Culture, Management Style, and Business Systems

Culture, Management Style, and Business

Systems

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Learning Objectives

• The necessity for adapting to cultural differences• How and why management styles vary around the world• The extent and implications of gender bias in other

countries• The importance of cultural differences in business ethics• The differences between relationship-oriented and

information-oriented cultures

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Required Adaptation

• Adaptation is a key concept in international marketing.• As a guide to adaptation, all who wish to deal with individuals, firms, or

authorities in foreign countries should be able to meet 10 basic criteria:- 1) open tolerance- 2) flexibility- 3) humility- 4) justice/fairness- 5) ability to adjust to varying tempos- 6) curiosity/interest- 7) knowledge of the country- 8) liking for others- 9) ability to command respect- 10) ability to integrate oneself into the environment

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The Impact of American Culture on Management Style

• “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 producing efficiency

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American Style Capitalism

Gordon Gecko“Greed is Good”

“Wall Street” the movie

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Management Objectives and Aspirations

• Security and mobility- Relate directly to basic human motivation and therefore have

widespread economic and social implications.

• Personal life- Worldwide study of individual aspirations, (David McClelland).

• Affiliation and social acceptance- In some countries, acceptance by neighbors and fellow workers

appears to be a predominant goal within business.

• Power and achievement- South American countries

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Annual Hours Worked Vs. Contextual Background

• Insert Exhibit 5.1

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Average Hours Worked

• Insert Exhibit 5.3

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P-Time versus M-Time

• Monochronic time:- Tend to concentrate on one thing at a time- Divide time into small units and are concerned with promptness- Most low-context cultures operate on M-Time

• Polychronic time:- Dominant in high-context cultures- Characterized by the simultaneous occurrence of many things- Allows for relationships to build and context to be absorbed as parts of

high-context cultures.

• Most cultures offer a mix of P-time and M-time behavior, but have a tendency to be either more P-time or M-time in regard to the role time plays.

• As global markets expand more businesspeople from P-time cultures are adapting to M-time.

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Speed is Relative

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The Impact of Gender Bias in the Boardroom

Female directors on corporate boards as a % of total

(March 2004)

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Corruption Defined

• Types of Corruption:- Profits (Marxism)- Individualism (Japan)- Rampant Consumerism (India)- Missionaries (China)

• Criticisms of Mattel and Barbie:- Sales of Barbie declined worldwide after the global standardization- Parents and government did react- Mattel’s strategy boosted sales of its competition

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Bribery: Variations on a Theme

• Bribery and Extortion:- Voluntary offered payment by someone seeking unlawful advantage

is bribery.- If payments are extracted under duress by someone in authority from

a person seeking only what he are she is lawfully entitled to that is extortion.

• Subornation and Lubrication:- Lubrication involves a relatively small sum of cash, a gift, or a

service given to a low-ranking official in a country where such offerings are not prohibited by law.

- Subornation involves giving large sums of money, frequently not properly accounted for, designed to entice an official to commit an illegal act on behalf of the one offering the bribe.

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Bribery: Variations on a Theme (continued)

• Agent’s Fees:- When a businessperson is uncertain of a country’s rules and

regulations, an agent may be hired to represent the company in that country.

- The Foreign Corrupt Practices Act- Change will come only from more ethically and socially

responsible decisions by both buyers and sellers and by governments willing to take a stand.

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Transparency International

Corruption Perception Index

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Transparency International

Bribe Payers Index

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A Synthesis, Relationship-Oriented vs. Information-Oriented Cultures

Information Oriented (IO)

Low context

Individualism

Low power distance

Bribary less common

Low distance from English

Linguistic directness

Monochronic time

Internet

Foreground

Competition

Relationship Oriented (RO)

High context

Collectivism

High power distance (including gender)

Bribary more common

High distance from English

Linguistic indirectness

Polychronic time

Face-to-face

Background

Reduce transaction costs