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Cross

Amity University

Cultural

MBA IB

Management

Cross-Cultural Management look around the key issues in one of the most testing and captivating areas of organizational life, and enables you to sharpen your insights and practical skills. It offers a broad view of traditional and modern thinking on culture and management, and persuades you to apply theories in practice.

Semester Two

Ms. K. P. Kanchana

Preface Change is permanent and is the need of the time. There is a drastic change in the market and in the styles of doing business. The importance of cross cultural management lies here where it is providing global outlook to the business across the global, making it a global village, providing diversity and speeding the actions taken to meet the competition and the leadership styles to be implemented and major cross-cultural issues and problems that managers face . The economic, political and social reforms have brought rapid changes across the countries and brought liberalization which is changing the entire international business environment. Cross Cultural Management creates an enduring awareness at all management levels of the need to be a more global organization. It corroborate the business need for developing and implementing a global strategy to compete effectively and enhance the value provided to key customers

The efficiency of cross cultural management basically depends upon the cultural background, cross cultural experiences, languages and personal experiences which in turn gives an insight on the information, technology and idea developed in one country or company can be implemented anywhere else in the world. To improve cross- cultural management in the corporate should focus on building the capabilities and beliefs of individual employees. Effective management of national and international boundaries is significant for the success of business and diversity of workforce within today‘s organizations. An intense consciousness and a high degree of proficiency in cross-cultural management are the key to the success of the leaders.

Cross-Cultural Management look around the key issues in one of the most testing and captivating areas of organizational life, and enables you to sharpen your insights and practical skills. It offers a broad view of traditional and modern thinking on culture and management, and persuades you to apply theories in practice.

The focus of this book is practical that will help you to appreciate the true significance of cross cultural management. The various concepts such as Cross-Cultural Concepts, Leadership, Communication, Negotiation, Different Management Styles of Different Countries etc will give you the outlook as how to carry out business and take is globally. Case Studies will help you to see the real problem and how to implement theories in real environment. The purpose of the course is not country specific but deals with the people of different cultures in work settings. Thanks are due to our Director General Dr. Gurinder Singh who constantly inspired and guided me in preparing this study material. I would also like to thanks Mr. Rajan Bhandari for giving necessary guidance.

INDEX-

CHAPTER 1

CULTURE

1.1

INTRODUCTION TO CULTURE

1.11

LAYERS OF CULTURE

1.2

CHARACTERISTICS OF CULTURE

1.20

EFFECTIVENESS OF CROSS CULTURAL MANAGEMENT

1.21

THE CROSS CULTURALLY EFFECTIVE PERSON

1.3

COMPARATIVE MANAGEMENT

1.4

IMPACT OF CULTURE ON BUSINESS

1.42

CULTURAL DIMENSIONS IMPACT ON MANAGEMENT

1.43

CULTURAL DIMENSION IMPACT ON BUSINESS STRATEGY

1.44

CULTURAL DIMENSION IMPACT ON BUSINESS STRATEGY

1.45

CULTURAL DIMENSION IMPACT ON NEGOTIATION

1.46

CULTURAL DIMENSION IMPACT ON DECISION MAKING

1.47

CULTURAL DIMENSION IMPACT ON LEADERSHIP

CHAPTER 2

2.1 LEADERSHIP

CROSS CULTURAL LEADERSHIP

2.2 APPROACHES TO LEADERSHIP

2.3 THE OHIO STATE UNIVERSITY STUDIES

CHAPTER 3

CROSS CULTURAL NEGOTIATION

3.1 CROSS CULTURAL NEGOTIATIONS

3.21

CULTURAL INFLUENCES IN NEGOTIATIONS

3.3

HOW CULTURE IMPACTS NEGOTIATION

3.4

DIMENSIONS OF CULTURE

3.41

VARIABLES INFLUENCING CROSS-CULTURAL NEGOTIATIONS

3.42

INTERCULTURAL IMPLICATIONS OF NEGOTIATIONS

CHAPTER 4

ROLE OF ETHICS IN CROSS CULTURAL MANAGEMENT

4.1

HOFSTEDE‘S VALUE DIMENSIONS

4.11

POWER DISTANCE

4.12

UNCERTAINTY AVOIDANCE

4.13

INDIVIDUALISM

4.14

MASCULINITY

4.2

TROMPENAAR‘S VALUE DIMENSIONS

4.21

UNIVERSALISM VERSUS PARTICULARISM

4.22

NEUTRAL VERSUS AFFECTIVE

4.23

SPECIFIC VERSUS DIFFUSE

4.24

ACHIEVEMENT VERSUS ASCRIPTION

CHAPTER 5

MODELS OF CROSS CULTURAL MANAGEMENT

5.1

HALL'S CULTURAL FACTORS

5.11

HIGH CONTEXT

5.2

LOW CONTEXT

5.21

LOW CONTEXT DEPENDS

5.3

HIGH-CONTEXT VERSUS LOW-CONTEXT CULTURES

5.4

TROMPENAARS' CULTURAL FACTORS

5.41

ACHIEVEMENT VS. ASCRIPTION

5.42

INDIVIDUALISM VS. COMMUNITARIANISM

5.43.

INTERNAL VS. EXTERNAL

5.44.

NEUTRAL VS. EMOTIONAL

5.45

SPECIFIC VS. DIFFUSE

5.46.

SEQUENCE VS. SYNCHRONIZATION

5.47

UNIVERSALISM VS. PARTICULARISM

5.48

GEERT HOFSTEDE‘S CULTURAL FACTOR

5.49

POWER DISTANCE (PD):

5.50

INDIVIDUALISM VS. COLLECTIVISM (IC)

5.51

MASCULINITY VS. FEMININITY (MAS)

5.52

UNCERTAINTY AVOIDANCE (UA)

5.53

LONG- VS. SHORT-TERM TIME ORIENTATION (LTO)

5.6

KLUCKHOHN AND STRODTBECK

CHAPTER 6

MANANGEMNT STYLE OF UNITED STATES OF AMERICA

6.1 SYMBOLISM

6.2 URBANISM, ARCHITECTURE, AND THE USE OF SPACE

6.4

SOCIAL STRATIFICATION

6.5

POLITICAL LIFE

6.6

GENDER ROLES AND STATUS

6.7

MARRIAGE AND FAMILY

6.8

ETIQUETTE

6.9

APPEARNCE

6.70

BEHAVIOR

6.71

COMMUNICATIONS

6.72

BUSINESS HOURS

6.73

PUNCTUALITY

6.74

ETIQUETTES OF GIFT GIVING

6.75

ETIQUETTES OF DINING

CHAPTER 7

JAPANESE STYLE OF MANAGEMENT

7.1 ABOUT JAPAN

7.2 JAPANESE LANGUAGE

7.3 JAPANESE SOCIETY & CULTURE

7.4 HISTORY OF JAPANESE-STYLE MANAGEMENT

7.5 BUSINESS MANAGEMENT STYLE

7.6 MEETING ETIQUETTE

7.7 GIFT GIVING ETIQUETTE

7.8 DINING ETIQUETTE

7.9 TABLE MANNERS

7.11

ASSOCIATIONS & COMMUNICATION

7.12 BUSINESS MEETING ETIQUETTE

7.13 BUSINESS NEGOTIATION

7.14 DRESS ETIQUETTE

7.15 BUSINESS CARDS

7.16 JAPANESE BUSINESS CULTURE: SOICHIRO HONDA, MANAGER AND

ENTREPRENEUR

CHAPTER 8

GERMAN STYLE OF MANAGEMENT

8.0 BUSINESS CULTURE IN GERMANY

8.1 MAKING APPOINTMENTS

8.2 BUSINESS DRESS

8.3 COMMUNICATION

8.4 SELECTING AND PRESENTING BUSINESS GIFT

8.5 GERMAN NEGOTIATION STYLE

8.6 GERMAN MEETINGS

8.7 GERMANS ACCEPTABLE PUBLIC CONDUCT

8.8 CASE STUDY: IBM GERMANY

CHAPTER 9

BRITISH STYLE OF MANAGEMENT

9.1 APPEARANCE

9.2 BEHAVIOR

9.3 COMMUNICATIONS

9.5

UK BUSINESS PART 1 - WORKING IN THE UK

9.6 UK BUSINESS PART 2 - DOING BUSINESS IN THE UK

9.7 BRITISH BUSINESS ETIQUETTE (DO'S AND DON'TS)

9.8 GEERT HOFSTEDE ANALYSIS

9.9 OTHER FINDINGS

CHAPTER 10

FRENCH STYLE OF MANAGEMENT

10.1 BEING A MANAGER IN FRANCE

10.2 THE ROLE OF A MANAGER

10.3 APPROACH TO CHANGE

10.4 APPROACH TO TIME AND PRIORITIES

10.5 DECISION MAKING

10.6 BOSS OR TEAM PLAYER

10.7 COMMUNICATION AND NEGOTIATION STYLES

10.8 APPEARANCE

10.9 BEHAVIOR

10.10 COMMUNICATIONS

10.11 FRENCH CULTURE - KEY CONCEPTS AND VALUES

10.12 FRANCE BUSINESS PART 1 - WORKING IN THE FRANCE

10.13 FRANCE BUSINESS PART 2 - DOING BUSINESS IN FRANCE

10.14 FRENCH SOCIETY & CULTURE

10.15 ETIQUETTE & CUSTOMS

10.16 BUSINESS NEGOTIATION

CHAPTER 11

LATIN AMERICA

11.1 THE COMPANY IS LIKE A FAMILY

11.2 THE IMPORTANCE OF SOCIAL STATUS

11.3 TEAMWORK, SUBCONTRACTING AND GEOGRAPHICAL MOBILITY

CHAPTER 1

CULTURE

1.1 Introduction to Culture

Culture is the inevitable part of every living things whether we talk of human beings or of animals. It is the innate behavior which varies from individual to individual and broadens when the individual lives in family. The evolution of culture is based on intelligence, reaction to experiences and needs of the individual. For instance the initial stages of humans behavior were similar to other animals lived in groups. Human intelligence reacted stronger to experiences and needs that widened cultural status. Each society has norms to follow by individuals in order to retain society strong and intact.

The development of culture depends on beliefs, faith, practices, customs, way to live, art, intelligence, language, food habits, economy etc. The growth of culture had given identity to the societies which were named, Christian, Muslim, Hindu, Jewish, Buddhist etc.

According to Kroeber & Kluckhohn,. (1952),

" Culture consists of patterns, explicit and implicit, of and for behavior acquired and transmitted by symbols, constituting the distinctive achievements of human groups, including their embodiments in artifacts; the essential core of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values; culture systems may, on the one hand, be considered as products of action, and on the other as conditioning elements of further action."

Hofstede, G. (1984) in his book National cultures and corporate cultures has defined culture as:

"Culture is the collective programming of the mind which distinguishes the members of one category of people from another." (p. 51).

1.1 Layers of Culture

Basically there are three layers of culture which are formed as a part of our learning and perceptions.

1 st Layer: It is the apparent cultural conduct that distinguishes one society specific form the other society. For example Italian, Chinese, Germans, Samoan, or Japanese have refer to the shared language, traditions, customs and beliefs that set each of these natives different from the others. In most cases, those who share your culture do so because they acquired it as they were raised by parents and other family members who have it.

2 nd Layer: It is the part of our identity and is called as Subculture. In diverse societies people come from different parts of the world and they preserve much of their original cultural traditions. This results to making them a part of an identifiable subculture in their new society which set them apart from the rest of the society. For examples the easily identifiable subcultures in the United States which include ethnic groups such as Vietnamese Americans, African Americans, and Mexican Americans who share a common identity, food tradition, dialect or language, and other cultural traits that come from their common ancestral background and experience. As the cultural differences between members of a subculture and the dominant national culture smudge and in due course disappear, the subculture ceases to exist except as a group of people who claim a common ancestry. This is generally in case of

the German Americans and Irish Americans in the United States today. Most of them identify themselves as Americans first. They also see themselves as being part of the cultural mainstream of the nation.

3 rd Layer: This layer of culture consists of learned behaviour patterns that are shared by all of civilization wherever they live in the world. This Universal Cultural traits include:

1. Communicating with a verbal language consisting of a limited set of sounds and grammatical rules for

constructing sentences

2. Using age and gender to classify people (e.g., teenager, senior citizen, woman, man)

3. Classifying people based on marriage and descent relationships and having kinship terms to refer to them

(e.g., wife, mother, uncle, cousin)

4. Raising children in some sort of family setting

5. Having a sexual division of labour (e.g., men's work versus women's work)

6. Having a concept of privacy

7. Having rules to regulate sexual behaviour

8. Distinguishing between good and bad behaviour

9. Having some sort of body ornamentation

10. Making jokes and playing games

11. Having art

12. Having some sort of leadership roles for the implementation of community decisions

While all cultures have possibly many other universal traits, different cultures have developed their own specific ways of carrying out or expressing them. For instance, people in deaf subcultures frequently use their hands to communicate with sign language instead of verbal language. However, sign languages have grammatical rules just as verbal ones do. Differences of cultures of two societies when clash leads to war and stronger one overpowers the other to establish own culture that way it broadens its culture. An apparent example we have is western culture spread in most part of the world.

1.2 Characteristics of Culture

Culture is dynamic, it is neither fixed nor static

A continuous and cumulative process

Learned and shared by a people

Behavior and values exhibited by a people

Symbolically represented through language and interactions

That which guides people in their thinking,

Cross Cultural Management

feeling and acting

According to Bobst, Cross Cultural Management (CCM) is ―the capability to manage different attitudes, culture, religion and habits to achieve best business results.‖ (Questionnaire, 2004). Funakawa approached CCM in a more general way, in a sense of how people and organizations focus on ‗transcending‘ cultural differences at a global situation (Funakawa, 1997:190-195). Cross Cultural Management is seen as a management style that can give quality to each division of an organization that negotiates internationally. Mead with his indepth study on the subject defined Cross Cultural Management as ―…working with members of the other culture, tolerating differences as far as possible, and recognizing their priorities when developing shared priorities.‖ (Mead, 1994:5). CCM is inevitable, as Evans and Doz found that ―research on multinational enterprises suggests that their future competitive advantage may not reside in their strategy or structure, nor in their technologies or products, but in their organizational capabilities to cope with the multidimensional and complex demands of a global business.‖ (Evans and Doz, 1992:87).

Culture is an aspect which is of much importance and cannot be ignored by the industries when they are talking of globalization and international competition. The more organizations recognize its importance and existence, the more thoughtfully they can relate it not only to their own but also to understand and tolerate others culture. Hofstede defined culture as followed, ―culture is the collective programming of the mind which distinguishes the member of one human group from another. Culture, in this sense, includes systems of values; and values are among the building blocks of culture.‖ (Hofstede, 1984:21). Mead elaborated that culture is a sample of different values, attitudes and beliefs. However, values, beliefs and attitudes can differ from each other. A belief is a strong thought of something that ought to be right. Americans, believes that wisdom come with not only age and experience but also with personal development and education, clashes with the value held by the Japanese people who believe that wisdom come with age and experience and so elders gain respect due to their age.

Research in the field of cross-cultural management originally evolved around two general lines of inquiry, arguing either that culture matters, or that culture is largely overruled by other conditions. Since Kluckhohn and Strodtbeck‘s seminal work (1961), one approach emphasises the importance of culture in cross-cultural interactions. In this perspective, culture matters because individuals have different values and different preferences with regard to management and leadership, that are related to their cultural background (see e.g., Hofstede, 2001; House et al., 2004). Cultural assumptions and values describe the nature of relationships between people and their environment, and amongst people themselves. Given little or no other information about an individual‘s values and behaviour, culture provides a good first impression of that person (Maznevski and Peterson, 1997). Research has shown that national culture influences an individual‘s perceptions, behaviour and beliefs (Harrison and Huntington, 2000; Hofstede, 2001; Kirkman et al., 2006). In contrast, the other approach takes the perspective that culture is largely overruled by other conditions. This line of research argues that even though culture does influence Individual outcomes, such as perceptions, the statistical significance of this relationship is very weak (e.g. Kirkman and Shapiro, 2001). Thus, other factors, such as personality, strong leadership, and uniformity of practices (e.g., Maznevski and Chudoba, 2000) are identified as predictors that overrule the weak

effect of culture. The new view represents a dynamic view of culture, leading towards the emergence of a globalised business environment (Bird and Stevens, 2003). Following Hofstede (2001) culture has been seen as a very stable concept that changes quite slowly. However, political, economic, and technical changes in the 21st century create cultural changes across the world. Globalization is leading to significant cultural cross-pollination. Thus, cultures do not operate as uncorrelated independent variables, even though they are often treated like this when studying cross-cultural interactions (Bird and Stevens, 2003, p.403). In negotiation simulations across various countries, Bird (2002) shows that within the world business community an identifiable and homogenous group is emerging that shares a common set of values, attitudes, norms, and behaviour, which overrule the diverse cultural backgrounds of the individuals involved. However, a precise and comprehensive understanding of the questions ‗if‘, ‗how‘, and ‗when‘ culture influences cross-cultural interactions is still lacking in the academic, as well as the corporate world. Gibson et al. (forthcoming) are among the first to identify a set of conditions, operating across three different categories individual, group, and situational characteristics that serve to moderate the influence of national culture on individual perceptions, beliefs and behaviour. Among others, moderating conditions include the degree to which an individual identifies with the culture, the stage of group development, as well as several situational conditions, such as technological uncertainty. Leung et al. (2005, p.367) argue that cultural differences might be reduced ―if mental processes associated with national culture are relatively fluid, and can be changed and sustained by appropriate situational factors‖. Thus, the questions of if and how culture matters are influenced by the situation per se. In social psychology research, it has long been recognized that the strength of situations has an important influence on understanding and predicting behavior Mischel, 1977). Mischel (1977) classifies situations along a continuum from strong to weak. Strong situations are characterized by having salient behavioral cues, i.e. everyone is interpreting the circumstances similarly, leading towards identical expectations regarding the appropriate response. For example, one would expect that most people would be serious while attending a funeral. Consequently, strong situations are characterized by suppressing the expression of individual differences. From a globalize business environment perspective, one could assume that cultural differences are suppressed as norms and values of individuals in the business community become more homogenous (Bird and Stevens, 2003). However, to the best of our knowledge there has been little research that enables us to understand when the impact of culture on interactions is reduced. On the other hand, given the fact that many researchers still find that culture has an effect, there must be conditions under which specific cultural differences influence cross-cultural interactions. Mischel‘s (1977) concept of ―weak‖ situations gives a deeper understanding of such conditions. Weak situations are characterized by having highly ambiguous behavioral cues providing few constraints on behavior, and hence do not induce uniform expectations. This can be the case in cross-cultural situations, where people with potentially very different expectations meet. In weak situations, the person has considerable discretion as to how to respond to the circumstances. Thus, weak situations provide the opportunity for individual differences, such as different cultural backgrounds, to play a greater role in determining behavior. We argue that to understand when and how culture influences interactions, it is needed to identify ‗weak situations‘ determining cross-cultural interactions. This leads to the following research question.

