162 midterm1

• 1. ethnocentric
• 2. polycentric
• 3. regio-centric
• 4. geocentric

nationalistic philosophy of mgmt where the values and interests of the parent company guide strategic decisions

philosophy of mgmt where strategic decisions are tailored to suit the cultures of the countries where the MNC operates

phil of mgmt where the firm tries to blend its own interests w/ those of its subsidiaries on a regional basis

phil of mgmt where the company tries to integrate a global systems approach to decision making

belief that one worldwide approach to doing business is key to efficiency and effectiveness

•Diversity of worldwide industry standards

•Continual demand by local customers for differentiated products

•Importance of being insider as in case of customer who prefers to “buy local”

•Difficulty of managing global organizations

• •Need to allow subsidiaries to use own abilities and talents
• unconstrained by headquarters

•Avoid reasoning or logic

•Advertising predominantly emotional, dramatic, symbolic

•Spots viewed as cultural events – art for sake of money – and reviewed as if they were literatures or films

•Value laughter above all else

• •Typical broad, self-deprecating British commercial amuses by
• mocking both advertiser and consumer

•Want factual and rational advertising

• •Typical German spot features standard family of 2 parents,
• two children, and grandmother

–Tailor advertising message to particular culture

• –Stay abreast of local market conditions; don’t assume all
• markets basically same

• –Know strengths and weaknesses of MNC subsidiaries; provide
• them assistance in addressing local demands

• –Give subsidiary more autonomy; let it respond to changes in
• local demand

–Parochialism: view world through own eyes and perspectives

–Simplification: exhibit same orientation toward different cultural groups

–Not possible to do business same way in every global location

–Procedures and strategies that work well at home can’t be adopted overseas without modifications

–Some similarities have been found

•Russia and U.S. (for example)

–Traditional management

–Communication

–Human resources

–Networking activities

–OB Mod

–Far more differences than similarities found in cross-cultural research

–Wages, compensation, pay equity, maternity leave

–Importance of criteria used in evaluation of employees

1.The Chinese place values and principles above money and expediency.

2.Business meetings typically start with pleasantries such as tea and general conversation about the guest’s trip to the country, local accommodations, and family.

3.The Chinese host will give the appropriate indication for when a meeting is to begin and when the meeting is over.

4.Once the Chinese decide who and what is best, they tend to stick with these decisions. Although slow in formulating a plan of action, once they get started, they make fairly good progress.

5.In negotiations, reciprocity is important. If the Chinese give concessions, they expect some in return.

6.Because negotiating can involve a loss of face, it is common to find Chinese carrying out the whole process through intermediaries.

7.During negotiations, it is important not to show excessive emotion of any kind. Anger or frustration is viewed as antisocial and unseemly.

8.Negotiations should be viewed with a long-term perspective. Those who will do best are the ones who realize they are investing in a long-term relationship.

1.Build personal relationships with partners. When there are contract disputes, there is little protection for the aggrieved party because of the time and effort needed to legally enforce the agreement.

2.Use local consultants. Because the rules of business have changed so much in recent years, it pays to have a local Russian consultant working with the company.

3.Ethical behavior in the United States is not always the same as in Russia. For example, it is traditional in Russia to give gifts to those with whom one wants to transact business.

4.Be patient. In order to get something done in Russia, it often takes months of waiting.

5.Russians like exclusive arrangements and often negotiate with just one firm at a time.

• 6.Russians like to do business face-to-face. So when they receive letters or faxes, they often put them on their desk but do
• not respond to them.

7.Keep financial information personal. Russians wait until they know their partner well enough to feel comfortable before sharing financial data.

• 8.Research the company. In dealing effectively with Russian partners, it is helpful to get information about this company, its
• management hierarchy, and how it typically does business.

9.Stress mutual gain. The Western idea of “win–win” in negotiations also works well in Russia.

• 10.Clarify terminology. The language of business is just getting
• transplanted in Russia so double-check and make sure that the other party clearly understands the proposal, knows what is expected and when, and is agreeable to the deal.

11.Be careful about compromising or settling things too quickly because this is often seen as a sign of weakness.

12.Russians view contracts as binding only if they continue to be mutually beneficial, so continually show them the benefits associated with sticking to the deal.

1. It is important to be on time for meetings.

2. Personal questions should not be asked unless the other individual is a friend or close associate.

3. Titles are important, so people who are doctors or professors should be addressed accordingly.

4. Public displays of affection are considered to be inappropriate, so one should refrain from backslapping or touching others.

5.Beckoning is done with the palm turned down; pointing often is done with the chin.

6.When eating or accepting things, use the right hand because the left is considered to be unclean.

• 7.The namaste gesture can be used to greet people; it also
• is used to convey other messages, including a signal that one has had enough food.

• 8.Bargaining for goods and services is common; this contrasts with Western traditions, where bargaining might be considered
• rude or abrasive.

1.When shaking hands with a French person, use a quick shake with some pressure in the grip.

• 2. It is extremely important to be on time for meetings and social
• occasions. Being “fashionably late” is frowned on.

3. During a meal, it is acceptable to engage in pleasant conversation, but personal questions and the subject of money are never brought up.

