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Cross Cultural Dynamics

UNIT 17

CROSS CULTURAL DYNAMICS


Confucius

All people are the same. It's only their habits that are so different.

Objectives After going through this unit, you should be able to: understand what is culture appreciate the dimensions of culture examine the competitive advantage of culture.

Structure 17.1 Concept of Culture 17.2 Key Dimensions of Culture 17.3 Underlying Cultural Assumptions 17.4 Converging Cultures 17.5 Culture as a source of Competitive Advantage/Disadvantage 17.6 When Culture Clash 17.7 Recognizing Culture 17.8 Discovering Cultural Advantage 17.9 Summary 17.10 Self-Assessment Questions 17.11 Further Readings/References

17.1 CONCEPT OF CULTURE


The term "culture' has been adopted from the Latin word cultura and in the broadest sense `the result of human action'. According to Hall (1959) culture is the pattern of taken-for-granted assumptions about how a given collection of people should think, act, and feel as they go about their daily affairs. Other definitions include: Common values Common beliefs Common attitudes Common Behaviour Common norms Heroes - Morals Symbols Customs - Rituals Ceremonies

Inter-Organisational Dynamics

Assumptions Perceptions Etiquette Patterns of

culture is simultaneously a product of human action as well as a determinant of future human action, .a composite of meanings and associated traditions which define, inform, and constitute the range of our understandings and investments'. Segall (1986) suggests that culture is made up of research variables. Further, Poortinga, Van de Vijer, Joe and van de Koppel (1987) argued that culture is merely a label, and that empirical testing is an idea or judgement about an entire class of objects, people, events and assumptions by uncovering the similarities as well as differences in behaviours across culture can create problems. The concept of culture has proved to be fuzzy concept of varying relevance to various scientific projects (Freilich, 1989). Its definitions vary from the very inclusiveness like "culture is the human - made part of the environment", to the highly focussed "culture is a shared meaning system. Two important values which distinguish people from one culture to another: (i) Core values are set-up during the childhood socialization and is very difficult to change; and (ii) Peripherals values, set up in later life and it is changeable. Peripheral values can be changed by organizational socialization but not in the core values.. Hofstede (199.1) describes that culture as "Collective programming of the mind which distinguishes the members of one group or category of people from another'. There is a diffuse range of elements ' involved in cultural programming: Language - both verbal and non verbal Economics Religion Politics Social institutions; social strata or classes and family structure Values Attitude Manners Customs Material items

Aesthetics Education

Bonthous (1994) suggests that there are two basic reasons for business failure - (i) inadequate information regarding the business environment, and (ii) lack of knowledge of foreign culture.

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KEY DIMENSIONS OF CULTURE

Schneider and Barsoux (1997) discussed several key dimensions of culture that are frequently used by the management scholars.

Cross Cultural Dynamics

Scheim
Relationship with nature Human activity Human nature Time Truth and reality

Trompenaars
Relationship with nature Relationship with people Universalism vs. particularism Individualism vs. collectivism Activity Diffuse vs. specific Achievement vs. ascription Relationship with time

Kluchkonl and Strodtbeck


Relationship with time Human activity Human nature. Relationship with people Time

Adler
Human nature Relationship with nature Individualism/ Collectivism Human activity (being/doing) Space (private/public) Time (past/present/Future)

Space: Personal/physical Time: Monoxhornic/ Polichronic Language: High context Low context

Hall

Hofstede
Uncertainty avoidance Power distance Individualism/collectivism Masculinity/Femininity

1.3

UNDERLYING CULTURAL ASSUMPTIONS

Culture has been seen as a shared solution to. the problems of external and internal integration (Schneider and Barsoux (1997). They also suggest that time, space and language are related as linking assumption between these two. The following model depicts their position.

Inter-Organisational Dynamics

People are affected by the culture where he/she is born and where he/she lives. A person of either middle class or high class family is usually taught the beliefs, values and expected behaviours viz. are common to that family. The same is also applicable in the context of organizational participants where people spend most of their working life. Schneider indicates that the relationship between corporate and national culture influenced acceptance and implementation of human resource practices. Such practices often is corporate career Planning, appraisal and compensation system and selection and socialization. Adler (1991) in a study found that national culture has a greater impact on employees than does their organizational culture. German employees at an IBM facility in Munich would be more influenced by German culture than by IBM's culture. Some Japanese management systems were supported by American social scientists (Likert, 1991; and Likert, 1976) and continued for a long time by American companies that Ouchi Called Type Z. Ouchi and Jaeger (1976) found that Type `Z' is a successful American process being adopted of an :organizational culture to the national culture. There are seven primary characteristics that, in collectively, succeed in representing the essence of an organizations's culture. 1. Innovation and risk taking- The degree to which employees are encouraged to be innovative and take risks. 2. Attention to detail- The degree to which employees are expected to exhibit precision, analysis, and take detail. 3. Outcome orientation- The degree to which management focuses on results or outcomes rather on the techniques and process used to achieve these outcomes. 4. People's orientations- The degree to. which management decisions take into consideration the effect of outcomes on people within the organization. 5. Team orientation- The degree to which work activities are organized around teams rather than individuals,