1.20 Effectiveness of Cross Cultural Management

We've cultured to live and work in a group of people who have influenced us. When living and working in foreign destinations, our spontaneous effect is to understand local ways of being through our own cultural references. This elucidation can be quite misleading, and in certain cases, cause irreparable damage to relationships, relationships upon which the success of projects rest.

The aim of intercultural effectiveness is to minimize the risk of failure and develop both the individual's and the organization's chances of success in an international environment.

1.21 The Cross Culturally Effective Person

Cross Culturally effective person is someone who is able to live happily and work productively in another culture. The Cross Culturally effective person has three main attributes:

1

An ability to communicate with people of another culture in a way that they earn their respect and trust.

2

The capacity to adapt his/her professional skills (both technical and managerial) to fit local conditions and constraints

3

The capacity to adjust personally so that s/he is content and generally at ease in the host culture

1.3

Comparative Management

The study of management or business practice simultaneously in two or more different cultures, countries, companies, or department is Comparative Management. It analyzes the degree to which management principles of one country are applicable to the another. Although the concept of comparative management evolved in the late sixties, it continues to be the subject of considerable debate.

According to Barry Curnow, the Consulting Editor of European Management Perspectives comparative management is use to capture how managers get to steal, beg, borrow and use ideas. There is also an academic field of study called comparative management, often taught in business schools alongside International Business, and this has been defined as dealing with―differences and similarities of managerial systems and practices in different cultural settings‖ (definition taken from the Anderson School UCLA Doctoral program course syllabus for International Business and Comparative Management www. ).

Comparative management entails leaders to understand the Political, Economic, Social, Technological and Ecological context in which organizations maneuver. (PESTLE). The leaders and the managers of the organizations must make a conclusion as how things happen, where and why it takes place. (All Certified Management Consultants must be competent in PESTLE so as to appreciate the requirements of different geographical and cultural settings)

The best management practices have some degree of closeness to the emerging world trends in management. In their study of management practices of best-run American companies Peters and Waterman (1982) observed that, being close to the customer and achieving productivity through people were among the key attributes of excellent American companies.These companies had believed that learning from the customer and exceeding their expectations were critical to organizational success. Similarly, these companies also developed a vast "extended family" atmosphere at work by taking care of the people and developing their capabilities.

For purposes of comparison the research team studied the management practices of a few multinational subsidiaries in Sri Lanka, one of which was SmithKline Beecham, a subsidiary of a British Pharmaceutical multinational which was in partnership with a Sri Lankan company. The management practices adopted by SmithKline Beecham were found to be highly formalized. Even in the area of organization and people interface SmithKline Beecham had precise ways of doing things referred to as "the Simply Better way ". Despite the system orientation associated with the MNC culture, SmithKline Beecham promoted relationships with their local distributor network to a high degree. The company also adopted a policy of taking care of its people and invested about one million rupees annually in developing the core-skills of the employees. Thus, one might find that the best practices of management identified during the study of a sample of successful trading companies in Sri Lanka have some resemblance to emerging global trends in management.

1.4

Impact of culture on Business

1.41

Cultural dimensions impact on management

Gale Prawda member of several philosophical practitioners associations in the US, UK, and France and an active member of L'école de Daseinanalyze said that Culture and Business practices are in each other's pocket. In management, culture influences, and sometimes even determines policy, style, structure, etc. of the organization. When managing a company in a domestic operation with a homogeneous culture everyone seems to speak the same language, understand the same cues, and have similar values & norms. According to Lauren's survey, the role of a manager to Americans is considered a 'problem solver' as opposed to his/her French counterpart, who to the French is considered an 'expert'. Business has so rapidly developed globally, management is no longer restricted to the domestic territory, but has gone beyond national borders and constantly confronts cultural diversity. The American manager, in a French subsidiary, may be quite ineffective as a 'problem solver' for the French staff may consider him/her incompetent, whereas, the French manager managing an American organization might be considered too directive in his response to staff's questions. On an organizational level, culture influences the structures as well as the behavior of the different stakeholders. Depending upon the organization, the response to operating globally varies from :

Ethnocentric approach: our way is the best way Parochial ―: our way is the only way Synergetic ―: managing with diversity Excluding the synergetic approach (which is the most uncommon of the three), the corporate culture doesn't usually take into account the national culture its operating in. The corporate culture and its norms override the national culture's norms. However, this universal view of a corporate culture does not erase cultural influences. In fact, organization culture magnifies cross-cultural differences, rather than minimizing them. Thus, cultural differences in organizations dealing internationally have their greatest impact mainly in motivation, teamwork, negotiations, decision-making, and mergers & acquisitions.

1.48 Cultural dimension impact on business strategy

According to Mark Mallinger and Gerry Rossy research published in Graziadio Business Report, 2007, Vol. 10, Issue 2, to be successful over the long term in the business a strategy has to be sound. Jay Barney[6] in describing his resource-based view of the firm identifies four requirements for defensibility:

Value (in the eyes of the customer),

Rareness,

Inimitability,

Non-substitutability.

In today‘s global marketplace with its rapid flow of information, these conditions are increasingly difficult to achieve through the traditional four P‘s of marketing—product, place, price, and promotion. It is important to erect barriers around its competitive space with a unique fifth P—―culture.‖

Many organizations develop internal organization culture that are unique and support their products, service, and internal management philosophy. If the organizations what to keep it sustained for the long run and be in competition they should develop a culture in which customers are integral part of business. By delivering innovative, unique, and interesting business will be able to differentiate themselves from their closest competitors. As the competition is intense for every business, being good or even great the execution of the strategy is no longer enough. What Trader Joe‘s (The Trader Joe‘s Experience) teaches us is that a unique organization culture that is carefully aligned with both its own competitive business strategy and with the values of the customers can provide an effective defence against incipient competitors. Such a strong and targeted organization culture takes time to develop and provides customers with a valuable and difficult to copy experience. It is always more complicated for competitors to imitate who you are than what you do.

1.49 Cultural dimension impact on Negotiation

The impact of culture on the negotiating process has intrigued both scholars and practitioners. (e.g. Weiss 1994, Faure and Sjostedt 1993; Binnendijk 1987; Fisher 1980; Graham, J. L. et. al. 1988; Campbell et al. 1988). Jeswald W. Salacuse said that for the impact of culture on negotiation, culture is defined as the socially transmitted behavior patterns, norms, beliefs and values of a given community. Persons from the particular community use the elements of their culture to interpret their surroundings and guide their interactions with other persons. So when an executive from a corporation in Dallas, Texas, sits down to negotiate a business deal with a manager from a Houston company, the two negotiators rely on their common culture to interpret each other's statements and actions. But when persons from two different cultures-- for example an executive from Texas and a manager from Japan -- meet for the first time, they usually do not share a common pool of information and assumptions to interpret each others' statements, actions, and intentions. Culture can therefore be seen as a language, a "silent language" which the parties need in addition to the language they are speaking if they are truly to communicate and

arrive at a genuine understanding. (Hall 1959) Culture also serves as a kind of glue -- a social adhesive -- that binds a group of people together and gives them a distinct identity as a community. It may also give them a sense that they are a community different and separate from other communities. (Salacuse 1991) identified ten factors that have an impact on the negotiating process and are influenced by a person's culture. The ten factors, each of which forms a continuum between two poles, consisted of the following:

1. negotiating goals (contract or relationship?);

2. attitudes to the negotiating process (win/win or win/lose?);

3. personal styles (formal or informal?);

4. styles of communication (direct or indirect?);

5. time sensitivity (high or low?);

6. emotionalism (high or low?);

7. agreement form (specific or general?);

8 agreement building process (bottom up or top down?);

10. risk taking (high or low?).

1.50 Cultural dimension impact on Decision Making

An understanding of structure, therefore, requires reference not only to such dimensions as centralization, specialization and formalization, but also to the relationships, processes and actions which lie behind these dimensions. These relationships and processes are power and authority relationships, coping with uncertainty and risk-taking, interpersonal trust, loyalty and commitment, motivation, control and discipline, coordination and integration, communication, consultation and participation.

1.46 Cultural dimension impact on Leadership

In the field of cross-cultural study of leadership styles, the distinction between general measures of leader style and the culturally-specific ones is explored in Misumi's (1985) theory. Here he argues that behaviour must be understood in terms of genotypes and phenotypes: the core intention of an action and the manner in which that intention is expressed in a particular cultural context. To cite an illustrative example, close attention to time-keeping might be construed in one culture as authoritarian leadership and in another as indicative of strong commitment to the goals of the workgroup.

Thus what emerges broadly from the study is that the ability of the organizations to balance different interests by being flexible, understanding and innovative had given rise to effective management practices which are dynamic and adaptable to changing environments.

References:

Hill, C. W. (2003). International Business: Competing in the Global Marketplace. 4th Edition. McGraw-Hill. (referred to as H) Griffin, R. W. and Pustay, M. W. (2002). International Business: A Managerial Perspective. FT/Prentice Hall. 3rd edition. Griffin, R. W. and Pustay, M. W. (2005). International Business. FT/Prentice Hall. 4th edition. Hibbert, E. (1997). International Business Strategy and Operations. MacMillan Press Ltd. Henry, C. M. and Springborg, R. (2001). Globalization and the Politics of Development in the Middle East. Cambridge University Press. Everett M. Rogers, William B. Hart, & Yoshitaka Miike (2002). Edward T. Hall and The History of Intercultural Communication: The United States and Japan. Keio Communication Review No. 24, 1-5. Accessible at

http://www.mediacom.keio.ac.jp/publication/pdf2002/review24/2.pdf.

Bartell, M. (2003). Internationalization of universities: A university culture-based framework. Higher Education, 45(1), 44, 48, 49. Hans Köchler (ed.), Cultural Self-comprehension of Nations. Tübingen: Erdmann, 1978, ISBN 978-3771103118, Final Resolution, p. 142. Bartell, M. (2003). Internationalization of universities: A university culture-based framework. Higher Education, 45(1), 46. Rymes, (2008). Language Socialization and the Linguistic Anthropology of Education. Encyclopedia of Language and Education, 2(8, Springer), 1.

Teather, D. (2004). The networking alliance: A mechanism for the internationalisation of higher education? Managing Education Matters, 7(2), 3. Rudzki, R. E. J. (1995). The application of a strategic management model to the internationalization of higher education institutions. Higher Education, 29(4), 421-422. Bartell, M. (2003). Internationalization of universities: A university culture-based framework. Higher Education, 45(1), 46. Cameron, K.S. (1984). Organizational adaptation and higher education. Journal of Higher Education 55(2), 123. Ellingboe, B.J. (1998). Divisional strategies to internationalize a campus portrait: Results, resistance, and recommendations from a case study at a U.S. university, in Mestenhauser, J.A. and Elllingboe, B.J (eds.), Reforming the Higher Education Curriculum: Internationalizing the Campus. Phoenix, AZ: American Council on Education and Oryx Press, 199. Bartell, M. (2003). Internationalization of universities: A university culture-based framework. Higher Education, 45(1), 48.

CHAPTER 2

Cross Cultural Leadership

The concept of ‗globalization‘ was apparent before this word became popular and the industries in most countries became ripe in cross-border business activities. However, socio-economic and cultural changes during the last few decades have influenced the internationalization of business activities as being said by Chan et al., 2001. This gave rise to several challenges to be faced by the players. Cross-cultural interactions play a significant role in negotiations, decision making, problem solving, and other aspects of business and technical operations. Leadership is a crucial component in the success or failure of all organizations. According to Fiedler (1967:11), leadership is "an interpersonal relation in which power and influence are unevenly distributed so that one person is able to direct and control actions and behaviors of others to a greater extent than they direct and control his". One of the most significant aspects of leadership is the style of the leader. The best style of leadership is that which varies with the circumstances (Mainiero & Tromley, 1989), and maximizes a firm's productivity, satisfaction, growth and development in all situations (Hersey & Blanchard, 1993).

Cultural differences account for the various management and leadership methods which are practiced in different cultures. According to Fellows et al., 1994, research had shown that failure to understand the cultural differences between the participating can result into undesirable circumstances. Norwood and Mansfield (1999) found that the differences within Asian and Western cultures led to several problems. For example of doing business in China, Dahles and Wels (2002) observed that one must be able to deal with tensions and conflicts, uncertainties and frustrations while negotiating and managing various national cultures, corporates identities, and business pressures and objectives. They highlighted the importance of cultural norms and values as the bases of personal networks.

Therefore, it is suggested that international firms should have managers who are culturally intelligent and have the ‗capacity to adapt to varying cultural settings based on the facets of cognitive and meta cognitive processing, motivational mechanism and behavioral adaptation‘ (Earley, 2006, p. 929). Others note that managers of global firms should have the reflexive capability (London and Chen, 2007) and ability to communicate effectively within culturally diverse teamsteams comprising members who come from two or more different cultures. Selmer (2001) suggests that managers with these attributes can be used in a strategic way to develop business across borders. There have not been many studies of issues related to cross-cultural management in the construction industry. The existing works in construction management

literature tend to have deficiencies in the frameworks they adopted, and mostly focus on exploring the dimensions of culture. Moreover, much of the research has been based on the work of Hofstede although many other authors have criticized key aspects of Hofstede‘s research (see, for example, points made by Schwartz, 1994; McSweeney, 2002; Kirkman et al., 2006 as discussed below). Furthermore, others have suggested that cultural studies should be advanced beyond Hofstede‘s five-dimensional model, and more complex approaches anchored in sound theory and empiricism employed (Javidan et al., 2006).

Many researchers have proposed frameworks for studying and measuring ‗culture‘. In his work that originated from a study at IBM, Hofstede (2001) argues that cultural dimensions such as power distance (PDI), individualism (IDV), masculinity (MAS), uncertainty avoidance (UAI) and long-term orientation (LTO) differ between Eastern and Western cultures. Attributes of Eastern cultures are high in peopleorientation, collectivism, long-term orientation, and also have high power distance. On the other hand, Western societies are more task-oriented, with relatively low power distance, individualistic, and uncertainty avoidant. Following the work of Hofstede (1980, 1991), many researchers have presented similar frameworks and models. For example, Trompenaars (1993), from his study of organizations in 50 countries, proposed seven dimensions of culture: universalism versus particularism; individualism versus communitarianism; neutral versus emotional; specific versus diffuse; achievement versus ascription; attitudes to time; and attitudes to the environment. Schwartz (1994), in the individual-level study of the content and structure of values, identified seven culture-level dimensions, namely, conservatism; intellectual autonomy; affective autonomy; hierarchy; egalitarian commitment; mastery; harmony. Smith et al. (1996) identified two main dimensions: egalitarian commitment versus conservatism; and utilitarian involvement versus loyal involvement.In their Global Leadership and Organizational Behavior ffectiveness (GLOBE) project which covered 62 countries, House et al. (2003) identified nine dimensions, each easured twice, isometrically, as practices and respective values. These dimensions are: performance orientation; assertiveness orientation; future orientation; humane orientation; institutional collectivism; family (now in-group) collectivism; gender egalitarianism; power distance; and uncertainty avoidance. These dimensions, although derived in the context of leadership, are similar to those proposed by Hofstede (1991). In recent studies, researchers have considered concepts of general beliefs, or ‗social axioms‘, which are basic premises that people endorse and use to guide their behaviour in their daily living (Bond and Leung, 2004, p. 552). Leung et al. (2002) introduced a five dimensional structure of social axioms from a survey covering five countries. their classification of social axioms comprises: cynicism; social complexity; reward for application; spirituality or

religiosity; and fate control. In a study of 41 nations, Bond and Leung (2004) attempted to reveal the culture-level factor structure of social axioms, and extracted two factors:

dynamic externality (related to power distance, conservatism and collectivism); and societal cynicism (relating to a lower emphasis on striving for high performance, a pertinent outcome if there is a general suspicion of the social system, and a general expectation of negative outcomes).

