Beruflich Dokumente
Kultur Dokumente
CROSS-CULTURE
MANAGEMENT
Dr Sabariah Yaakub
Dr Nik Abdul Halim
Mohd Haniff Jedin
Nursafinas Mohd Saad
Mustafa Zakaria
Project Directors: Prof Dr Mansor Fadzil
Prof Dr Zakaria Ismail
Open University Malaysia
Dr Wardah Mohamed
Open University Malaysia
Answers 196
References 203
TOPIK 2 KAEDAH DAN TEKNIK W 17
COURSE GUIDE
x X PANDUAN KURSUS
COURSE GUIDE xi
INTRODUCTION
BBSB4103 Cross-culture Management is one of the courses offered by the Faculty
of Business and Management at Open University Malaysia (OUM). This course is
worth 3 credit hours and should be covered over 8 to 15 weeks.
COURSE AUDIENCE
This is a core course for Bachelor of Management students and a major core
course for Bachelor of Human Resource Management students. This course is
also an elective course for Bachelor of Business Administration students majoring
in International Business.
As an open and distance learner, you should be able to learn independently and
optimise the learning modes and environment available to you. Before you begin
this course, please confirm the course material, the course requirements and how
the course is conducted.
STUDY SCHEDULE
It is a standard OUM practice that learners accumulate 40 study hours for every
credit hour. As such, for a three-credit hour course, you are expected to spend
120 study hours. Table 1 gives an estimation of how the 120 study hours could be
accumulated.
xii COURSE GUIDE
Study
Study Activities
Hours
Briefly go through the course content and participate in initial discussion 3
Study the module 60
Attend 3 to 5 tutorial sessions 10
Online participation 12
Revision 15
Assignment(s), Test(s) and Examination(s) 20
TOTAL STUDY HOURS 120
LEARNING OUTCOMES
By the end of this course, you should be able to:
1. Explain the cultural aspects which influence the operations and decisions of
organisations;
2. Analyse the situations experienced by organisation managers of different
cultural backgrounds;
3. Review the different concepts and practical aspects of planning,
management, organisation, control and leadership in international and
multicultural organisations;
4. Evaluate value differences that exist in a culture; and
5. Summarise the aspects of culture in the era of globalisation.
COURSE SYNOPSIS
This course is divided into 10 topics. The synopsis for each topic is presented
below:
Topic 1 introduces the undertow of culture and explains about culture in terms of
management. It also introduces the definition of culture, elements of culture,
competitive advantage of cultures and the two enduring myth about culture.
Topic 2 discusses the cultural spheres of influence. You will learn each cultural
sphere, the competitive advantages created by each cultural sphere, and finally
COURSE GUIDE xiii
evaluate the various cultural spheres of influence and the complex interaction in
implementing an efficient cultural management.
Learning Outcomes: This section refers to what you should achieve after you
have completely gone through a topic. As you go through each topic, you should
frequently refer to these learning outcomes. By doing this, you can continuously
gauge your progress of digesting the topic.
Activity: Like Self-Check, activities are also placed at various locations or junctures
throughout the module. Compared to Self-Check, Activity can appear in various
forms such as questions, short case studies or it may even ask you to conduct an
observation or research. Activity may also ask your opinion and evaluation on a
given scenario. When you come across an Activity, you should try to widen what
you have gathered from the module and introduce it to real situations. You should
engage yourself in higher order thinking where you might be required to analyse,
synthesise and evaluate instead of just having to recall and define.
Summary: You can find this component at the end of each topic. This component
helps you to recap the whole topic. By going through the summary, you should
be able to gauge your knowledge retention level. Should you find points inside
the summary that you do not fully understand, it would be a good idea for you
to revisit the details from the module.
Key Terms: This component can be found at the end of each topic. You should go
through this component to remind yourself of important terms or jargons used
throughout the module. Should you find terms here that you are not able to
explain, you should look for the terms from the module.
PRIOR KNOWLEDGE
Learners of this course are required to pass BDPP1103 Introductory Management
course.
ASSESSMENT METHOD
Please refer to myVLE.
REFERENCES
Deresky, H. (2003). International management: Managing across borders and
cultures. New Jersey: Prentice Hall.
Edgar, H. S. (1997). Organisational culture and leadership. San Francisco: Jossey
Bass Wiley.
Farid Elashmawi, & Haris, R. P. (1998). Multicultural management 2000.
Houston: Gulf Publishing Company.
Hodgetts, M. R., & Luthans, F. (2003). International management: Culture strategy
and behaviour. Boston: McGraw Hill.
Hofstede, G. (1997). Cultures and organisations: Software of the mind. New
York: Mc Graw Hill.
Md Zabid Abdul Rashid, & McLaren, C. M. (2002). Issues and cases in cross-
cultural management: An Asian perspective. Selangor: Prentice Hall.
Schneider, S. C., & Barsoux, J. L. (2003). Managing across cultures. Essex:
Prentice Hall.
Seelye, H. N., & Seelye, J. A. (1995). Culture clash: Managing in a multicultural
world. Lincolnwood: NTC Business Books.
TOPIK 2 KAEDAH DAN TEKNIK W 17
Topic X Influence
1 of Culture
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
1. Define culture;
2. Explain all the elements that constitute culture;
X INTRODUCTION
Read the following story.
Ahmad was very excited about his first business assignment, which was in Jordan. He
was going to negotiate a joint venture project in Amman with a company there.
However, upon his arrival at the airport in Jordan, Ahmad became upset because no one
came to pick him up. Instead, he had to take a taxi to his hotel. Ahmad had expected the
Jordanian company to send someone to fetch him like Malaysian companies usually do
for their business partners.
Later, Ahmad had a meeting at 2pm with the representatives of the Jordanian company.
He arrived at 2.10pm. In Malaysia, people usually arrive 10 to 15 minutes later than the
scheduled time. To Ahmads surprise, the representatives were already at the meeting
venue and had been waiting there since 1.55pm. Ahmad felt embarrassed and
apologised. He offered a handshake to his business partner but the Jordanian spread out
his hands and gave Ahmad a hug and tried to kiss him on both cheeks. Ahmad felt very
uncomfortable being hugged and kissed by another man while the Jordanian felt Ahmad
was not friendly as he seemed to distance himself when he was about to be hugged.
2 X TOPIC 1 INFLUENCE OF CULTURE
With these questions in mind, this topic will give you insight into the meaning,
elements, direction and myths about culture as well as the relationship between
culture and business.
How do we make a connection between culture and business? How does culture
make an impact on a business organisation? You may wonder about these
questions when you are reading this topic. So, let us find out the role of culture in
business.
A system of values and norms that are shared among a group of people and that
when taken together constitute a design for living.
(Source:http://www.slideshare.net/knksmart/mgnt4670-ch-3-differences-in-culture)
One of the most recent definitions of culture by Luthans and Doh (2009)
refers to culture as the acquired knowledge that people use to interpret
experience and generate social behaviour. This knowledge will form values,
create attitude and influence behaviour of individuals or society. To know more
on culture, it is better to look at these characteristics of culture:
(a) Learned
Culture is acquired by learning and experience, not inherited;
(b) Shared
People as members of a group, organisation or society share culture;
(c) Transgenerational
Culture is passed down from one generation to the next;
(d) Symbolic
Culture is based on human capacity to symbolise or use one thing to
represent another;
(e) Patterned
Culture has structure and is integrated; a change in one part will bring
changes in another; and
(f) Adaptive
Culture can change or adapt according to other cultures.
ACTIVITY 1.1
Do an online search on definitions of culture by other scholars. Next,
write your own interpretation of culture. Present your work in the
classroom.
(a) Values
Values refer to abstract ideas about what a group believes to be right and
acceptable such as attitudes towards justice, individual freedom, truth,
honesty, loyalty, collective responsibility, role of women, love, sex and
marriage (Hill, 2010). One example of values is a societys attitude towards
same-gender marriage (refer to Figure 1.3). In some cultures, it is acceptable
while in other cultures, it is shameful and even against the law.
(b) Norms
Norms are social rules and guidelines that prescribe appropriate behaviour
in particular situations (Hill, 2010). Usually, violations of norms are
considered less serious than violation of values. For example, it is a
6 X TOPIC 1 INFLUENCE OF CULTURE
(i) Individual
In this culture, it stresses on individualism and usually emphasises
the personal achievements and social standing of individuals. Success
in this type of culture is determined by performance and
achievements. This type of social structure is usually associated with
Western culture.
(ii) Group
In some societies, especially in the East, more stress is placed on
group orientation. The social status of an individual is determined by
the status of the group the person belongs to. The group could be in
the form of family, village, team or organisation where people work.
This type of culture encourages members to work together for the
common good of the whole society.
TOPIC 1 INFLUENCE OF CULTURE W 7
In countries like Japan, people usually work for a lifetime at the same
company because of their close associations with the company.
Japanese managers feel proud to introduce themselves together with
the company they work for, such as Mr Saito of Fuji or Mrs
Chiyaki of Sony, due to their strong feeling of belonging to the
organisations.
1.3.3 Language
At the mention of language, what comes to your mind? Basically, language
comprises two categories:
1.3.4 Communication
Communication differs across cultures as some societies have the following
aspects:
1.3.5 Religion
Now, let us look at this last element of culture. You may wonder why religion is
one of the elements involved in the formation of culture. So, let us find out the
answer in the following paragraph.
Religion is also an element of culture because it shapes the values, ethics and
behaviour of people in a society. There are four major religions in the world:
TOPIC 1 INFLUENCE OF CULTURE W 9
Christianity encourages individuals to work hard and create wealth for the glory
of God. It creates a value system that stresses capitalism. It spurs the
entrepreneurial activities and economic growth in Christian society.
Islam also encourages its people to work hard and seek wealth but reminds its
followers that wealth is temporary in nature. The main objective for Muslims
should be to gain the greater treasure, which is to enter paradise. In Islam, wealth
is a blessing from God and should be shared with the needy by giving donation
and zakat (alms).
ACTIVITY 1.2
(a) Briefly explain, using your own words, each of the elements that
constitute culture; and
(b) Give one example for each element.
Previously, Malays usually lived in rural areas or villages. But now, many have
migrated to big cities such as Kuala Lumpur in search of better living. This is also
the case with the Chinese and Indian communities. The Tionghuas (a Chinese
ethnic group), who were previously known for engaging in business, now prefer
to be employed by others. On the contrary, some Indians, previously farmers or
rubber tappers, have become successful businessmen today.
According to Schneider and Barsoux (2003), there are two enduring myths in the
direction of culture (refer to Figure 1.6). We will concentrate on one of these
myths in the coming section. The term global village will be discussed as well
in the following sections.
10 X TOPIC 1 INFLUENCE OF CULTURE
SELF-CHECK 1.1
In the context of culture, the world is described as getting smaller not due to
physical changes but due to rapid development in the information and
communication network. How do you relate the claim that the world is getting
smaller to the information and communication network? What is the actual
meaning behind this myth?
Todays world is said to be at our fingertips. Just with a click or a phone call, a
person can contact another within a few seconds. The information and
communication network, which includes the telephone, radio, computer,
Internet, satellite and so on, enable you to send and receive information. These
communication gadgets, as shown in Figure 1.7, even allow you to attend a
meeting without having to spend much time and money.
TOPIC 1 INFLUENCE OF CULTURE W 11
The myth that the world is getting smaller is illustrated in Figure 1.8.