6. Aggressiveness- The degree to which people are aggressive and competitive rather than easygoing.

7. Stability- The degree to which organizational activities emphasize maintaining the status quo in. contrast to growth. Each of the characteristics continue for a long time on a continuum from low to high. These characteristics become the basis for a sense of apportion understanding that the members have the organizational feelings, how things are done in the organization and the way members are supported by each other. Some other important characteristics are: 1. Culture is learnt- Individual beliefs, attitudes and values are learnt from the individual environment. The internal environment is social and technical system which helps decision making, planning and control procedures for recruitment, selection and training and the behaviour of the members. Externally, the organization is in a surrounding mass like social, political, legislative, economic and technological system. These factors play a different role in the organization and make a new learning environment. 2. Culture is historically based- The role of the founder is important and the culture of the organization is influenced by the founder through their beliefs, values and attitudes. 3. Culture as commonly held beliefs, attitudes and values- In addition to the beliefs, attitudes and values are uniquely common to the work group, department, function or unit, organization and to the society. How Organizational culture Form:

Cross Cultural Dynamics

Functions of Organizational culture Some of the functions are discussed below: 1. Culture has a boundary - defining role, i.e., it makes distinguished one organization from others. 2. It communicates a sense of quality for organizational members. 3. Culture promotes the generation of commitment to do something for the sake of organization to a larger extent than one's individual self - interest. 4. Culture improves social system constancy. Culture is the adhesive, helps the organization and the employees what they commit to do in the organization. 5. Culture can promote sense-making and control mechanism which in turn shapes the attitudes and behaviour of the employees. Culture identifies the principal goals, work methods and behaviour, how individuals interact, address each other, how friendships and personal relationships are conducted. It guides organizational memberships, how the boundaries are maintained, who is an insider and who is an outsider etc. Importance of culture to the organization Culture facilitates organizational commitment and makes the consistency in the behaviuor of the employees. Culture is valuable because it reduces ambiguity and provides information on how things are done and what is important. Recruitment and selection are related areas of management development, have an impact on the organization's culture. Organizational socialization is an important process by which "an individual is taught and learns what behaviour and perspective are customary and desirable within the work setting as well as what ones are not" (Van Mannen and Schein, 1979; pp.213-214). Leadership also plays an important role in developing organizational culture. "Culture and leadership. are two sides of the same coin ..In fact, there is possibility

Inter-Organisational Dynamics

under -emphasized in leadership research - that the only thing of real importance that leaders do is create and manage culture" (Schein, 1985, p.2).

17.4 CONVERGING CULTURES?


Convergence myth 1: the world is getting smaller.... We are often told the world is getting smaller. Thanks to advantages in television, telecommunications, and transportation we are en route towards what Marshall McLuhan called the "global village". So by the year 2000, we would all look alike and act alike wearing Levi jeans, Lacoste (alligator) shirts, Adidas running shoes, and Swatch watches CNN on Samsung televisions, drinking Heineken, eating at MacDonalds, and singing in karaoke bars. Yet this is a vision that few find appealing, and many find appealing. And while it may be true that on the surface we appears to be converging on our dress (jeans and T-shirt) and even eating habits (fast food), the pull of culture runs deep, and cannot be easily detected. Convergence myth #2: management is management Belief in the convergence of management practice and the creation of a global corporate are village is strongly held among many managers and management scholars. Their core argument is that management is management, consisting of a set of principles and techniques (like management by objectives) that can be universally applied. Management is considered to be similar to engineering or science, and therefore, transcends national boundaries. And yet even in science and engineering; this assumption may be misplaced. For example, while it may be true that civil engineers designing road systems have an inherent logic with regard to speed and safety, this has not prevented them from implementing different systems, even in ostensibly similar environments. Take the simple problem of crossing roads. Depending on where you are in the world, there is preference for simple stop signs, traffic lights, roundabouts (with priority to those going on or those coming off), or an overpass. Each solution corresponds to a different mind-set: either collective or individualistic, contractual or negotiated, everyone's responsibility or no-one's. Forces for and against convergence Those who argue for the universality of management practice may concede that management differs in Malaysia or Poland. This, they argue, is due to an economic or technological lag. The assumption is that once those countries catch up, then it will be business as usual. In fact, the pace of technological and economic development in eastern Europe and southeast Asia has been quite impressive, and indeed bears evidence of convergence. Convergence is also encouraged through management education, which is being exported wholesale to these regions. This training not only provides the tools and techniques of finance, accounting, and marketing but also transmits a particular business philosophy and ideology, such as notions of the free market, the divine rights of shareholders, and the bottom line. Teaching the meaning of free enterprise in the former Soviet Union carries with it a set of business norms, as shown in Figure 1:2, that may or may not be particularly relevant or useful in the local context.

