Markfield Institute of Higher Education

(in association with University of Gloucestershire)

International management MFP 212 Analyzing and comparing Culture and Management Lecture 7 Toseef Azid 22-11-2012

Russia: Culture & History

one of the greatest experiment of our time Russians .. Have made incredible strides towards a market economy in an extremely short time Archie Dunham, CEO of Conoco) 150 million potential consumers If investors do not get (in Russia0 now, they might as well never The best buys are available now (Dana McGinnis, President of San Antonio Capital Management) 116 registered US firms with Moscow based operation US Department of Commerce plan to open several American Business centres in Russia

Russia: Culture & History

Environment is complex and different than Western Culture because 70 years of controlled economy If values differed then management style must be differed Russian merchandise and industrial business developed under tight centralized state control

Russia: Culture & History

Private business and entrepreneurship by law and present them as ideologically an d socially evil Soviet Market transition began in the 1980s with glasnost and perestroika In Late 1980s: Cooperative and private entrepreneurial ventures were allowed Jan 1994: 75% medium and large scale and 80% small scale establishments were privatized In 1997 more than 80% workforce was in Private sector Created a class of small business owners, entrepreneurs and entrepreneurial culture Russian mangers are less ideological oriented than their Soviet counterparts

Russia: Culture & History

Do not believe ethical behaviour is positively connected to profits Three main influence of business ethics in Russia today: 1. Pre-revolutionary business practices (influenced by Church) 2. Soviet Business Practices (Emphasis was towards the worker, private and underground form of business) 3. Private and shadow business practices

Russia: Culture & History

In 1999 Russia attracted a mere $ 4.26 billion in FDI $31 million in portfolio investment $74.54 billion exported (good and Services) US foreign investment is estimated at $4.7 billion as of Jan. 2000 Less than 1% of total US foreign trade

Russia: Culture & History

US ranked second after Germany as a leading source of Russian imports for 1998 In 1999 total foreign direct investment in Russia amounted to $61 per capita, compared with $389 for neighbouring Poland and $967 for Czech Republic In Jan 1998 more than 9000 foreign companies have registered offices in Russia

Management: US and Russia

Illegal or unethical in US but not in Russia (dual-sets of accounting books and extensive use of gifts) Two main reason of success in Russia; Connections and dishonesty Russians taking large projects and dissecting them into small Tendency to alter the scenario to fit the picture that they find most useful Use political influence, informal arrangements and personal connections to conduct business Nepotism instead of efficiency and effectiveness Success of a worker = f ( Communist party)

Management: US and Russia

Power distance: High in Russia whereas low in America Russians are collectivists and Americans are individualist Russia: close personal relationship, care for the weak, femininity Americans: masculinity Russia: High Uncertainty avoidance America: Low Uncertainty Avoidance

Management: US and Russia

Russia; Political influence, informal arrangements and personal connections There is a peculiar Russian mentality.. (A Russian man) sees a law and instantly thinks of ways to manoeuvre around it. This is just a tradition (A senior Russian Govt Official) American culture is not characterized by a high degree of political influence orientation No significant difference in terms of competitive orientation. Both are low dogmatic

Leadership: US and Russia

Russia: Intuitive management, use of political power, high power distance, collectivist rather than fact based, following clear organizational procedures, low power distance and individualist Russia in context of power: 1. Legitimate power: power based on formal position and authority in an organization 2. Reward power: power to bestow recognition (tangible or psychologically) 3. Expert power: power obtained through the exercise of specialized skills and knowledge 4. Referent power: power based on the followers personal liking or admiration of the leader 5. Coercive power: power to obtain compliance through fear or punishment or sanctions 1 and 4 are more closer to Russian behaviour

Motivational approach: US and Russia

Russia: A sense of belonging and security are the strongest motivations Respond positively when emphasized benefits to collective, group benefits and team contributions, indirect feedback Reverse in America, direct feedback about the task of subordinates

Malaysia: Culture and Organization

22 MILLION POPULATION, 60% Malay, 27%Chinese, 7% Indians and 6% others Heterogeneous country Every group tries to co-operate and compete each other for the bigger slice of pie Among groups more difference appear on one construct religiosity

Malaysia: Culture and Organization

Traditionally: Feudalistic country Middle class is recent phenomenon Values of Malay mangers are odd with the normal values of Malay culture organizational culture Not ones culture but also by ones position in the organization

Malaysia: Culture and Organization

Malaysian bosses would be preferred by subordinates because they would be more in tune with local culture: Malay and Chinese Japanese Indian preferred Americans Malays dislike German most Chinese and Indian dislike British most

Malaysia: Culture and Organization

Chinese who educated in Chinese schools strongly hold Chinese values and viceversa Most are bilingual and many are tri lingual