INTERNATIONAL

MANAGEMENT

SUBMITTED TO:
Prof. Shekhar Chaudhuri
SYMBIOTIC
Prof. Samir Chatterjee

Prof. Kankana Mukhopadhyay

RELATIONSHIP
CALCUTTA BUSINESS BETWEEN CULTURE
SCHOOL
AND MANAGEMENT
DEBANGAN DAS CHALLENGES FOR INTERNATIONAL MANAGERS

ROLL 17006

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 CONTENTS
SL. NO. TOPIC PAGE NUMBER
1 INTRODUCTION 3
2 FRAMEWORK OF THIS PAPER (WHAT TO 4
EXPECT FROM THIS PAPER)
3 GLOBAL COMPANY, GLOBAL MINDSET AND 5-9
GLOBAL MANAGERS
4 CULTURAL CHALLENGES IN INTERNATIONAL 10-16
MANAGEMENT
5 SYMBIOSIS OF CULTURE AND MANAGEMENT 17-18
6 CHALLENGES IN INTERNATIONAL 18-19
MANAGEMENT WITH RESPECT TO INDIA
7 CONCLUSION 20
8 REFERENCES 21

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 1. INTRODUCTION
The world is being affected by the globalization of the economy. This phenomenon is bringing
intense movement of companies, assets, services, capital and people. Analyzing globalization,
Amboni and Meyer (1999) emphasize that this process is taking the world to major changes in the
economic, technologic and social areas, which are having consequences in all organizations and
societies that participate in this globalized market. It is a process that does not bring equal
benefits to all participants. The globalization concentrates more of its actions in some sectors of
economic activity and some regions and countries, rather than acting everywhere.

One of the biggest challenges faced by organizations that operate in the international market is
the cultural differences. The globalization of the world economy has intensified international
relationships, increasing the importance of cultural dimension. Literature has emphasized various
variables that have influence over the culture of a population or a region. Many times these
elements are invisible to the eyes of foreigners that travel around the world searching for new
business opportunities, resulting in conflicts, problems and failures. Usually managers who take
over the prevailing norms in their country, assuming they are equally valid in other contexts, may
find difficulties in the performance of their companies. In order to be successful it is necessary to
read the cultural context and seek the required adjustments to avoid problems may arise and
affect the performance of our business.

The goal of this paper named “Symbiotic relationship between Culture and Management is the
most significant challenge for International managers” is to analyze the influence of culture in
international business and to understand the importance of the symbiosis of culture and
management in international management.

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 2. FRAMEWORK OF THIS
PAPER

In this paper, we will at first study the concepts of Global company, global mindset, global
manager and challenges that global managers and global companies face. We will also study
about the cultural challenges that they face and go through the concepts of high and low context
by Hall, Hofstede’s 6D, global perspectives, cultural perceptions of time, Ghemawat CAGE
framework, Ghemawat AAA framework. We will also go through the key concepts of strategic
alliances and partnerships relevant to international management. We will finally come to
understand the various concepts discussed above in Indian context and what international
managers from India should be focusing on while going global.

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 3. GLOBAL COMPANY,
GLOBAL MINDSET AND
GLOBAL MANAGER
3.1 GLOBAL COMPANY:

• A global company is a business that is driven by a clear global strategy and mindset. A global
company serves its local and global customers with equal excellence.
• Getting to global requires companies to think globally, source globally, make globally, sell
globally, and learn globally.

Types of global corporations:

Types Description
International business Business whose activities are carried out across national borders. This
definition includes not only international trade and foreign
manufacturing but also the growing service industry in areas such as
transportation, tourism, advertising, construction, retailing,
wholesaling, and mass communications.

Foreign business Operation of a company outside its home or domestic market

Multi-domestic An organisation with multicounty affiliates, each of which formulates

company (MDC) its own business strategy based on perceived market differences

Global Company (GC) An organisation that attempts to standardise and integrate operations
worldwide in most or all functional areas

International Is a global or multi-domestic company; but the terms multinational

Company enterprise (MNE) or multinational company/corporation (MNC) is also
used interchangeably

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 Transnational An enterprise comprising entities in more than one country which
corporation (TNC) – operate under a system of decision-making that permits coherent
UNCTAD definition policies and a common strategy. The entities are so linked, by
ownership or otherwise, that one or more of them may be able to
exercise a significant influence over the other and, in particular, to
share knowledge, resources and responsibilities with others.