17.5

CULTURE AS A SOURCE OF COMPETITIVE ADVANTAGE/DISADVANTAGE

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Rather than seeing culture as a problem to be solved, there is evidence that culture can provide a source of competitive advantage. Michael Porter has argued that nations derive competitive advantage from a set of country-level factors such as the availability of resources, the size and sophistication of the market, the nature of government intervention, and the type of strategic linkages or networks. For example, he attributes the success of

the shoe industry in a particular region in northern Italy to the network of relationships between suppliers, manufactures, and distributors. The strategic link between business and university research centers is credited with the development of insulin in Denmark. And Holland is the world's export leader in the flower business due to unique resources, such as top research institutes. Many argue that it is these types of unique institutional arrangements that are responsible for the success of "Japanese management". This 'model is considered effective, not because of anything unique to Japanese culture, but because of the role of government, the nature of ownership and methods of financing, the structure of unions, and the linkages among Japanese business? Nevertheless, culture, although difficult to separate out, is deeply embedded in the institutional arrangements. For example, given the importance placed on the collective or group, it is not surprising to find such linkages among business, or between business and government which in more individualist countries would be considered unjust collusion or undue interface. Similarly, in Japan the existence of Keiretsu, the networks of tight relationships between customers and supplier, relies on a high degree of mutual trust, which is rare in countries which place more value on individual initiative and independence. Thus, culture and institutional configurations work interactively to create potential competitive advantage or disadvantage. France's many industrial innovations (the TGV high speed train, the Minitel videotxt system, the Airane space rocket, and the extensive nuclear power program) can be attributed to the nature of the education system which places high value on engineering and administration and the close relationship between state and industry. These very features considered responsible for technological success, however, are being challenged given a more competitive and international business environment as potential impediments to commercial success. Critics now say that this very system of education (which is heavily based on math and science, focusing on abstract knowledge instead of concrete experience) is too narrow. As a result, alumni of the grandes ecoles tend to be "too inflexible and hierarchical", not taking initiative nor having the "communication, negotiation or imaginative skills" thought necessary for "the fast-changing scenarios of modern economic warfare". In Denmark, the concern for the impact of culture on competitive advantage was raised by the daily newspaper, Morgenavisen. It warned that the competitiveness of Danish companies entering the common market could be constrained by the cultural influence of Janteloven. Janteloven means that you are supposed to keep a low profile and not to act superior to anyone else. (In Sweden, it is called "Royal Swedish Envy"! They argued that, as a result, Danish companies would not be aggressive enough in marketing' and in competing with their European rivals. ' When Jan Carizon took control of SAS, Janteloven did not help his efforts to create an internationally competitive airline. First of all, his market-driven approach caused a certain discomfort among Scandinavians: fancy cabin interiors and uniforms designed by Pierre Cardin were considered too flashy, and the promotional activities were considered excessive - overdone and expensive. Furthermore, the focus on business clients was resented - why treat them specially? The strategy of targeting the business customer did not stir well with Scandinavian .sense of egalitarianism. In Norway, there is a sign above the SAS check-in counter for business class which reads: "Euroclass -FULL PRICE", in other words, not special treatment. This may have been designed to make the class distinction more culturally acceptable. The point of these example is to demonstrate that each country has its unique institutional and cultural characteristics, which can provide sources of competitive advantage. However what may have provided a source of competitive advantage in the past can become an Achilles heel in the future. Managers therefore, need to evaluate the extent to which national culture can interfere with their company's efforts to respond to strategic requirements, now and in the future.

Cross Cultural Dynamics

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Inter-Organisational Dynamics