International Air Transport Association (IATA) embodies 230 airlines and has employed 1,600 staff of 140 ethnic group in 74 countries. It has its headquarters in Geneva and Montreal. Traditionally the corporate thinking has been biased towards western ideas and practices, with little appreciation to the important fast growing markets, particularly those of India, China and other parts of Asia. IATA faces the same problems as many other organizations around the world:

How to acquire leaders who can enhance local business by effectively interacting with the local team and implementing global HR processes and also maintaining effective communication with headquarter?

How to do business in the unfamiliar market?

There are two characteristic approaches to these problems.

1. Use of expatriates- sending ―experts‖ from the company‘s HQ or another branch office.

2. bi-cultural intermediaries people who have lived in different countries and have first-hand experience of at least two cultures. In the case of China, western companies often fill executive roles with Chinese from Taiwan, Hong Kong or Singapore or Chinese nationals who have studied and worked abroad.

Guido Gianasso, the vice-president for human capital, IATA believes that none of the approach is perfect. The cultural differences often make the western expatriate unable to operate and the ‗cultural translators‘ who are educated or trained abroad work well but are in very high demand and not always loyal to their employer. He says that we should go for the leadership, paying attention to the critical issue of culture.‖

The cross-cultural leadership should aim at the following steps that can help organizations tackle the important but difficult task of integrating different cultures:

1.

Identify

two

cultures

that

need

to

collaborate

For the global organizations the cultural sense and potential gaps between the ―home‖ and ―target‖ cultures should be identified.

2.

Identify

leaders

and

leadership

talent

from

each

culture

Leaders should be culturally intelligent to develop cross-cultural integration and collaboration.

3.

Identify

appropriate

pairs

of

co-leaders

Team-players, high growth potential, open-minded and empathetic nature should be given preference.

4.

Identify

real

projects

Simulation assignments which can enhance the learning experience during an intercultural program.

5.

Identify

a

realistic

time

frame

6.

A minimum of three to six months is a reasonable time-frame for start-up activities, content delivery and evaluation. Share practices

Share with the people who are working closely together and adopting an enquiring rather than judgmental mindset.

7.

Adapt

for

the

next

cross-cultural

 

challenge

Cultural programs should not be replicated in their entirety because markets and cultures differ

The difference in the culture, patterns of life, philosophy and value systems influences the behavior of the individual and their leadership styles. The experiments carry out by various researchers and scientists have shown how widely these leadership styles vary from country to country, and from culture to culture (Trompenaars, 1993). In order to lead effectively in another culture, a leader must understand the social values, customs, norms, leadership behavior and work-related cultural values of the host country's workforce (Fatehi, 1996).

Cultural differences influence leadership styles, norms, role expectations, and traditions governing the relationship among various members of society. These are strong determinants of effective leadership behavior in a society (Fatehi, 1996). Fatehi argues that what constitutes a good leader in one culture may not constitute a good leader in other cultures. He stated that in the United States of America, for example, people would prefer democratic leaders who seek input from subordinates before making decisions. In other cultures, such would be regarded as incompetence or lack of knowledge on the part of the leader. He emphasizes that these other cultures might prefer

a leader who takes charge of the situation without consulting subordinates prior to decision-making. Besides having technical expertise, international managers must possess the ability to organize, and lead a workforce of diverse cultures (Fatehi, 1996).

The historic trip of President Clinton to Africa in March 1998 had developed confidence American business leaders to hunt for business undertaking in the African continent. During the course of his diplomatic mission, President Clinton emphasized the need for the United States to build closer diplomatic and economic ties with the countries of Sub-Saharan Africa. Two bills (H.R. 434 & S. 666) in support of economic development in Sub-Saharan Africa (African Growth and Opportunity Act, 1999) have been approved by the U.S. Congress and signed by the president. Among U.S. investors who accompanied him to Africa were several African-American business leaders, who enthusiastically applauded the notion of U.S. investments in Africa (Coleman, 1998). As the desire for U.S. investments in Africa gathers momentum, the need to learn and understand the leadership behavior of these African countries will begin to emerge. Foreign investors need to know the cultural work values of the African workforce in order to prepare their expatriate employees for assignments in these countries (Osuoha, 2000). Since most U.S. firms send their most talented managers to these overseas assignments, failure of these managers to perform effectively will result in both monetary and business losses.

One of the most politically significant countries in Africa that may likely attract a lot of foreign investors is Nigeria. Nigeria is Africa's most populous country (has about one-fourth the population of the entire continent) and has an abundance of mineral resources (Compton's Encyclopedia, 1999). Foreign Direct Investment (FDI) in Nigeria is estimated at about US $50 billion, with the U.S. share of this amount at about 26% (Maps N' Facts, 1995). Nigeria has the potential to become the largest market in Africa for foreign goods and services. There is the probability that foreign industrialists would rush into Nigeria to establish businesses, and take advantage of the cheap labor prevalent in the country since the military dictatorship, which governed the country for the past two decades, has handed over power to an elected civilian government (Osuoha, 2000).

2.1 Leadership Leadership is the ability of an individual to inspire and influence the thinking, attitude, and behavior of other people (Bennis & Nanus, 1985; Yukl, 1989). A leader's principal objective is to assure synergy in his or her organization,

and draw from the joint efforts of people working together a result that is more than the sum of the individual efforts put together (Koontz & Fulmer, 1975). In the words of Bennis and Nanus (1985: 3):

Leadership is like beauty, it is hard to define, but you know it when you see it. the new leader is one who commits people to action, and who converts followers into leaders, and who may convert leaders into agents of change.

Bennis and Nanus studied ninety successful business leaders, mostly from top Fortune 200 companies. Through intensive interviewing, these leaders revealed how they viewed their roles in their various organizations. Bennis and Nanus developed four areas of competence shared by all these successful leaders which include the following: 1) Attention through vision-all the leaders studied were agenda driven and unparalleled results oriented. Their vision and intensity were magnetic and attracted followers towards them. 2) Meaning Through Communication-effectively communicating one's leadership vision induces enthusiasm and commitment from followers. 3) Trust Through Positioning-positioning is the set of actions necessary for implementing the leader's vision. A leader must establish reliability, demonstrate predictability and accountability in order to be trusted by followers. 4) Deployment of Self- leaders must recognize their strengths and weaknesses. While leaders continue to develop their strengths, they must compensate for their weaknesses through competent staff.

To some people, leadership may mean power, authority and control (Adizes, 1988; Earley & Erez, 1997), while to others, it means motivating subordinates to act by non-coercive means. Mainiero and Tromley (1989, p.159) stated that "a leader is someone who is able to size up a situation quickly (often in the absence of information), define a direction to pursue, and mobilize subordinates' energies towards the achievement of a particular goal".

Hersey and Blanchard (1993) view the leadership process as a function of the leader, the follower, and the situational variables. They emphasized that "the style of the leader" is the key to effective leadership, and that the best style of leadership is one that maximizes productivity, satisfaction, growth and development in all situations.

The major approaches of leadership includes the Trait theory of leadership, the Behavioral, Situational or Contingency, Transformational, and the Cultural Contingency approaches. The Cultural Contingency approach targets on the effect of cultural values and beliefs on the leadership style of a leader.

The Trait Approach: This approach is characterized by the certain unique qualities of the persons that made them great leaders, for example Winston Churchill, Mahatma Gandhi, George Washington, and Franklin Roosevelt were among great leaders who used their leadership skills in the building of their nations, while Thomas Watson, Edwin Land, Alfred Sloan, Lee Iaccoca etc. will always be remembered for their leadership skills in building successful business organizations. The trait approach claimed that leadership attributes were inherited, and limited to individuals who possessed extraordinary abilities, such as tireless energy, great intuition and extraordinary persuasive ability.

The Behavioral Approach: The behavioral approach focused on what leaders can do but not what leaders are. The behavioral study examines a leader's behavior and its impact on subordinate performance and satisfaction. The behavioral approach became a major research activity at the Ohio State University (Fleishman 1953a; Fleishman, Harris, & Burt 1955) and the University of Michigan (Bowers & Seashore, 1966; Likert, 1961, 1967). The Ohio State University studies will be reviewed in detail later in this paper.

Situational Contingency Approach: The situational contingency approach specifies situational factors that make certain leader behavior more effective. Fiedler (1967) provided a framework for effectively matching the leader's behavior with the situation to determine leadership effectiveness. After studying the leadership styles of hundreds of leaders who worked in different contexts, mainly in the military, the situation in which they worked, and their leadership effectiveness, Fiedler empirically determined leadership styles that were good and bad within the organizational context. He used the Least Preferred Co-worker (LPC) scale, which measured leaders' attitudes toward their least-preferred co-worker to evaluate leadership styles of managers. Leaders with high scores were rated relationship-oriented and those with low scores were rated task-oriented. The conditions that influenced the effectiveness of the leadership behavior depended on a combination of: (a) leader-member liking, (b) the degree of task structure, and (c) the position power of the leader.

Transformational Leadership Approach: Transformational leadership is part of the "New Leadership" paradigm (Bryman, 1992), a process that changes the attitude of individuals in organizations towards commitment to organizational missions, objectives and strategies (Bass, 1985; Yukl, 1989). It focuses on values, long-term goals and vision. Transformational leadership uses vision, charisma, inspirational motivation, intellectual stimulation or individualized consideration to inspire followers to go beyond the call of duty in discharging their responsibilities, and achieving organizational goals.

2.3 The Ohio State University Studies

An extensive research program, which focused on what leaders can do but not what leaders are started at the Ohio State University (Fleishman, 1953a; Fleishman, Harris $ Burtt, 1955) and the University of Michigan (Bowers & Seashore 1966; Likert 1961, 1967) in the 1960s to investigate the behavioral approach to leadership. The Ohio State University researchers, (Fleishman, 1953a; Fleishman & Harris, 1962; Fleishman & Peters, 1962), defining leadership as the behavior of individuals when influencing a group of followers towards goal attainment described leader behavior in two dimensions: Initiating Structure and Consideration. Fleishman and Peters (1962: 127) defined these two factors of leadership as follows:

President Barack Obama: Transformational Leader

Management Theories Demonstrated in Obama's First 100 Days

During his first 100 days, President Obama showcased several models of leadership theory; not the least of which was transformational and charismatic leadership

Since he took the oath of office, President Barack Hussein Obama has embodied several models of leadership theory; one of those leadership theories is transformational-charismatic leadership. Arianna Huffington (2009) wrote: ―…any list of the most impressive achievements of Obama's first 100 days should start with the intangible qualities of transformational leadership.‖

Characteristics of Transformational and Charismatic Leadership

Peter Northouse (2004) wrote that transformational leadership is ―the process whereby an individual engages with others and creates a connection that raises the level of motivation and morality in both the leader and the follower." Additionally, transformational leadership is often seen as synonymous with charismatic leadership. First identified by German sociologist Max Weber, charismatic leadership is ―a special personality characteristic that gives a person…exceptional powers that result in the person being treated as a leader‖ and according to Robert House (1976) displays characteristics of ―being dominant, having a strong desire to influence others, being self-confident, and having a strong sense of one‘s own moral values." The same type of intangible qualities that Huffington attributed to President Obama.

President Obama Benefits from Personal Charm and Charisma

John T. Woolley and Gerhard Peters (2009) are currently involved in a special research project regarding the American Presidency called An American President Project Exclusive Analysis sponsored by the University of California, Santa Barbara (UCSB). In their analysis of Obama's first 100 days, they observed that President Obama excelled in how he communicated with the American people, they wrote:

"Obama has benefited from skillful oratory, personal charm and charisma…He has mixed old and new media strategies to sustain and build popular support…Obama and his communications team have been clever at devising novel ways to present Obama in a sympathetic light. In confronting the contemporary era of fragmented media of communication, the president has shown a savvy ability to 'find the audience,' as opposed to expecting the audience to come to him. Obama has appeared on the 'Tonight Show' with Jay Leno. He publicly chose his NCAA basketball tournament picks on ESPN. He reached out to the Latino community by appearing on Spanish language television." President Obama stays accessible through New Media Technologies

Furthermore, Woolley and Peters show how President Obama attempted to stay accessible to the American people and others by (a) actively engaging the Internet generation through media technologies like YouTube and MySpace; (b) traveling abroad more than any preceding president; and (c) attending 87 public events, all of which happened during his first 100 days in office

In his acceptance speech delivered in Chicago's Grant Park, newly chosen President-elect Barack Hussein Obama threw down the gauntlet and declared, "A new dawn of American leadership is at hand" (DeFrank, 2008). Indeed,

with expectations for his incoming administration at a historic high (Ruggeri, 2009), the unprecedented election of Barack Obama as the 44th President of the United States of America was met with heightened euphoria and emphatic hallelujahs (DeFrank). Undoubtedly some wondered, "Can he truly live up to all the hype and handle well the monumental task at hand?" From day one, the ills of the nation and the planet called all his leadership skills into practice; putting his bold promise of "a new kind of American leadership" clearly on the line.

President Obama Active from Day One in Office

For the most part (whether one agrees or disagrees with his policies or accomplishments) President Obama attempted to fulfill his pledge to be that new kind of presidential leader (Conrad & Holder, 2009). From the first day he sat down in the Oval Office, Obama's works were characterized by an ambitious agenda and decisive action through which he showed evidence that the office of the American presidency requires carefully formulated combinations of leadership approaches (Conrad & Holder). Consequently, in his first 100 days, President Obama demonstrated a number of well-recognized leadership models including the five highlighted below:

Charismatic/Transformational Leadership Theory

Charismatic/Transformational Leadership Theory demonstrated in just about everything "from the president's

personal equanimity …to his masterful use of the bully pulpit" (Huffington, 2009). "Charismatic leadership is a

unique personality characteristic that gives a person a leader" (Weber as cited in Northouse, 2008).

powers that result in the person being treated as

exceptional

Contingency Leadership Theory

Contingency Theory in so far as he showed a knack "of capturing the essence of a moment and delivering exactly what it demands" (Conrad & Holder; Winston, 2009) e.g. seizing the moment to force GM and Chrysler (which received substantial amounts of federal aid to keep operating) to endorse part of his environmental policy by accepting an accelerated time table for new MPG standards (Garrett, 2009).

Leader-Member Exchange Theory

Leader-Member Exchange Theory (LMX) in that he worked with individual staff members including Vice President Joseph Biden and White House Chief of Staff Emmanuel Rohm.

Team Leadership Theory

Team Leadership Theory in that he worked with (a) the ordinary teams of the presidency including his White House staff, his appointed Cabinet, the National Security Council and (b) specialized task forces like his team of economic advisors (which actually began working before the president the president took the oath of office) (Sahadi, 2008).

Cross-cultural Leadership Theory

Cross-cultural Leadership Theory demonstrated (a) in his inaugural speech through which he spoke directly to enemies of Western values and made promises to "the poor nations of the world"(Obama, 2009; Lawson, 2009), (b) in his first appearance at the G20 summit where he attempted to begin "healing bruised relations with American allies" (Parsons, 2009), and (c) in receiving of heads of state representing various countries and cultures around the world e.g. Israeli Prime Minister Netanyahu (Mitnick, 2009).

Global Consciousness

One aspect of leadership at a global level is an understanding of the larger system implications of our actions. Corporate leaders are having as much impact across countries as our political systems, and in many cases, far more. How one develops the large system sensitivity to begin to understand the economic, social, and environmental implications of the work you do at a global level?

The one thing one must find is the positive global intention that is carried during the planning of global activities. Because of the size and scope of the potential impacts and subsequent changes of our actions, it is probably impossible for one person to imagine the overall consequences. This is further limited by the fact that individually, all the predictions are based on the unique worldview, filled with own cultural experience. The challenge of a global leader is to hold the multiple interests at heart and begin to see the possibilities of how groups of people who are seemingly very different can work together to accomplish an overall higher goal.

References:

Conrad, J. and Holder, G. (2009). President Obama: A New Kind of Leader. TheFragileMind.org.

DeFrank, T. (2008). Democrat Barack Obama wins historic presidential election over Republican John McCain. NyDailyNews.com.

Huffington, A. (2009). Obama‘s First 100 Days: The Good, the Bad, and the Geithner. HuffingtonPost.com.

Mitnick, (2009). Obama demands that Israel stop settlements. How feasible is that? Christian Science Monitor.

Northouse, P. G. (2004). Leadership: Theory and Practice 3rd Edition. Thousand Oaks, California: Sage Publications.

Obama, B. H. (2009). Inaugural Address.

Parsons, C. (2009). Obama at G-20 summit: Popular president, unpopular plan. Los Angeles Times: World.

Ruggeri, A. (2009). Barack Obama Faces Historically High Expectations As President. U.S. News & World Report.

Sahadi, J. (2008). Obama names his economic team. CNNMoney.com.