In the United States, for example, the society is made of various ethnic groups
from all over the world. These groups still preserve their own culture. In
Chinatown, for example, the majority of the occupants are from the US-based
Chinese community. They still practise their own way of living and culture, even
though they have been living in the United States for centuries. They preserve
their culture and language so that they can be more competitive. This shows
there are still some layers of cultural barriers that prevent total assimilation of
other cultures.
ACTIVITY 1.3
Find out the meaning of the term global village from the Internet or
business books. Explain these terms to the class using your own
words.
TOPIC 1 INFLUENCE OF CULTURE W 13
The example shown in the introduction of this topic (Ahmad and the Jordanian)
clearly shows how important cross-cultural understanding is because it can
influence the outcome of a business meeting or negotiation.
In the following sections, we will look in-depth into two elements which play a
part in business:, we will look in-depth into two elements which play a part in
business:
(a) Culture shock; and
(b) Competitive advantage.
The ability of expatriates to complete their tasks and assignments depend very
much on their ability to respond and adjust to the local culture. Failure to do so
will result in culture shock, a situation where expatriates feel upset, confused,
disoriented and face emotional upheaval. Those experiencing culture shock
might fail to assimilate into a different culture and return to their home country
without completing their given tasks.
14 X TOPIC 1 INFLUENCE OF CULTURE
Competitive advantage is defined as an advantage that a firm has over its competitors,
allowing it to generate greater sales or profit margins and retain more customers than its
competitors. There can be many types of competitive advantages such as the firm's cost
structure, product offerings, distribution network and customer support.
Competitive advantage gives a company an edge over its rivals and an ability to generate
greater value for the firm and its shareholders. The more sustainable the competitive
advantage, the more difficult it is for competitors to neutralise the advantage.
(Source: http://www.investopedia.com/terms/c/competitive_advantage.asp)
The Japanese have a concept called Keiretsu. It involves a set of companies with
interlocking business relationships or a strong relationship between the client
and the supplier. This business culture is rarely found because it requires a
strong value of trust between one another. Such a relationship creates a unique
strength which provides competitive advantage for firms, especially in todays
environment which is full of uncertainties and high risks due to issues such as
terrorism, economic crisis, globalisation and e-commerce.
Malaysia has its own competitive advantage through the intervention of the
government in protecting local firms. This is very important because these
TOPIC 1 INFLUENCE OF CULTURE W 15
firms are still young and need the governments assistance. For instance,
Proton, the first local car manufacturer, still needs the assistance of the
government to strengthen its operations and management. A good relationship
between these two is crucial to create a competitive advantage in producing the
cars.
SELF-CHECK 1.2
EXERCISE 1.1
Multiple Choice Questions
2. There are two main myths with regard to the direction of culture.
Which myth talks about the global village?
A. The world is getting bigger
B. The world is getting smaller
C. Management is management
D. Management is business
16 X TOPIC 1 INFLUENCE OF CULTURE
3. Japanese organisations are well known for their success. There is a term
used in Japanese organisations which refer to the strong relationship
among clients and suppliers. What is this term?
A. Sogo sosha
B. Chaebol
C. Kumikawa
D. Keiretsu
X INTRODUCTION
Have you noticed how Proton, our national car-maker, has a business culture
that is different from the business culture of Royal Selangor, our internationally-
acclaimed pewter producing company? Why should there be differences in the
business culture when both companies are local? You may find the answer by
reading the following paragraph.
In this topic, we will learn about cultural spheres of influence. Each sphere of
influence has its own set of artefacts (such as building and architecture),
behaviour, beliefs and values. These influences can be dealt with through
external adaptation and internal integration. You will also learn how various
spheres can create problems or possibilities for gaining competitive advantage in
businesses which involve businessmen from different cultural backgrounds.
Think of the culture practised by you and your family. There is no doubt that you
have your own culture. You might realise that the culture of people in your
society is somewhat unique and different from that of other societies in the other
areas of your country. This is known as regional culture. Now, let us see what is
meant by regional culture as shown below.
Regional culture refers to the spatially defined communities that share values,
attitudes, opinions, lifestyles, symbols and behaviours that are unique to a
particular community.
TOPIC 2 CULTURAL SPHERES OF INFLUENCES W 21
Regional culture evolves from time to time. We will look at some of the factors
that result in this evolution as shown in Figure 2.3.
In order to elaborate more on the factors that result in the regional evolution of a
state or country, let us concentrate on Perak, the most developed state in
Malaysia after Selangor.
(a) History
Based on the history of Perak, it was at the peak of development in the past
due to its mining activities and vast resources such as tea plantations and
limestone hills. The British settlement in Perak also brought glory and fame
to the state.
(b) Politics
Politics in Perak has always been stable due to its loyalty to Barisan
National, the leading political party in Malaysia.
(c) Economy
Tin-mining, trading, tourism and many other activities have been
developed to make Perak a developed state. Peraks evolution mainly lies
in its vast natural resources which have been generating profit and stability.
22 X TOPIC 2 CULTURAL SPHERES OF INFLUENCES
(d) Language
The states emphasis on English as one of the languages which need to be
learned has also made Perak more developed than states like Kelantan and
Terengganu which put more emphasis on the Malay language.
(e) Religion
Peraks official religion is Islam, similar to other states in Malaysia. Even
though religion does not play a big role in the evolution of Perak, it helps
Perak deal effectively with other states which have adopted Islam and other
Muslim countries.
(f) Geography
The state is located strategically along the Straits of Malacca. This
encourages trading activities and the promotion of beaches and islands
located along the straits as tourist destinations for Perak.
Why do you need to know the culture of a given place? Knowing the culture of a
given place will give you a picture of why an industry thrives in certain areas.
Cultural influences according to area can be divided into two categories: within
national borders and beyond national borders.
There are also countries which are divided into two parts, causing cultural
differences. It could be a north-south divide, as in the case of North Korea
and South Korea, or an east-west divide, as in the case of East Germany and
West Germany. South Korea is regarded as more liberal and welcoming to
visitors compared to North Korea which is ruled by a very strict regime and
is very conscious in dealing with outsiders.
TOPIC 2 CULTURAL SPHERES OF INFLUENCES W 23
Table 2.1 shows the differences that exist in a country with more than one
division.
ACTIVITY 2.1
2. Find out whether there are any other factors which may cause
the evolution of a regional culture.
In order to better understand the points above, look at Table 2.2. It shows
countries distinguished according to particular categories.
Category Countries
Germanic Germany, Switzerland and Austria
Nordic Finland, Norway, Denmark and Sweden
Near East Turkey, Iran and Greece
Arab Bahrain, United Arab Emirates, Oman and Kuwait
Far East Malaysia, Vietnam, Singapore, Taiwan, China, Thailand,
Philippines, Indonesia and Brunei
Latin America Argentina, Venezuela, Mexico, Peru, Chile and Colombia
Latin Europe France, Belgium, Italy, Spain and Portugal
Anglo United States, Canada, New Zealand, Ireland,
Britain, Australia and South Africa
Independents Brazil, Japan, India and Israel
Figure 2.5: The practice of taking off shoes before entering a house
Source: http://gawker.com
Firms in the banking industry, for example, have a different culture from firms in
the insurance industry. Let us look at the comparison of these two industries as
shown in Table 2.3.
Professional cultures also include the proper behaviour and distinctive image
of a profession. In the United States and Malaysia, for example, professionals
such as doctors or lawyers are not allowed to advertise their services through the
mass media. Professionals also have their own dress code which reflects their
profession.
28 X TOPIC 2 CULTURAL SPHERES OF INFLUENCES
For example, a doctor wears a white coat and a judge wears a black robe (refer to
Figure 2.7). Professionals also differ in their values and beliefs. For example,
medical doctors and lawyers differ in their missions and methods.
Figure 2.7: Professionals like doctor must adhere to their dress code
Source: http://personalisedgift.org.uk/product/5/277/Personalised-Occupation-
Caricatures-Mechanic.html
professionals who have the skills required. Often, recruitment is done based on
the criteria fulfilled by candidates.
ACTIVITY 2.2
In your opinion, is professional culture more influential than
national culture? Discuss with your classmates during the tutorial
session.
We can clearly see the differences when we compare these two divisions:
Which functions are most highly valued is in part determined by the nature
of the industry. In pharmaceutical companies, R&D may be the most
valued. For consumer goods, marketing has the biggest say.
Corporate culture is a blend of the values, beliefs, taboos, symbols, rituals and
myths all companies develop over time. It is influenced by the industry, business
and product of a given company.
The concept of corporate culture emerged in the early 1980s when Americans
tried to follow in the steps of the Japanese to gain competitive advantage. It is
believed that the Japaneses corporate culture was the secret weapon responsible
for the success of Japanese firms.
However, Peters and Waterman (1982) in their book, In Search of Excellence, said
that we do not have to be like the Japanese to achieve excellence. They provided
examples of strong corporate cultures in US companies such as IBM, Disney and
Delta. Many multinational firms focused on strategic planning, structure and
systems in the previous decade. These firms have now changed their directions
and determined their mission and philosophy in order to create greater
coordination and integration.
32 X TOPIC 2 CULTURAL SPHERES OF INFLUENCES
For example, the late Anita Roddick, who founded The Body Shop,
demonstrated her personal values in her actions through innovation and a
strong sense of social responsibility (see Figure 2.10). Leaders can also
influence and change the culture of a given organisation such as Sir John
Harvey-Jones who changed the meaning of Imperial Chemical Industries
(ICI) to Innovative, Competitive and International.
For example, the Ford Motor Company started with a functional structure
and grew through vertical integration in order to have better control over
supply and distribution. At Ford, control was highly centralised.
Meanwhile, General Motors began with a divisional structure as it was
created by merging several of its subsidiaries and grew through related
diversification.
TOPIC 2 CULTURAL SPHERES OF INFLUENCES W 33
National culture interacts with corporate culture in ways which may converge to
create opportunities for competitive advantage, such as the corporate culture of
BMW and Audi which is influenced by German engineering, and the culture of
McDonalds which was established in the United States.
Even though corporate culture can provide opportunities, it can also cause
difficulties as shown in the example below.
This huge amount of losses not only brought failure to Disneyland but also made
a long-term impact on Disneys effort to establish itself in a country. The failure
to adapt the corporate culture of an organisation according to the culture of a
particular country not only creates minor problems but can even bring a huge
impact to an organisation, such as illustrated in the Disney example.
ACTIVITY 2.3
How will you apply the five cultural spheres of influence in your
own business?
SELF-CHECK 2.1
For example, a smart partnership between firms from different countries, cultural
backgrounds and industries allows them to share expertise, technologies and
costs associated with a project. Blends of people from different cultural
backgrounds provide a blend of creativity that might not exist if firms work
alone.
Let us look at companies which have more than two cultural spheres
incorporated in them and how this helps the companies in creating a competitive
advantage. One example is Proton Holdings which formed a partnership with
the Mitsubishi Motors Corporation. They shared the industry and functional
spheres, which helped them to strengthen their competitive advantage. The
recently unveiled Proton Inspira, a Proton-Mitsubishi car, shows how the
partnerships between companies with different approaches but share the same
spheres can create outstanding products.
However, interaction among spheres can also create problems, as shown below.
ACTIVITY 2.4
In your opinion, will the merging of a bank and an insurance
institution experience the interaction of cultural spheres, therefore
creating a competitive advantage?
Give an example for this merger and post your opinion in the myVLE
forum.