17.6 WHEN CULTURE CLASH


There is no shortage of evidence of cross-cultural friction between business. In every cross-border alliance there are seeds of potential cultural conflict and misunderstanding. One survey conducted by a consulting firm in Europe has found that "cultural differences are the biggest source of difficulty in integrating European acquisitions". Another found that 35 percent of senior executives ranked cultural differences as the number one problem in foreign acquisitions (compared with 20 percent who ranked unrealistic expectations, and 13 percent who attributed poor management). The problem is that this cultural malaise may go unrecognized. It may therefore be some time before cultural differences are surfaced and diagnosed. In one FrancoAmerican joint venture the problem was only recognized after eight years of collaboration. Called in to investigate problems .of cooperation, a French consultant interviewing American managers was shocked at the litany of complaints aimed at their French counterparts. Such complaints may seem trivial at first glance, but were apparently rather important, as eight years of collaboration had not resolved them. The blended realization that cultural problems were responsible for poor cooperation alerts us to the need to anticipate potential misunderstanding. Failure to pay attention to culture can, in fact, have disastrous consequences. Consider the example of the shoe store in Leicester, England. Eager to attract customers from the large local Muslim community, it advertised it footwear with the saying in Arabic, "There is no God but Allah". A subsequent arson attack on the store, with a car ramming through the front window, was claimed to be protest. Although the, desire to attract the local Muslim market was well-intended the implementation was ill-conceived due to lack of understanding that it was insulting to associate the name of Allah with products (shoes) that were to be trampled in the dirt. In another instance, an American oil company set up a drilling operation on a Pacific island and hired local labour. Within a week, all the foreman were found lined up on the floor, their throats cut. Only afterwards did they understand that hiring younger men as foremen to boss older workers was not acceptable in a society where age indicates status. Using their own cultural criteria for recruitment, they failed to anticipate the deadly consequences. While the reaction was far less dramatic, the next example demonstrates that subtle differences can still have far-reaching impact. This was the case of an American firm that purchased a textile machinery company near Birmingham, England, in the hope of using it as a bridgehead into Europe. Shortly after the takeover, the US manager set about tackling what he perceived to be a major production problem, the time lost on tea-breaks: In England, tea breaks can take a half-hour per man, as each worker brews his own leaves to his particular taste and sips out of a large, pint size vessel with the indulgence of a wine taster .... Management suggested to the union that perhaps it could use its good offices to speed up the "sipping time": to ten minutes a break .... The union agreed to try but failed. Then one Monday morning, the workers rioted. It seems the company went ahead and installed a tea-vending machine - just put a paper cup under the spigot and out pours a standard brew. The pint-sized container was replaced by a five-ounce one imprinted - as they are in America - with morale building messages imploring grater dedication to the job and loyalty to the company .... The plant never did get back into production. Even after the tea-brewing machine was hauled out, workers boycotted the company and it finally closed down. The reason behind the preceding disasters, is not only that behaviour, values, and beliefs are different across cultures, but also that importance to those cultures should not be underestimated. What people in one culture value or perceive as sacred (seniority or tea) may be considered irrelevant in another culture. The trouble is that it is difficult to recognize just what matters (and how much) to another culture especially when we find it so hard to recognize what is important in our own. The complaints expressed by the American managers about their French joint-venture partner tell as much, if not more, about what is important to the Americans.

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Whether engaging in strategic alliances, setting up operations abroad, or attracting the local market, companies need to discover how culture can be harnessed to derive business forward. Companies also need to analyze the potential for cultural clashes that can undermine good intentions. Managers involved in these cross-border adventures need to recognize the symptoms of cultural malaise and to find out what is causing the irritation. To capture the potential benefits while limiting the potential understanding, manners must be prepared to articulate how they see their own culture and recognize how others may experience it. This, however, is not as easy as it stands.

Cross Cultural Dynamics

17.7 RECOGNIZING CULTURE


As we see us/as they see us If you were asked to describe your own culture, what would you say? Describing one's own culture is, in fact, not an easy task. It is a bit like asking a fish in water what it is like to swim in the water. Washed up on the beach, the fish quickly recognize the difference, but may not may able (nor inclined) to describe it. Its immediate objective is to get back into the water. We only begin to perceive our culture when we are out of it, confronted with another. "I understand my country so much better"., said Samuel Johnson, the eighteenth century British writer, "when I stand in someone else's". Or in the words of French philosopher, Jean Baudrellard, "To open our' eyes to the absurdity of our own customs is the charm and benefit of travel". Another way of exploring our own behaviour and values is to introduce an outsider, someone from an alien culture who, unfettered by preconceptions, could point out the absence of the Emperor's newclothes. Such was the story of Gulliver's Travels by Swift or Voltaire's Candide, outsiders or innocents who questioned what they observed. Culture serves as a lens through which we perceive the other: Like the water surrounding the fish, culture distorts how we see the world and how the world sees us. Furthermore, we tend to use own culture as a reference point to evaluate the other. For instance, as far as many continental Europeans are concerned the British do not drive on the left side of the road; they drive on wrong side of the road. It is easy when encountering differences to evaluate them according to what we take as normal. This can give rise to a perceived hierarchy of civilization, whereby some cultures are seen as only slightly less civilized than our own, while others are considered primitive, as shown in Figure 1. For example, Chinese negotiators, among themselves, often refer to their Western counterparts as "harmless barbarians". Recognizing cultural differences is the necessary first step to anticipating potential threats and opportunities for business encounters. But in order to go beyond awareness and to create useful interaction, these differences need to be open for discussion. One model known as the "Johari window" provides a way of discussing and "negotiating" the different perspectives, as shown in Figure II. The Johari window tries to shed light on what I know and do not know about myself and what others know and do not about me. Through self-disclosure and feedback, we can "become more aware of the potential blind spots in how we see ourselves and how others see us that may interface with effective interaction. This technique, popular in the 1960s era of sensitivity training in the United States, may be helpful in making cultural differences discussable. For example, an American tends to be rather direct and explicit when making a point. Her Indian colleagues often try to advise her to be more subtle or diplomatic. This characteristic of being direct is one, that both parties are aware of and which can therefore be discussed and joked about. In other respects, she may be seen as "typically American" in ways that she does not even suspect. To be told "That's so American" can be quite disconcerning when she is not sure why, and tends to elicit a defensive response.