CHAPTER 3 CROSS CULTURAL NEGOTIATION The word ―negotiation‖ has originated from the Roman word negotiari meaning ―to carry on business‖ and is derived from the Latin root words neg (not) and otium (ease or leisure). A modern definition of negotiation is two or more parties with common (and conflicting) interests who enter into a process of interaction with the goal of reaching an agreement (preferably of mutual benefit). John Kenneth Galbraith said ―Sex apart, negotiation is the most common and problematic involvement of one person with another, and the two activities are not unrelated.‖ negotiations is a decision making process that provides opportunities for the parties to exchange commitments or promises through which they will resolve their disagreements and reach a settlement. Negotiation consists of two distinct processes:

Creating value and claiming value. Creating value is a cooperative process in which the parties in the negotiation seek to realize the full potential benefit of the relationship. Claiming value is essentially a competitive process. The key to create value is finding interests that the parties have in common or that complement each other, then reconciling and expanding upon these interests to create a win-win situation. Parties at the negotiating table are interdependent. Their goals are locked together. A seller cannot exist without a buyer. The purpose of a negotiation is a joint decision-making process through which the parties create a mutually acceptable settlement. The objective is to pursue a win-win situation for both parties.

Negotiations Take Place within the context of the four Cs: Common interest, conflicting interests, compromise, andcriteria (Moran and Stripp, 1991). Common interest considers the fact that each party in the negotiation shares, has, or wants something that the other party has or does. Without a common goal, there would be no need for negotiation. Conflict occurs when people have separate but conflicting interests. Areas of conflicting interests could include payment, distribution, profits, contractual responsibilities, and quality. Compromise involves resolving areas of disagreement. Although a win-win negotiated settlement would be best for both parties, the compromises that are negotiated may not produce the result. The criteria include the conditions under which the negotiations take place. The negotiation process has few rules of procedure. Rules of procedure are as much a product of negotiation as the issues. Over time, the four Cs change and the information, know-how, and alternatives available to the negotiating international company and the host country also change, resulting in a fresh interpretation of the four Cs, the environment, and the perspective. In essence, negotiation takes place within the context of the political, economic, social, and cultural systems of a country.

The theory of the negotiation process includes the following dimensions:

1. Bargainer characteristics,

2. Situational constraints

3. The process of bargaining, and

4. Negotiation outcomes.

These theories are based on parties who share certain values and beliefs based on their culture. These factors

operates in business and economic situations that have cultural influences, and they act in certain culturally emblazoned ways. We bargain when:

1. A conflict of interest exists between two or more parties; that is, what one wants is not necessarily what the other

one wants.

2. A fixed or set of rules or procedures for resolving the conflict does not exist, or the parties prefer to work outside

of a set of rules to invent their own solution to the conflict.

3. The parties, at least for the moment, prefer to search for agreement rather than to fight openly, to have one side

capitulate, to permanently break off contact, or to take their dispute to a higher authority to resolve it.

In summary, negotiations primarily consists of five aspects:

1. Goals: motivating the parties to enter;

2. The process of negotiating that involves communications and actions;

3. Preexisting background factors of cultural traditions and relations; and

4. Specific situational conditions under which the negotiation is conducted.

3.2 Importance Of Negotiations

The importance of negotiation can be understood by an example of Rolls Royce. The two parties to a great extent wanted the engine contract for Lockheed‘s L-1011 airliner. Despite repeated warnings from their own engineers, they made concession after concession. They ended up with a contract that any rational engineer would have known was ridiculous. They agreed to go well beyond the existing state-of-the-art on a low-margin, fixed-price contract. When the nearly inevitable cost overruns occurred, they found that they were selling each engine for substantially less than it cost to build. This contract (and various other mistakes) literally drove Rolls Royce, a famous name and a fine engineering firm, into bankruptcy. The Lockheed negotiators naturally felt they had negotiated very well. However, they had actually made an extremely costly mistake. By driving the price so low, they bankrupted a key supplier, could not meet their commitments to their own customers, and ultimately lost $2.5 billion on the L-1011. The moral is quite clearif a deal is too good for any side, it is probably bad for both of them. Experience by itself is insufficient unless it is transformed into expertise. Arbitration is another form of negotiation and one of the most widely used methods of settling disputes. It is basically a process where two groups or persons agree to submit the dispute to a non-aligned third person and further agree that they will carry out that third person‘s decisions. Arbitration avoids going to court and the uncertainties of an unknown legal system. International arbitration has a time-tested set of rules and procedures to govern the arbitration, the organization to manage the proceedings, and an established group of experienced arbitrators.

3.21 Cultural Influences in Negotiations

Inter cultural is when two individual interact. In some countries, negotiating is seen in practically every transaction,

whether it is buying fruits or buying industries. Intercultural negotiations exist because people think, feel, and behave differently reaches agreements on practical matters. In every negotiation the participants have different points of view and different objectives. When the negotiation is done in the home country it is accelerated communications by making logical cultural assumptions. The situation reverses when two cultures are involved in negotiation leading to misunderstandings and miscommunications. The international negotiator must be careful about cultural stereotypes Needs, values, interests and expectations may differ radically. Some cultures are likely to search for compromise while others will strive for consensus and still others will fight until surrender is achieved. Some cultures prefer a deductive approach: first agree on principles and later these principles can be applied to particular issues. Other cultures think inductively: deal with problems at hand and principles will develop.

3.3 How Culture Impacts Negotiation

· By conditioning one‘s perception of reality

· By blocking out information inconsistent or unfamiliar with culturally grounded assumptions · By projecting meaning onto the other party‘s words and actions

· By impelling the ethnocentric observer to an incorrect attribution of motive

Culture influences negotiation through its effects on communications and through their conceptualizations of the process, the ends they target, the means they use, and the expectations they hold of counterparts‘ behavior. Culture affects the range of strategies that negotiators develop as well as the many ways they are tactically implemented. In an international negotiations, you bring to the negotiating table the values, beliefs and background interference of your culture and normally will unconsciously use those elements in both the presentation and

interpretation of the data, interpreting and judging the other culture by your own standards. Nations tend to have a national character that influences the types of goals and processes pursued in negotiations. Israeli preference for direct forms of communication and the Egyptian preference for indirect forms exacerbate relations between the two countries. The Egyptians interpreted Israeli directness as aggression and were insulted; the Israelis viewed Egyptian indirectness with impatience and viewed it as insincere. Thus, negotiation rules and practices often vary widely across cultures. Thus cross-cultural negotiators bring into contact unfamiliar and potentially conflicting sets of categories, rules, plans, and behaviors. The cross-cultural negotiator cannot take common knowledge and practices for granted. Difficulties sometimes arise from the different expectations negotiators have regarding the social setting of the negotiation. These patterns can extend to styles of decision making (the way officials and executives structure their negotiation communication systems and reach institutional decisions) and logical reasoning (way issues are conceptualized, the way evidence and new information are used or the way one point seems to lead to the next, paying more attention to some arguments than others, different weight to legal, technical, or personal relations).

3.4 Dimensions of Culture

Hofstede1 devised four cultural dimensions which could explain much of the differences between cultures:

masculinity, uncertainty avoidance, power distance and individualism. Masculine cultures value assertiveness, independence, task orientation and self achievement (traditional ‗masculine‘ characteristics) while feminine cultures value cooperation, nurturing, relationships solidarity with the less fortunate, modesty and quality of life (traditional ‗feminine‘ characteristics). Masculine societies tend to have more rigid division of sex roles. Masculine cultures subscribe to ‗live-to-work‘ while feminine societies subscribe to ‗work-to-live.‘ The competitiveness and assertiveness embedded in masculinity may result in individuals perceiving the negotiation situation in win-lose terms. Masculinity is related to assertiveness and competitiveness while femininity is related to empathy and social relations; a more distributive process is expected in masculine societies where the party with the most competitive behavior is likely to gain more. The most masculine country is Japan, followed by Latin American countries. The

most feminine societies are the Nordic countries. Uncertainty avoidance refers to the degree to which one feels uncomfortable in risky and ambiguous (uncertain, unpredictable) situations, favors conformity and safe behavior, and tolerates deviant ideas. In high uncertainty avoidance cultures, people tend to avoid uncertain situations while in low uncertainty avoidance cultures, people are generally more comfortable with ambiguous uncertain situations and are more accepting of risk. Low risk-avoiders require much less information, have fewer people involved in the decision-making, and can act quickly. High risk-avoidance cultures tend to have lots of formal bureaucratic rules, rely on rituals, standards and formulas and trust only family and friends. People in low uncertainty avoidance societies dislike hierarchy and typically find it inefficient and destructive. In weak uncertainty avoidance cultures, deviance and new ideas are more highly tolerated. Uncertainty avoidance may lead to focus on the obvious competitive and positional aspects of negotiation and may hinder the exchange of information on interests and development of creative proposals. A problem solving orientation is likely to be found in cultures characterized by low uncertainty avoidance and low power distance. The United States, the Nordic nations, Hong Kong, and Singapore all have low uncertainty avoidance. Power distance refers to the acceptance of authority differences between people; the difference between those who hold power and those affected by power. In low power distance one strives for power equalization and justice while high power distance cultures are status conscious, respectful of age and seniority. In high power cultures, outward forms of status such as protocol, formality, and hierarchy are considered important. Decisions regarding reward and redress of grievances are usually based on personal judgments made by powerholders. Power distance implies a willingness to accept that the party which comes out most forcefully gets a larger share of the benefit than the other party. A low power distance culture values competence over seniority with resulting consultative management style. Low power distance cultures include the Anglo-American, Nordic, and Germanic cultures. High power distance cultures are Latin America, South Asia, and Arabic cultures. Low masculinity and low power distance may be related to the sharing of information and the

offering of multiple proposals as well as more cooperative and creative behavior. High masculinity and high power distance may result in competitive behavior, threats, negative reactions.

3.41 Variables Influencing Cross-Cultural Negotiations

Two groups of variables influence he process of international business negotiation:

1. Background factors, which include the parties and their objectives, often categorized as being common, conflicting, or complementary. Other aspects include third parties involved, such as consultants, agents, and the respective government. The position of the market (seller‘s vs.buyer‘s) and finally, the skills and experience of the negotiators.

2. Atmosphere is the perceived ―milieu.‖ It can include the perceived cooperation/conflict—that the parties have something to negotiate for and something to negotiate about; power and dependencethat one of the parties gains more power in the relationship; and perceived distancethat the parties are unable to understand each other; and finally, the expectations, long-term expectations of the true deals or benefits and short-term expectations concerning the prospects of the present deal. Twelve variables in the negotiation process lead to understanding the international negotiating styles better.

3.42 Intercultural Implications of Negotiations

· A situation.

· The appreciation of cultural differences is essential in cross cultural situations.

· Mutual understanding.

· A conscious endeavor to manage cultural differences is required.

· Communication.

· Both parties must be in a position to communicate clearly and overcome cultural barriers to effective communication.

· Need satisfaction.

· One must ascertain expectations and then work for their achievements.

· Compromise or settlement.

· One must narrow down differences and emphasize commonalities of interest.

· A deal.

· Both written and unwritten aspects of negotiation are important

· A bargaining process.

· One must be prepared to give and take.

· Anticipation.

· You must familiarize yourself with management styles and assumptions of others to anticipate their moves.

· Persuasion.

· You must establish your credibility and be soft while not losing your grip on the problem.

· Achieving consensus.

· You must reduce differences to reach an agreement.

· Practicing empathy

· You must appreciate the problems and limitations of your ―opponents.‖

· Searching for alternatives.

· You should be systematic and simple

· Conflict management

· It is possible to manage conflicting interests.

· Winning.

· It can create problems and generate bad feelings.

· A means of getting what you

· It also means giving what others want from others. Expect of you.

· Gaining the favor of people

· It is easier to gain favors while acting in a from whom you want nothing, genuine and rational manner.

· Managing power and information.

· You should know in advance the limitations of your power.

· Time and opportunity

· Timely actions based on opportunity management. Analysis provide the needed edge in highly competitive situations.

·

Selling.

·

You should create the need first.

· The least troublesome method· The use of intercultural negotiating styles, of settling disputes. modes, and skills is important.

Effective international negotiators understand that negotiation, first and foremost, is not about numbers or terms or dates but personal relationships. It is about developing relationships of trust and mutual respect. He or she must become relationship oriented rather than deal oriented. The problem with deal orientation is that the difficulty of creating and enforcing a legal agreement across multiple legal and government jurisdictions can be insurmountable. A deal orientation is essentially static in nature while the world is dynamic. Negotiators who have an effective ongoing relationship will be able to agree to disagree and not have the disagreement negatively affect their relationship. Therefore, working on developing solid mutually beneficial relationships is the first step to traveling the road to success. The effective international negotiator knows how to probe, how to ask questions, and how to listen. He or she seeks areas where needs are mutual and hence, easiest to satisfy, as well as being the first step towards establishing trust and relationships. Once mutual needs are established, meeting individual needs can begin to be accomplished. Sharing of information is crucial towards success. Effective international negotiators have staying power. They recognize that things take longer to communicate across cultures, that relationship building can be a time consuming process, that the long-term perspective must be pursued. They must remain calm, not lose sight of the ultimate objectives of the negotiation, be flexible and willing to accept new conditions, remain on the creative lookout for needs, and communicate a commitment to the negotiation and the satisfaction of mutual needs. Experienced international negotiators create agendas in advance and try to get buy-in from the other side on the agenda before the actual start of the negotiation.

References:

Parker B, (2005), Introduction to Globalization and Business, Sage Publications Hodgetts, Luthans Doh, 2005, International Management, 6 th Edition, Tata McGraw Hill Tayeb, M. (2003). International Management: Theories and Practice. Prentice Hall. Todaro, M. P. (2000). Economic Development, 7 th Edition. Pearson Education Limited. ISBN: 0-201

64858-X.

CHAPTER 4 ROLE OF ETHICS IN CROSS CULTURAL MANAGEMENT The cultural variables described above result from unique setsof shared values among different groups of people. Most of the variations stem from underlying value systems, which cause people to behave differently under similar ircumstances. Values are a society‘s ideas about what is good or bad, right or wrong. Values determine how individuals will probably respond in any given circumstance. As a powerful component of society‘s culture, values are Communicated through the cultural values already discussed and are passed on from generation to generation. These value dimensions can again prove to be a powerful tool for understanding cultural diversity. There are several value dimensions available from the research work undertaken by the researchers. These are explained:

4.1 Hofstede‘s Value Dimensions

G. Hofstede has analyzed IBM employees in 53 countries in the world and showed differences in values between Countries. This is reflected in four dimensions given by him. These value dimensions as proposed by Hofstede

provide a useful framework for understanding the workforce diversity. The value dimensions proposed by him are:

· Power Distance

· Uncertainty Avoidance

· Individualism

· Masculinity

4.11 Power Distance

It is the level of acceptance by a society of the unequal distribution of power in institutions. The extent to which the

subordinates accept unequal power is societally determined under this dimension. In the countries where people display high power distance, employees acknowledge the boss‘s authority simply by respecting that individual‘s

formal position in the hierarchy, and they seldom bypass the chain of command. This respectful response results in

a centralized Structure and autocratic leadership. In countries where people display low power distance, superiors

and subordinates are apt to regard one another equal in power, resulting in more harmony and cooperation. Hence, an autocratic management style is not likely to be well received in low-power distance countries. The characteristics differences between high power distance and a low power distance countries can be observed as follows:

Countries with low power distance in- Countries with high power distance include India, France, Japan, Pakistan, etc. clude-USA, UK, Denmark Austria, etc.

Low Power Distance Countries Lesser inequalities among people. Interdependence between less powerful and more powerful people Emphasis on decentralization. Flatter organization structures. Parents treat children as equals. Supervisory personnel are lesser in pro- portion among the workforce proportion. Countries with low power distance include USA, UK, Denmark Austria, etc.

High Power Distance Countries Inequalities among people exist and are desired. Dependence of less powerful people on more powerful people

Centralization is popular. Taller organization structures. Parents teach children to be obedient. Supervisory personnel constitute large

Countries with high power distance include India, France, Japan, Pakistan, etc

It refers to the extent to which people in society feel threatened by ambiguous situations. Countries with a high level of uncertainty avoidance tend to have strict laws and procedures to which people adhere closely, and there is strong sense of nationalism. In a business context this value results in formal rules and procedures designed to provide more security and greater career stability. Managers have propensity for low-risk decisions, employees exhibit little aggressiveness and lifetime employment is common. In countries with lower levels of uncertainty avoidance nationalism is less pronounced, and protests and other such activities are tolerated. As a consequence, company activities are less structured and less formal, some managers take more risks, and there is high job mobility. The differences between countries with low uncertainty avoidance and high uncertainty avoidance can be studied as under:

Low Uncertainty Avoidance Countries Less incidence on rules and regulations. Risk-taking attitude. High labour turnover. More ambitious employees. Encouragement to employees for assuming responsibilities. Flatter organization structure. Countries with low uncertainty avoidance UK, etc.

High Uncertainty Avoidance Countries High incidence on rules and regulations. Risk-averting attitude. Low labour turnover. Less ambitious employees. People shirk responsibilities.

Taller organization structure. Countries with high uncertainty avoidance include-India, USA,include- Japan, Pakistan, Israel, Austria, etc.