EXERCISE 2.1
Multiple Choice Questions
Corporate Professional
Functional Regional
Industry
Topic X Exploring
3 Culture
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
1. State the two frameworks of culture;
2. Discuss the external cultural dimension;
3. Elaborate how beliefs and values can lead to organisational success;
and
4. Examine the basic underlying assumptions used by scholars of
culture and management.
X INTRODUCTION
Imagine you are a businessman trying to market your products in a foreign
market such as Japan. After carrying out an in-depth research about the country,
you feel there are various cross-cultural differences and problems that might
arise when you deal with your potential business partners in Japan. List the
potential problems and think about what you can do to overcome them. Identify
what you have to do to adjust to the Japanese culture, which is known for its
uniqueness. Imagine the effect on your business if you failed to explore and
understand the culture of others.
Let us look at Figure 3.1 which shows one of the possibilities when someone
approaches a person from a different culture.
TOPIC 3 EXPLORING CULTURE W 39
You need to realise that culture has a great effect on businesses especially when
they operate outside their home country. Due to cultural differences, companies
are usually cautious in doing business with foreign businessmen. Knowledge
and understanding about the culture of potential business partners are very
important when doing business at the international level. In order to develop
understanding, managers must first conduct research and explore the culture of
potential business partners because their business could suffer great losses if they
take a wrong step.
In this topic, you will learn in detail the framework of culture from two different
dimensions: external and internal. This framework will explain several cultural
dimensions which are very useful for company managers.
behaviours. Underneath the ocean is the internal culture which requires more in-
depth study for better understanding and it consists of beliefs and values. This
framework by Schneider and Barsoux (2003) will assist you in understanding in
detail the dimensions of culture.
EXTERNAL
INTERNAL
This framework states that culture has two dimensions as depicted in Figure 3.3,
namely:
Beliefs and values are difficult to assess and need to be inferred through
sophisticated interpretation such as attitude towards women who work.
Each of the aspects involved in both dimensions will be discussed in detail in the
following sections.
3.2 ARTEFACTS
Artefacts refer to anything created by humans which gives information about the
culture of its creator and users. It can be discovered easily through the societys
architecture, interior design, dress code, contracts and others. You may begin
learning about the culture of a society by studying and observing the artefacts
and the way of life of its people.
3.2.1 Architecture
The most obvious artefacts that symbolise culture are the architecture and
interior design of a building. A country is not only identified by its people and
government but by its architecture as well. Through architecture, it is possible to
gauge many things about a culture, such as lifestyle, artistic sensibilities and
social structure. For example, when someone mentions India, we will
straightaway think of Taj Mahal (see Figure 3.4). Without Indias unique culture,
would Taj Mahal be designed that way or would it look differently? The
Egyptians are another amazing example as their environment and culture
produced the great pyramids.
the members of the society. Therefore, dress code is considered as one of the
cultural artefacts. When doing business overseas, managers must observe the
appropriate dress code for a particular occasion in order to avoid the
embarrassment that results from wearing the wrong clothes.
Figure 3.6 shows the different dress codes for men in the following situations:
(a) Leisure Street wear;
(b) Informal - Casual;
(c) Sporting events such as golf - Business casual;
(d) Office environment - Smart casual;
(e) Business meeting, informal business negotiation - Business/Informal; and
(f) Function - Black tie/Semi-formal.
Let us look on the dress code used by the different countries in Table 3.2.
There are also some firms which encourage their workers to dress in ways to match
the customers style. For example, the employees of Levi-Strauss wear jeans to work.
3.3 BEHAVIOUR
Behaviour refers to the cultural conduct of a particular society and forms the
social characteristics of the members personality. It covers greeting rituals,
making contact, forms of address, moral norms and rules of religion, folk and
traditional etiquette. These differ from one cultural group to another.
Now, let us take a look at the examples of behaviour in the following sections:
(a) Greeting rituals;
(b) Forms of address; and
(c) Making contact.
Instead of the usual handshake, the New Zealander greets the Indian by rubbing his
nose against his (refer to Figure 3.7). The Indian is shocked as he does not know this
is the Maori form of greeting. Now, let us have a look at other interesting examples
of how greeting rituals differ according to society (refer to Table 3.3).
Other greeting rituals include body contact in greeting. Each body movement
reflects the intention of the greeter. Are women supposed to shake hands with
men? Can men embrace or kiss one another? This phenomenon has caused many
misunderstandings among international businessmen. For example, a female
student from Hong Kong was quite distressed when her French male colleagues
insisted on kissing hello and goodbye. As for Brazilians, shaking hands and
kissing is a farewell ritual known as the abruca (two-armed hug).
TOPIC 3 EXPLORING CULTURE W 47
In a society where the level of class consciousness is high, for example, titles such
as Professor, Doctor, Your Majesty, Sir and so on must be mentioned during
conversation. Even in Malaysia, students address their teachers or lecturers as
Ms, Madam, Dr or Prof. In the context of Malaysian culture, it is rude to just call
these persons by their name.
The form of address might be different if it is for a friend, family member, elderly
person, business counterpart, teacher and so on. Now, let us look at some of the
ways to address people from Europe, Japan and China (see Table 3.4).
ACTIVITY 3.1
Every culture has a different distance of personal space and it is important for
managers to understand it. Do you know the distance preferred by Malaysians
when talking to another person? Do Malaysians prefer large personal space
distance or do they prefer to get very close to each other? Figure 3.8 shows you
an example of how distance is maintained between people.
The topic chosen to be discussed also plays an important role in establishing a good
relationship. For example, French people do not appreciate inquiries into their
TOPIC 3 EXPLORING CULTURE W 49
personal lives and family circumstances. They consider their professional life and
their personal life as quite separate domains. Topics such as sports, weather and
travel would be suitable when communicating with people from Latin American
countries but avoid discussions on local politics and religion with them.
What about the European, Middle Eastern and American society? How do they
maintain their physical space? Table 3.5 will answer your questions.
SELF-CHECK 3.1
3.4 BELIEF
In contrast to artefacts and behaviour which have been discussed before, belief is
the internal aspect of culture that you cannot directly observe. Let us look at the
definition of belief in relation to culture before going into depth of the
explanation given for it.
Belief is the way in which a culture collectively builds a model or framework for
how it thinks about something. A religion is a particular kind of belief system. In
addition to governing almost all aspects of human activity, belief has a huge
impact on what a culture deems worthy of passing down to following
generations as its cultural heritage. This also influences how cultures view the
cultural heritage of other cultures.
(Source: http://www.dot-connect.com/Dictionary_of_Cross CulturaL_termin
ology_Inter_cultural_terminology.html)
50 X TOPIC 3 EXPLORING CULTURE
Beliefs are the assumptions we make about ourselves and about others, and
about how we expect things to be. It also includes statements, principles or
doctrines that individuals choose to acknowledge as true. For example, people
have different political views and their affiliation to certain political parties is
due to their belief in the leaders of that party and they are confident that it is the
right thing to do.
For example, in Malaysia, people vote for a political candidate based on their
affiliation to certain parties. Most commonly, the Malay people will go for the
political parties such as UMNO and PAS based on their strong beliefs that these
two parties are the parties that will safeguard the interest of the Malay people.
3.5 VALUES
Values are deeply held-ideas about what is good, right, and appropriate. We
accumulate our values from childhood based on teachings and observations of
our parents, teachers, religious leaders, and other influential and powerful
people. Acquired values will eventually influence peoples personal and work
behaviours, decision-making skills, contribution, and interpersonal interaction.
Different culture will demonstrate different values.
Man and woman living together without getting married, for example, is not part
of a Muslim societys value as it is against the teaching of Islam. However, it is a
commonly accepted value in the Western society, which predominantly consists
of Christians.
How do company communicate their beliefs and values to their workers? The
answer is through their objectives, missions and visions of the company.
Objectives, missions and visions which are clearly employee-centred, will foster
beliefs and values among the workers and they will do their best towards
achieving it.
TOPIC 3 EXPLORING CULTURE W 51
Figure 3.9: Elements which form the beliefs and values of an organisation
These three dynamic elements are the stakeholders of the organisation namely
the shareholders, employees and customers. Different stakeholders have
different criteria for success. Therefore, beliefs and values differ in term of what
is considered to be important to the stakeholders, be it product integrity,
technological leadership, market share, customer satisfaction or shareholder
value.
In the United States, a company exists for the benefit of the shareholders. On the
other hand, in Japan, a company exists to fulfil the needs of the customers. While
in Germany, it may be the employees who have the divine rights, such as right to
job security, social welfare and others. This different beliefs and values actually
dictate the relevant corporate success factor in different countries.
In order to aid your comprehension, let us observe Table 3.6 which explains how
product quality, technological leadership and market share are relevant to
corporate success in different countries.
52 X TOPIC 3 EXPLORING CULTURE
Kluckholn and Strodbeck conclude that the value orientation as suggested by the
other researchers can be grouped into five important value orientations in society
and they are:
(a) Relationship with nature;
(b) Human activity;
(c) Human nature;
(d) Relationship with people; and
(e) Relationship with time.
Let us take a look at the explanation provided for each of the value orientations.
Let us look at a study by Douglas McGregor (1960) which is related to this human
nature orientation. According to McGregor, there are two types of workers:
(a) Theory X (Evil); and
(b) Theory Y (Good).
SELF-CHECK 3.2
ACTIVITY 3.2
EXERCISE 3.1
Exploring culture is not an easy task. Many aspects must be studied and
examined as cultures differ from one country to another.
The framework of culture is divided into two dimensions external and
internal.
The framework of culture can assist in identifying the level of culture:
whether it can be seen physically such as dress codes, or cannot be seen
physically such as customs and beliefs.
Artefacts also demonstrate cultural differences such as architectural
differences. Today, many buildings in Malaysia, notably in Putrajaya, are
designed with Islamic architecture incorporating mosque-like domes. In
TOPIC 3 EXPLORING CULTURE W 59
India, on the other hand, the buildings are more artistic and use statues as
decoration.
In any given culture, values and beliefs play a big role, particularly in leading
companies towards success, such as producing quality products and using
modern technology.
There are basic value orientations which play an important role in exploring
culture.
These orientations, which are derived from several studies on culture,
include relationships with time, nature, people, human activity and human
nature.
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
1. Review several views found in the studies conducted on organisational
structure;
2. Analyse four value dimensions which influence organisational
structure and processes;
3. Explain the influence of culture in organisational processes; and
4. Examine four categories of corporate culture and how to use the
said culture for organisational success.
X INTRODUCTION
Read the following case study.
In the early 1990s, Chrysler had terrible customer service and press relations, with a
history of innovation but a current reputation for outdated products. Its market share
was falling, and its fixed costs and losses were high. Bob Lutz, then the president,
wanted Chrysler to become the technology and quality leader in cars and trucks; a clear,
globally-applicable vision. A programme of cultural change, Customer One, was built
around it.
The results were impressive as overhead was cut by $4.2 billion in less than four years,
the stock price quadrupled and the company reversed its slide into bankruptcy and
became profitable. A completely new and competitive line of cars or trucks has appeared
each year since. New engines produce more fuel economy and power as new cars
provide more comfort, performance and space. They did this with the same people but
by working in different ways.
(Source: http://www.toolpack.com/culture.html)
TOPIC 4 CULTURE AND ORGANISATION W 61
Based on the above case, can you answer the following questions:
(a) What is the meaning of an organisational culture?
(b) Why is organisational culture so important, especially to a firm?
(c) Does organisational culture differ among firms?
(d) Should organisational culture follow national culture?
You will be able to find the answers by reading through until the end of this
topic.