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Inter-Organisational Dynamics

On the other hand, there are features of American culture which she knows but they either do not know or may have misapprehended. This provides opportunities to learn about the cultural riches of the other. Finally, despite the best intentions of both parties, a business relationship can turn sour because of something cultural of which neither side is aware.

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Thus they can discuss differences that are plain to see (obvious to both), and begin to explore or shed some light on what she cannot see' (her blind spot), what they cannot see (their blind spot), and try to imagine what it is that both cannot see (shared blind spot). Stereotypes: for better or for worse. In trying to describe one's own culture, we often call up stereotypes that others have of us. In fact, while we may find it difficult to describe ourselves, characterizing someone else's culture seems relatively easy. Stereotyping comes naturally. However, many of us have been brought up to think of stereotyping as bad - as ignorant and immoral - as evidence of prejudice and bigotry, and far from being politically correct. Stereotypes can indeed be wrong, based on misinformation, and harmful, used to discredit the other. But they can also be used in a positive way to sort out what William James, a prominent turn-of-the-century psychologist, referred to as the "buzzing confusion". Stereotypes represent mental "files" that are used to process new information by comparing it with past experience and knowledge. When we meet someone from the United States, we are apt to think, "This is an American" (much to the consternation of Canadians and South Americans). What is happening is that we are calling up the mental file of our experience or knowledge of Americans. We then simplifies the current reality, but is necessary given the uncertainty and ambiguity inherent in crosscultural encounters. However, although stereotypes may be necessary, they are far from sufficient. The problem with stereotypes is not their existence but the way they are used. For example, if on meeting an American I assume that "all Americans are alike", then I simply imposed my mental file, or stereotype, on the current reality cramming new data into old boxes. New input is distorted to fit the file - a bit like the Procrustean bed, wherein the visitor's arms and legs were cut off of stretched to fit. Or, this encounter can serve as an opportunity to enrich the cultural file on Americans. Research indicates that managers are ineffective in cross-cultural situations when they either deny having stereotypes or get stuck in them. Managers rated most effective by peers were those who admitted having stereotypes, using them as starting point but continually revising them as gained more experienced. These managers were constantly checking and rechecking, always updating the files against first hand information. They were willing to question themselves and their stereotypes, to consciously unlearn and to redefine their experiences. This requires careful observations, suspending judgement, and looking for explanations - reasons that makes sense from the "native" perspective. Getting beyond stereotypes A famous American comic of the 1960s Lenny Bruce, would start his routines by using every bad name for ethnic groups. Having shocked his audience, he would then say, "now that I have attention, lets get down to business". The purpose of the above discussion is to encourage managers to recognize and accept the existence of stereotypes in order to consciously go beyond them. In your next business encounter with Russians, the point is not to say, "let me tell you about my stereotypes of Russians", but rather to call up the file and be ready to modify. Further more, you do not have to become a Russian to do business with one. Consider the example in reverse. Figure 1.5 shows an American journalist interviewing the farmer head of the USSR, Gorbachev, on his views of opening up trade with the United States. Gorbachev, based on his stereotype of Americans, has come prepared the point, then, is not to act out the stereotype of the other, but rather top be aware of how the difference may influence business interactions. Cultural briefing are used with increasing frequency for managers; therefore, to parties coming into an international negotiation are likely to have a rudimentary understanding of each others business customs. This is a useful starting point. But unless each party moves beyond that, one can imagine a rather bizarre scenario taking place; Japanese managers showing up, slapping the backs of their American counterparts, and saying, "call me kaz"; while the American managers look on bemused, bow their heads and quietly introduced themselves as smith - desu, however unlikely the more we understand each others cultures, the more important it will be to arrive at a shared way of working together, rather than imposing our ways or adapting to theirs.

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Inter-Organisational Dynamics

17.8 DISCOVERING CULTURAL ADVANTAGE


The Johari window, described earlier can be used to stimulate awareness, first by asking managers to describe their culture as they see it (as we see us),. then as others see it (as they see us). Describe your culture as you see it: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ Describe your culture as others see it: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ Often managers find that it is far more difficult to complete the first part of the exercise than the second. They report difficulty in describing their own culture, and have to rely on what others have said about their culture as a point of reference. Those who find it less challenging tend to have had experience abroad. They acknowledge that it is in confrontation with other cultures that they have to recognize themselves. Although recognizing the difficulty in describing one's own culture, managers are surprised at how easy it is to describe other's culture. And although acknowledging stereotypes, they are at the same time rejecting them. After all, business is business, or we are all engineers, bankers Yet when asked to give tips to others about to embark on business endeavour in their country the advice can be pretty specific. Through this exercise, managers begin to recognize that what they expect and what they take for granted in doing business may not be shared. Furthermore, managers can be asked to indicate which aspects of their culture are seen as a plus, which might be leveraged to achieve competitive advantage in conducting business, and which may prove a hindrance. In this way managers can begin to think through the implications of national culture for competitiveness. For example, managers from a British travel business identified "being traditional" as part of their (British) culture. They were then asked to work through how this could get in the way of their success (with potential partners for example) or could be used to enhance their success. This led to brain storming on how being traditional could be used in a way to attract customers and to strengthen links with suppliers. For example, being seen as traditional, this travel company could promote itself as having been in the business for a long time, as being interested in establishing longterm relationships with customers and suppliers, and as being reliable. They could position themselves against some fly-by-night operations that you leave you stranded on the other side of the world. A similar challenge can confront an American consulting firm based in London. When, for example, developing strategies to internationalize it needs to help its British clients to recognize their company's strengths and weaknesses (including cultural ones). At the same time, this consulting firm must question its own valueaided (in terms of culture) to British client firm. What value-aided does their being an American firm bring to British industry? In what ways could being an American consultancy be viewed negatively by potential

