achievement by not challenging the status quo, so... We need to reward the things our people do and achieve based on skill, but... We want to avoid the instability that comes with only valuing the last performance, so we must... Respect 'who' our people are based on their experience, although... Respect what people are so we can better take advantage of what they do Orientation towards time
Managers need to consider:
Is strategy focused on the future
Is strategy about reviving the past
Dilemma of seeking visions and missions
and managing changes in relation to the past in dance-like synchronizations The more carefully operations converge "just-in-time"... in race-like sequences... the faster they can go incrementally We need clear plans leading from current competencies to our new visions Internal vs. External
Internal- Control of nature, more focus on oneself than other, inner direction
External- Nature dominates, outer-directedness
The "Big Idea" or Rapid Refinement?
Managers must combine creative ideas with refining products We must not just want to be at the mercy of the forces around us, so... We need to focus on things we are good at, however... We need to make sure there is a market for what we produce, so... We need to respond to the needs of our customer, but... Use opportunities by taking advantage of existing forces and not contradict them Novo Nordisk (NN)- Danish company in biotechnology
Wanted to establish a global ethical standard for its subsidiaries
1996-NN invited 1000 senior managers to became Facilitators, 14 were chosen
Facilitators became "change agents"
Transferred values of NN by traveling to every NN site
All issues were negotiated with local culture, nothing imposed Sulzer Infra (SI)- Construction consultancies
1990s company shifted to focus on pan-European contracts
Subsidiaries had own way of doing business
Set up Sulzer Academy to share knowledge where managers throughout Europe discussed their values and techniques By: Conor Hughes & Greg Caplin Cultural Problems that Multinational Companies Face (Lewis) Diversity
Organizational Culture
Human Resources
Communication and Cultural Norms
Etiquette and Customs How Do Some U.S. Companies Deal With Diversity (Iwata, 2007) "Diversity is at the heart of globalization. It's happening across economies on a global scale, and it will only grow in the future."
- Douglas Freeman CEO of Virtcom Consulting Going Native Understand native cultures and traditions
Seeking trust of locals and forging new relationships
Weyerhaeuser- Timber company in U.S. and Canada
Has faced several lawsuits from First Nations people in the past
Hired aboriginal people at its plants
Signed contracts with aboriginal suppliers
Forged joint ventures with the tribes
"Our goal is to have good relationships with the aboriginal people, to be aware of their concerns, and understand their cultures." -Weyerhaeuser spokesman Recognizing Religious Differences Texas Instruments, American Express, HP, and Ford
Allow employees to form religious-based networks
Some have chapels or prayer rooms http://live.wsj.com/video/cross-cultural-management-strategy/B955CFB2-8AC7-4AFF-BA8C-CC41514D259B.html#!B955CFB2-8AC7-4AFF-BA8C-CC41514D259B Industry Wide Norms Sullivan Principles
Caux Round Table Principles for Business
OECD guidelines Sullivan Principles
1. Non-segregation of the races in all eating, comfort, and work facilities.
2. Equal and fair employment practices for all employees.
3. Equal pay for all employees doing equal or comparable work for the same period of time.
4. Initiation of and development of training programs that will prepare, in substantial numbers, blacks and other nonwhites for supervisory, administrative, clerical, and technical jobs.
5. Increasing the number of blacks and other nonwhites in management and supervisory positions.
6. Improving the quality of life for blacks and other nonwhites outside the work environment in such areas as housing, transportation, school, recreation, and health facilities.
7. Working to eliminate laws and customs that impede social, economic, and political justice.
1. Express our support for universal human rights and, particularly, those of our employees, the communities within which we operate, and parties with whom we do business.
2. Promote equal opportunity for our employees at all levels of the company with respect to issues such as color, race, gender, age, ethnicity or religious beliefs, and operate without unacceptable worker treatment such as the exploitation of children, physical punishment, female abuse, involuntary servitude, or other forms of abuse.
3. Respect our employees’ voluntary freedom of association.
4. Compensate our employees to enable them to meet at least their basic needs and provide the opportunity to improve their skill and capability in order to raise their social and economic opportunities.
5. Provide a safe and healthy workplace; protect human health and the environment; and promote sustainable development.
6. Promote fair competition including respect for intellectual and other property rights, and not offer, pay or accept bribes.
7. Work with governments and communities in which we do business to improve the quality of life in those communities – their educational, cultural, economic and social well-being – and seek to provide training and opportunities for workers from disadvantaged backgrounds.
8. Promote the application of these principles by those with whom we do business. The Global Sullivan Principles
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