4. Visiting businesspeople should try very hard to be cultured and sophisticated.

5.The French tend to be suspicious of early friendliness in the discussion and dislike first names, taking off jackets, or disclosure of personal or family details.

6.In negotiations the French try to find out what all of the other side’s aims and demands are at the beginning, but they reveal their own hand only late in the negotiations.

7.The French do not like being rushed into making a decision, and they rarely make important decisions inside the meeting.

8.The French tend to be very precise and logical in their approach to things, and will often not make concessions in negotiations unless their logic has been defeated.

1.It is important never to display feelings of superiority, because this makes the other party feel inferior. Let one’s action speak for itself and not brag or put on a show of self-importance.

2.One should not take credit for joint efforts. A great deal of what is accomplished is a result of group work, and to indicate that one accomplished something alone is a mistake.

3.Much of what gets done is a result of going through administrative channels in the country. It often is difficult to sidestep a lot of this red tape, and efforts to do so can be regarded as disrespect for legal and governmental institutions.

4.Connections are extremely important in conducting business.

5.Patience is critical to the success of business transactions. This time consideration should be built into all negotiations.

• 6.Important decisions usually are made in person, not by correspondence or telephone. This is why an MNC’s personal presence often is a prerequisite for success in the Arab
• world. Additionally, while there may be many people who provide input on the final decision, the ultimate power rests with the person at the top, and this individual will rely heavily on personal impressions, trust, and rapport.

Acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior.

•Learned

•Shared

•Trans-generational

•Symbolic

•Patterned

•Adaptive

–In some societies, top managers make all important organizational decisions.

–In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions.

–In some societies, organizational decision makers are risk averse and have great difficulty with conditions of uncertainty.

–In others, risk taking is encouraged, and decision making under uncertainty is common.

–In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions.

–In others, cultural norms require group rewards, and individual rewards are frowned upon.

–In some societies, much is accomplished through informal means.

–In others, formal procedures are set forth and followed rigidly.

–In some societies, people identify very strongly with their organization or employer.

–In others, people identify with their occupational group, such as engineer or mechanic.

• –Learned
• from culture in which individual is reared

• –Differences
• in cultural values may result in varying management practices

• –Basic
• convictions that people have about

•Right and wrong

•Good and bad

•Important and unimportant

1.Power distance

2.Uncertainty avoidance

3.Individualism/collectivism

4.Masculinity/femininity

• –High power distance countries: people blindly obey superiors; centralized, tall structures
• (e.g., Mexico, South Korea, India)

• –Low power distance countries: flatter, decentralized structures, smaller ratio of
• supervisor to employee (e.g., Austria, Finland, Ireland)

–High uncertainty avoidance countries: high need for security, strong belief in experts and their knowledge; structure organizational activities, more written rules, less managerial risk taking (e.g., Germany, Japan, Spain)

• –Low uncertainty avoidance countries: people more willing to accept risks of the unknown, less structured organizational activities, fewer written rules, more managerial risk
• taking, higher employee turnover, more ambitious employees (e.g., Denmark and Great Britain)

• –High individualism countries: wealthier, protestant work ethic, greater individual
• initiative, promotions based on market value (e.g., U.S., Canada, Sweden)

• –High collectivism countries: poorer, less support of Protestant work ethic, less
• individual initiative, promotions based on seniority (e.g., Indonesia, Pakistan)

• –High masculine countries:
• stress earnings, recognition, advancement, challenge, wealth; high job stress
• (e.g., Germanic countries)

• –High feminine countries:
• emphasize caring for others and quality of life; cooperation, friendly
• atmosphere., employment security, group decision making; low job stress (e.g.,
• Norway)

–Universalism: ideas/practices can be applied everywhere

• –High universalism countries: formal rules, close adhere to
• business contracts (e.g., Canada, U.S., Netherlands, Hong Kong)

• –Particularism: circumstances dictate how
• ideas/practices apply; high particularism countries often modify contracts (e.g., China, South
• Korea)

–Individualism: people as individuals

• –Countries
• with high individualism: stress personal and individual matters; assume great
• personal responsibility (e.g., Canada, Thailand, U.S., Japan)

–Communitarianism: people regard selves as part of group

• –Value
• group-related issues; committee decisions; joint responsibility (e.g.,
• Malaysia, Korea)

neutral: culture in which emotions not shown eg. japan & UK

emotional: emotions expressed openly and naturally eg. mex, netherlands, switzerland

specific: large public space shared with others and small private space guarded closely - ppl extroverted, strong separation of work and personal life eg. austria UK US

diffuse: public and private spaces similar size, public space guarded because shared w/private space - ppl indirect/introverted, work/private life closely linked eg. venezuela, china, spain

achievement culture: status based on how well perform functions ( austria, switzerland, US)

ascription culture: status based on who or what person is (venezuela, china, indonesia)

sequential: only one activity at a time; appts kept strictly, follow plans as laid out (US)

sychronous: multi-task, appts are approx, scheds subordinate to rel'ns (france, mex)

present vs future: future more important (italy, US, germany), present more important (venezuela, indo), all 3 time periods equally important (france, belgium)

inner-directed: ppl believe in control of outcomes (us, switz, greece, japan)

outer-directed: ppl believe in letting things take course (china, many other asian countries)