4.13 Individualism This refers to the tendency of people to look after themselves and their immediate family only and neglect the needs of society. In the countries that price individualism, democracy, individual initiative and achievement are highly valued; the relationship of the individual to organizations is one of independence on emotional level, if not on an economic level. In the countries where low individualism prevails, there exist a tight social framework, emotional dependence on belonging to―the organization,‖ and a strong belief in group decisions. People from collectivist countries believe in the will of the group rather than that of the individual and their pervasive collectivism exerts control over individual members through social pressure and fear of humiliation. The society values harmony and saving face, whereas individualistic cultures emphasize self-respect, autonomy and independence. Hiring and promotion practices in collectivist societies are based on paternalism rather than achievement or personal capabilities, which are valued in individualistic societies. Other management practices reflect the emphasis on group decision-making processes in the collectivist societies. Differences in focus in individualism and collectivism are explained in the followingTable. Individualism 1) Individual take care of self and family. (2) 'I', consciousness. (3) Independence of individual from organisation. (4) Need for selective friends. (5) Greater individual initiative. (6) Protestant work ethic. (7) Tasks take precedence over relationships. (8) Promotions are based on merit and performance. (9) Countries include USA, UK, Australia, etc.

Collectivism

(1)

Interest of group.

(2)

'We', consciousness.

(3)

Dependence on organization.

(4)

Social relationships.

(5)

Less individual initiative.

(6)

Less support for protestant work ethic.

(7)

Relationships prevail over task.

(8)

Promotions are seniority-based.

(9)

Countries include Japan, Taiwan, Pakistan, etc.

4.14 Masculinity

This refers to the degree of traditionally ―masculine‖ values assertiveness, materialism, aggressiveness and a lack of concern for others -that prevail in society. In comparison, ―femininity‖ emphasizes ―feminine‖ values-a concern for others, for relationships, nurturing, care for weak and for quality of life. In highly masculine society women are expected to stay at home and raise family. In organizations, one finds considerable job stress, and organizational interests generally encroach on employee‘s private lives. In countries with low masculinity, one finds less conflict and job stress, more women in high-level jobs, and a reduced need for assertiveness. The degree of masculinity affects in the following characteristic ways:

High Masculinity Career is considered as most important. Individual decision-making Is emphasized. Achievement is given importance and is defined in terms of money and recognition. Countries with high masculinity include- India, Japan, USA, UK, etc.

Low Masculinity Work needs take precedence. Importance is placed on cooperation and Employee security gets precedence. Group decision-making is emphasized. friendly atmosphere. Achievement is defined in terms of human include contacts and living environment. Countries with low masculinity Denmark, Norway, Sweden, etc.

These Hofstede‘s values do not operate in isolation; rather, they are interdependent and interactive. Hofstede provides a framework for understanding cultural diversity across nations. An awareness of the differences on these important characteristics between cultures can help to develop a strategy for tackling them. Hofstede dimensions provide a framework for prediction of many kinds of behavior in cross-cultural organizational settings. Some Examples Are:

(a) Japanese are with less power distance, highly task-oriented, and with low tolerance for uncertainty. The

behavior of Japanese bears this out. They believe in consensus. Cross cultural negotiator must respect different cultures. He must develop high tolerance for ambiguity and have patience to get clarity.

(b)

In France, punctuality in business and social interaction is important. Neatness and taste is the key.

(c)

In Middle-East, when interacting with Arabs maintain strong eye contact. Do not gesture with left hand. Do not

point sole of your foot to some one. They are emotional and easily outraged by slightest provocation. Do not make

enquiries about Arab‘s wife or daughters or discuss your own.

(i)

Large power distance: Indians look for approval from superior, as have low self-esteem. Boss is

benevolentautocrat and has more privileges.

(ii)

Weak uncertainty avoidance: Each day is taken as it comes and not feared from.

(iii)

Somewhat collectivitist tendencies but with individualistic streaks, expect protection from organization and

colleagues.

(iv) Indian culture is affected by region, faith, religion, climate, language, and gradations of society, education and

history. Core values of Indian culture are tolerance hallmark of society, faith in respective religions, emphasis on liberty and equality, respect for elders and religious teachers, faith in superstitions, recognition of achievements and actions, spiritualism, indifference towards health and cleanliness. Indians also feel that small is good and they care

more for tomorrow than today as compared to- many other cultures.

(e) Americans value directness, openness, independence and informality and hence possess:

(i) Low power distance: They believe in quick decision making and may not consult any superior before taking

decision.

(ii) Individualism: They believe in individual rewards, responsibilities and even the teams have to be designed

keeping in view their individualistic tendencies.

b. Geographic Clusters Nath and Sadhu categorised the four value dimensions given by Hofstede as well as those given by some other

researchers, by geographic region. The results of their study coincide with the Hofstede‘s value dimensions. Ronen and Shenkar developed eight country clusters grouped according to the similarities in the attitudes of the employees.The attitudinal dimensions used by the two were:

· The importance of work goals.

· Need fulfilment and job satisfaction.

· Managerial and organisational variables.

· Work role and interpersonal orientation.

Also GNP of the countries was used to place the countries in the figure, the most developed nations close to the center. This approach again provided the basis for understanding the individual cultures but did not help much in

comparing and contrasting the various cultures effectively and to the fullest.

4.2 Trompenaar‘s Value Dimensions

Trompenaar through his research work gave another set of value dimensions. These 4 dimensions are as follows:

· Universalism versus particularism

· Neutral versus Affective

· Specific versus Diffuse

· Achievement versus Ascription

4.21 Universalism versus Particularism

This dimension deals in type of orientation towards obligation. The two aspects can be characterized as in the following table:

Universalism Rules Legal Systems Contracts ―Higher Obligations‖ ―Objectivity‖ One right way

Particularism Relationships Personal Systems Interpersonal Trust Duty to friends, family, etc. Relativity Many ways.

Oriented towards

personal obligations

Oriented towards societal

obligation

4.22 Neutral versus Affective

This dimension focuses on emotional orientation of relationships.The following table shows the comparison

between the two aspects:

Neutral Physical contact reserved for close friends and family Subtle communication ―Hard to read‖

Affective Physical contact more open and free Expressive; vocal Strong body language

4.23 Specific versus Diffuse

This dimension relates to the people‘s involvement in relationships. The table below contrasts the two aspects:

Specific Direct Confrontational Avoid Open; extrovert Separate work and private life

Diffuse

Indirect direct confrontation More closed; introvert Link private and work life

4.24 Achievement versus Ascription

This dimension examines the source of power and status in the society. The two aspects differ in the following manner:

Achievement

Status based on competency and achievements Status based on position, age, schooling or other criteria

Ascription

Other Factors Affecting Cross-culture Differences Besides values dimensions another way to study and understand cultural diversity is on the basis of certain culturally based variables that cause frequent problems for the people in international management. These factors

are:

Temporal Factors This relates to the degree to which the various nations believe in ―Time is money‖ concept. Two diverse approaches to time exist are:

· Monochromic

· Polychromic

Monochromic time represents the ordered, precise, schedule driven view of time. Such cultures are characterized by precise appointments, tight calendar and promptness. They stick to the schedule and never waste time. Polychromic time is the view that the time is a vague element that is caught up in the multiple, cyclical, and concurrent involvement of different people. Such cultures lack precision in time, linger on the jobs, waste lot of time and never stick to schedule.

Material Factors

The material elements of the culture are composed of those things used to organize its economic activities. It involves these things and objects people love using. These at the same time may include various infrastructural facilities, natural resources and so on. The attitude of various nations towards the usage of these resources varies. Such differences have implications for management functions, such as motivation and reward systems.

Aesthetics Aesthetics deals with the culture‘s sense of beauty, which is depicted through folklore, myth, legends and expressions of arts, etc. Change This refers to the attitude of the culture towards change. The values regarding acceptance of change and pace of change may vary across cultures. Cultures with internal locus of control, that is which believe that they themselves can control the future, tend to take the change easily and with speed but it is not the case with cultures having external locus of control. Language The language not only relates to the spoken language but also unspoken language which includes facial expression, walking, posture, hand gestures, color symbolism, proxemics, touching, eye contact, artifacts, clothing, hairstyle; cosmetics and silence.

Value Systems of Some Countries Most of the life‘s actions and interactions, whether they may be for business purpose or for personal needs, are based on several sets of cultural values developed since childhood., These sets of values have been accumulated, rewarded and enforced by the family, community, company, and country. These values differ from country to country and even within the country. The value differences playa major role in creating cultural diversity. For this reason, in the proceeding pages we have made an attempt to develop brief cultural profiles or the countries based on value systems of:

1. America;

2. Japan;

3. Middle-Eastern countries; and

4. Russia.

The value systems of these countries are also summarized. The analysis of following situations in order to point out the differences in values across cultures and their influence on daily business interactions:

I. American Value System The American value system in the decreasing order of importance or priority of values can be highlighted as follows:

· Equality

· Freedom

· Openness

· Self-reliance

· Cooperation

· Family Security

· Relationship

· Privacy

· Group Harmony

·

Reputation

·

Time

·

Competition

·

Group Achievement

·

Spirituality

·

Risk-taking

·

Authority

·

Material Possessions

·

Formality

·

Group Consensus

II

Japanese Value System

The Japanese values, in the decreasing order of priority, can be listed as follows:

· Relationship

· Group Harmony

· Family Security

· Freedom

· Cooperation

· Group Consensus

· Group Achievement

· Privacy

· Equality

· Formality

· Spirituality

· Competition

· Seniority

· Material Possessions

· Self-reliance

· Authority

· Time

· Openness

· Risk-taking

· Reputation

III. Russian Value System

The Russian values, in the decreasing order of priority, can be listed as follows: -

· Family Security-

· Freedom

· Self-reliance

· Openness

· Material Possessions

· Cooperation

· Spirituality

· Equality

· Time

· Relationship

· Reputation

·

Authority

·

Formality

·

Group Harmony

·

Group Achievement

·

Risk-taking

·

Seniority

·

Competition

·

Privacy

·

Group Consensus

IV. Middle-Eastern Value System

The priority-wise list of middle-eastern values, in the decreasing order of priority, can be listed as follows:

·

Family Security

·

Family Harmony

·

Parental guidance

·

Age

·

Authority

·

Compromise

·

Devotion

·

Very Patient

·

Indirectness

·

Hospitality

·

Friendship

·

Formality/Admiration

·

Past and Present

·

Religious Belief

·

Tradition

·

Social Recognition

·

Reputation

·

Friendship

·

Belongingness

·

Family Network

As culture has been described as a set of beliefs, values,attitudes and behavior which community adopts, these values playa major role in affecting an individual motivations, expectation or work and group relations. These values in turn also exercise influence at the organizational level.

References:

Adler, N. (2008) International Dimensions of Organizational Behavior (5th edition) Prentice Hall Browaeys, M-J and Price, R. (2008) Understanding Cross-cultural Management FT Prentice Hall French, R. (2007) Cross-Cultural Management in Work Organisations CIPD Gannon, M, and Newman, K. (2002) The Blackwell Handbook of Cross-cultural Management Blackwell Guirdham, M (2005) Communicating across cultures at work (2nd edition) Palgrave Macmillan Hofstede, G. (2001) Culture‘s Consequences: International Differences in Work Related Values Sage Hofstede, G. (2005) Cultures and Organizations McGraw Hill Jandt, F. (2004) An Introduction to Intercultural Communication: Identities in a Global Community Sage

Mead, R. (2005) International Management: Cross-cultural Dimensions (3rd edition) Blackwell Perkins, S. & Shortland, S. (2006) Strategic International HRM - choices and consequences in multinational people management London: Kogan Page. Schneider, S. and Barsoux, J-L (2003) Managing Across Cultures (2nd edition) Prentice Hall Smith, P.B. Bond, M.H. and and Kâgitçibasi, Ç. (2006) Understanding social psychology across cultures: living and working in a changing world Sage Trompenaars, F. and Hampden-Turner, C. (1997) Riding the Waves of Culture; Understanding cultural diversity in Business (2nd edition) Nicholas Brealey Ward, C., Bochner, S. and Furnham, A. (2001) The Psychology of Culture Shock Routledge. Schneider, S. and Barsoux, J-L (2002) Managing Across Cultures (2nd edition) Prentice Hall

Journals:

Cross-cultural Management International Journal of Human Resource Management International Journal of Cross-cultural Management

CHAPTER 5

MODELS OF CROSS CULTURAL MANAGEMENT

Leaders of Multi National Organizations today encounter cultural differences, which affects the smooth functioning and the success of the organization. Many researchers have conducted the study on Cross Cultural Management. They developed the approaches of Cultural Dimensions along with the dominant value system. The cultural dimensions reflect the basic of the society, the way they handle the problem which differs from culture to culture. They are similar in some respect and different in others. These approaches can be summarized as the various works of thinkers and researchers.

5.1 Hall's cultural factors

Edward T. Hall was an anthropologist who worked on the key cultural factors. During World War II the foundation for his research on cultural perceptions was laid when he served the U.S. Army in Europe and Philippines. He is known for high context cultural factors and low context cultural factors.

Context

5.11

High context

High-context culture has many related elements for people to understand the rule which otherwise can be very

perplexing for people who does not understand the 'unwritten rules' of the culture.

5.12

High context depends heavily upon:

1.

external environment

2.

situational context

3.

non-verbal behavior

4.

meaning indirectly conveyed

5.

relationships are long-lasting

6.

agreements may be verbal & changeable

5.2

Low context

In a low-context culture, very little is taken for granted. Whilst this means that more explanation is needed, it also means there is less chance of misunderstanding particularly when visitors are present.

5.21 Low context depends heavily upon:

1 External environment less important

2 Direct, often blunt communication

3 Non-verbal behavior less important

4 Explicit information given, ambiguity avoided

5 Meaning directly conveyed

6 relationships are shorter-term

Low context and High context.

 

High-context

 

culture

Low-context

 

culture

Factor

 

Many covert and implicit messages, with use of metaphor and reading between the lines.

Many overt and explicit messages

Overtness of messages

that are

simple and clear.

   
 

Inner

locus

of

control

and

personal

Outer locus of control and blame of others for failure

 

and

Locus

of

control

attribution for failure

acceptance

failure

 

for

 

Much nonverbal communication

More

focus

 

verbal

 

on

Use

of

non-verbal

communication

 

communication

than

body

 

language

 

Expression of reaction

Reserved, inward reactions

 

Visible, external, outward reaction

Cohesion separation of groups

and

Strong diistinction between ingroup and outgroup. Strong sense of family.

Flexible and open grouping patterns, changing as needed

 

Strong people bonds with affiliation to family and community

Fragile bonds between people with little sense of loyalty.

People bonds

 
 
 

High

commitment

to

long-term

Low commitment to relationship. Task more important than relationships.

Level of commitment to relationships

relationships. Relationship more important than task.

 

Flexibility

of

time

   

Time

is

highly

organized.

 

Time

Process is more important than product

is

open

and

flexible.

Product

process

is

more

important

than

5.3 High-Context versus Low-Context Cultures

Hall affirmed high-context and low-context cultures where the high and low context conception is chiefly concerned with the way information is transmitted (communicated) and where context has to do with how much you need to know before you can communicate effectively (Dahl, 2006 and www.via-web.de). All cultures are to be found in relation with one another through their communication style. ( Wurtz, 2005).

Low-context communication is primarily through verbal communication that is in written and oral most of the information is in the in the plain code. Cultures, such as Scandinavians, Germans, and the Swiss, are predominantly low-context communicators (Wurtz, 2005).

High-context communication involves implying a message through non verbal communication, that involves communication through body language, eye movement, para-verbal cues, and the use of silence (Wurtz, 2005). These transactions feature pre-programmed information that is in the receiver and in the setting, with only minimal information in the transmitted message (Hall, 1976 as presented in Dahl, 2006). Japan and Arab countries have high- context communication culture. This is the easiest concept to define culture and intercultural encounters.Hall posits, ―meaning and context are inextricably bound up with each other‖ (Hall, 2000, p. 36 as presented in Wurtz, 2005).

5.4

TROMPENAARS' CULTURAL FACTORS

5.4 TROMPENAARS' CULTURAL FACTORS ―It is still amazing how reluctant leaders are to tackle the whole

―It is still amazing how reluctant leaders are to tackle the whole issue of the intercultural realities of their organization. Deep inside, most very well understand that it is a very important, if not the most important, process in their organization.‖

Fons Trompenaars is one of the 50 most influential management thinkers alive. A Dutch culturalist has done his intensive study into international culture. He teamed with Charles Hampden-Turner (a dilemma enthusiast), to understand individuals. Professor Trompenaars premeditated and analyzed the problem resolution behaviour of the people of different culture in their specific countries and identified 7 basic dimensions for culture. When designing sales strategies International trade consultants and lawyers consider these cultural dimensions, where buyers and sellers are from different cultures. This is predominantly factual for up-and-coming markets unacquainted to deal with people from more developed countries.

5.41 Achievement vs. Ascription

Achievement culture is based on performance. High achievers are given status in Achievers and they must continue to prove their worth, as status is accorded based on their actions.Achievement-oriented countries include Austria, Switzerland, the United Kingdom and the United States.

Ascription culture is based on the assumption that status is through other means as is acquired by right rather than daily performance, which may be as much luck as judgment. Status is attributed to who or what a person is. This is based on age, gender and social connections.

5.42 Individualism vs. Communitarianism

Individualism culture is when people make their own decisions and they work for individual success. It is about the rights of the individual which seeks to let each person grow or fail on their own, and team work is seen as denuding the individual of their inalienable rights. Highly individualistic countries include Canada, the United States, the United Kingdom and France. The emphasis is on individual responsibility and decision-making, and negotiations are made on the spot.