So, let us find out what this topic is all about. It highlights the meaning of
organisational culture. Studies on organisation management from across the
world have shown that there are unique national differences from one country to
another in terms of organisational culture. We will discuss several views of
culture and structure as well as value dimensions which influence organisational
structure and processes. We will also discuss the definition, features and
categories of corporate culture.
The set of beliefs, values, and norms, together with symbols like
dramatised events and personalities that represents the unique character of
an organisation, and provides the context for action in it and by it.
-Gareth Morgan
"A pattern of shared basic assumptions that the group learned as it solved
its problems that has worked well enough to be considered valid and is
passed on to new members as the correct way to perceive, think and feel in
relation to those problems."
-Edgar Schein
(Source: http://www.organizationalculture101.com/definition-of-organiz
ational -culture.html)
62 X TOPIC 4 CULTURE AND ORGANISATION
(b) Norms
Norms are reflected by things such as the amount of work to be done and
the degree of cooperation between management and employees.
(d) Philosophy
Set forth in the multinational corporations (MNC) beliefs, a philosophy
relates to how employees and customers should be treated.
(e) Rules
There are rules that dictate the dos and donts of employee behaviour
relating to areas such as productivity, customer relations and inter-group
cooperation.
Among these arguments which specifically discuss culture and structure are the
following:
(a) The culture-free (Etic);
(b) The structuralists (Emic); and
(c) The culturalists.
You can find the detailed explanations of all these arguments in Table 4.1.
Culture and
Explanation
Structure Argument
Culture-free (etic) This argument states that structure is determined by
Argument organisational features such as size and technology.
For example:
The Aston studies conducted in the 1960s in the United
Kingdom state that size is the most important factor
influencing structure. Larger firms tend to have a greater
division of labour and more formal policies.
SELF-CHECK 4.1
What are the views or arguments presented in the studies conducted
on organisational structure?
Now, let us explore these four value dimensions identified by Hofstede in the
following sections.
TOPIC 4 CULTURE AND ORGANISATION W 65
Table 4.2: Differences between Countries with High and Low Power Distance
Countries with High Power Distance Countries with Low Power Distance
Centralised decision-making. Decentralised decision-making.
Have many hierarchy levels of Have flatter organisation structures.
organisation structures.
Power and status are motivating factors. Smaller proportion of supervisory
personnel and promoting empowerment.
People blindly obey the orders of their Encourage and promote cooperation
superior. between people at different levels.
When it comes to power distance, how does Malaysia fare? Malaysia scores the
highest in power distance with an index score of 104. This explains the reason
workers in Malaysia have very high respect for their superiors. Table 4.3 shows
the index scores obtained by other countries in terms of their power distance.
Table 4.4: Differences between Countries with High and Low Uncertainty Avoidance
We have looked at our countrys performance in power distance. Now, let us see
how Malaysia performs in uncertainty avoidance. Table 4.5 shows the index
scores obtained by Malaysia and other countries in terms of uncertainty
avoidance.
Table 4.8: Differences between Countries with High and Low Masculinity/Femininity
ACTIVITY 4.1
Let us look at how decision making is made in countries which differ in their
emphasis on power and hierarchy:
How fast a decision is made also depends on the culture. Table 4.10
shows the timeframe of decision making between the Japanese and the
Americans.
70 X TOPIC 4 CULTURE AND ORGANISATION
If you refer to Table 4.5, you will realise that Japan scores very high on
Hofstedes uncertainty avoidance dimension. This explains the detailed study for
each proposal by the Japanese, unlike the Americans. The American manager
will complain about the slowness of Japanese managers decision making
while the Japanese managers will think that American managers make decisions
hurriedly.
(a) Theory Y
When workers are seen as capable and self-directed, the level of control will
be low.
(b) Theory X
When workers are seen as lazy and require directions, the level of control
will be higher.
TOPIC 4 CULTURE AND ORGANISATION W 71
Figure 4.2: Workers who are hard working and workers who are lazy
Source: http://jobs.aol.com
Planning also differs from one culture to another. In the United Kingdom, for
example, planning practices are more strategic, more long-term with more
participants in the process. In France, on the other hand, planning is more short-
term with fewer participants in the process.
Some believe that best practices can be transferred anywhere. This is because
they consider management as universal. This might be the rationale behind the
Wests rush to copy Japanese management practices and the current attempt by
organisations across the world to imitate Western management such as re-
structuring and re-engineering.
ACTIVITY 4.2
This will include how different departments or functions relate to one another in
the production process, the line of communication established between
management and departmental employees, and rules governing acceptable
conduct of everyone who is part of the company. This basic organisational
culture makes it possible to develop other layers of corporate culture based on
these foundational factors.
For example, when employees are provided with ways to make suggestions that
could improve the productivity or the general working environment of the
company, it can be said that the corporate culture is inclusive, as it allows for free
communication between everyone employed by the business.
As with many types of cultures, corporate culture usually involves some rites or
rituals. This can be something as simple as annual holiday bonus, a week in the
summer when the entire company shuts down or even the naming of an
employee of the month (refer to Figure 4.3). These rites help to bond people
together and provide some sense of collective identity, which is very important
to the creation of a positive corporate culture (http://www.wisegeek.com/what-
is-corporate-culture.htm).
Source Definition
Greenberg & A cognitive framework consisting of attitudes, values,
Baron (1997) behavioural norms, shared beliefs and expectations.
Clemente & Collective thoughts, habits, attitudes, feelings and
Greenspan (1999) patterns of behaviour.
Ahmed et al. (1999) Material or behaviour which has been adopted by a society
(corporation, group, or team) as the accepted way of solving
problems.
SELF-CHECK 4.2
From the above definitions and based on your own understanding,
describe what is meant by corporate culture.
TOPIC 4 CULTURE AND ORGANISATION W 75
(a) Academy
In the academy category, employees are exposed to various types of works
so that they can be transferred to any division within the organisation. This
culture is usually found in new companies where employees share jobs and
incentives.
(b) Club
The club category focuses more on adjusting the employees in the
organisation. Employees regard the organisation as their home and co-
workers as family. Work is done through subcultures in the organisation.
(d) Fortress
This category is concerned primarily with survival. The employees work
independently and seldom interact with co-workers. This culture is
normally found in law firms and organisations which are reducing the
numbers of employees.
SELF-CHECK 4.3
What are the four categories of corporate culture? Explain briefly
each of the categories.
However, it is not only firms which do business at the international level that
encounter workforce diversity nowadays, as culturally different workers can be
found even in domestic-based firms. For example, a Malaysian firm usually
consists of different ethnic groups such as Malays, Chinese, Indians and other
groups as shown in Figure 4.5. This different ethnicity creates workforce
diversity in an organisation.
TOPIC 4 CULTURE AND ORGANISATION W 77
Let us take a look at the advantages of cultural diversity as shown in Table 4.12.
Aspe Advantages
t
Marketing Increases the ability to respond to cultural preferences of local markets.
Resource Increases the ability to recruit employees of different national
acquisition backgrounds, and host country elites.
Cost Reduces cost incurred by turnover of non-home country managers.
Problem-solving Improves decision-making through wider range of perspectives and
more thorough critical analysis.
Creativity Enhances creativity through diversity of perspectives and less
emphasis on conformity.
System flexibility Enhances organisational flexibility and responsiveness to
multiple demands and changing environments.
Figure 4.6 shows a non-verbal cue expressed by the former president of the
United States, George W. Bush.
SELF-CHECK 4.4
EXERCISE 4.1
Essay Questions
3. In what type of culture are people more willing to accept the risks
associated with the unknown?
A. Masculine
B. Individualism
C. High Power distance
D. Low uncertainly avoidance
Academy Fortress
Baseball team Individualism
Club Masculinity
Collectivism Power distance
Culturalists Structuralists
Culture-free Uncertainty avoidance
Femininity
Topic X International
5 Manager
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
1. Explain the roles of an international manager;
2. State three categories of culture shock reactions;
3. Examine three phases of cultural adjustment;
4. Analyse the skills and abilities needed to manage cultural
differences; and
5. Examine the strategies required to help managers in the transitional
period.
X INTRODUCTION
Read the following.
The productivity level of the workers is very far behind that of their American
counterparts. The workers union is so strong that any action he takes towards the
problematic workers will result in a strike. At the individual level, John finds it
hard to adjust to the Mexican lifestyle. The food is too spicy, the public
transportation uncomfortable and the people at the market cannot communicate
in English. All these things are making him upset. The thought of leaving and
returning to the United States is growing stronger by the day.
84 X TOPIC 5 INTERNATIONAL MANAGER
After reading the above story, you may have formed some of these questions:
(a) What is Nashs problem?
(b) How can a successful manager such as Nash face these kinds of difficulties?
(c) How can he avoid such problems?
As you may be aware, big companies need people who are capable of
representing them in the international market. They need people who can
expand and manage their businesses at the global level. These people are known
as international managers or commonly known as expatriates. It is not an easy
job, as it requires someone with skills and in-depth knowledge of management
systems and cultures of foreign countries. Adequate physical and mental
preparation are also necessary to avoid failure.
(c) Inpatriates
Managers from the host country or third countries recruited to work in the
home country. This group is also known as inpatriates.
- Tacitus
86 X TOPIC 5 INTERNATIONAL MANAGER
You may have heard another quote that says talented individuals are not born
but made. The same goes for international managers. They are not born but
groomed through proper training. However, there are some existing traits of
people that can determine whether a person can become a good international
manager. International managers must act based on the current situation and
take into account the source of problems in making a decision. Listed below are
some traits of a good international manager:
-Kalvaro Oberg
Why does culture shock happen? Culture shock among international managers
occurs when they find that life in a foreign country is not like what they had
expected. The environment in a foreign country might be very different from
their home country. These differences will make it difficult for them to adjust and
might lead to various traumas and conflicts.
Furthermore, they will experience stress, worry and depression easily, making it
difficult for them to control situations. They will feel unable to perform their
duties and become dependent on others. This problem can be solved if
international managers are given initial training such as performing short-term
international tasks in a foreign country in order to give them brief exposure to
the culture of a particular country.
You may ask whether culture shock happens to managers only. Under certain
circumstances, the family members of the managers such as their spouse and
children will also experience culture shock. The spouse might find it hard to
communicate with neighbours if they speak a different language or might feel
lonely as there are no family members or friends to talk to. The children might
find it hard to adjust to the new environment.
Basic facilities, education system and the surrounding community which are
different will make it quite difficult to adjust. Most times, the spouse and
children are the main reason why international managers fail to perform their
duties effectively.
88 X TOPIC 5 INTERNATIONAL MANAGER
There are also expatriates who are asked to return home although they have yet
to complete their term abroad. They are asked to come back as they fail to
perform their assignment due to the reasons shown in Table 5.1:
They are not happy with the international assignment, sometimes due to lack
of support from the headquarters.
The manager or family members fail to adjust to the new culture and local
setting.
The manager has neither motivation nor interest in carrying out the
international assignment.
For example, if an American manager who has never been to India is assigned to
work there, he will feel awkward in the beginning due to the differences in
infrastructure such as inadequate public transport, poor hygiene, spicy food,
different religious practices and different daily customs from those practised in
the United States.
These differences will cause stress to international managers. The attitude of the
managers will change as they start to feel frustrated, angry and unable to control
themselves. The psychological signs which indicate that the managers are
experiencing culture shock are stress, anger, loneliness, fear of being deceived
and suspicion. These differences and stresses will cause the managers to react
consistently with the culture shock they are facing.
