Doing Business in Emerging Markets (BMI)
Lecture 4
Negotiation and conflict management in Emerging Markets
Cultural impacts and leads to manage
2
Outcomes expected from the session
• Understand the importance of the global and different mindsets and cultures
• Understand the main elements in the cultural business approach
• What we need to know, when we work with another culture and their potential
way to think, act and negotiate
Lecture 4
3
Index
• The culture as a driver for negotiation, management and leadership
• International Management and Cultural Differences: Understanding New
Cultures
Lecture 4
4
Index
• The culture as a driver for negotiation, management and leadership
• International Management and Cultural Differences: Understanding New
Cultures
Lecture 4
Characteristics of Culture
• Culture is the collection of values, beliefs, behaviors,
customs, and attitudes that distinguish one society from
another
• Characteristics Of Culture
• Learned behavior
• Interrelated
• Adaptive
• Shared
Cultural impacts and leads to manage
Elements of Culture
Cultural impacts and leads to manage
Social Structure
• Individuals, Families, and Groups
• Defining family
• Individual’s role within groups
• Importance of the individual relative to the group
• Social Stratification
• Attributes
• Highly stratified societies
• Less stratified societies
• Social mobility
• Low social mobility
• Socially mobile societies
Cultural impacts and leads to manage
Language
• Delineates cultural groups
• Shapes one’s perceptions of the world
• Filters observations and perceptions
• Provides important clues about the cultural values of the
society
• Offers indications about the diversity of a country’s
population
Cultural impacts and leads to manage 8
Language
• Language as a Competitive Weapon
• Linguistic ties
• Linguistic legacy of colonialism
• Predominant common language, or Lingua Franca
• English
• Translation
• Backtranslation
• Common words
• Words may have different meanings
• Saying No
Cultural impacts and leads to manage
Communication
• Nonverbal Table 4.1 Forms of Nonverbal Communication
Communication Dress: fashionable, flashy, or conservative
Hand gestures
• Facial Expressions
Facial expressions: smiles, frowns, nods, eye contact (or lack of
it)
• Hand Gestures
Hair styles
• Intonation Greetings: bows, hugs, kisses, and hand shakes
Perfumes and colognes
• Eye Contact
Physical contact: hand holding, pats on the back
• Body Positioning Posture: formal or relaxed?
Time: arrive promptly, early, or late?
• Body Posture Waiting your turn: queue up? or not?
Walking: fast, slow; in group or single file; position of leader within
group
Source: Based on Gary Ferraro, The Cultural Dimension of International Business, 6th ed., Prentice Hall, 2010, pp. 82–105;
Lillian Chaney and Jeanette Martin, Intercultural Business Communication, 2nd ed., Prentice Hall, 2000, pp. 105–128.
Cultural impacts and leads to manage
Communication
• Gift-Giving and Hospitality
• Important means of communication
• Different gift giving etiquettes
• Hospitality customs also differ
• Communicating bad news
Cultural impacts and leads to manage
Religion
Major World Religions
Cultural impacts and leads to manage
Religion
• Shapes attitudes of • Impact on international
adherents businesses
• Constraints the roles of • Legal system
individuals in society • Homogeneity of religious
• Affects consumer buying beliefs
behavior • Tolerance
• Affects seasonal patterns
of consumption
Cultural impacts and leads to manage
Values and Attitudes
• Time
• Age
• Education
• Status
Cultural impacts and leads to manage
The Social Structure: A Cultural
Cluster Approach
Map 4.4 A Synthesis of Country Clusters
Source: Based on Vas Tara, Piers Steel, and Bradley Kirkman, “Improving national culture indices using a longitudinal meta-analysis
of Hofstede’s dimensions,” Journal of World Business, vol. 47 (2012), pp. 329–421; Amir Shoham and Ilan Alon, “Changing cultural
clusters: A research note,” International Journal of Business and Globalisation, vol. 5, no. 3, pp. 328–342 (2010); Mansour Javidan,
Peter Dorfman, Mary Sully de Luque, and Robert House, “In the Eye of the Beholder,” Academy of Management Perspectives,
February 2006; Simcha Ronen and Oded Shenkar, “Clustering countries on attitudinal dimensions: A review and synthesis,” Academy
of Management Review, vol. 10, no. 3 (1985).