Communitarianism culture is about the rights of the group or society. It put the family, group, company and country before the individual. It sees Communitarianism as selfless and far-sighted. Communitarianism culture prevails in the country like Japan that gives importance to the group before the individual. Success is achieved in groups, decisions are referred to committees and groups jointly assume responsibilities.

5.43. Internal vs. External

Internalistic culture people believe that what happens to them is their own doing. It is about thinking and personal judgement, ‗in our heads‘. It assumes that thinking is the most powerful tool and that

considered ideas and intuitive approaches are the best way.

Externalist culture refers to the outer world. It assumes that we live in the 'real world' and that is where we should look for our information and decisions, like the United States, Many Asian countries have an external culture in which the environment shapes their destiny. Because they don‘t believe they are in full control of their destinies.

5.44. Neutral vs. Emotional

In neutral cultures emotions are held in check, countries like Japan and the United Kingdom where people do not show their feelings.

In an emotional culture, people profusely express their feelings naturally and openly. They smile a lot while they interact, during excitement they talk loudly and show great enthusiasm while greeting people. Mexico, Netherlands and Switzerland are high-emotion countries.

5.45 Specific vs. Diffuse

People from specific cultures take specific elements into consideration. They analyze the issues separately, and then they put them back together again. In specific cultures, the whole is the sum of its parts. Interactions between people are highly purposeful and well-defined. The public space of specific individuals is much larger than their private space. People are easily accepted into the public space, but it is very difficult to get into the private space. Specific individuals concentrate on hard facts, standards, and contracts. Countries like Austria, Switzerland, the United Kingdom and the United States show a strong severance between public and private life.

People from diffusely oriented cultures start with the whole and see each element in perspective of the total. All elements are related to each other. Like most introverts, diffuse culture people guard both spaces carefully Diffuse individuals have a large private space and a small public one. The qualities that are cherished by diffuse cultures are style, demeanor, ambiance, trust, understanding, etc. China, Spain and Venezuela are examples of diffuse cultures where work and private life are closely linked but intensely protected.

5.46. Sequence vs. Synchronization

Time as sequence sees events as separate items in time, sequence one after another. It finds order in a actions

that happen one after the other. People with sequence culture will like to do one work at a time. Example USA.

Time as synchronization sees events in parallel, synchronized together. It finds order in coordination of multiple efforts. In other words people of synchronized culture will like to take multiple tasks together and they juggle with them for their completion for example in the cultures like France and Mexico.

5.51 Universalism vs. Particularism

Universalism is about finding broad and general rules. When no rules fit, it finds the best rule. Universalistic countries focus more on formal rules than relationships. Australia, Germany, Sweden and the United Kingdom are universalistic countries. America is highly universalistic

Particularism is about finding exceptions. When no rules fit, it changes according to the requirements and culture, rather than trying to force-fit an existing rule. The culture place more emphasis on relationships than rules. Countries that practise high particularism include China, Indonesia and Venezuela. Particularistic peoples believe that circumstances dictate how ideas and practices are applied. Therefore, ideas and practices cannot be applied the same everywhere.

5.48 Geert Hofstede‘s Cultural Factor

During 1978-83, the Dutch cultural anthropologist Geert Hofstede conducted detailed interviews with 1lakh 16 thousand employees of IBM in 53 countries. Through standard statistical analysis he formulated his theory that world cultures vary along consistent, fundamental dimensions. (One weakness is that he maintained that each

country has just one dominant culture.) His focus was not on defining culture as refinement of the mind (or "highly civilized" attitudes and behavior) but rather on highlighting essential patterns of thinking, feeling, and acting that are well-established by late childhood. Hofstede identified five dimensions and rated 53 countries on indices for each dimension. His five dimensions of culture are the following:

Power-distance

Collectivism vs. individualism

Femininity vs. masculinity

Uncertainty avoidance

Long- vs. short-term orientation

5.49 Power Distance (PD):

Power distance is the extent to which people with less power expect and accept people with higher power within a culture. It tends to have centralized power and reveal tall hierarchies in organizations with large differences in salary

and status. Subordinates view their boss as a benevolent autocrat and they follow him blindly. Countries with low PD are apt to view subordinates and supervisors as closer together and more compatible, with flatter hierarchies in organizations and less difference in salaries and status. Power distance may influence the following aspects

Hierarchies in mental models: tall vs. shallow.

Emphasis on the social and moral order (e.g., nationalism or religion) and its symbols: significant/frequent vs. minor/infrequent use.

Focus on expertise, authority, experts, certifications, official stamps, or logos: strong vs. weak.

Prominence given to leaders vs. citizens, customers, or employees.

Importance of security and restrictions or barriers to access: explicit, enforced, frequent restrictions on users vs. transparent, integrated, implicit freedom to roam.

• Social roles used to organize information (e.g., a managers‘ section obvious to all but sealed off from non-managers): frequent vs. infrequent

5.50 Individualism vs. Collectivism (IC):

Individualism in cultures is when individual is anticipated to look only after one‘s self or immediate family but no one

else. Collectivism implies that people are social well beings and are incorporated since birth into strong, interconnected groups. At work, collectivist cultures give significance to learning, physical environment, skills, and the intrinsic rewards of expertise. In personal life, they emphasis more on harmony and integrity, will give their best to achieve behavioral goals, and strive to maintain the relationship.

Individualism and collectivism may influence the following aspects of individual‘s working behaviors.

Motivation : For individualist cultures, is based on personal achievement and for collectivist cultures it is in favor of group achievement

Images of success: For individualist cultures, it is demonstrated all the way through materialism and consumerism and for collectivist cultures it is of social-political agendas.

Rhetorical style: For individualist cultures it includes controversial or argumentative Speech and for collectivist cultures it comprises of official slogans and submissive exaggeration and controversy

Prominence: For individualist cultures prominence is given to youth whereas in collectivist cultures aged, experienced, wise leaders are given importance.

5.51 Masculinity vs. Femininity (MAS):

Masculinity and femininity submit to the gender roles. Hofstede focuses on the traditional obligation of audacity, rivalry, and sturdiness to masculinity and roles such as looking after home and children, people, and empathy to Femininity. Traditional masculine work includes earnings, recognition, advancement, and challenge. Traditional feminine work includes building relationships with supervisors, peers, and subordinates; look to provide good living and working conditions; and employment security to the employees.

Culture with high-masculinity index would focus on the following elements:

Traditional gender/family/age distinctions

Work tasks, roles, and mastery, with quick results for limited tasks

Attention gained through games and competitions

Feminine cultures would emphasize the following:

Blurring of gender roles

Mutual cooperation, exchange, and relational support (rather than mastery and winning)

Attention gained through poetry, visual aesthetics, and appeals to unifying values

5.52 Uncertainty Avoidance (UA):

Uncertainty Avoidance is the extent to which people differ in the degree to which they feel angst about uncertainty or unknown situations. Cultures differ in their tolerance to uncertainty, creating different rituals and having different values regarding formality, punctuality, legal-religious-social requirements, and tolerance for uncertainty.

Hofstede noted that cultures with high uncertainty avoidance tend to have more formal rules, require longer career commitments, and focus on tactical operations rather than strategy. These cultures tend to be expressive; people talk with their hands, raise their voices, and show emotions. People seem active, emotional, and aggressive and avoid uncertain situations; and expect structure in organizations, institutions, and relationships and help to make events clearly interpretable and conventional.

The low UA cultures businesses may be more informal and focus more on long-range strategic matters than day-to-

day operations. These cultures tend to be less expressive and less openly anxious; people behave quietly without showing aggression or strong emotions People appear easy-going, and relaxed. High-UA cultures would put emphasis on the following:

Simplicity, with clear metaphors, limited choices, and restricted amounts of data

Attempts to reveal or forecast the results or implications of actions before users act

Cultures with Low UA would emphasize on the following

Complexity with maximal content and choices

• Acceptance (even encouragement) of wandering and risk, with a stigma on ―over-protection‖

Mental models and help systems might focus on understanding underlying concepts rather than narrow tasks

Coding of color, typography, and sound to maximize information(multiple links without redundant cueing.)

5.53 Long- vs. Short-Term Time Orientation (LTO)

In the early 1980s, Michael Bond convinced Hofstede that a fifth dimension Long- vs. Short-Term Time Orientation is needed to be added to the cultural dimensions. Long-Term Orientation plays an important role in Asian countries

that had been influenced by Confucian philosophy over many thousands of years. Hofstede and Bond found such countries shared the following beliefs:

A stable society requires unequal relations.

The family is the prototype of all social organizations; consequently, older people (parents) have more authority than younger people (and men more than women).

Virtuous behavior to others means not treating them as one would not like to be treated.

Virtuous behavior in work means trying to acquire skills and education, working hard, and being frugal, patient, and persevering.

Western countries, by contrast, were more likely to promote equalrelationships, emphasize individualism, focus on treating others as you would like to be treated, and find fulfillment through creativity and self actualization. Hofstede and Bond concluded that Asian countries are oriented to practice and the search for virtuous behavior while Western countries are oriented to belief and the search for truth. Of the 23 countries compared, the following showed the most extreme values:

China (ranked 1) Japan (4) USA (17) Pakistan (23) Based on this definition,

Countries with high LTO cultures would emphasize on the following aspects

Content focused on practice and practical value

Relationships as a source of information and credibility

Patience in achieving results and goals

Countries with low LTO countries would emphasize on the following

Content focused on truth and certainty of beliefs

Rules as a source of information and credibility

Desire for immediate results and achievement of goals

Hofstede notes that some cultural relativism is necessary: it is difficult to establish absolute criteria for what is noble and what is disgusting. There is no escaping bias; all people develop cultural values based on their environment and early training as children. Not everyone in a society fits the cultural pattern precisely, but there is enough statistical regularity to identify trends and tendencies. These trends and tendencies should not be treated as defective or used to create negative stereotypes but recognized as different patterns of values and thought. In a multi-cultural world, it is necessary to cooperate to achieve practical goals without requiring everyone to think, act, and believe identically.

Cross-cultural psychology has two broad aims: to understand the differences between human beings who come from different cultural backgrounds, and to understand the similarities between all human beings. The similarities may be sought at all levels - from the physiological (our eyes are able to perceive colour) through the cognitive (we are also able to perceive perspective, or relative distance), to the personal (we can be both happy and sad, gentle or aggressive) to the social (we all relate to our parents and siblings), to the cultural (we all share cultural norms with others of the same cultural background).

5.6

One theory of basic human values which has been very influential is that of Kluckhohn and Strodtbeck

(1961).

Florence Kluckhohn and Fred Strodtbeck set out to operationalise a theoretical approach to the values concept developed by Florence's husband, Clyde Kluckhohn (1949, 1952). He argued that humans share biological traits and characteristics which form the basis for the development of culture, and that people typically feel their own cultural beliefs and practices are normal and natural, and those of others are strange, or even inferior or abnormal. He defined a value as: "A conception, explicit or implicit, distinctive of an individual or characteristic of a group, of the desirable which influences the selection from available modes, means and ends of action." (Kluckhohn, 1951, p

395).

5.61

Florence Kluckhohn and Fred Strodtbeck developed a theory which put these principles into action. They

started with three basic assumptions:

1. "There is a limited number of common human problems for which all peoples must at all times find some solution".

2. "While there is variability in solutions of all the problems, it is neither limitless nor random but is definitely variable within a range of possible solutions".

3. "All alternatives of all solutions are present in all societies at all times but are differentially preferred".

They suggested that the solutions for these problems preferred by a given society reflects that society's values. Consequently, measurement of the preferred solutions would indicate the values espoused by that society. They suggested five basic types of problem to be solved by every society:

1. On what aspect of time should we primarily focus - past, present or future?

2. What is the relationship between Humanity and its natural environment - mastery, submission or harmony?

3. How should individuals relate with others - hierarchically (which they called "Lineal"), as equals ("Collateral"), or according to their individual merit?

4. What is the prime motivation for behaviour - to express one's self ("Being"), to grow ("Being-in-becoming"), or to achieve?

5. What is the nature of human nature - good, bad ("Evil") or a mixture?

Kluckhohn and Strodtbeck also suggested a sixth value dimension of Space (Here, There, or Far Away) but did not explore it further. They then speled out the possible answers to each of the questions, arguing that the preferred answer in any society reflects the basic orientation of the society to that aspect of its environment. The orientations to each question are shown in Table 1.

5.62 Table 1. Four basic questions and the value orientations reflected in their answers.

Question

Orientation

Description

Time

Past

We focus on the past (the time before now), and on preserving and maintaining traditional teachings and beliefs.

 

Present

We focus on the present (what is now), and on accommodating changes in beliefs and traditions.

Future

We focus on the future (the time to come), planning ahead, and seeking new ways to replace the old.

Humanity and Natural Environment

Mastery

We can and should exercise total control over the forces of, and in, nature and the super-natural

Harmonious

We can and should exercise partial but not total control by living in a balance with the natural forces

Submissive

We cannot and should not exercise control over natural forces but, rather, are subject to the higher power of these forces.

Relating to other people

Hierarchical (―Lineal‖)Emphasis on hierarchical principles and deferring to higher authority or authorities within the group

 

As equals

Emphasis on consensus within the extended group of

(―Collateral‖)

equals

Individualistic

Emphasis on the individual or individual families within the group who make decisions independently from others

Motive for behaving

Being

Our motivation is internal, emphasising activity valued by our self but not necessarily by others in the group

Being-in-becoming

Motivation is to develop and grow in abilities which are valued by us, although not necessarily by others

Achievement

Our motivation is external to us, emphasising activity

(―Doing‖)

that is both valued by ourselves

and is approved by others in our group.

In proposing orientations to the Nature of Human nature question, Kluckhohn and Strodtbeck suggested that there are two dimensions involved - good, bad or mixed, and that of mutability, or whether we are born the way we are

and cannot change, or can learn to change (in either direction). Moreover they suggested that "mixed" may mean either both good and bad, or neutral. To test their theory out, Kluckhohn & Strodtbeck interviewed members of five different cultural groups in the South-West USA. These included itinerant Navaho, Mexican-Americans, Texan homesteaders, Mormon villagers, and Zuni pueblo dwellers. In doing so, however, they did not attempt to develop measures of the Nature of Human Nature orientations, finding them too complex. For the remaining four dimensions, however they were able to develop real-life situations relevant to all five cultural groups, and questions to probe the value orientations used by members of those cultures in dealing with the situations involved. They were then able to draw value profiles of each group, showing the ways in which they differed from each other, and the ways in which they were similar. All of this work was published in their 1961 book, and immediately made a strong impact on cross-cultural psychologists. Since then other theorists have also developed theories of universal values - notably Rokeach (1979), Hofstede (1980, 2001) and Schwartz (1992). However the theory developed by Kluckhohn & Strodtbeck remains widely used and has sparked a good deal of research - as any good theory should. A conference of users of the theory in 1998 (Russo, 2000), for instance, attracted over 400 delegates. Although the Kluckhohn and Strodtbeck theory was derived half-way though last century it has generated much further research, which has in turn generated new theories. Though their work our understanding of ourselves as human beings has been increased.

Hofstede, G. (1980). Culture's Consequences: International differences in work-related values. Beverly Hills, Calif.: Sage. Hofstede, G. (2001). Culture's Consequences: Comparing values, behaviors, institutions and organizations across nations Beverly Hills, Calif.: Sage. Kluckhohn, C. K. (1949). Mirror for Man Kluckhohn, C. K. (1952) Culture: A Critical Review of Concepts and definitions. Kluckhohn, C. K. (1951). Values and Value Orientations in the Theory of Action. In T. Parsons and E. A. Shils (Eds.), Toward a General Theory of Action. Cambridge, MA: Harvard University

Press.

Kluckhohn, F.R. & Strodtbeck, F.L. (1961). Variations in Value Orientations. Evanston, Ill.:

Row, Peterson

Chapter 6

MNANGEMNT STYLE OF UNITED STATES OF AMERICA

Chapter 6 MNANGEMNT STYLE OF UNITED STATES OF AMERICA Until the political formation of the United

Until the political formation of the United States, the name "America" was used to refer and after the Revolutionary War, this was referred to South America. Modern uses of the term United States emphasize the country's political and economic dominance in the western region. The country has political and economic dominance of Anglo. The inheritance of slavery and the persistence of economic and social inequalities based on race is the defining characteristic of this country. The Americans are sentient of the differences in spite of the fact that they have experienced economic revolution. The people are mobile and often leave their regions of origin.

The Northeast part of United States is densely populated. Its widespread strip of urbanization is called as national "megalopolis." Northeast region has been overtaken by California‘s Silicon Valley which once upon a time was the leader in technology and industry. The Midwest is the abode of the family farm and is the "corn belt" and "breadbasket" of the nation and is both rural and industrial. With the decline in the automobile and steel industries which were central to community and economy the Great Lakes area of the upper Midwest, is now known as the rust belt.

The South region are known as the sunshine states, retirement havens, and new economic frontiers.

The West has the nation's most open landscape and unlimited opportunity and individualism. The United

The West has the nation's most open landscape and unlimited opportunity and individualism. The United States is the world's fourth largest country, with an area of 3,679,192 square miles (9,529,107 square kilometers). It includes fifty states and one federal district, where the capital, Washington, D.C., is located. Its forty-eight contiguous states are situated in the middle of North America. The mainland United States borders Canada to the north and Mexico, the Gulf of Mexico, and the Straits of Florida to the south. The western border meets the Pacific Ocean, and to the east lie the Atlantic Ocean.