Let us look more closely at the three culture shock reaction categories as shown
below:
(a) Withdrawal
In this category, managers will demonstrate an aggressive reaction such as
rejecting the new culture, being aggressive and angry. This situation is
classified as encapsulator culture, where managers will have the following
contacts:
Truly global leaders need a set of core values that will guide them in
whatever environment they may find themselves.
- Kets de Vries
Do you know that adjustment to a particular culture can make a difference in the
success or failure of an international manager? Cultural adjustment is a very
important process for an international manager. If adjustment is not made, the
mission of achieving the international assignment objective will fail.
92 X TOPIC 5 INTERNATIONAL MANAGER
In the United States, studies conducted show that failure rates up to 30% within
US multinational companies reveal the difficulties of adapting to new cultures.
This failure is estimated to cost US business $2 billion a year.
We will learn the phases and stages of adjusting to a foreign culture in order to
help us understand the process of cultural adjustment. There are three phases of
cultural adjustment as depicted in Table 5.2.
Happily ever after Period of gradual adjustment to the new environment (also
known as the adjustment stage which is followed by the mastery
stage)
However, after facing the problems hands-on, they discover that it is not an
easy task after all. The situation becomes even more complicated and
confusing if the problems affect their values and principles. All the
symptoms of culture shock, as discussed before, will start to appear at this
stage. Those who fail to cope with the pressure will eventually give up and
return to their home country without completing the assignment.
At the same time, the managers might also gain more knowledge on the
culture and language of the foreign country. The relationship with the
foreign workers might improve. Since the managers are now able to adjust
to the culture and lifestyle, it means they have undergone cultural
adjustment and managed to assimilate into the new culture successfully.
94 X TOPIC 5 INTERNATIONAL MANAGER
ACTIVITY 5.1
Read the below situation.
SELF-CHECK 5.1
Answer the following questions to enhance your knowledge on the
aspects learned.
1. Explain briefly the three roles of an international manager.
2. What are the three culture shock reaction categories?
3. What are the three phases of cultural adjustment? Explain each
phase briefly.
TOPIC 5 INTERNATIONAL MANAGER W 95
According to Scheneider & Barsoux (2003), there are seven skills and abilities
which are needed to manage cultural differences in a foreign country as can be
seen in Figure 5.4. Each of the skills will be elaborated in the following sections.
Perhaps, you may have experience of conversing with foreigners. For example,
when those whom you think do not know the Malay language suddenly say
Selamat pagi or Apa khabar, you will feel impressed with them. Likewise, if
you were assigned to work in China and greeted the locals in Mandarin, they will
be impressed with your ability. If you do not want to try to use their language,
it will be difficult for you to gain the trust and respect of the local workers.
SELF-CHECK 5.2
Motivation to live and work abroad is a key ingredient for the successful
adaptation of expatriates and their families. They should be selected based on
genuine interest in other cultures and enthusiasm to gain new experiences.
with patience and respect will instead try to understand the local reasons for the
way things happen and not complain about them. While patience and respect
may be the golden rule of international management, these seem to be the ones
most often broken in the process of adaptation.
A positive ego will reinforce the ability to handle stress, particularly in critical
situations, when the manager is far from the headquarters. All uncertainties and
frustrations of international experiences need to be appropriately handled. If the
chosen manager is someone with a high mental resistance, he or she will be able
to face all problems rationally.
through the media, travelling, training, education and through experience with
international business ventures.
For example, if you attend a formal event in which alcohol is served as the main
drink and you do not consume such drink for the reason of religion, then you are
not obliged to do so. The reason is that it goes against your cultural values and
personal principles.
As can be seen in Figure 5.5, Muslims are admonished from taking alcohol due to
some religious practise.
Adjusting oneself can be made easier by preparing a profile on both, the foreign
and home cultures. From here you will be able to identify the cultural similarities
and differences and form a basis for international management. However, in
reality, the international manager should not depend totally on the information
gained through reading and training. This is because the clash of culture can be
handled through negotiation which requires your skills to be modified and
adjusted from time to time.
There are six types of cross culture training programmes which can be provided
to managers who have been selected for international assignments. Apart from
possessing the technical skills and abilities mentioned in Subtopic 5.5, these
training programmes will help managers to adjust their attitude and
behaviour in order to be able to perform their international assignment
successfully and they are:
5.8 REPATRIATION
Most expatriates will return to their home country after spending two or three
years abroad. Firms usually stress on training for expatriates before they left for an
overseas assignment but overlooked at the importance of preparing the same
expatriates for re-entry into their home countrys organisation. Upon returning to
their home country, managers might face another problem, which is adjusting their
families and themselves to the home countrys culture, as well as returning to their
old job.
Regardless of the reason of their repatriation, many companies fail to make the
necessary planning to assist managers in re-adjusting themselves to the setting of
the home country. Many managers feel that the position given to them upon their
repatriation is a demotion as they are not given the opportunity to use their
experience abroad, and they have not been informed clearly about their new
position. Some of them even tender their resignation immediately upon their
repatriation.
Studies have also shown that the following are the main causes of why managers
sometimes quit the organisation upon their return:
ACTIVITY 5.2
Discuss the following questions with your classmates.
1. If you have visited a foreign country, list out some of the
different and unique practice of people in that country. Present
your findings in the class.
2. Analyse the skills and abilities which are needed to manage
cultural differences.
3. Examine in detail the strategies required to help managers in
the transitional period.
EXERCISE 5.1
Essay Question
While technical skills are needed, the ability to manage workers of different
cultural background, to control oneself and to cope with uncertainties is far
more important.
If all these abilities are integrated with technical skills, the international
manager will be able to handle whatever problems in any new environment.
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
1. Explain how global organisations exist by adjusting to the local
environment;
2. Analyse the importance of cultural differences and the competitive
advantage created by these differences;
3. Assess nine ways of reducing cultural differences; and
4. Formulate cross-cultural management best practices for global
organisations.
X INTRODUCTION
What do companies such as Shell, Tesco, INTEL, Microsoft, Procter & Gamble,
Unilever, Honda, Sony, Hyundai, Nokia, Proton and Allianz have in common?
Can you spot the similarities between them? Basically, all of them are few
examples of true global organisations as shown in Figure 6.1.
Based on the term global organisation, the following would be the questions
asked in order to enhance our knowledge on global organisation:
(a) Can you determine the birthplace of these companies?
(b) Why did they become global organisations?
(c) How did they survive in various countries with different cultural
environments?
108 X TOPIC 6 GLOBAL ORGANISATION
Now, let us move on to find out the strategies employed by the multinational
companies in managing cultural differences.
However, it is not really easy to find a company which uses cultural differences
to create competitive advantage. The ignore, minimise and fully utilise
strategies have implications for relationships between headquarters and
subsidiaries as well as for managing conflicting demands for global integration,
local responsiveness and organisational innovation.
Let us look in depth at each of the strategies used to manage cultural differences
in the coming sections.
Companies assume that policies and practices developed in the home country are
readily transferable. The host country subsidiaries feel that they have to maintain
product quality to uphold customer service and technological standards, and
ensure that the corporate culture is shared by all employees. Such companies
might even create their own training centres or universities to inculcate the
necessary management practices and behaviour, core beliefs and values.
110 X TOPIC 6 GLOBAL ORGANISATION
ACTIVITY 6.1
In your own words, explain the term multinational companies.
Do you know that some companies prefer to bring their work culture and ethics
to other countries without considering the cultural differences? They will practise
their own culture although it goes against the local culture, hoping that their
employees at the said countries will follow their way.
As you may realise, under this ignoring attitude towards cultural differences, the
management will implement standardised procedures in all host countries.
Indeed, there are multinational companies which succeed although they do not
pay much attention to cultural differences. In fact, their competitive advantage is
derived from this standardised ways of operating worldwide. This may be
particularly true in industries which are engineering-driven, such as oil or
construction, or rely on high technology such as telecommunications.
You need to realise that sensitivity towards cultural differences and willingness
to solve related problems are only considered important for the purpose of
improving communication among one another. Companies like Coca-Cola (refer
to Figure 6.3) are able to sell standardised products worldwide because people
around the world prefer the same original taste of Coke drinks and there is no
need for any product customisation to local taste and preferences.
The assumptions of one best way means that management practices just
require fine-tuning for optimal effectiveness. A study of eight foreign
acquisitions of US firms found that while cultural differences were easy to
identify, they did not seem to have important operational consequences.
112 X TOPIC 6 GLOBAL ORGANISATION
ACTIVITY 6.2
Let us look at some of the ways to reduce cultural differences as shown in Table
6.1:
For example, Sony sends managers from their subsidiary in Malaysia to Japan to
learn the latest Japanese quality practices in manufacturing. However, success is
not always guaranteed as non-Japanese managers, even those who speak fluent
Japanese, are not able to develop the necessary personal network. They also
would never really be able to understand the Japanese way of doing things.
Local managers would not have the essential experience that is needed to build
relationships and understand the management processes. While these
approaches may take into account national cultural differences, they aim to
assimilate these differences into an overriding corporate culture. Efforts to create
a strong corporate culture in order to reduce cultural differences often meet with
resistance because the parent company culture remains dominant.
SELF-CHECK 6.1
What are the ways to reduce cultural differences?
European managers often complain that they spend most of their time
gathering information for the head office and that they are judged solely on
results without concern for local conditions. They also complain that this
leads to an obsession with numbers and to short-term thinking.
SELF-CHECK 6.2
Explain in detail each of the ways to reduce cultural differences that
you have learnt so far by using your own words.
Do you realise that one of the key concerns that must be addressed is preserving
the autonomy of each partner? Clearly, boundaries between sectors and nations
are becoming less distinct. Companies can engage in joint ventures or strategic
alliances with other company worldwide, sometimes even with rival companies.
Both joint venture and strategic alliances will result in a new entity, where the
entity will make use of the best cultural aspect from all parent companies to
create its own organisational culture.
What is a geocentric management? If you are wondering about the answer, read
on. Global organisations that fully utilise cultural differences use geocentric
management, which involves a global view of the organisation's international
operations. Rather than orienting themselves towards either the home country or
118 X TOPIC 6 GLOBAL ORGANISATION
host country, top managers consider the organisation's goals, plans and
performance from a broader, worldwide perspective.
The best managers, regardless of their nationality or location, are selected for the
assignments that fit their skills and abilities. The various units are connected by a
coordinated plan that allows for local needs and actions in the context of overall
organisational performance. Although this is the most complex of the three
international management approaches (ethnocentric, polycentric and
regiocentric), managers who apply geocentric management can make the most
effective use of their resources, regardless of origin or location, and achieve the
highest possible overall performance.
(Source:http://www.blurtit.com)
Top management in this type of organisation openly talks about cultural issues
and encourages each team to define its own culture. Expatriates are chosen based
not solely on job competence but on being adaptable and having a sense of
adventure and problem-solving skills. Good support is provided before and after
expatriation by outside consulting firms. Training is provided based on the needs
of expatriates and organisations. The training itself is globalised, using methods,
materials and trainers from different cultures.
SELF-CHECK 6.3
How to establish closer relations between headquarters and
subsidiaries by fully utilising cultural differences?