Source: Ball et al. 2010

Globalisation is a process of growing interaction and interdependence between economies,

societies and nations across large distances.

Source: How to Measure Globalisation? A New Globalisation Index (NGI) by Petra Vujakovic.

Model of a global company:

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 3.2 GLOBAL MANAGER:

• All Managers today are Global Managers

• Managers need to be informed about global/regional developments in their industry
• They need to have a transnational outlook: transcending from ethnocentric to geocentric
outlook

“The global business manager has to achieve an efficient distribution of assets and resources
while protecting the competence at hand.”
Source: https://hbr.org/2003/08/what-is-a-global-manager

3.3 GLOBAL MINDSET:

• The ability to influence individuals, groups, organizations, and systems that are unlike the
leader’s
• “Global mindset to me means that the individual has a global passport, but in their head.”
• “It’s the ability to understand the similarities and differences among cultures and their
reasons.”
• “understanding and respecting other cultures rather than judging them.”
• “The ability to avoid the simplicity of assuming all cultures are the same, and at the same
time, not being paralysed by the complexity of the differences.”
• “Being comfortable with being uncomfortable in uncomfortable environments.”
• “It’s like a bug. Once you have it, you can’t get rid of it.”
• “I think it’s a natural curiosity to learn more about other cultures.”
• “Rather than being frustrated and intimidated by the differences, enjoying them and seeking
them out because you find them fascinating.”

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Source: Copenhagen business school

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Source: Copenhagen business school.

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 4. CULTURAL CHALLENGES
IN INTERNATIONAL
MANAGEMENT
To understand the cultural challenges, we need to understand the various aspects of the cultural
differences. We will study a few models to gain proper insight about them.

4.1: Global perspectives:

4.2: Hall’s High/Low Context Cultural Factors:

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Characteristics of Hall’s High and low context:

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4.3: Hofstede’s cultural dimension:

4.4 COMPARATIVE STUDY OF HOFSTEDE 6D ON FOUR COUNTRIES

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Source: https://www.hofstede-insights.com/country-comparison/australia,china,india,the-usa/

4.5 WAYS THAT CULTURE CAN AFFECT INTERNATIONAL NEGOTIATIONS

 NEGOTIATING GOAL: CONTRACT OR RELATIONSHIP?

 NEGOTIATING ATTITUDE: WIN-LOSE OR WIN-WIN?

 PERSONAL STYLE: INFORMAL OR FORMAL?

 COMMUNICATION: DIRECT OR INDIRECT?

 SENSITIVITY TO TIME: HIGH OR LOW?

 EMOTIONALISM: HIGH OR LOW?

 FORM OF AGREEMENT: GENERAL OR SPECIFIC?

 BUILDING AN AGREEMENT: BOTTOM UP OR TOP DOWN?

 TEAM ORGANIZATION: ONE LEADER OR GROUP CONSENSUS?

 RISK TAKING: HIGH OR LOW?

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Source: https://iveybusinessjournal.com/publication/the-top-ten-ways-that-culture-can-affect-
international-negotiations/

4.6: The three reasons why western businesses fail in India:

FAILING TO ADAPT TO LOCAL ATTITUDES

BELIEVING THAT ENGLISH-SPEAKING INDIANS MUST THINK LIKE WESTERNERS

IMAGINING THAT RULES OPERATE IN INDIA THE WAY THEY DO IN THE WEST

Source: Global post https://www.pri.org/stories/2014-08-11/three-reasons-why-western-

businesses-fail-india

4.7 CULTURAL PERCEPTIONS OF TIME

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4.8 GHEMAWAT’S CAGE FRAMEWORK:

Cultural Administrative
Distance Distance

Economic Geographic
Distance Distance

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 Cultural Administrative Geographical Economical
Country  Different  Lack of  Physical  Rich-poor
pairs languages colonial ties distance difference
(bilateral)  Different  Lack of  Lack of land s
ethnicities; shared border  Other
lack of regional  Differences in difference
connective trading bloc time zones s in cost or
ethnic or  Lack of  Differences in quality of:
social common climates and Natural
networks currency disease resources
 Different  Political environments Financial
religions hostility resources
 Lack of trust Human
 Different resources
values, Infrastructure
norms, and Information or
dispositions knowledge