Cultural impacts and leads to manage
The Social Structure: A Cultural
Cluster Approach
• Internationalization strategies
• Foreign Market Entry Methods
Cultural impacts and leads to manage
17
Index
• The culture as a driver for negotiation, management and leadership
• International Management and Cultural Differences: Understanding New
Cultures
Lecture 4
International Management and Cultural
Differences: Understanding New Cultures
• Every country, his citizens, their companies, … has their
own way to understand and apply their culture.
• We need to understand their key elements of cultural
aspects for two reasons:
To have a better communication with them
To Building trust with them, as a foreign cultures
Cultural impacts and leads to manage
International Management and Cultural
Differences: Understanding New Cultures
• Self-reference criterion
• Acculturation
• Cross-cultural literacy
Cultural impacts and leads to manage
International Management and Cultural
Differences: Understanding New Cultures
Methodologies to understand the national culture and
anticipate conflicts:
• Hofstede’s Six Dimensions of National Culture
• Meyer’s eight Dimensions in “cross border” leaderships
Cultural impacts and leads to manage
International Management and Cultural Differences:
Hofstede’s Six Dimensions
Figure 4.2 Hofstede’s Six Dimensions of National Culture
Cultural impacts and leads to manage
Hofstede’s Six Dimensions
Social Orientation
Table 4.3 Extremes of Social Orientation
Individualism Collectivism
I is the focus of decisions; I do what is best for We is the focus of decisions: do what is best for
myself the group
Individuals are responsible for themselves The group is responsible for its members
Success a result of the individual’s actions An individual’s success is due to the group’s
assistance
Primary loyalty to my career, my goals, and my Primary loyalty to the organization or the group
close family, not to the organization
If a setback occurs, goal is return to self- If a setback occurs, group provides continuing
sufficiency assistance
Source: Gary Ferraro, The Cultural Dimension of International Business, 6th ed. Pearson, 2010; Geert Hofstede, Gert
Jan Hofstede, and Michael Minkov, Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill,
2010; Nancy J. Adler and Allison Gundersen, International Dimensions of Organizational Behavior, 5th ed. Thompson
South-Western, 2008; John B. Cullen, Multinational Management, South-Western College Publishing, 1999; Vern
Terpstra and Kenneth David, The Cultural Environment of International Business, South-West Publishing Company, 1985.
Cultural impacts and leads to manage
Hofstede’s Six Dimensions
Power Orientation
Table 4.4 Extremes of Power Orientation
Power Tolerance Power Respect
Children are adults-in-training, taught to think for Children taught to obey
themselves
Teachers are guides who facilitate Teachers are the source of all knowledge and
learning wisdom
Superiors consult with subordinates Superiors tell subordinates what to do
Everyone should have the same rights Rights and privileges are tied to rank
Hierarchies are a necessary evil Hierarchies are desirable; everyone knows their
place
Inequality is bad, should be minimized Inequality is good, a way of demonstrating
superiority
Source: Gary Ferraro, The Cultural Dimension of International Business, 6th ed. Pearson, 2010; Geert Hofstede, Gert
Jan Hofstede, and Michael Minkov, Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill,
2010; Nancy J. Adler and Allison Gundersen, International Dimensions of Organizational Behavior, 5th ed. Thompson
South-Western, 2008; John B. Cullen, Multinational Management, South-Western College Publishing, 1999; Vern
Terpstra and Kenneth David, The Cultural Environment of International Business, South-West Publishing Company, 1985.
Cultural impacts and leads to manage
Hofstede’s Six Dimensions
Power Orientation
• Power Orientation Extremes
• Power Respect
• Power Tolerance
Cultural impacts and leads to manage
Hofstede’s Six Dimensions
Uncertainty Orientation
Table 4.5 Extremes of Uncertainty Orientation
Uncertainty Acceptance Uncertainty Avoidance
Uncertainty and ambiguity create opportunities Uncertainty and ambiguity create threats and
challenges
Weak hierarchies and bureaucracies Strong hierarchies and bureaucracies
Change jobs if new opportunities arise Changing jobs risky—why take the chance?