TOPIC 6 GLOBAL ORGANISATION W 119
EXERCISE 6.1
Essay Questions
Ethnocentric Polycentric
Geocentric Regiocentric
Global
Topic X Leadership
7 Across Culture
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
1. Explain the term leader;
2. Explain different leadership styles and behaviour across cultures;
3. Compare leadership practices in different countries; and
4. Analyse three types of leaders.
X INTRODUCTION
Managers nowadays cannot escape from working with people from different
cultural backgrounds as globalisation and regional integration increase. Even
firms that do not have business abroad might face challenges in managing a
culturally diverse workforce. This creates a need for leaders who are well-versed
in cross-cultural management and its impact on the workplace.
7.1 LEADERS
Good leaders are made not born. If you have the desire and willpower, you
can become an effective leader. Good leaders develop through a never-
ending process of self-study, education, training and experience
- Jago, 1982
Now, what do you understand from the above quote? Well, it says that in order
to become a leader, you need to be willing and make the effort.
What is meant by the term leader? Leaders are people who hold a dominant or
superior position within their field, and are able to exercise a high degree of
control or influence over others. Leadership can be defined as the process of
influencing people to direct their efforts towards the achievement of some
particular goal or goals (Luthans & Doh, 2009). In the context of global business,
leaders are those who have the ability to inspire and influence the thinking,
attitudes and behaviour of people everywhere in the world (Deresky, 2007).
124 X TOPIC 7 LEADERSHIP ACROSS CULTURE
SELF-CHECK 7.1
What are the definitions given for the term leader?
You need to realise that even though participative leaders encourage group
members to participate, they retain the final say over the decision-making
process. Group members feel engaged in the process and are more motivated
and creative. This leadership style is normally used when managers have part of
the information and employees have other parts.
126 X TOPIC 7 LEADERSHIP ACROSS CULTURE
The leader is not expected to know everything and this is why decision- making
is shared with more knowledgeable and skilful employees. Using this style is of
mutual benefit as it allows employees to become part of the team and allows
managers to make better decisions. This kind of leadership is usually associated
with managers from technologically- advanced countries such as the United
States, the United Kingdom and Scandinavian countries.
However, the leader is still responsible for the decisions made. This is used when
employees are able to analyse the situation and determine what needs to be done
and how to do it. Leaders will only make important decisions based on the pre-
determined set of priorities and at the same time, will delegate certain tasks to
the employees.
Using this leadership style does not mean that the leaders can blame others when
things go wrong. Instead, this style is used when leaders fully trust and have
confidence in the people below them. Leaders should not be afraid of using this
style. However, it must be used wisely.
Usually, this leadership behaviour satisfies some employee needs, and in turn,
subordinates tend to exhibit loyalty and compliance. While this style can be
effective in situations where group members are highly qualified in an area of
expertise, it often leads to poorly defined roles and a lack of motivation. Studies
have shown this behaviour can be seen throughout Latin America.
ACTIVITY 7.1
SELF-CHECK 7.2
Explain briefly the different leadership styles that exist across
cultures.
American leaders are able to use this style, specifically in the decision-making
processes. There are four types of participation approaches:
(a) Quality circle;
(b) Self-directed work teams;
(c) Quality of work-life programme; and
(d) Scale on gain-sharing plans.
128 X TOPIC 7 LEADERSHIP ACROSS CULTURE
While most Japanese organisation are highly hierarchical and rigidly organised,
the leaders have an outstanding concern for the personal lives of their
subordinates. Trust plays a vital role as most Japanese leaders leave their
subordinates with a set of instructions and it is up to them to carry out the work.
Most Japanese managers believe that their employees are so motivated by
teamwork that they want to share in the responsibility for attaining group goals.
Thus, Japanese workers seek opportunities to participate in the management
process. In terms of decision-making, they similarly acknowledge the consensus
of everyone particularly during extensive consultation.
best practices with Chinese wisdom and this is one of the most important
differences that lead to business leadership success in Chinese companies
nowadays.
Many Western leadership best practices are imported to China because they were
proven in the West. But they often fail in China unless they are modified in some
ways. An example of this is the empowerment concept. This Western concept is
always mentioned in Western leadership books. It works very well in a Western
environment where employees are looking for more independence from their
bosses and ownership of their jobs. In China, however, a society founded on
Confucianism, where hierarchy is advocated and roles are clearly defined,
empowerment needs some explanation before it can be applied effectively.
Not only are leadership attitudes in many Middle Eastern countries highly
authoritative, their organisational structures are bureaucratic, over-centralised
with authority and power unequally distributed at the top. This results in a slow
business environment, with lots of time taken to make decisions or get approval
for projects.
Decisions are made only at the highest levels. Performance evaluation and
control are informal, with routine checks on performance. This is due in part to
the fact that personnel policies depend on personal relationships. Contacts and
social networks are more important than finding the strongest candidate through
more formal channels.
general statement, most evidence indicates that European managers tend to use a
participative approach (Luthans & Doh, 2008).
However, the results of the Globe project state that organisations in Latin
America tend to value the following:
(a) Flexibility to face uncertainty;
(b) Vertical hierarchy;
(c) Work groups;
(d) Good personal relations over performance;
(e) Management with masculine characteristics; and
(f) Short-term results.
ACTIVITY 7.2
Let us look at the explanation given for each type in the following sections.
The transactional leader will create clear structures to indicate what is required of
their subordinates, and the rewards they will get for following orders.
Punishments are not always mentioned but they are well-understood and formal
systems of discipline are usually in place. When work is allocated to the
subordinates, they are considered to be fully responsible for it, whether or not
they have the resources or capability to carry it out. When things go wrong, the
subordinates are considered to be personally at fault and punished for their
failure (just as they are rewarded for their success).
Charismatic leaders use a wide range of methods to manage their image and, if
they are not naturally charismatic, may tirelessly practise at developing their
skills. They may engender trust through visible self-sacrifice and taking personal
risks in the name of their beliefs. Charismatic leaders will always show these
traits:
(a) Inspire great confidence in their followers;
(b) Very persuasive; and
(c) Make very effective use of body language and verbal language when
communicating.
134 X TOPIC 7 LEADERSHIP ACROSS CULTURE
ACTIVITY 7.3
EXERCISE 7.1
Essay Questions
1. What is leadership?
A. The process of implementing a good management system
in the organisation.
B. The process of influencing people to direct their efforts
towards the achievement of some particular goal or goals.
C. The process of replacing incompetent managers with good
ones.
D. The process of creating a new product.
Leaders are people who hold dominant or superior positions within their
fields and are able to exercise a high degree of control or influence over
others.
Leadership is the process of influencing people to direct their efforts towards
the achievement of some particular goal or goals.
Behaviours and styles of leaders may be divided into three commonly
recognised styles authoritarian, participative and delegative.
Managers from different cultural backgrounds will display different
behaviours and styles.
There are three types of leaders: transformational, transactional and
charismatic.
Authoritarian Leadership
Charismatic Participative
Delegative Transactional
Leaders Transformational
Topic X Cross-Cultural
8 Communication
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
1. Differentiate between cross-culture communication and
normal communication;
2. Apply procedures and guidelines which must be observed in cross-
culture communication; and
3. Explain six cultural variations that exist in several cultures in cross-
culture communication.
X INTRODUCTION
Read the following situation.
Honda introduced its new car "Fitta" in Nordic countries in 2001. If they had
conducted cross-cultural marketing research, they might have discovered that
"Fitta" was an old word used in vulgar language to refer to a woman's body
part in Swedish, Norwegian and Danish. In the end, they renamed it "Honda
Jazz". In another example of cross-cultural communication issues, even
pictures or symbols are not interpreted the same across the world. Once, staff
at the African port of Stevedores saw the "internationally recognised" symbol
for "fragile" (the broken wine glass picture) and presumed it to mean a box of
broken glass. They decided not to waste space and threw all the boxes into the
sea.
Do you know that many companies from around the world are now conducting
their businesses across the borders of their countries in order to gain more profits
or raw materials? The increase in multinational operations requires company
managers to communicate with their counterparts from different parts of the
world. How to properly communicate with people from other countries is an
TOPIC 8 CROSS-CULTURAL COMMUNICATION W 137
Communication Explanation
Level
Thought The information to be conveyed to the receiver is identified by
the sender.
Encoding The sender converts an idea into words or expressions.
Channel The sender identifies the suitable channel of transmission:
verbally, in writing or gestures.
Receiver The receiver listens, reads or sees the information sent by the
sender.
Decoding The receiver tries to understand the information received.
The communication process will then be repeated by the receiver who becomes
the sender. The communication process will become more difficult when the
sender and receiver look at the information from different angles. The intended
idea transmitted by the sender may be interpreted or decoded from a different
perspective by the receivers culture. This will result in the actual meaning of the
communication not being achieved.
Thus, managers who will be communicating across cultures must have adequate
understanding of the environment and values which form the local culture. The
main thing which must be stressed is good and effective style of speech. For
example, certain messages may be considered as rude and ineffective in other
cultures. To address this problem, especially when you meet a foreign
counterpart for the first time, both parties must know the procedures and
guidelines on how to communicate across cultures.
TOPIC 8 CROSS-CULTURAL COMMUNICATION W 139
ACTIVITY 8.1
Let us look at the elaboration for each of these guidelines in the coming sections.
verbally. There are three skills which must be polished when communicating
across cultures as shown in Figure 8.2.
(i) Empathy
It is the ability to understand and somehow feel the emotions of
others.
Apart from the skills mentioned above, language skills also play an
important role in the process of cross-culture communications.
Although English is now considered to be the main medium of
communication in international business, the ability to speak the
language of the receiver is an advantage to the speaker. Such ability
TOPIC 8 CROSS-CULTURAL COMMUNICATION W 141
will create a more pleasant atmosphere and show that you are serious
in doing business together.
ACTIVITY 8.2
SELF-CHECK 8.1
As illustrated in the above quote, willingness to accept new cultures does not
mean that managers must change the values from original culture and totally
practise a different culture. Instead, they must create cultural awareness within
their self. Awareness of social values of a given society will enable managers to
understand how others think and act, factors which promote the behaviour,
attitude and values practised by the counterpart. This understanding will help
evaluate mutual priorities and interests and search for a way to cooperate in a
different cultural environment.
For example, businessmen from Malaysia doing business in Japan must adjust
themselves to the practices of their Japanese counterparts and vice-versa. But
when they are in their own countries, they will return to the practices of their
own cultures.
SELF-CHECK 8.2
Figure 8.3 lists six cultural variations in the communication process. These
variations influence the outcome of the communication process and will be
discussed further in the following sections.
144 X TOPIC 8 CROSS-CULTURAL COMMUNICATION
Let us look at the example below in order to get a clearer picture of what is
meant.
TOPIC 8 CROSS-CULTURAL COMMUNICATION W 145
The culture of the American people is very different from that of the
British. Although both use the English language, their culture differs. It is
the same for the Spanish language which is used by 21 countries in Latin
America due to colonisation. It is not accurate to assume that the cultures
of these countries are similar to each other or are similar to the Spanish
culture.
Do you know that a word from one language when translated into another
language might also result in a funny or negative meaning? Multinational
companies are among the guilty parties who commit such translation
errors.
So, let us look at the hilarious meanings derived from the words used in the
advertisement as shown in Table 8.2. The translation errors damaged the
reputation of the companies shown below.
146 X TOPIC 8 CROSS-CULTURAL COMMUNICATION
Pepsi Pepsi brings you back In Chinese, the translation means: Pepsi
to life brings your ancestors back from the grave.
KFC Finger lickin good In Chinese, it means eat your fingers off.
Volkswagen Jetta Letter "J" does not exist in the Italian alphabet, so
Jetta is pronounced as "Ietta", which means
misfortune.