Countries  Insularity  Nonmarket  Landlocked  Economic

(unilateral  Traditionalis or closed geography size
or m economy  Lack of  Low per-
multilateral  Extent of internal capita
) home bias navigability income
 Lack of  Geographic
membership size
in  Geographic
internationa remoteness
l  Weal
organisation transportation
s or
 Weak communicatio
institutions; n links
corruption

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 5. SYMBIOSIS OF CULTURE
AND MANAGEMENT

Companies from different countries are managed based on distinct values, beliefs and priorities.
Culture directly influences management producing specific characteristics and forms affecting
actions.
One of the problems that makes the understanding of the relation between culture and
administration more difficult, according to Rosenzweig (1994), is the comprehension of what is
understood as “culture.” A second reason, according to the same author, is the conjecture that all
members of a certain culture behave identically, that is, follow the same cultural stereotypes. A
third and last reason is the lack of a systematic reflection regarding the forms by which culture
manifests itself in the business surroundings.
Organizational culture is formed by “A pattern of shared basic assumptions that the group learned
as it solved its problems of external adaptation and internal integration, that has worked well
enough to be considered valid and, therefore, to be taught to new members as the correct way to
perceive, think, and feel in relation to those problems.”

Japan and China present very distinct management characteristics. In Chinese companies for
example, there is always a familial presence inside the company. The Chinese companies many
times are confused with the founder’s family. Already in Japan, companies prefer creating a
surrounding that is similar to a family home, even if their collaborators are not related between
themselves. Both in Japan and in China it is believed that family relationships are more
trustworthy and, for this reason, they are stimulated inside the organizational surrounding.
Drucker (1997) points out that, while the secret of the Japanese administration is to transform a
modern corporation into a family, in the Chinese administration the secret is to transform the
family into a modern corporation. The inability to coexist with distinct cultures in the same
company is a challenge for the administration. Schein (1992) describes the example of the
European subsidiary of a North American company, which was not able to find local
administrators to name to the board of trustees, because everyone was considered “too
emotional.” For Schein, they did not realize that the stereotype of a cold and emotionless
administrator was based on the North American pattern. Many companies fail in their
international experiences exactly for not adjusting themselves to the local culture and for not
promoting the integration of their local employees to the organization’s culture. Mthembu (1996)
stresses that many companies in South Africa brought to the business world a foreign culture
which was unknown to the employees, which did not allow them to better explore the potential
of their employees.
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Cultural differences can also explain the differences on the enterprising level between two
populations. Stoner and Freeman (1995) argue that the entrepreneurism level in Japan and in the
United States is different due to the cultural differences that exist. While the American culture
emphasizes individualism, the Japanese culture emphasizes group action and cooperation in
addition to the cooperation between the government and companies. In the 10 opinion of Stoner
and Freeman, this cultural difference suggests the North Americans have a higher level of
entrepreneurism than the Japanese.

Multiculturalism is another reality that affects companies, especially those in developed

countries. According to Robbins (2002), an important factor related to the cultural diversity is the
multiculturalism. Globalization has reduced barriers for immigration, making countries like
England, Germany, the United States and Canada go through profound changes in their
population profile. When relating to migratory movements, Bhagwati (2004) points out that
nowadays 175 million people, or 3 percent of the world population, cross frontiers to live for over
a year in other countries. Canada is a typical case due to the big contingent of people who
immigrated recently from Hong Kong, Vietnam, Pakistan and countries from the Near East. These
immigrants are making Canada’s population more diversified and its manpower more
heterogeneous. As a result, it is increasing the number of people from different cultural origins,
working in the same organization.

6. CHALLENGES IN
INTERNATIONAL
MANAGEMENT WITH
RESPECT TO INDIA

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 Now we will learn about the challenges that global businesses entering into India may come
across or the problems that Indian global managers face while moving for greener pastures
globally.

