[PPT]PowerPoint Presentation - Welcome to BOYD websitesboyd-home.com/.../Luthans10/Luthans_10e_PPT_Ch05.pptx · Web viewLearning Objectives Examine the strategic dispositions that

Cover Slide

© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 5

Managing across Cultures


Learning Objectives

• Examine the strategic dispositions that characterize responses to different cultures

• Discuss cross-cultural differences and similarities

• Review cultural differences in select countries and regions, and note some of the important strategic guidelines for doing business in each


Strategic Predispositions

• Firm allows values and interests of the parent company to guide strategic decisions

Ethnocentric

• Company makes strategic decisions tailored to suit the cultures of the countries where the MNC operates

Polycentric

• Firm blends its own interests with those of its subsidiaries on a regional basis

Regiocentric

• Company integrates a global systems approach to decision making

Geocentric


Table 5.1 - Orientation of an MNC under Different Profiles


Globalization Imperative

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

• Effective multinational companies (MNCs) should make efforts to address local needs– Regional strategies can be used effectively to

capture and maintain worldwide market niches


Need for Unique Strategies for Different Cultures

• Diversity of worldwide industry standards• Continual demand by local customers for

differentiated and locally-sourced products• Difficulty of managing global organizations• Local units should be allowed to use their own

abilities and talents unconstrained by headquarters


Delivery of Marketing Message

Nationality Nature of advertising

Germans • Factual and rational • Spots feature a standard family of two parents, two children, and

grandmother

French • Avoidance of reasoning or logic• Emotional, dramatic, and symbolic• Spots are viewed as cultural events and reviewed as if they were

literature or films

British • Laughter is valued• Typical broad, self-deprecating commercial mocks both the

advertiser and consumer


Challenges Faced by MNCs

• Staying abreast of local market conditions and not assuming that all markets are same

• Knowing the strengths and weaknesses of its subsidiaries and assisting them in addressing local demands

• Giving more autonomy to the subsidiary


Barriers to Cross-Cultural Management

• Tendency to view the world through one’s own eyes and perspectives

Parochialism

• Process of exhibiting the same orientation toward different cultural groups

Simplification


Table 5.2 - Six Basic Cultural Variations


Cross-Cultural Similarities

• Russia and U.S.– Traditional management, communication, human

resources, and networking activities– Organizational behavior modification interventions


Cross-Cultural Similarities (continued)

• Korea and U.S.– Organizational commitment relates to employees'

position in the hierarchy, tenure in their current position, and age

– Commitment increases with positive perceptions of organizational climate


Cross-Cultural DifferencesExamples Human resource management differences

Mexico • Concept of an hourly wage plays a minor role

Austria and Brazil • Employees with one year of service are automatically given 30 days of paid vacation

Some jurisdictions in Canada

• Legislated pay equity between male- and female-intensive jobs

Japan • Compensation levels are determined by age, length of service, and educational background

United Kingdom • Employees are allowed up to 40 weeks of maternity leave, and employers must provide a government-mandated amount of pay for 18 of those weeks

Majority of large Swedish companies

• Head of human resources is on the board of directors


Approaches for Formulating Effective Compensation Strategies in Different Clusters

Examples Strategies

Pacific Rim countries • Incentive plans should be group-based

Japan, Hong Kong, Malaysia, the Philippines, and Singapore

• High salaries should be paid to senior-level managers

Italy and Belgium • Higher salaries should be paid to local senior-level managers

Portugal and Greece • Profit-sharing plans are effective

Denmark, the Netherlands, and Germany

• Personal-incentive plans are useful

Great Britain, Ireland, and the United States

• Compensation plans should provide opportunity for earnings, recognition, advancement, and challenge


GLOBE Project

• Provides an extensive breakdown of:– How managers behave– How different cultures can affect the perspectives

of managers


Business in China

• Primary criterion - Technical competence • Value is placed on punctuality, patience,

guanxi networking, and reciprocity– Guanxi: Good connections


Business in Russia

• Building personal relationships with partners is important

• Working with local consultants can be valuable• Gift-giving is considered ethical when

engaging in business transactions


Business in India

• India has become a desirable market because of unsaturated consumer markets with cheap labor and production locations

• Bureaucratic restrictions have been lifted to attract foreign investment and raise economic growth rate


Business in France

• Social interactions are affected by class stereotypes

• French organizations tend to be highly centralized and have rigid structures

• Management is autocratic in nature


Business in Brazil

• Brazilian businesspeople tend to have a relaxed work ethic

• Face-to-face interaction is preferred• Patience is key when managing business


Business in Arab Countries

• Arab businesspeople:– Follow a fatalistic approach to time– Tend to attach a great deal of importance to status

and rank• Business-related discussions may not occur

until the third or fourth meeting


Review and Discuss

1. Define the four basic predispositions MNCs have toward their international operations

2. If a locally based manufacturing firm with sales of $350 million decided to enter the EU market by setting up operations in France, which orientation would be the most effective: ethnocentric, polycentric, regiocentric, or geocentric? Why?

– Explain your choice


Review and Discuss (continued 1)

3. In what ways are parochialism and simplification barriers to effective cross-cultural management?

– Give an example for each case


Review and Discuss (continued 2)

4. Many MNCs would like to do business overseas in the same way that they do business domestically– Do research findings show that any approaches

that work well in the U.S. also work well in other cultures?

• If so, identify and describe two

Documents

[PPT]PowerPoint Presentation - Welcome to BOYD websitesboyd-home.com/.../Luthans10/Luthans_10e_PPT_Ch05.pptx · Web viewLearning Objectives Examine the strategic dispositions that