Washington DC Exterior facade of United States capital in Americans are expected to speak Standard

Washington DC

Exterior

facade

of

United

States

capital

in

Americans are expected to speak Standard English. However, most Americans do not speak Standard English; instead, they speak a range of class, ethnic, and regional variants. Spoken English has many dialects which are been influenced by Native Americans, immigrants, and slaves. These languages include Dutch, German, Scandinavian, Asian, African languages and less widely spoken languages such as Basque, Yiddish, and Greek. Thus, spoken English reflects the nation's immigration and history. Spanish has become more widely spoken, language has become an important aspect of the debate over the meaning or nature of American culture.

6.1 SYMBOLISM- The flag of United States is the powerful national symbol. It is made up of stripes

symbolizing the original thirteen colonies and fifty stars representing the fifty states. When there is any reason to protest in US they represent flag. In the nineteenth century, northern abolitionists

hoisted the flag upside down to protest the return of an escaped slave to his southern owner, and upside-down flags continue to be used as a sign of protest.

6.2 URBANISM, ARCHITECTURE, AND THE USE OF SPACE

The United States has numerous states which are either urban or suburban, each having its own history of economic development. For example New York was founded by the Dutch which was the hunting and fishing grounds of Native Americans. It became an important industrial center in the nineteenth century, but by the mid- twentieth century its industries had declined and much of its middle class population had relocated to the suburbs. As the twenty-first century begins, New York is a "global" city resurrected from decline by its role as a center of finance in the world economy. Like New York, Chicago and Los Angeles have emerged as important cities in connected world.

6.3 FOOD AND ECONOMY

Americans eat large amounts of processed, convenience, and fast foods. The average diet is high in salt, fat, and

refined carbohydrates. It is estimated that 60 percent of Americans are obese. Americans as a whole enjoy the taste of hamburgers, hot dogs, and junk foods

Industrial food producers use advertising to associate processed foods with the desirable modern and industrial qualities of speed, cleanliness, and efficiency. Speed of preparation was essential in a nation of nuclear family and therefore, gourmet, regional, and alternative styles of eating are highly influential. Gourmet foods, including high quality fresh and local produce, imported cheeses, fine coffees, and European kinds of bread, are available in every city and in many towns.

Basic Economy. The United States has highly mechanized industrial economy which is very advanced. The gross national product is the largest in the world. The country produce more than it requires in the country and therefore it‘s the world's leading exporter of food.

6.4 SOCIAL STRATIFICATION

Americans do not believe in caste or class rather they believe in equal opportunity. Gambling and lotteries are very popular in America. However only the top 1 percent of the population has made significant gains in wealth in the last few years. Similar gains have not been made by the poorest sectors. In general, it appears that the gap between rich and poor is growing. Stratification is in evidence in many aspect of daily life. The social segregation of blacks and whites in cities mirrors their separation. The degenerating houses of blacks in the inner cities are contrasts with giant homes of whites in the suburbs all across the country is the mark of demarcation. With some exceptions, strong regional or Spanish accents are associated with working-class status.

6.5 POLITICAL LIFE

The United States is a federal republic composed of a national government and fifty state governments. The

political system is dominated by two parties: the Republicans and the Democrats. The powers and responsibilities

of the Federal government are set out in the Constitution, which was adopted in 1789. The national government

consists of three branches viz-a- viz the executive, the legislative and the judicial that are intended to provide "checks and balances" against abuses of power. The executive branch includes the President and federal agencies that regulate everything from agriculture to the military. The legislative branch includes members elected to the upper and lower houses of Congress: the Senate and the House of Representatives. The judicial branch consists of the Supreme Court and the U.S. Court of Appeals. Leadership and Public Officials. With the exception of local-level offices, politics is highly professionalized: most people who run for political offices are lifelong politicians.

.

6.6

GENDER ROLES AND STATUS

W omen are paid less as compared to women though they say they give equal opportunity to males and females as

women are paid seventy cents to every dollar what male earns for the same or comparable job. Secretarial or low- level administrative jobs are called as pink collar jobs as they are predominantly occupied by females. In the white- collar world, women are often up to middle-management positions. With a few exceptions, the "glass ceiling" keeps women out of high management positions.

6.7 MARRIAGE AND FAMILY

Marriage is formally a civil institution but is commonly performed in a church. Statistically, marriage appears to be

on the decline. Half of all adults are unmarried, including those who have never married and those who are

divorced. Rates of marriage are higher among whites than among blacks.

With the exception of Vermont, civil unions are legal only between heterosexual adults. However, gay marriages are increasingly common whether or not they are formally recognized by the state. Some religious denominations and churches recognize and perform gay marriages. The high rate of divorce and remarriage has also increased the importance of stepfamilies.

The typical model of the family is the nuclear family consisting of two parents and their children.

6.8 ETIQUETTE

Personal posture appears to be insensitive, loud, and demonstrative to people from other cultures, but Americans

value emotional and bodily restraint. The permanent smile and unrelenting enthusiasm of the stereotypical American may mask strong emotions whose expression is not acceptable. Bodily restraint is expressed through the relatively large physical distance people maintain with each other, especially men.

6.9 APPEARNCE

maintain with each other, especially men. 6.9 APPEARNCE Business suit and tie are apt every part

Business suit and tie are apt every part of Unites States of America. It includes dark coloured business suits in typical colors of gray and navy. For an important formal meetings, they prefer to wear a white shirt and for less formal meetings a light blue shirt can do. Attires of women includes a suit or dress with jacket. Classic clothing with typical colours of navy, gray, ivory, and white gives a confident and conservative appearance.

But the part of the country where it is extremely warm summer women use to dress up in business dress, or skirt and blouse. Men may conduct business without wearing a jacket and/or tie. Casual clothing is appropriate when not attending a work related meeting/dinner.

Business discussion may take place during meals. However, many times more social discussion happens during the actual meal. Business meetings may be arranged as breakfast meetings, luncheon meetings, or dinner meetings depending on time schedules and necessity. Generally a dinner, even though for business purposes, is treated as a social meal and a time to build rapport. Gift giving is discouraged or limited by many US companies. A gracious written note is always appropriate and acceptable. If gift is given it should not appear to be a bribe. An invitation for a meal or a modest gift is usually acceptable. People stand in a queue and wait for their turn. Chewing of toothpick in public is not considered as good. Many public places and private homes do not allow smoking. In some areas laws have been passed to prevent smoking in public places.

6.71 Communications

to prevent smoking in public places. 6.71 Communications People of USA offers firm handshake lasting for

People of USA offers firm handshake lasting for 3-5 seconds when they greet or at the time of leaving. It is important to have a good eye contact during handshake. If they are meeting several people at one time, they will maintain eye contact with the person with whom they are shaking hands , until they move to the next person. Good eye contact during business and social discussion shows interest, sincerity and confidence. Good friends may give a brief embrace, The larger the city, more formal is their behavior. They use the prefixes such as Mr., Ms., or Mrs., and their full name when they introduce themselves. They generally exchange business cards during introduction. A smile is a sign of friendliness. They seek permission if they need to smoke.

6.72 Business hours

The normal business hours are Monday to Friday from 8.30 or 9.00 a.m. to 5 or 6 pm, with a 30 to 60 minute lunch

break.

6.73

Punctuality

Punctuality is a very important rule of business etiquette. Every effort is being made to arrive on time to any

scheduled meetings or appointments. If the person is late for the meeting or an appointment, a call should be given proclaiming the expected delay.

.

6.74

Etiquettes of Gift Giving

In general, gifts are given on the occasion of birthdays, anniversaries and on Christmas. It can include a simple card with a personal note written on it. If the person is invited to someone's home for dinner, it is polite to take a small box of good chocolates or a bottle of wine or a potted plant or flowers for the hostess. They generally open the gift in public.

6.75

Etiquettes of Dining

6.75 Etiquettes of Dining It is important to arrive on time if invited for dinner; no

It is important to arrive on time if invited for dinner; no more than 10 minutes late if invited to a small party. If the

party is large late upto 30 min is acceptable. Table manners are more relaxed in the U.S. than in many other countries. The fork is always held in the right hand and is used for eating. The fork is held tines down. The knife is used to cut

or spread something. To use the knife, the fork is switched to the left hand. To continue eating, the fork is switched

back to the right hand.

A cross with knife and fork on the plate indicated the person is not through with his meals. But if the fork and knife is

laid parallel to each other on the right side of the plate it indicates the meal is over. They can refuse to the specific foods or drinks without offering an explanation. There are many foods which can be eaten by hand. They generally serve the food in large serving dishes and are passed around the table for everyone to serve themselves. It is not advisable to start eating until the host starts or says to begin. It is against the dinning etiquette to put the napkin in the lap as soon as one sits down. They always leave a small amount of food in the plate when finished eating.

References

Binnendijk, Hans, ed. (1987). National Negotiating Styles. Washington, D.C.: U.S. Dept. of State.

Campbell, N.C.G. et al.(1988). "Marketing Negotiations in France, Germany, the United Kingdom, and the United

States." Journal of Marketing 52, 49-62.

Faure, Guy-Olivier and Gunnar Sjostedt (1993). "Culture and Negotiation: An Introduction" in Culture and

Negotiation (Faure and Rubin eds.). Newbury Park: Sage Publications.

Fisher, Glen (1980). International Negotiation: Across-Cultural Perspective. Yarmouth, Maine: Intercultural Press.

Graham, John L. et al. (1988). "Buyer-Seller Negotiations Around the Pacific Rim: Differences in Fundamental

Graham, John L. and R. A. Herberger (1983). "Negotiators Abroad - - Don't Shoot From the Hip: Cross Cultural Business Negotiations," Harvard Business Review. 61, 160-83. Hall, Edward T. (1959). The Silent Language. New York: Doubleday. Hall, Edward T and Mildred Reed Hall.(1990). Understanding Cultural Differences. Yarmouth, Maine: Intercultural Press. Hoebel, E. Adamson (1972). Anthropology: The Study of Man (4th ed.) New York: McGraw-Hill. Hofstede, Geert (1980). Culture's Consequences: International Differences in Work-Related Values. Newbury Park,CA: Sage Publications. Hoppman, Terrence (1995). "Two Paradigms of Negotiation: Bargaining and Problem Solving," Annals, AAPSS, 542, 24-47. Hughes, Philip and Brian Sheehan (1993). "Business Cultures: The Transfer of Managerial Policies and Practices from One Culture to Another," Business & The Contemporary World 5, 153-170. Kolb, Deborah M and Gloria G. Coolidge (1991). "Her Place at the Table: A Consideration of Gender Issues in Negotiation," Breslin & Rubin, eds. Negotiation Theory and Practice. Cambridge: PON. Lewicki, Roy et al. (1993). Negotiation -- Readings, Exercises and Cases. Burr Ridge, Illinois: Richard D. Irwin, Inc. Moran, Robert T. and William G. Stripp (1991). Successful International Business Negotiations. Houston: Gulf Publishing Company. Pye, L. (1982). Chinese Negotiating Style. Cambridge, Mass.: Oelgeschlager, Gunn, & Hain. Salacuse, Jeswald W. (1991). Making Global Deal - Negotiating in the International Market Place. Boston:

Houghton Mifflin.

Chapter 7 JAPANESE STYLE OF MANAGEMENT

―I do not want my house to be walled in on all sides and my windows to be stuffed. I want the cultures of all the lands to be blown about my house as freely as possible. But I refuse to be blown off my feet by any.‖ - (Mahatma Gandhi )

7.1 About Japan

Japan is located in Eastern Asia, island chain between the North Pacific Ocean and the Sea of Japan , east of the Korean Peninsula. Its capital is Tokyo. It has the population of 127,288,416 (July 2008). They follow both Shinto and Buddhism including Christianity

7.2 Japanese Language

In Japan almost 99% of country‘s population speak Japanese making it the most spoken language of the world. The origin of the Japanese language has been predicted and approved to be close in syntax to the Korean language. Colloquial language are used in areas, particularly in Kyoto and Osaka.

7.3 Japanese Society & Culture

Japanese culture does not turn down anyone‘s requests as they believe that this gesticulation can cause embarrassment and loss of face to the other person. But if they do not agree on the request they will say, 'it's inconvenient' or 'it's under consideration'. Japanese people do not criticize, insult or put anyone on the spot openly. They believe in harmony which is the guiding philosophy for the family, business settings and society as a whole. The education system of Japan accentuates the mutual dependency of people, and therefore children of Japan are

taught

group.

Japanese people are very polite and take personal responsibility. They work together for the whole, rather than the individual.

to

work

in

a

7.4

History of Japanese-style management

Tokyo Photos

Tokyo Otemachi Business District

management Tokyo Photos Tokyo Otemachi Business District An economic historian, Yasuoka Shigeaki, has cut off the

An economic historian, Yasuoka Shigeaki, has cut off the three areas of industry where the Japanese style of management was first recognized subsequent the changes brought about by the Meiji Restoration.

1. The areas that were giving benefit in the beginning like silk and tea, which were the good products for export.

2. Those industries and products that were not affected by the international economy such as salt, soya-bean

paste, soy sauce, and shake and fuels such as coal and charcoal; materials for housing such as straw floor mats and wood; and indigenous clothing.

3. Those areas and their products that has a intricacy in the beginning, for example, cotton and wool, which suffered strong external competition (Yasuoka 1981).

This procedure was most evident in the last group, where, in the transition to import swapping and expansion of exports, Japanese-style management became firmly institutionalized.

7.5

BUSINESS MANAGEMENT STYLE

Japanese Non-Verbal Communication

1.

Japanese rely on facial expression, tone of voice and posture. Non verbal communication is also being given due importance.

2.

Making frowning faces when someone is speaking is understood as a sign of incongruity.

3.

It is also considered as disrespectful to stare into the person's eyes, especially who is senior in age or status.

4.

In crowded state of affairs the Japanese avoid eye contact to give themselves private space. Japanese Hierarchy.

5.

Japanese are cognizant of age and status and they follow it religiously.

6.

Every person has a distinctive position in the hierarchy, whether it‘s a family unit, the extended family, a social or a business situation. Even at school children are made to learn to call the senior students as senpai and junior as kohai.

7.

The eldest person in a group is always honored. In a party they will be served first.

7.6

Meeting Etiquette

1. In Japan they greet each other in very formal and ritualized way.

2. People show great deal of reverence and regard to somebody who is higher in status or in the age.

3. Japanese traditional form of greeting people is the bow. How much one bows is based on the relationship.

7.7

Gift Giving Etiquette

1.

People of Japan love to give and receive gift, it is highly ritualistic and significant and the way it is wrapped is also very important. Gifts are always wrapped in Japan and is never opened in public.

2.

Gifts are given for many occasions which can be a good quality chocolates or small cakes.

3.

Lilies, camellias or lotus are not given as the gift as they are associated with funerals. Even white flowers of any kind are also associated with funerals.

4.

Japanese do not give potted plants as they are considered as encouraging sickness, but a bonsai tree can be given.

7.8

Dining Etiquette

Japanese rarely invite anyone to their house.

1.

One is supposed to remove their shoes pointing away from the doorway before entering the house.

2.

It is not appreciated if one arrives late for more than 5 minutes late if invited for dinner, but if it‘s a large

social assembly arriving bit late can be accepted

3.

People always dress in formal unless being told that the occasion is informal.

7.9

Table Manners

1.

People in Japan follow the protocol very religiously, so one wait unless they are being said where to sit.

2.

The eldest person or the honored guest is made to sit in the center of the table and he starts with the eating first.

3.

People in Japan do not like if they pierce food with chopsticks, or if it‘s pointed towards the person or crossed when putting them on the chopstick rest, therefore they learn how to use the chopsticks. Its always advisable to return the chopsticks in its rest after every few bites or when speaking or drinking.

4.

It is always advisable to put bones on the side of the plate, and leave a small amount of food on the plate when finished eating.

5.

Generally they do not like any discussion at the table as they like to relish their food.

7.10 Dealing with the Foreigners

1. People of Japan realize that foreigners cannot work in Japan.

2. They can tolerate mistakes till the time they show respect.

7.11 Associations & Communication

1. Personal relationship is very important and Japanese like to do business with people with whom they have the relationship.

2. It is good to give greetings cards or seasonal cards to maintain relationship.

1.

It is require to take appointments and preferably one week in advance for meetings.

2. It is important to arrive on time for meetings. Punctuality is important.

3. Hierarchy is followed, and they respect people who are higher in status, position, and age. The most senior Japanese person will be seated furthest from the door, with the rest of the people in descending rank until the most junior person is seated closest to the door.

4. It is desirable to accept the request, how so ever difficult or non- profitable it may appear as they look for

relationship.

long-term

7.13 Business Negotiation

1. Japanese do not confront and do not say ‗no‘ and give importance to non verbal communication.

2. They have a difficult time saying 'no', so you must be vigilant at observing their non-verbal communication.

3. Group decision-making and consensus are important. They prefer board agreements and mutual understanding so that when problems arise they can be handled flexibly.

4. They believe in written contracts.

5. During negotiation with the Japanese, it is not acceptable to raise voice or loose temper, one may loose the deal. Be patient and try to work out as Japanese remain silent for long period of time. They even close their eyes if they are listening attentively.