The conflict between Infosys’ founding patriarch NR Narayana Murthy and its first non-founder
CEO Vishal Sikka led to an embarrassing situation for the company. Differences in mindset and
cross-cultural issues may explain such an awkward state of affairs.
Murthy and Sikka belong to two very different mindsets. The former represents the middle
class, conservative and Spartan set of values, whereas the latter shows more ‘millennial’ traits
— spontaneous, flamboyant and risk-takin. Sikka embodies the culture of the US where he
migrated in his early-20s. Murthy, on the other hand, represents Indian culture. Applying
Hofstede’s cultural dimensions to compare US with India, one finds significant differences in
the scores on three dimensions: in power distance, the US measures 40 to India’s 77; in
individualism the US scores 91 while India 48, and in indulgence the US has 68, with India 26.
What does this mean?
A high score of power distance indicates that society is hierarchical and there is unequal
distribution of power. Family patriarchs/matriarchs rule till their death, a common practice
accepted in India. The job of a typical head is of preserving values, traditions and the ‘family
name’, or the business.

A high score on Individualism indicates a society of individuals who think in terms of ‘I, me and
myself’. People lack interpersonal connection and value personal freedom and privacy. On the
other hand, a low score on individualism, as in India, indicates that there is strong group cohesion.
There exists a large amount of loyalty and respect for members of the group.

People in India show respect for age and would not mind suppressing feelings to work in
harmony. Sikka’s irritation over the repeated allegations was quite evident in his Skype
communication to the Infosys board and media as he tendered his resignation. A low score on
indulgence indicates a restrained behavior.

Frugality is a virtue. Infosys was rewarded for its team’s perseverance, loyalty, commitment and
restraint. Being extravagant and boisterous — and an indulgent Sikka — are frowned upon.
With this real life case we can understand the challenges of global business and culture and
what are the do’s and don’ts.

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 7. CONCLUSION
Today’s world is represented by a large interaction among companies localized in all parts of the
planet and by an intense movement of people, merchandise and services. In this context, the
cultural dimension is constituted, in a crescent form, in a strategic component in the international
businesses. These businesses require from the companies, contacts, trips and meetings among
potential buyers, sellers and partners interested in developing commercial relations, negotiations
and alliances for business success. In these activities, problems of a cultural nature emerge
influencing, many times, the development of the negotiations. It is important that people who
represent companies abroad become aware of the cultural differences and of the possible
influences of these differences in the success of their jobs. Culture is, many times, something
invisible abroad or to the ill-informed visitor, being spread in thin in individual and group behavior.
Managers, when crossing countries’ frontiers with the frequency which is observed today, need to
pay attention to the countries’ and organizations’ cultural dimension with which they relate under
the penalty of having their work compromised. Managers by taking over the prevailing norms in
their country, assumes they are equally valid in other contexts, may find difficulties in the
performance of their company. It is not sufficient for the businessman to be aware of the cultural
differences. To understand the cultural differences and adjust to them, is a requirement for the
success of any manager who acts in a globalized economy. Since 2000 because of the collapse of
communism in the Soviet empire, the shift to market capitalism in China and the development of
India, approximately 1.5 billion new workers have entered the global economy (Friedman, 2005,
182). There is no turning back. Moving forward must be built on cultural understanding, one person
and one business at a time.

8. REFERENCES
1. Heavy dependence on study material shared by Prof. Samir Chatterjee (Curtin University,
Australia)
2. https://hbr.org/2003/08/what-is-a-global-manager
3. http://www.hult.edu/blog/cultural-differences-impact-international-business/
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 4. http://www.anpad.org.br/enanpad/2006/dwn/enanpad2006-esob-0700.pdf
5. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2016/impact-of-
culture-on-business-strategy.html
6. https://smallbusiness.chron.com/examples-cultural-differences-business-21958.html
7. https://iveybusinessjournal.com/publication/the-top-ten-ways-that-culture-can-affect-
international-negotiations/
8. https://www.commisceo-global.com/blog/cultural-tips-doing-business-in-india
9. https://www.ukibc.com/india-guide/how-india/business-culture/
10.https://economictimes.indiatimes.com/blogs/et-commentary/infosys-a-story-of-cultural-
differences/
11.https://www.pri.org/stories/2014-08-11/three-reasons-why-western-businesses-fail-india
12.https://www.researchgate.net/publication/305403637_Impact_and_Influence_of_Culture_
on_Brands_in_Indian_Market
13.https://www.hofstede-insights.com/country-comparison/australia,china,india,the-usa/
14.Gupta. A. Govindrajan Global strategy
15.Copenhagen business school

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