Figure 8.4 shows the logo of KFC which says Its finger lickin good!. This
is one of the advertisement examples which can mean different things to
different people.
There are many forms of non-verbal communication which share the same
meaning in some cultures, such as nodding the head to mean agreement.
However, nodding carries a different meaning in some other cultures. You
have to be careful with your body language as some might carry a negative
meaning in another culture.
148 X TOPIC 8 CROSS-CULTURAL COMMUNICATION
ACTIVITY 8.3
To further enhance your understanding of cultural variation,
provide several variations of non-verbal communication which exist
between Malaysian and European cultures.
TOPIC 8 CROSS-CULTURAL COMMUNICATION W 149
This is prevalent among Westerners, where in their cultures, time must not be
wasted. All tasks, activities or appointments are scheduled properly so that time
can be fully utilised. Each task carried out must be completed within a specified
period. Those who are brought up in such cultures are educated from the very
beginning about the importance of punctuality. Failure to observe a deadline or
to be punctual for an appointment is the wrong thing to do, and the person is
considered undisciplined as shown in Figure 8.7.
Have you ever heard that in Germany and Japan, arriving late is considered as
rude and unacceptable? The Americans emphasise very much on punctuality too
and it plays a very important role in their daily life. Thus, it is normal for them to
feel stressed and uncomfortable when they have to wait for someone who is late
for an appointment. In some other cultures, failure to observe punctuality is not
considered a serious mistake and is taken as quite common as shown below.
Being 30 minutes late might be considered as too much in the United States.
However, it is a normal thing in South America and many developing
countries. In fact, if you want to set an appointment with an executive from
Brazil at noon, you must indicate clearly that the time meant is noon
English time. If you do not indicate so clearly, the Brazilian executive will
show up any time between noon and 2.00p.m.
150 X TOPIC 8 CROSS-CULTURAL COMMUNICATION
During discussions, those who are concerned about time will strictly discuss
business and would not be interested to have leisure conversations in order to
save time. Such behaviour might be construed as rude by their business
counterparts; particularly those from Asian countries who tend to begin
discussions by talking about family, current and personal affairs first. The
objective is to establish better relations and a friendly atmosphere before
discussing a much more serious business issue. As a result, the discussion will
take more time than what is expected by those who are concerned about time.
ACTIVITY 8.4
(a) Have you ever been asked the Malay time or the English time
when making an appointment?
(b) How do you relate such question to the culture of time?
(c) How do you rectify negative nuances with relation to punctuality
and culture?
Thus, burping is a sign of appreciating the efforts of the host who served you the
food. In such cultures, failing to burp might be considered as a sign that you do
not appreciate the food or that you are implying the food is not appetising.
For Asians, eating using hands is common. Westerners, however, might feel
uncomfortable using their hands because they are not used to it or are unsure
whether it is hygienic. Another important rule to know is that when eating with
the French, do not change the position of the fork and spoon from one hand to
the other as doing so is regarded as rude and impolite.
TOPIC 8 CROSS-CULTURAL COMMUNICATION W 151
also cultures where gifts are given privately such as at dinner parties or while
playing golf and not during meetings or formal discussions.
The type and colour of gift may also reflect different meanings. Gifts which
come in white are normally avoided in many Asian countries as they
symbolise death. The type of hamper or gift which is suitable for all
cultures are chocolates, books or items which can be used in the office.
Giving alcoholic beverages as a gift in countries where Muslims form the
majority population must be avoided as it goes against their religion.
How people greet and welcome their guests is important as it will create a
first impression and build relationships. People of most cultures greet
guests with a hand shake, light embrace or both. However, there are also
cultures which have their own unique way of greeting guests with the hope
that they will respond in a similar manner.
As depicted in Figure 8.10, the Japanese people, for example, will greet a
person by bowing. Thais do it by putting their hands together and saying
Sawasdee which means welcome. Arabs, on the other hand, greet each
other with an embrace and cheek-to cheek kissing, while the Maoris of New
Zealand rub noses.
TOPIC 8 CROSS-CULTURAL COMMUNICATION W 153
For example, in the Middle East, people of the same sex stand much closer to
each other than North Americans and Europeans, while people of the opposite
sex stand much further apart. Japanese men stand four or five feet apart when
154 X TOPIC 8 CROSS-CULTURAL COMMUNICATION
Figure 8.11 shows how gender plays a role in peoples preference to stand closer
to or apart from each other.
Please refer to Table 8.3 on the comparison about appropriate distances when
talking in different countries.
in terms of dress code, dining ethics and others which are common practices in
European countries and the United States.
In general, a business visitor to a foreign country should dress well. Men should
dress in a suit and tie in most foreign countries. Businesswomen who go to an
Islamic country should wear dresses with slightly lower hemlines than in the
West and with the shoulders and arms covered to the wrists as depicted in
Figure 8.12. As a visitor, managers are also expected to be patient, punctual and
not overly demonstrative in personality or mannerisms.
Figure 8.12: Proper attire for women managers when doing business in a
Muslim country
SELF-CHECK 8.3
(a) What are the six cultural variations that exist in cross-culture
communication?
(b) Explain briefly each of the variations.
156 X TOPIC 8 CROSS-CULTURAL COMMUNICATION
EXERCISE 8.1
Essay Question
X INTRODUCTION
Read the following situation.
George Mason, who is from the United States, is in India to have a negotiation with
Dharmendra Choudhury who is his new business colleague. Choudhury, who
used to study in California, watches American football and listens to rock music
and speaks excellent English. All this makes Mason think Choudhury is just like
any American. During the negotiation, things did not go really well. It even came
to a screeching halt as Choudhury decided to take a break during the negotiations.
What was the problem? Both parties had different perceptions of the negotiation
process and misinterpretations of the others behaviour. For Mason, negotiation is
about pushing through a quick deal. When Choudhury took a lot of time asking
about his family and life. Mason became increasingly impatient and pushy in the
meetings. Choudhury interpreted this with suspicion and assumed that Mason
was pulling a fast trick on him. He thought there was something not right and
therefore, he needed some more time to study Masons proposals. Though the
negotiations concluded successfully, it took a longer time than Mason initially
anticipated.
TOPIC 9 NEGOTIATION ACROSS CULTURES W 159
The above example shows how cultural differences are often ignored by both
parties in a negotiation and how it affects the process itself. It is said that over
two-thirds of the effectiveness of a negotiation is determined by non-verbal
communication. Body language, as shown in the above example, provides
valuable insight into a person's feelings and attitudes. Gestures and facial
expressions can communicate diverse emotions and attitudes. They are, however,
often misleading due to the marked cultural differences in the use and
interpretation of non-verbal cues.
Do you agree that the above quote shows that negotiation is more effective
compared to confrontation? This is because finding a solution can be accepted by
all parties rather than finding a way to fight. Basically, negotiations are
conducted to solve a problem or conflict between two parties or to find an
alternative to an existing problem.
In this topic, we will discuss the process and important factors to be considered
in a cross-cultural negotiation. This is followed by explanation on the best
negotiation strategy to ensure success and some discussion on various styles of
negotiation among people from different countries.
160 X TOPIC 9 NEGOTIATION ACROSS CULTURES
ACTIVITY 9.1
Some negotiations are successful while others are unsuccessful.
Let us explore each of the stages involved in the negotiation process in the
following sections.
TOPIC 9 NEGOTIATION ACROSS CULTURES W 161
9.1.1 Preparation
You can never overstate the importance of proper preparation for cross-cultural
negotiations. Distinct advantage can be gained if negotiators familiarise
themselves with the entire context and background of their counterparts because
most negotiation problems are caused by misinterpretation of the other partys
culture, language and environment.
Do you know that there are several variables which must be studied by
managers in this planning process? These findings can help managers
understand the deep-rooted cultural and national motivations and traditional
processes underlying negotiations with people from other countries. Table 9.1
illustrates several variables which must be considered when planning a
negotiation.
After developing profiles of the other parties, managers should find out as much
as possible about the kind of demands that might be made, the composition of
the opposing team, and the relative authority that the members possess. With
these three things, you will be able to predict what the negotiators want and
determine the aim of the negotiation process.
This approach is well understood in the United States but it can be disastrous if
the foreign negotiators want to take some time to build trust and respect as a
basis for negotiating contracts. In such cases, American efficiency do not go well
with the Asian laidback approach in developing a mutually trusting relationship,
which is the cornerstone of an Asian business agreement.
Intermediary is someone who already has the trust and respect of the the
foreign negotiator.
You may wonder how people from different countries make their presentation or
channel their queries during a negotiation process. To satisfy your curiosity,
Table 9.2 will show the characteristics of negotiators from different nationalities.
9.1.4 Persuasion
Do you know that the persuasion stage can be considered as the hardest to
implement? Typically, both parties try to persuade each other to accept more of
their position and to give up some of their own. Often, some persuasion has
164 X TOPIC 9 NEGOTIATION ACROSS CULTURES
already taken place beforehand in informal social settings and through mutual
contacts. This will facilitate the actual negotiation and help in reaching an
agreement quickly.
Based on a research in the United States, better end results are attained by
starting with extreme positions. After a long process of bargaining, both parties
will agree on a certain concession that benefits both parties. If not, the negotiation
is considered as having failed and another round of negotiation might be needed
if both parties are still interested in doing business with each other.
ACTIVITY 9.2
9.2.2 Decision-making
How the business counterpart chooses to negotiate and conduct decision-making
must be studied and understood. Sometimes, how a person makes a decision is
influenced by the culture of his or her home country.
For example, Asian negotiators are indirect in their words due to Asian culture
which stresses on politeness and face-saving value. They are reluctant to say a
straight no because it might hurt the other negotiators feeling and they might
feel embarrassed. As a result, they will use words such as We will think about
your proposal first or Your proposal is interesting but I have to discuss with
the top management first. Negotiators who understand the style of Asian
negotiators will get the message directly that the negotiation has failed.
For negotiators from other countries that are group-oriented or do not enjoy such
freedom might have quite a different style. In contrast with what the American
managers believe, these negotiators might hold the view that nothing is
permissible except those allowed by the country.
another. Negotiators may find it useful to consider the way gender roles play out
in the cultural contexts of their negotiating partners.
(Source: http://www.clynchinternational.com/Checklist.pdf).
168 X TOPIC 9 NEGOTIATION ACROSS CULTURES
French people are very proud of their culture and language. Therefore, most of
them prefer to communicate in French. Even the number of French people who
can speak in English is very small. So, negotiations should be conducted in
French and for managers who do not speak French, there is no way that the
negotiation can take place.
So, what will you do if you were a manager trapped in the situation portrayed
above? In such situations, it is a good idea to use an interpreter to assist the
manager and his or her counterpart. Furthermore, it will give the managers more
time to think about their next statement while the previous statement is being
translated. However, there could also be a problem.
Since language and culture are intertwined, translators may not convey the
intended message due to the nuances of the languages involved. What the
managers say might be translated wrongly or out of context. Another thing to be
considered is that the body language of the translator might not reflect the
attitude of the managers. Such misinterpretations will negatively affect the
negotiation.
SELF-CHECK 9.1
9.3.1 Location
These would be the questions forming in your mind while conducting a
negotiation:
(a) Where should the negotiation take place?
(b) Should it be at the office, golf club, hotel or restaurant?
(c) c) Should it be a formal or informal meeting?
Choosing the right place is very important because it reflects the sincerity of each
party in doing business with each other. In general, managers have four options
for the venue:
In addition, if negotiators are at their own office, they will have easier
access to any documents or records they might need during the negotiation.
