IAF605 Week 2
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IAF605 Week 2 - The Cultural Environment Facing Business
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IAF605 Week 2
- 1. IAF 605 - International Business Management Week 2 The Cultural Environment Facing Business
- 2. Agenda
- 3. Review 3 Types of Int’l Organizations Modes of Operation 7 Factors - Increased Globalization 3 Criticisms of Globalization Reasons That Firms Engage in International Business
- 4. Does International Business Lead to Cultural Imperialism?
- 6. Cultural Factors affecting International Business Operations (page 49)
- 10. Cultural values are set early in life but change can occur CHOICE IMPOSITION
- 13. Issues in Social Stratification
- 14. Issues in Work Motivation Source: http://img510.imageshack.us/img510/2872/motivation2jh1.jpg
- 15. The Hierarchy of Needs vs. The Need Hierarchy (page 62)
- 25. Strategies for Instituting Cultural Change
- 27. Concerns about Charles Martin
- 29. Questions
- 30. Homework read Chapter 3 work on Group presentation
Notas do Editor
- business involves people diversity – important but hard to do collision – practices are less effective than intended; distress due to difficulty in accepting or adjusting to foreign behaviours; sensitivity and adjustment – sensitive to how business is done in another country and adjust business practices if necessary
- by age 10, most children have their basic value systems choice – social and economic situations present new alternatives (Chinese farmers moving into the city for work - leaving family behind) imposition – contact among countries – creolization (mixing cultural elements)
- Membership : ascribed = by birth; acquired = religion/political affiliation, professional association (i.e. Institute of Chartered Accountants) Orientation – what do businesses rewards? In Canada? Elsewhere? Societies – if more “open” or egalitarian, ascribed group membership is less important; if closed, ascribed group membership is important (and laws made to support or change that)...Dubai – hiring locals Malaysia – support ethnic Malays over Chinese and Indians Many countries don’t recognize the equality of men and women. Age-based – retirement, age of majority, civic duty, advertising rules Family – individual’s position due to family’s social status (Royalty, China...) lots of family-run business tough to expand Occupation - prestigious jobs, self-employed
- desire for wealth – aka Protestant work ethic vacation time – Japan or Europe vs Canada/USA – want leisure more than money Success/Reward – people like uncertainty –they are more enthusiastic Assertiveness – “live to work” money/work orientation instead of “work to live” /people orientation – Japan, Austria, Venezuela and Switzerland People orientation – Sweden, Norway, Netherlands and Denmark int’l manager has to adapt to local differences
- Maslow’s - different countries rank needs differently helps when differentiating amongst reward preferences of employees in different countries different higher-order needs (poor country – satisfy the need for food and shelter)
- Power distance: high = little consultation between superior and subordinates – autocratic (rule with unlimited authority) or paternalistic (regulate conduct by supplying needs) Germany in my experience was very autocratic. Individualism – take care of themselves (personal decision making) (USA) Collectivism – want company to take care of things like training and benefits (Japan) Nuclear family vs vertical extended family (multi-generational) or horizontal extended family (uncles, aunts, cousins) can affect businesses (Maslows needs met at home; relocation tough; money as a motivator...)
- Uncertainty avoidance - preference for known quantities – set rules (Belgium,Portugal) Trust – if high, cost of business is lower because you can focus on investing and innovating Future orientation – delayed compensation plans, invest in the future (Canada) Fatalism – believe that every event in life is inevitable – may not be swayed by cause-effect logic (The will of God); otherwise, will work hard to achieve goals and take responsibility for performance
- Cues – differ among cultures (senses, perspective); vocabulary might be richer and allow one to be more precise (many different words for snow amongst the Inuit people for example) Context – low = get to the point, no preamble or small talk; high = what is said casually or indirectly has meaning as well Processing – systems for classifying information may vary by country – impacts on ability to share global data (names are good example – Asian – last name first, Sri Lankan take part of fathers name as their last name – similar to Iceland?) Chronic – pertaining to time. Mono – do things in sequence; Poly - do many things at once. Implications on business interactions and also business practices/standards like customer service and sales. Idealism – focus on mass/overall principles before resolving small issues (general strike vs specific demands) Pragmatism – focus more on details than on abstract principles (hourly pay increases)
- language – often no direct translation – different meaning to the same word in different culture/country black/white/purple = death (western/asian/latin american) distance – personal space time – arrive early for meetings, fashionably late for dinner/cocktails (to allow host to prepare) time as a commodity = scarce or in abundance? depends on culture (France/Italy vs USA) body language – yes/no; open hands vs closed hands, arms crossed... prestige – what you do/don’t do represents your position in the organization as does your furnishings and even clothes (ties/jackets vs casual)
- Accommodation – host culture might allow trade-offs if they do not go against attitudes or beliefs Cultural Distance - how apart countries are in terms of cultural characteristics Culture Shock – absorbing new cultural cues and expectations (Dubai’s squatter toilets; taking the bus in Amsterdam or Italy; using the phone) polycentrism – believe business units in different countries should act like local companies BUT this might not be good because they could be less risk-averse and innovative ethnocentrism - believe that home culture is superior to other cultures BUT might overlook important cultural factors; long-term might not be competitive; challenges of introducing a new product or new ways of marketing might be underestimated geocentrism – preferred approach – balance informed knowledge of their own org. culture with both home- and host-country needs, capabilities, and constraints – encourages innovation
- value systems / habits – change acceptable if it does not contradict your value system cost/benefits – cost of changing vs. benefit of change resistance – have to manage change, can’t do it all at once participation – get the people affected involved in the process reward sharing - show immediate benefit to people affected (what’s in it for me?) opinion leadership – use opinion leaders to facilitate acceptance of change timing – choose the appropriate time/opportunity for change learning abroad – some cultural traits or nuances could change the way you do business
- Describe Ugandan cultural attributes that might affect the operations of a foreign company doing business there. How would you describe the attitude of Green: ethnocentric, polycentric, or geocentric? What factors do you suspect of having influenced his attitude? How would you describe the attitude of Martin: ethnocentric, polycentric, or geocentric? What factors do you suspect of having influenced his attitude? Who was right, Green or Martin, about Martin’s more controversial actions in facilitating the project? How might things have turned out if Martin had not been a member of the project team? In the next phase of the project—constructing the dam itself—should HG employ someone whose main function is that of liaison between its corporate culture and the culture of its host country? If so, is Martin the person for the job?
- Homework review Chapters 1 and 2 read Chapter 3 work on Group Presentation