Decentralized decision-making encourages Centralized decision-making ensures uniformity
flexibility
Subordinates encouraged to think for themselves, Subordinates expected to do what they are told
innovate
Social norms are weak; unorthodox behavior Social norms are strict and to be obeyed
tolerated
Source: Gary Ferraro, The Cultural Dimension of International Business, 6th ed. Pearson, 2010; Geert Hofstede, Gert
Jan Hofstede, and Michael Minkov, Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill,
2010; Nancy J. Adler and Allison Gundersen, International Dimensions of Organizational Behavior, 5th ed. Thompson
South-Western, 2008; John B. Cullen, Multinational Management, South-Western College Publishing, 1999; Vern
Terpstra and Kenneth David, The Cultural Environment of International Business, South-West Publishing Company, 1985.
Cultural impacts and leads to manage
Hofstede’s Six Dimensions
Goal Orientation
Table 4.6 Extremes of Goal Orientation
Passive Goal Behavior Aggressive Goal Behavior
Quality of life more important than material Material rewards more important than quality of
rewards life
Work life and family life integrated Work life and family life separate and distinct
Desire low level of work-related stress Work-related stress expected, a badge of honor
Cooperation more important than competition Competition more important than cooperation
Success: “a well-lived life” Success: “he who dies with the most toys wins”
Source: Gary Ferraro, The Cultural Dimension of International Business, 6th ed. Pearson, 2010; Geert Hofstede, Gert
Jan Hofstede, and Michael Minkov, Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill,
2010; Nancy J. Adler and Allison Gundersen, International Dimensions of Organizational Behavior, 5th ed. Thompson
South-Western, 2008; John B. Cullen, Multinational Management, South-Western College Publishing, 1999; Vern
Terpstra and Kenneth David, The Cultural Environment of International Business, South-West Publishing Company, 1985.
Cultural impacts and leads to manage
Hofstede’s Six Dimensions
Time Orientation
Table 4.7 Extremes of Time Orientation
Short-term Orientation Long-term Orientation
Tradition is important Pragmatism dominates tradition
Truth is an absolute Truth is situational and contextual
Luck affects success and failure Effort affects success; lack of effort causes failure
Saving for the future unimportant Thrift and perseverance are virtues, lead to future
rewards
Decisions focus on immediate financial success Decisions focus on growth and long-term
financial success
Source: Gary Ferraro, The Cultural Dimension of International Business, 6th ed. Pearson, 2010; Geert Hofstede, Gert
Jan Hofstede, and Michael Minkov, Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill,
2010; Nancy J. Adler and Allison Gundersen, International Dimensions of Organizational Behavior, 5th ed. Thompson
South-Western, 2008; John B. Cullen, Multinational Management, South-Western College Publishing, 1999; Vern
Terpstra and Kenneth David, The Cultural Environment of International Business, South-West Publishing Company, 1985.
Cultural impacts and leads to manage
Hofstede’s Six Dimensions
Indulgence-Restraint Orientation
Table 4.8 Extremes of Indulgence-Restraint Orientation
Indulgence Restraint
Enjoy life, have fun Self-control important
Optimism prevails Cynicism prevails
Leisure time is highly valued Leisure time unimportant
“If it feels good, do it” Seeking instant gratification is looked down on
Weak allegiance to social norms Strong allegiance to social norm
Source: Gary Ferraro, The Cultural Dimension of International Business, 6th ed. Pearson, 2010; Geert Hofstede, Gert
Jan Hofstede, and Michael Minkov, Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill,
2010; Nancy J. Adler and Allison Gundersen, International Dimensions of Organizational Behavior, 5th ed. Thompson
South-Western, 2008; John B. Cullen, Multinational Management, South-Western College Publishing, 1999; Vern
Terpstra and Kenneth David, The Cultural Environment of International Business, South-West Publishing Company, 1985.
Cultural impacts and leads to manage
International Management and Cultural Differences:
Meyer’s eight Dimensions in “cross border” leaderships
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries communicate?
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries evaluate?
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries leads?
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries Decides?
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries build the trust?
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries build Disagrees?
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries Schedule?
Cultural impacts and leads to manage
Meyer’s eight Dimensions in “cross border” leaderships:
How the countries Persuad?
Cultural impacts and leads to manage