They will also have the benefit of support staff and access to computers and
other sources of information that may be important.
Neutral sites might also include the golf course, service clubs or an
exclusive club. Deals can be negotiated without the pressure of an office
environment or any other disturbance. If the negotiation is held at some
place upscale, it gives the message to the other negotiator that "I think you
are special enough to bring you here," or "This is the way I do business".
(d) No Place
Finally, with the development in information and communication
technology, negotiation can be done through video conferencing. Both
parties have the advantage of being at home, so they can access all
necessary information, documents and advice needed during the
negotiation. The only problem with this kind of negotiation is both parties
cannot access the overall body language of others as the view is very
limited.
9.3.3 Authority
Now, let us move on to the last tactic used to bring success to the negotiation
process. Most people would like to end the negotiation process as quickly as
possible. Good managers with good negotiation skills will never follow the same
tune and let the other partys impatience beat them. One great way of doing this
is to let them believe the person they are negotiating with is not actually the
manager but some other people with higher authority.
Managers should stress that they are not the person who can make a definite yes
or no decision and should say something like, "I will have to discuss your
proposal with my boss or partner before I can give our decision on this matter".
A skilled negotiator will want to talk to the person who makes the final decision
but do not allow this. Use whatever excuse such as the person with the authority
over the deal wants you to sort things out but still needs to have the final say or
TOPIC 9 NEGOTIATION ACROSS CULTURES W 171
he or she is out of office. Then, managers should notify the other party that it will
be discussed and get back with an answer later. This is also a great strategy for
preventing people from rushing for a decision.
SELF-CHECK 9.2
(a) Explain the five stages involved in a negotiation process.
(b) What are the tactics you can use during negotiations?
ACTIVITY 9.3
Draft your tactics and give your justifications for them. Share your
answers in the myVLE forum.
ACTIVITY 9.4
Give your ideas on the style and characteristics which you must
present as a successful and effective Malaysian negotiator.
TOPIC 9 NEGOTIATION ACROSS CULTURES W 173
EXERCISE 9.1
Many people are not aware that they go through the negotiation process
every day in their daily life, such as negotiating for a salary increase, to get a
low price for a piece of land, bargaining for accident compensation, and
negotiating to sell a used car.
These are all negotiations which involves various processes and decisions.
If you understand that the basic purpose of negotiation is to obtain what is
desired from others, it would be easier for you to use negotiation strategies to
help you achieve your goals.
As time passes by, there are more and more matters which require
negotiations. This is because, conflicts in matters which involve various
cultures is increasing from time to time. Such situation occurs because each
culture has its own style in managing problems and reaching an agreement.
The best way to reach an agreement is an agreement which benefits both
parties.
Each negotiation is different due to differences in culture, negotiators,
negotiation purposes, negotiation atmosphere and how negotiations are
conducted. Thus, in order to bridge the gap, negotiators must first
study their counterparts.
Such preparation will facilitate the negotiation process as strategies can be
organised beforehand, conflicts can be reduced and agreement can be
reached quickly.
If all negotiating parties understand one another, the likelihood of a win-win
situation is greater.
There are five stages in a negotiation process:
(i) Concessions and agreement;
TOPIC 9 NEGOTIATION ACROSS CULTURES W 177
(ii) Persuasion;
(iii) Exchanging task-related information;
(iv) Relationship building; and
(v) Preparation.
There are five important factors in a negotiation:
(i) The players and the situation;
(ii) Decision-making;
(iii) National character;
(iv) Cultural noise; and
(v) Use of interpreters.
There are several tactics used in a negotiation:
(i) Location;
(ii) Time limits; and
(iii) Authority.
X INTRODUCTION
Read the following situation.
After reading Rahims story, do you have friends or relatives who have a similar
habit? Rahim is a perfect example of a new generation of workers who live
differently from those in the 1970s and 1980s. Young workers nowadays are very
much exposed to other cultures and have no problem embracing these as part of
their daily life. Traditional Malaysian breakfasts such as nasi lemak and nasi
TOPIC 10 GLOBALISATION: CULTURAL ISSUES AND CHALLENGES W 179
goreng are now replaced with American or European breakfasts such as burger,
pizza, fried chicken, doughnuts and sandwiches as shown in Figure 10.1. These
foods have become the preference for lunch instead of rice.
These following questions may be bothering you after reading the above
explanation:
(a) Does this mean that culture is evolving?
(b) Will the new culture replace the current national culture?
(c) Is there any implication of this cultural change to the business?
This topic will discuss globalisation and its impact on culture, followed by a
couple of issues regarding culture such as culture clash and ethics in the current
global business environment.
Globalisation is a very popular term in this decade. The topic has become the
centre of discussion in many aspects of life by the writers, politicians,
businessmen, academicians and even regular workers, as almost everybody now
feels the effect of globalisation as illustrated in Figure 10.2. It is a global
phenomenon as the world is experiencing great changes with the emergence of
new economic, political and cultural environments.
Nevertheless, it is not true that the effects of globalisation are limited to the
commercial arena. Many things can be globalised such as products, services,
human beings, information, or even abstract things such as ideas, traditions and
customs.
TOPIC 10 GLOBALISATION: CULTURAL ISSUES AND CHALLENGES W 181
The following are two definitions of globalisation which are often used as
depicted in Table 10.1:
Source Definition
Hill, 2001 A shift towards a more integrated and interdependent
world economy.
Ceglowski, 1998 A world in which goods, services, capital and information flow
across seamless national borders.
Some welcome globalisation as a revolution which makes this world a safer place
and provide the world with an economic environment which is more stable and
equitable, while others regard globalisation as a new form of colonisation which
exploits poor countries.
Let us look at Figure 10.3 which reflects the opinion of people from various
countries on globalisation. Majority of them view globalisation as mostly good. It
is, however, a surprise to see that people from the United States and France are
among those who say that it is mostly bad.
ACTIVITY 10.1
At the same time, companies which succeed locally might not succeed in the
international market if they fail to look at the differences in culture between both
countries. When a company enters a foreign market, rival companies will follow
suit to avoid losing competitive advantage. The sudden increase in international
competition among international firms has resulted in rapid globalisation, as
they bring product, people (expatriate), organisational culture and practices from
their home country to the other markets.
For example, McDonalds brings with it the culture of its home country, whether
in terms of management, processes or technology, when expanding its business
to China. Similarly, Levis will do the same when entering the Indian market, and
Sony when entering the African market and so on.
(a) Development;
(b) Mass media influence; and
(c) Advancement of communication technology.
The decrease in cultural gap among countries has created a form of unification in
consumer preference and taste worldwide or more commonly addressed as
global village. With this unification, multinational companies are able to offer
uniformed products in the market. Companies no longer have to bear the cost of
modifying the products according to the taste of each local community.
Various proofs have shown that globalisation has created a global village and
brought along with it a culture which is almost universal. Brand names such as
McDonalds, Sony, Mercedes and Burger King have become synonymous with
the daily life of people worldwide, including the Malaysian community.
Do you know that the main concern among cultural scholars is the possibility
that the cultural identity of a country might disappear due to the presence and
influence of the global culture? Governments are no longer able to prevent global
culture, which is mostly based on Western culture, from entering our culture and
identity. It spreads freely through communication technology, is absorbed into
the minds of the local community and finally, erodes cultural identity and
values, thus changing drastically the way of life of a particular society.
Do you eat local delicacies such as karipap, samosa, popiah and other traditional
food items? If you do not, global culture could be one of the reasons. The
influence of global culture on local culture and its effects is evident everywhere,
including in Malaysia. Many Malaysian citizens nowadays prefer eating KFC
fried chicken instead of ayam percik and pizza instead of roti canai as well as buy
imported clothes and cars. What is even more disturbing is its influence among
youths who are becoming less interested in practising traditional Malaysian
culture. They imitate negative Western trends in terms of dressing and music
preferences. They also imitate destructive habits such as having intercourse out
of wedlock, taking drugs, consuming alcohol and so on.
ACTIVITY 10.2
Globalisation and the concept of global culture can prevent the conflicts
from occurring or continuing to occur through political and cultural
integration between the involved parties. When each party understands the
others culture, or practises a unified global culture, religious and ethnic
differences will not be that obvious and any disagreement can be resolved
through tolerance.
Are you aware that globalisation also allows people from around the world to
learn about each others cultural elements, such as the norms and behaviour of
communities? When everyone understands each others culture, they will try to
adjust themselves and practise tolerance towards other cultures. Intercultural
conflicts can be eliminated. As for firms, cultural uniformity will assist them in
offering uniformed products across the world. Consumers taste and needs can
be easily understood due to the fact that they are becoming more and more
similar from one market to another. Furthermore, product modification or
marketing techniques will no longer be considered as against the ethics or norms
of a given culture.
ACTIVITY 10.3
Discuss how intercultural conflicts can be eliminated through
globalisation.
Figure 10.7 depicts the situation of developing nations, which face the threats
posed by the global market, in a lighter perspective.
Figure 10.7: Developing nations face threats posed by the global market
ACTIVITY 10.4
A research carried out by a consulting firm from Europe found that cultural
differences are the biggest source of difficulty in integrating European
acquisitions. Cultural differences are obvious between one country and another.
Therefore, problems and misunderstandings often happen among businessmen
as shown below.
TOPIC 10 GLOBALISATION: CULTURAL ISSUES AND CHALLENGES W 191
Companies which want to expand operations to foreign countries must learn first
the customs of the local people in order to avoid undesired incidents as
portrayed below.
Let us have a look at some culture clash issues which often occur in business as
shown in Table 10.2.
ACTIVITY 10.5
Based on your experience on culture, list the three things that can
prevent the occurrence of a culture clash (apart from those
mentioned above). Discuss with your course mates and present
your answers in class.
However, there are certain things which managers must know when coping with
a cultural clash. Table 10.3 shows some tips on overcoming cultural clash.
Dos Donts
Take care of your friends and invite them Avoid judging a culture by comparing it
to your parties. with your own culture
Socialise with locals and participate in their Do not brag about the country which you
activities have just visited
Learn the micro behaviour practised Do not ever interrupt your friends
locally conversation, particularly when he or she is
talking about an internal political issue
Provide community services to the Do not decline anything straight away. Do
locals it politely.
ACTIVITY 10.6
SELF-CHECK 10.1
EXERCISE 10.1
Answers
TOPIC 1: INFLUENCE OF CULTURE
Exercise 1.1
Multiple Choice Questions
1. C
2. B
3. D
4. C
5. B
1. C
2. C
3. A
4. B
5. B
1. B
2. C
3. C
ANSWERS W 197
4. A
5. B
1. A
2. A
3. D
1. B
2. A
3. B
4. A
5. C
ANSWERS W 199
1. B
2. D
3. B
1. B
2. C
3. B
4. D
5. C
202 X ANSWERS
1. B
2. C
3. A
4. B
5. B
REFERENCES W 203
References
Deresky, H. (2008). International management: Managing across borders and
cultures (6th ed.). Plattsburgh: Pearson Prentice Hall.
Duygulu, E., & Ozeren, E. (2009). The effects of leadership styles and
organizational culture on firms innovativeness. African Journal of
Business Management, 3 (9), 475-485.
Nacinovic, I., Galetic, L., & Cavlek, N. (2009). Corporate culture and
innovation: Implications for reward systems. World Academy of
Science, Engineering and Technology, 53, 397-402.
Peters, T., & Waterman, R .J. (1982). In search of excellence. New York: Harper
& Row.
204 X REFERENCES
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