Chapter objectives:• Conditions affecting multinational operations• Individual differences among employees• Barriers to cultural adoption• Overcoming barriers to cultural adoption• Productivity and cultural contingencies

The people of the world are organized into nations with its own way, according to its recourses and heritages. There are some similarities and differences among the nations. Understanding these differences and how they influence organizational behavior is aided by examination of following keys:

Social conditions Legal and ethical conditions Political conditions Economic conditions

In many countries the social condition is poorly developed , there are major

shortages of managerial personnel, scientists and technicians and these

deficiencies limit the ability to employ local labor . Needed skills must be

imported from other countries while the local workers will be prepared.

exp American nation welcomed an electronic assembly plant to its capital city .the plant was labor- intensive, so the many jobs it provided reduce the nation’s high unemployment rate. wages were above standards, working conditions were good and the plant was environmentally clean. Additionally company’s agreement with the host nation stated that the company would supply a cadre of managers and technicians to train local employees. local would gradually become supervisors, technician and purchasing specialist and so on.

As this example shows, the lending of skilled people to a nation for training their local may provide a more lasting benefit to its development rather than lending of capital.

Training multiplier effect: is in action by which the loaned skilled people developed others, and those trained locals become the nucleus for developing more people.

Loaned skilled people

Local trainers

Local trainees

In judicial systems, some countries practice rapid disposition of cases, in other countries cases may drag on for years. Some countries condone the practice of bribery as way of obtaining and retaining businesses others strictly prohibit it.

Managers need to be aware of the possible differences in both laws and ethical values that define acceptable and unacceptable behaviors in foreign countries .

The managers in foreign countries need to become familiar with local customers and practice .Applying their own personal and organizational value system, their must then decide which behaviors are compatible with both parties’ expectations and which are not. Finally ,they need to recognize that the resolution of ethical issues is not always clear-cut.

Political condition that have a significant effect on organizational behavior include instability of government ,nationalistic drives, and subordination of employers .

On the other hand ,a strong nationalistic drive may enforce local to desire to run their country by themselves without interference by foreign nationals.

Inflation makes the economic life of workers insecure. It encourages them to spend quickly before their money loses its value and this spending pattern o the country’s inflationary problem.

Social unrest is compounded by enormous disagreement in the distribution of wealth in these nations. The consequences are often varied; some workers passively accept their situation, while others aggressively protest.

In conclusion ,by looking at the social, legal and ethical, political and economic conditions we will find out that these conditions can restrain the advanced technology and sophisticated organizational systems. They constrain stability, security and trained human resources that developing countries require to be more productive.

There are five dimensions that accounted for the sharpest differences among employees including:

Individualism/collectivism Power distance Uncertainty avoidance Masculinity/femininity Time orientation

Individualism/Collectivism: cultures that emphasize individualism tend to accent individual rights and freedoms and place considerable attention on self-respect whereas collectivism heavily accent the group and values harmony among members. For example in US there is individualistic culture(“every person for him/her self”) but Japan is collectivistic, with the culture that can be characterized by the proverb:”The nail sticks up gets pounded down.”

Power distance: refers to the belief which are strong and legitimate decision-making rights separating managers and employees.

Uncertainty avoidance: These employees prefer to avoid ambiguity at work and those who with high degree often prefer stability, security and clarity.

Masculinity/ Femininity: define gender roles in more traditional ways. In addition, masculine societies evaluate assertive behavior and acquisition wealth ;whereas feminine cultures contribute to the relationships among people, caring for others and greater balance between family and work life.

Time orientation: some cultures emphasize values such as the necessity of preparing for the future, the value of thrift and savings and the qualification of persistence which have long-term orientation such as Hong Kong, China and Japan.

Other cultures value the past and accent the present with the respect for tradition and need to fulfill historical social obligations, they have short-term orientation such as France, Russia, and West Africa.

Multiculturism: occurs when the employees in two or more cultures interact with each one regular basis.