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clients? In other words, what are the potential cultural competitive advantages and disadvantages for the client as well as for themselves? Again, our aim here is to alert managers to the potential risks, or missed opportunities, of ignoring the impact of culture. In each interaction across cultures there are cues which signal potentially powerful undercurrents which can either undermine or propel our efforts. Very often our initial reactions and stereotypes of others can provide important signals to help cultural differences. By allowing these differences to be open to discussion we can achieve insights instead of accumulating blind spots. Not only do we begin to appreciates the other person's culture, but we begin to understand our own better. By being alert to these cues, we can then anticipate the potential impact of culture, and consider alternative approaches to management. But what is this thing called culture any way? The next chapter tackles that question. Dimensions of cultural differences as suggested by Hofstede A well known Dutch researcher's discussion of worldwide difference across cultures in the values of organizational employee behaviour have been focussed around the pioneering study of Great Hofstede (1980s). In an extensive study involving 116,000 respondents (IBM) he found highly significant differences in the behaviour and attitudes of employees from seventy countries can be thought of as varying along lust four dimensions which Hofstede identified as individualism - collectivism, power distance, uncertainty avoidance and masculinity Femininity. (i) Power distance Hofstede (1996) expressed that `inequality is a normal and desirable thing', which means large power distance, to `inequality should be avoided as much as possible', which means small power distance (p. 152). (ii) Individualism and Collectivism Hofstede (1996) states that `everybody for him or herself', which is called individualism, and `people should remain attached to tight throughout life' which is called collectivism (p. 152). (iii) Uncertainty Avoidance Hofstede (1980:b) states that `the extent to which society feels threatened by uncertain and ambiguous situation providing career stability, establishing more formal rules, not tolerating deviant idea and behaviour, and believing in absolute truth and the attainment of expertise'. (iv) Masculinity and Femininity According to Hofstede (1996) "Social gender roles should be maximally different" which is called masculinity, to "social gender roles should be maximally overlapping" which is called Femininity. A large difference between gender roles leads to a "tough" society; whereas, large overlap leads to a "tender" society. Further, Hofstede (1996) suggested another dimension namely Long-term, vs. Short term orientation. (v) Long-term vs. Short-term orientation According to Hofstede (1996), "Long-Term Orientation implies a stress on virtuous living in this world, with thrift and persistence as key virtue. Short-Term orientation goes together with a stress on finding the Truth with a capital T : Truth rather than Virtue assures salvation" (P.152). Some of the more important factors that affect the managerial behaviour are: Personal values, manager's backgrounds, interpersonal skills and decision-making. (a) Personal values Personal values help the managers to take decision in the Organization. Personal values help shape their (manager's) perception of a situation, exert influence upon the managers to analyze or think alternatives to solve a problem. The flower's personal values also exert influence upon the managers and the followers easily understand how they accept authority 0 their power distance, their loyalty and commitment etc. England, Dhingra and Agarwal

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Inter-Organisational Dynamics

