Cross Cultural management
Challenges and opportunities of doing
business in different countries
Submitted to
Dr. Sayel Sabha
Submitted by
Amer Almansoori
201620104
The Nature of Culture
The word « culture » comes from Latin
« cultura », which refers to cult or worship.
In management aspect, « culture » means
acquired knowledge that people use to
interpret experience and generate social
behavior.
This knowledge forms values, creates
attitudes, and influences behavior.
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The Nature of Culture
Caracteristics of culture:
1. Learned
2. Shared
3. Transgenerational
4. Symbolic
5. Patterned
6. Adaptive
If international managers do not know
something about cultures of the countries
they deal with, the results can be quite
disastrous. For example: Asians’ name.
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The Nature of Culture
Cultural diversity
Most importantly, culture affects how people
think and behave.
Therefore, cultural differences have impacts on
international mamangement.
An example of handshake:
American (firm), Asian (gentle), British (soft),
French (light and quick), Latin American (moderate
grasp)
Priorities of cultural values are not the same in
different countries or groups of countries.
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The Nature of Culture
Values in culture
Values are basic convictions that people have
regarding what is right and wrong, good and
bad, important and unimportant.
These values are learned from the culture in
which the individual is reared, and they help
direct the person’s behavior.
Differences in cultural values often result in
varying management practices.
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Hofstede’s Cultural Dimensions
Geert Hofstede is a Dutch researcher who
tried to indentify why people from various
cultures behave as they do.
He introduced 4 main dimensions of any
culture into his research.
116 000 respondents from over 70 different
countries around the world. (The largest
organizationally based study ever
conducted.)
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Hofstede’s Cultural Dimensions
a) Power distance:
The extent to which less powerful
members of institutions and organizations
accept that power is distributed unequally.
Countries in which people blindly obey
the orders of their superiors have high
power distance. This should be observed at
lower levels or even upper levels.
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Hofstede’s Cultural Dimensions
b) Uncertainty avoidance
The extent to which people feel threatened
by ambiguous situations and have created
beliefs and institutions that try to avoid
these.
Countries populated with people who do
not like uncertainty tend to have a high
need for security and a strong belief in
experts and their knowledge; examples
include Germany, Japan, and Spain.
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Hofstede’s Cultural Dimensions
c) Individualism
The tendency of people to look after
themselves and their immediate family only.
Collectivism (in contrast to individualism) is
the tendency of people to belong to groups
or collectives and to look after each other in
exchange for loyalty.
Hoftstede’s findings show that the wealthy
countries have higher individualism scores
and poorer countries higher collectivism
scores. (GNP based wealth) 9
Hofstede’s Cultural Dimensions
d) Masculinity
A cultural characteristic in which the
dominant values in society are success,
money, and things.
In contrast, femininity is the term used by
Hofstede to describe a situation in which
the dominant values in society are caring
for others and the quality of life.
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Hofstede’s Cultural Dimensions
e) Integrating the dimensions
A description of the four dimensions of
culture is useful in helping to explain the
differences between various countries.
Hofstede’s research has extended beyond
this focus and shown how countries can be
described in terms of pairs of dimensions.
Pairings and clusters can provide useful
summaries for international environment.
Example of pairing between PDI and UAI
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The strategy for managing across
cultures
As MNCs become more transnational, their
strategies must address the cultural
similarities and differences in their varied
markets.
A good example of Renault, a French auto
giant.
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The strategy for managing across
cultures
Strategic predispositions
Most MNCs have a cultural strategic
predisposition toward doing things in a
particular way.
Four distinct predispositions have been
identified: ethnocentric, polycentric,
regiocentric and geocentric.
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The strategy for managing across
cultures
Ethnocentric
Ethnocentric predisposition is a nationalistic
philosophy of management whereby the
values and interests of the parent company
guide strategic decisions.
14
The strategy for managing across
cultures
Polycentric
Polycentric predisposition is a philosophy of
management whereby strategic decisions
are tailored to suit the cultures of the
countries where the MNC operates.
15
The strategy for managing across
cultures
Regiocentric
Regiocentric predisposition is a philosophy of
management whereby the firm tries to
blend its own interests with those of its
subsidiaries on a regional basis.
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2.1. The strategy for managing
across cultures
Geocentric
Geocentric predisposition is a philosophy of
management whereby the company tries to
integrate a global systems approach to
decision making.
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The strategy for managing across
cultures
1. See themselves as multinational enterprises
and are led by a management team that is
comfortable in the world arena.
2. Develop integrated and innovative strategies
that make it difficult and costly for other firms to
compete.
3. Aggressively and effectively implement their
worldwide strategy and back it with large
investments.
4. Understand that innovation no longer is
confined in the US and develop systems for
tapping innovation abroad. 18
The strategy for managing across
cultures
5. Operate as if the world were one large
market rather than a series of individual,
small markets.
6. Have organization structures that are
designed to handle their unique problems
and challenges and thus provide them the
greatest efficiency.
7. Develop a system that keeps them informed
about political changes around the world and
the implications of these changes on the
firm. 19
The strategy for managing across
cultures
8. Have management teams that are
international in composition and thus better
able to respond to the various demands of
their respective markets.
9. Allow their outside directors to play an active
role in the operation of the enterprise.
10.Are well managed and tend to follow such
important guidelines as sticking close to the
customer, have lean organization structures,
and encouraging autonomy and
entrepreneurial activity among the personnel. 20