In some instances the new employees are parent-country nationals from the

nations in which the home office is located or they may be third-country

nationals from some other nations. In either case they are called expatriate

because they come from another nation. Their role is to provide a

combination of cultures in which both parties adjust to the new situation of

seeking greater productivity for the benefit of both the organization and the

citizens of the country.

An expatriate manager may find several barriers to adjust to the new culture. For overcoming such problems is to acquire cultural awareness of the multiple ways in which cultures differ(language , religion , food ,social behavior and etc).

High –context cultures: these cultures tend to emphasize personal relations, place high value on trust, focus on nonverbal cues(guidelines) and accept the need to attend to social needs before business matters like China, Korea and Japan.

Low-context cultures: tend to rely on written rules and legal documents, conduct business first and value expertise and performance like Germany, US and Scandinavian countries.

Parochialism: it means that the people see the situation around them from their own perspective. They may fail to recognize key differences between their own and others’ cultures.

Ethnocentrism: occurs when people are predisposed (talented) to believe that their homeland conditions are the best. This predisposition is known as the self-reference criterion or ethnocentrism.

Cultural empathy: is the awareness of the differences across the cultures and understanding of the ways in which those differences can affect business relationships. When culture empathy continues, it will result in geocentric organization which ignore person's nationality while emphasizing employee ability in selection, assignment, and decisions.

Cultural distance: is the amount of difference between any two social systems and may range from minimal to substantial and it can affect the responses of all people to business issues. For instance ,expatriates managers tend to be a little ethnocentric and to judge conditions according to their country standards and consequently ,these problems will be magnified .

Culture shock: the employees who move to new job often experience various degrees of cultural shock which is a feeling of confuion, insecurity and anxiety. These are related to not knowing how to act and about losing their self-confidence when wrong things are made.

careful selection

Compatible adjustment

Pre-departure training

Orientation and support in new country

Preparation for reentry

Cultural contingency: means that the most productive practices for a particular nation will depend heavily on its culture. This lesson for both expatriate and local managers to accept is neither home nation’s nor host nation’s practices are used exclusively.

Cultural contingencies are illustrated by theory Z ,an integrative model of organizational behavior proposed by William Ouch. It provides a useful way in which behavioral instructions must be adapted to fit the organization’s cultural environment:

• Long-term employment • Non-specialized careers• Individual responsibility• Concern for the total person• Less formal control systems• Consensus decision making• Slower rates of promotion

“The features of theory Z”

In addition to the desirability to speak and understand the language of the host country the expatriates also need to gain an appreciation for important differences in non-verbal communication (i.e. Body language). If they do not, they risk making serious errors that might damage their relationships with their employees, partners and suppliers.

Areas in which orientations to Cross-culture communication may differ and are important contingency factors that must me considered carefully by managers include:◦ Value placed on time efficiency, ◦ Value placed on seeing the future◦ Thought patterns◦ Need for personal space, Eye contacts, Physical Appearance,

Posture, Gesture ◦ Meaning of Silence◦ Legitimacy of touch

CROSS-CULTURAL COMMUNICATIONCROSS-CULTURAL COMMUNICATION

Transcultural Managers are those who have learned to manage employees in several cultures effectively.

Transcultural Employees are those who have learned to operate effectively in several cultures. These employees are low in ethnocentrism and adapt readily to different cultures without major cultural shock. They usually communicate in more than one language.◦ Transcultural employees are especially needed in large, multinational firms that

operate in a variety of national cultures.

Multinational Firm: For a firm to be fully Multinational in character, it should have the following items truly diversified without primary dominance of any one nation :

- Ownership, - Operations, - Markets, - Managers.◦ Multinational Companies management look to the world as an economic

and social unit; but reorganize each local culture, respect its integrity, acknowledge its benefits, and use its differences effectively in their organization.

CROSS-CULTURAL COMMUNICATIONCROSS-CULTURAL COMMUNICATION