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(1974) inn a study found that North American and Japanese managers are apt to be pragmatic and their personal values put emphasis on productivity, profitability and achievement;' whereas Indian managers who tend to be less programmatic and moralistic, lay emphasis on equity, fairness and the overall goodness of the work. England and Lee (1974) in a study of managers in America, Japanese, Indian, and Australian found that the four countries. Whitely and England (1980) in a study on Personal Values Questionnaire with managers in the U.S.A., Japan, Korea, India and Australia found that there are differences between countries in their judgements. (b) Manager's Background McClellands' (1961) study shows that U.S. managers come from all economic strata such as - lower, middle, and upper classes. In Japan, those who passed their school education from a prestigious school have much better chance of becoming top managers. There are some other factors such as - educational qualification, class, family background that make a difference. In the U.S., managers come from all classes; in Turkey, many of the top managers come from upper classes. In Poland, most of the business leaders come from the lower middle class. In Chile, the landed aristocracy are the managerial leaders. Time and family upbringing are also an important factors in this regard. In India, the top boosts is all-in-all, exercising a directive leadership style which every one has to follow. In contrast, the U.S. managers come from different classes, are well-educated and have a liberal upbringing. They prefer participatory decision-making and delegating of authority to solve any problem. (c) Inter personal skill Research studies reveal that the managers differ across cultures in their interpersonal skills. Brass and Burger (1979) in a comprehensive study of managers in the U.S.A., Belgium, Britain, France, Germany, Austria, Iberia, India, Japan, Latin America and Scandinavia found that : (i) Spanish and Portuguese managers were too concerned with their subordinates' welfare. The German, Australian and French were less interested, about their subordinates' welfare; (ii) Indian managers themselves were most dependent on higher authority; whereas, German and Austrian managers were very independent; (iii) Indian managers very much follow bureaucratic rules; whereas, the Japanese managers were least concerned; (iv) Dutch manager were cooperative with others; whereas, the French were least willing; and (v) U.S. and Latin American managers emphasize much greater interpersonal skill/communication, competence than other managers. (d) Decision. Making This explain how managers make their decisions that differs across culture. Heller and Yuki (1969) in a study found that in Argentina, Chile; and Uruguay authority is equated with quick decision-making acid emphasized on speed which is more important to them than generating information or carefully analyzing the data. Luthans, Hodgetis and Rosenkrantz (1988) found that the managers of U.S.A., Germany and Sweden prefer rationality in decision-making. Yates and. Lee (1995) found that Chinese and several other east Asian groups (but not Japan) were more confident than Americans and their decisions were correct. Wang and Heller (1993) in a cross-cultural study compared decision-making of British and Cjhinese managers participation and supervisor consultation for both the countries. Redford, Mann, Ohta and Nakane (1993) found that there were also differences between Japanese and Australian students in decision making. (e) The influence of political context In the 1970s and early 1980s, as far as the importance of political factors such as (Marxist) socialism and capitalism are concerned, the main difference between public and private ownership was in industrial organizations. Political factors whether of the country or of the culture (organizational culture) is important as a variable for crossculture , study. Robbins (1987) suggests that there are three important political factors/dimensions working from within such as (i) Complexity which referring to the degree of differentiation in an organization. (ii) Formulization referring to the degree of standardization in tasks, ranging from almost total absence of any rule to a high degree of programming of what to do and how to do, (iii) Centralization meaning the concentration of decision making, which can be concentrated at a single point in the organization or widely dispersed.

In a study on Chinese people, Laaksoner (1988) suggested that "Perhaps, taken as a whole the changes after all only rubbed the surface of Chinese society, and the basic structure, 'learning upon the old culture, has not been destroyed too much" (p.223). Again he argued that most of the Chinese still live in the rural areas and a large number of Chinese are untouched by the political changes. Maurice (1979) in a crossculture study between the hierarchical structure of matched pairs of firms from France and the (then) Federal Republic of Germany on similar technological advancement and political orientation observed that there were considerable differences in salary between employees in the hierarchy. He explained these differences in terms of cultural factor such as the education system and social stratification. In another study Maurice, Sorge and Warner (1980) found that there were differences within Great Britain, France, and Germany based on cultural factors. According to Child (1981), external factors impose certain limits within which organizations develop in harmony with the culture of country. Cultural variable can moderate the effects of an existing political and economic systems as well as organizational characteristics. According to IDE (Industrial Democracy in Europe, 1981) group their results indicate that democracy in industries is influenced by socio-political factors rather than by requirements of a technological or structural nature. Finally, it may be noted that no effect was found in cultural values (cooperation and equality in power) on the extent to which participation promotion legislation existed in various countries. In other words, cultural values did not appear to become manifest indirectly in laws and regulations. According to Kanungo and Jaeger (1990) the political and legal environment also provides either facility or inhibitory conditions for the successful operation of organizations. For example, the stability of Government (local/regional/or national) creates business confidence. Legal systems which provide protection from foreign competition and establish specific labour mores and practices either promote or inhabit healthy organizations. Political interference in the management often encountered are widely known to contribute to organizational failure. Tayeb (1988) conducted a literate survey, a national culture survey and a work attitude survey and later, on proposed a casual model. CONTINGENCY VARIABLES- Conditions for organization 666 Formalization, Centralization, Communication POLITICAL - ECONOMIC- Conditions. of markets, labour 66 control strategies, rewards and punishment

Cross Cultural Dynamics

CULTURAL VARIABLES.- Work related attitudes Formalization, power and autonomy, delegation of authority, consultation, communication. The basic assumption of the model Is that cultural variables appear as a result of political and economic factors that change social characteristics. From the above discussion, it may be said` that it is very difficult to conclude that whether political factor play an important role or not in the cultural context and thus it is a subject of controversy. (f) The role of religion Some religious values put emphasis on allowing event to develop in their own way. For example the development of ,capitalism is a result of the Protestant ethic. Now-adays, the Japanese success is also a result of a religion based on the Confucian ethic (Fry, 1991; Saha, 1991; Durlabhji, 1990; Coates, 1987). In the west, many business leaders look for meaning and guidance for their lives from religious activities. For example, Von Steenbergen, (1989) observed that in the San Farncisco Bay area most small-scale businessmen accept and practice their inspiration from Eastern philosophy and life style. Eastern philosophies and life styles emphasize: (i) simple living (living on less, material simplicity); (ii) sharing with each other (mutual support and cooperation); and (iii) service ,to community, self reliance and doing it all with joy. Fallon (1988) observed that a Chicago-based financial company in its 11 years existence emphasized on religion and an ego-less team 'culture and the company had a phenomenon growth rate.

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Inter-Organisational Dynamics

Madlin (1986) in a survey found that among 1,512 American business owners and managers, nearly two-third considered themselves either religious or very religious. Cushmir and Koberg (1988) in a survey found that in America the degree of religious belief was deeper among the nonmanagerial employees than the managerial employees. Carl Jung observed that religion is an important factor, playing a central role in the psychological transformation of individuals life style (Coward; 1989). Besides, religion and religious orientation play a great consequence in the life of Indians. For example, Sinha (1977) reviewed more than 300 publications related to industrial and organizational psychology and management in India. These articles were published between 1971 and 1976. Though the topics were parallel in the west but there was unique finding, in India in the context of leadership. In India leadership is limited within religion, caste and class as compared to the west. Further he viewed that in the case of Indian cooperatives, education and landholdings are important antecedent factors of leadership than caste or religion. There are several aims and objectives of cross-cultural study (i) (ii) Cross-cultural study helps to understand the systematic co-variation between cultural and behavioural variables Cross-cultural study can also reveal the total range of the board variability and every possible difference which exists in human social behaviour. The utility of cross-cultural 'study is to examine the psychological laws. It is done to establish laws which are truly universal and which are modified by the cultural variation. The cross-cultural studies give the both culture general and culture specific. Intact, it is only within the context of similarities that one can understand the differences '(Campbell, 1964). Cultunits provide us the "natural quasi-experiment" by being higher or lower on variables of a particular interest,

The Utility of Cross-Cultural Study are as follows (i)

(ii)

(iii) Culture constitutes different aspects of psychological functioning. The planning can be less developed as a characteristics response. The planners are less. employed to value planning to enjoy planning and to support one another (Triandis,1980).

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Cultural Spheres of Influence in the Context of International Management There are several spheres that can explore the influence on the basis of business practice, These `cultural spheres of influence' act reciprocally on each other in complex ways that limit the relevance of simple directions for doing business in any particular country or. region. However, we may be able to identify and to estimate the value of which dimensions as pertinent, regardless of which cultural sphere of influence is performing or causes to perform an act. How relationships could be tactfully controlled in a particular unit or department of that particular company, in that part of the country or region. In this sense, culture can be perceived in different ways in many places, such as regional culture within nations (urban vs. rural, East vs. west), among groups of nations (Nordic vs. Latin America), individual cultures (private vs. public). Basically, the culture concept assumption depends on the beliefs and values of a manager that he holds; the importance of rules, regulations, communication styles and the informations available. Thus, it is necessary to analyze the culture that is relevant in mergers and join ventures and also managers from different countries, industries and companies which try to achieve a common goal for the benefit of these strategic alliances. In this context, J. Santos proposed a model to explore multiple cultural spheres of influence on management styles across whatever boundaries.

Cross Cultural Dynamics

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SUMMARY

The objective of this unit has been to explain and make you understand the meaning of culture, various dimension which play crucial roles in inculcating culture and the advantages and disadvantages of culture in the organizational situation. This unit has brought out very well the dynamics of culture clash and convergence of culture. Towards the end the unit has explained the cultural advantage at the organizational level.

17.10

SELF-ASSESSMENT QUESTIONS

Explain the concept of culture, and discuss the underlying assumptions. What is culture convergence, explain the dimensions which play crucial role in culture? Enumerate the advantages and disadvantages of culture at the organizatinal level, explain with example. What are the functions of organizational culture? Why is it so important for an organization?

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FURTHER READINGS/REFERENCES

Bateson, M.C. (1994). Peripheral Vision, New York, Harper Collins. Deal T. & Kennedy A (1982). Corporate Cultures, The Rites of Rituals of Corporate Life. Reading MA, Addison Wesley. Ghoshals & Westney D.E. (ed.) (1993). Organization Theory and the Multinational Corporation New York, St. Martins Press. Hoslete, G. (1980). Culture's Consequence, London, Sage. Kanter, R.M. (1991). Transcending Business Boundaries : 12,000 World Managers View Change, Harvard Business Review, May-June. Martin J (1992). Cultures in Organizations : Three Perspectives. New York : Oxford Univ. Press. Ratwi, I (1983). Thinking Internationally : A Comparison of How International Executives Learn. International Studies of Management and Organization, XIII (1-2). Rotten, S. & Shentar, O. (1985). Clustering Countries on Attitudinal Dimensions : A Review and Synthesis, Academic Management Review, 10(3). Schneider, S.C. & Basoux, J.L. (1997). Managing Across Cultures, Paris, Prentice Hall.

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