6. Japanese rarely compromise, they want that both the parties to come with their best offers. They keep the room open for re-negotiation as they not take the contracts as final agreements.

7.14 Dress Etiquette

1. Japanese go for conventional business attire.

2. Men prefer to wear dark-coloured, business suits and women dress up conventionally.

7.15 Business Cards

1. The Japanese exchange business cards when they meet people. The card is in Japanese. So it is advised to have one side of the business card translated into Japanese.

2. They keep quality cards with them and keep their cards in immaculate condition.

3. They give their business card facing Japanese side to the beneficiary.

4. It is compulsory that the business card should include the title of the person, to make them aware of the status the person is holding in the organization and during the meeting it has to be placed in front of the person owning the card on the table which can be kept in the business card case at the end of the meeting.

7.16 Japanese Business Culture: Soichiro Honda, manager and entrepreneur

The romantic image of the founder-millionaire wearing overalls. tinkering visibly with some mechanical marvel in workshop or lab, is often reality. So it was with Soichiro Honda, in many ways the least typical of the post-war Japanese economic victors: but simultaneously the most visible archetype of the success of Japanese business culture, though an eccentric one. 'Mr Honda', said one baffled journalist, ' is a management executive who always wears red shirts and tells naughty stories when drinking.'

The drinking was important to Honda. In his early sixties, the great man admitted that he didn't understand computers. The fact that he couldn't keep up with the technology, though, was only one factor in his decision to take relatively early retirement. He also couldn't drink so much sake as before, while in sex his 'powers of doing and '

recovery' weren't what they had been

and 'without sex and sake, I should quit the life of an entrepreneur.'

In contrast to Honda, Henry Ford I didn't totally surrender power until death took over the decision, and he was notably abstemious in both wine and women. Yet Honda was known as 'the oriental Henry Ford', and deserved the description. Like Ford, whose first business efforts were littered with failures and false starts, Honda learmt the principles of efficient production quality the hard way. Out of 50 piston rings tested in Honda's first manufacturing venture, only three passed. Not surprisingly, the business failed.

His 1947 notion, to make motorized bicycles with two-stroke engines adapted to run on pine-root extract, was no more promising. Five years later, however, Honda came of technological age. With the Japanese market in recession, Honda invested $450,000 in German, Swiss and American machine tools, reckoning that they were the best in the world. He then 'reverse-engineered' the European bikes he was copying - taking them apart to see how they were made: and discovering that their best was simply not good enough.

European manufacturers believed it was impossible to run motorcycle engines at 15,000 rpm, with even faster bursts. Honda not only proved that you could, but also started to win Grand Prix races all over the world. Super- design went with super-efficiency in production engineering. At Honda's motorcycle plants not a single storeroom

existed for parts, raw materials, or finished machines; deliveries went in at one end, and finished bikes, up to one every seven seconds, moved straight on to double-decker trucks at the other.

Building the world's 24th largest company (1993 sales, $35.8 billion) on the pillion of the motorbike is not only a prime economic achievement. It's one that, before Honda demonstrated the method, would have been disbelieved - especially by the established British companies, bearing once-proud names such as Norton, Matchless, and BSA. In the Honda era, their decline and fall ended in pathos, with workers at the once-famous Triumph factory fruitlessly defying the management's efforts to close the works down forever.

Like those benighted British firms, the Japanese car establishment refused to take Honda's car plans seriously - especially when they saw his first, doomed model: little more than a covered motorbike. His vault, from a standing start, to number three in Japan (and number one in America) is all the more remarkable - given that the opposition in Japanese cars was infinitely tougher than the biking Brits. Honda recovered from his false start to build, very deliberately, a 'world car': he undertook deep global research, wrote Robert Shook, into 'everything from road conditions to driving habits.' The result was the Civic.

As in bikes, so in cars. Honda's strength was to be ahead or abreast in all the improvements to the car in his time, from fascias and four-wheel steering to engine and braking systems - even though, atypically for a Japanese company, Honda would not buy in technology. As a top Honda man later explained, 'There are some technologies

when you buy technology it remains frozen, a foreign thing that is not part of yourself, and

in the end you don't know where to go with it.'

that we didn't have

But

It's hard not to see in this philosophy the highly visible example of Soichiro Honda writ large. There's the indefatigable inventor who (as with the non-polluting engine) prefers to create his own technology because, if he leaves tasks to other companies, there will be fewer fields to conquer. The whole secret of Honda was his direct participation in the life of the firm and its employees - much too direct in the early days, to judge by one anecdote.

'A bolt that had been tightened by a young worker made a few more turns when Honda did it himself. "You damned fool. This is how you're supposed to tighten bolts," shouted Honda, as he hit his employee over the head with a wrench.'

While definitely visible, that intervention isn't how the West pictures Japanese management. Honda's partner, Takeo Fujisawa, fitted the pattern better when asked this question by the head union negotiator. 'What do you think of the pay offer you're making to us?' According to author Tetsuo Sakiya, Fujisawa replied that 'The offer is so low, I

think it's ridiculous.' The boss went on to admit that 'It is our (management's) fault that the situation has become such that we had to make such a low offer'; predicted that sales would pick up in March; proposed a new pay negotiation at that time; and received thunderous applause.

Honda himself stayed clear of industrial relations (wisely, no doubt, in view of his penchant for hitting workers with wrenches); yet it was he who stumbled on the management style which eventually got the company out of manpower messes for keeps. Honda got angry with 'workers who played baseball on the plant grounds', saying to himself, 'In collective bargaining, they complain about having to work too hard. But when it comes to playing baseball, they do it until they become completely exhausted, even though baseball does not bring a single yen to them. What kind of men are they?'

But then he thought, 'I must recognize that man achieves the highest degree of efficiency when he plays. If someone says he works out of loyalty to the company, he is a damned liar. Everyone must work for himself. Even I work because I like working. I must create a workshop where everybody will enjoy working.' Which is what Honda proceeded to do, not only leading his men by example, but changing the example to one that suited both them and the company.

Visibility isn't only a matter of contact and example between management and men. That between managers and managers is also crucial. One of Honda's successors decided to move the executive suite from the customary top floor to mid-building (so that senior management would spend the minimum time elevating up or down). On that executive floor, there are no separate offices - not even for the chief executive. He sits in a corner at a round desk. The other executives are scattered about the enormous room, also at round desks.

Why round? So that anybody who wants can sit down for a discussion at will. That's eminently practical. But you can't ignore the high and highly visible symbolism of this office layout. Taking the executive suite off the top foor signals that there is no exclusive, literally higher authority. Putting the emphasis on easy access to colleagues signals that involvement figures high in the corporate values.

Then, placing top executives in an open office signifies the intention to have an open style, in which rank and status have no practical importance. The round tables indicate that decisions are only to be taken after full discussion among colleagues who are always on tap. The proximity of the desks establishes that lines of communication are to be short and easily opened. The classic Western office layout, based on the 'behind closed doors' principle, is the antithesis of visibility and delivers an utterly contrasting message.

The Honda message is entiely consistent with the visible example of the founder. In the 'sex and sake' valedictory quoted earlier, Honda revealed that neither he nor Fujisawa had seen any operational papers or attended any operational meetings for the previous ten years. By playing no part in operational management, despite their enormous success and prestige, the two men enabled their successors to go beyond them. That was always their intention, as a banker discovered when he once addressed the pair as follows:

I think you have an outstanding business going for you. I presume, of course, that you will eventually hand over the company to your sons.' They replied as one man, 'We have no such thought whatsoever.' As Honda explained, with

family, who would have the motivation to work for the

company?'. The unanimity of the partners, on this and other issues, was a powerful force in Honda's success and dates back to a 1949 conversation between Honda and Fujisawa.

a rhetorical quote, 'If the company belonged to the

Honda was then forty-two; and Fujisawa, four years younger, informed Honda, already known as a brilliant inventor, that 'I will work with you as a businessman. But when we part I am not going to end up with a loss. I'm not talking only about money. What I mean is that when we part, I hope I will have gained a sense of satisfaction and achievement.' A very Japanese wish, but a perfect expression of what business friendship means. They never did part - retiring by mutual agreement on the same day twenty-two years later.

You can get the flavour of their creation from a story about the initial build-up of Honda. It was based on a little, low- powered bike called 'Dream Type D.' The name arose when somebody, at a sake and sardine party to celebrate the prototype, remarked that it was 'like a dream.' At which point, Honda yelled out, 'That's it! Dream!' The story comes form an excellent book entitled Honda Motor: The Men, the Management, the Machines, by Tetsuo Sakiya.

Honda, though, made plenty of mistakes on the road from the Dream to the Civic and beyond. 'Success', he wrote, 'can be achieved only through repeated failure and introspection. In fact, success represents 1% of your work, which results only from the 99% that is called failure.' The errors occurred even in the technology where he was most triumphant, engines. He obstinately insisted, against all contrary opinion in the company, that air-cooled engines, not water-cooled, held the future for cars. Finally, Fujisawa resolved the issue at dinner with his long-time partner. Here's Sakiya's fascinating account of the proceedings:

'They had not seen each other for quite some time and Fujisawa's mind was made up: "If Mr Honda refuses a water cooled engine, this would mean he is following a path different from mine. If the two of us cannot go in the same direction, our teamwork will not function." At the dinner, Honda told Fujisawa, "The same thing can be achieved with an air-cooled engine, but I guess that's difficult for a man like you to understand." Fujisawa replied, "You can do one

of two things. You can continue to serve as the president of our company, or you can join the engineers at Honda Motor. I think you should choose now."

'Honda looked unhappy to have to make such a decision, but replied, "I'm sure I should continue to be the president." "Then," said Fujisawa, "you will permit your engineers to work on water-cooled engines, too, won't you?" "I will," Honda agreed. Their conversation had lasted no more than a few minutes, after which the meeting turned into a party with both of them drinking sake and singing old folk songs together. The next day Honda went to the R & D centre and told the engineers, "Okay, now you can work on water-cooled engines."'

Although Honda was never seen to smile when anybody talked about water-cooling thereafter, his surrender was another marvellously visible example to everybody else. Remember, this was a highly combative, competitive man, who hated to give in to anybody or anything, especially a rival. That characteristic, highly developed in the Japanese economy as a whole, has been a major factor behind the national success. In Honda's saga, the greatest example came in the motorcycle wars of the early 1980s.

This domestic Japanese bloodbath began with near-defeat. Yamaha's motorbike sales had pulled tantalizingly close to Honda's: 37% of the domestic market against 38% - and you can't get much closer than that. There was a reason for the rise, as Yamaha's president shrewdly spotted. His words were reported by James Abegglen, a

veteran Japan watcher and resident, and George Stalk, Jr., in their book Kaisha: 'At Honda, sales attention is focused on four-wheel vehicles. Most of the best people have been transferred (into cars). Compared to them, our

specialty at Yamaha is mainly motorcycle production

If only we had enough capacity, we could beat Honda.'

Suiting the action to the words, Yamaha decided to match Honda new model for new model; then it went for the supreme prize. In 1981 Yamaha announced a new factory that would inside one year take the domestic lead; within two years the upstart would be 'number one in the world.' This was not a threat that Honda could brush aside. Its reading of the situation was as clear as Yamaha's: 'Yamaha has not only stepped on the tail of a tiger, it has ground it into the earth.' Honda adopted a new battle cry: 'Yamaha wo tsubusu,' translated as 'We will crush/break/smash/butcher/ slaughter/or destroy Yamaha.'

The message got across. Whatever Yamaha produced, Honda produced more, until the Japanese islands seemed in some danger of sinking under the weight of unsold motorbikes.In innovation, the counterattack was even more dramatic. In eighteen months, Honda introduced 81 new models, against only 34 from Yamaha. That understated the full impact of Honda's devestating response. Its 81 new models were accompanied by 32 discontinuations.

Since Yamaha could only manage three withdrawals, it was outgunned by 113 changes to 37. 'The customer,' says Kaisha, 'was seeing fresh Hondas and increasingly stale Yamahas.'

After a year of blood, sweat and tears, the story had a happy ending - for Honda. The group chairman at Yamaha observed the wreckage and said, 'We plunged like a diving jet. My ignorance is to blame.' The Yamaha motorcycle boss, who had started the wars, now saw reality: 'We can't match Honda's product development and sales strength. From now on I want to move cautiously and ensure Yamaha's relative position.' Personally, he didn't have the chance to pursue this more sensible strategy: he was out, and the great motorbike wars were over.

Those victorious product development strengths are no accident. At Honda, the production of new models and new ideas is thought so important that it's a young man's job. Development teams are selected to match the age group at which the new model is targeted, and engineers in R&D who haven't reached top status by forty are packed off elsewhere - just as Honda packed himself off when he considered that his prime usefulness was over. His successor, a mere 43-year old, in turn made way for a younger man ten years later.

As Rosabeth Moss Kanter has pointed out, a key to Honda's success was that its resident genius used to work directly on new products with the engineers. That was only posible because, as noted above, he and Fujisawa had delegated all operational responsibility. Honda was thus free to concentrate on his vision of the future and to share it visibly with others. The corporate vision statement is like the founder himself, enormously practical:

1. Quality in all jobs - learn, think, analyse, evaluate and improve.

2. Reliable products - on time, with excellence and consistency.

3. Better communication - listen, ask and speak up.

Developing a philosophy built on the experience of a practical engineer, the founding father had created a corporate culture that would go on working towards his objective - nothing less than becoming and remaining the world's best motor manufacturer - long after his own active day. His influence, like the man himself, is still highly visible. And the visibility is inseparable from the success.

Source:- By Edward De Bono and Robert Heller

References

Binnendijk, Hans, ed. (1987). National Negotiating Styles. Washington, D.C.: U.S. Dept. of State.

Campbell, N.C.G. et al.(1988). "Marketing Negotiations in France, Germany, the United Kingdom, and the United States." Journal of Marketing 52, 49-62. Faure, Guy-Olivier and Gunnar Sjostedt (1993). "Culture and Negotiation: An Introduction" in Culture and Negotiation (Faure and Rubin eds.). Newbury Park: Sage Publications. Fisher, Glen (1980). International Negotiation: Across-Cultural Perspective. Yarmouth, Maine: Intercultural Press. Graham, John L. et al. (1988). "Buyer-Seller Negotiations Around the Pacific Rim: Differences in Fundamental Exchange Processes," Journal of Consumer Research 15, 48-54. Graham, John L. and R. A. Herberger (1983). "Negotiators Abroad - - Don't Shoot From the Hip: Cross Cultural Business Negotiations," Harvard Business Review. 61, 160-83. Hall, Edward T. (1959). The Silent Language. New York: Doubleday. Hall, Edward T and Mildred Reed Hall.(1990). Understanding Cultural Differences. Yarmouth, Maine: Intercultural Press. Hoebel, E. Adamson (1972). Anthropology: The Study of Man (4th ed.) New York: McGraw-Hill. Hofstede, Geert (1980). Culture's Consequences: International Differences in Work-Related Values. Newbury Park,CA: Sage Publications. Hoppman, Terrence (1995). "Two Paradigms of Negotiation: Bargaining and Problem Solving," Annals, AAPSS, 542, 24-47. Hughes, Philip and Brian Sheehan (1993). "Business Cultures: The Transfer of Managerial Policies and Practices from One Culture to Another," Business & The Contemporary World 5, 153-170. Kolb, Deborah M and Gloria G. Coolidge (1991). "Her Place at the Table: A Consideration of Gender Issues in Negotiation," Breslin & Rubin, eds. Negotiation Theory and Practice. Cambridge: PON. Lewicki, Roy et al. (1993). Negotiation -- Readings, Exercises and Cases. Burr Ridge, Illinois: Richard D. Irwin, Inc. Moran, Robert T. and William G. Stripp (1991). Successful International Business Negotiations. Houston: Gulf Publishing Company. Pye, L. (1982). Chinese Negotiating Style. Cambridge, Mass.: Oelgeschlager, Gunn, & Hain. Salacuse, Jeswald W. (1991). Making Global Deal - Negotiating in the International Market Place. Boston:

Houghton Mifflin.

CHAPTER 8

GERMAN STYLE OF MANAGEMENT

Germany is located in Central Europe, bordering Austria 784 km, Belgium 167 km, Czech Republic 646 km, Denmark 68 km, France 451 km, Luxembourg 138 km, Netherlands 577 km, Poland 456 km and Switzerland 334 km. Its capital is Berlin. It has temperate and marine climate with cool, cloudy and wet winters. Summers are occasionally warm.

Germany has Population of about 82,424,609 as per the census report of July 2008 and as per the ethnic make up is concerned the country has 91.5% German, 2.4% Turkish, and 6.1% others made up largely of Greek, Italian, Polish, Russian, Serbo-Croatian and Spanish. As far as religion is concerned it has 34% Protestant, 34% Roman Catholic 3.7% Muslim and 28.3% unaffiliated or others.

German is the official language of Germany. 95% people speak German. The other language that are spoken in Germany are Sorbian, Danish, Roman, Turkish and Kurdish.

German culture is a planning culture. They are the masters in planning so that they can take precautions in their activities or in the decisions that they take. These people are very particular about the rules and regulations. They segregate work life and personal life. They use their time in most effective and efficient way at the work place ad try to leave the office at time indicating that they have planned their work and time well.

Germans are very fond of their homes and keep every part of their home very clean and in order and only close relatives and friends are invited to the home.

8.0 BUSINESS CULTURE IN GERMANY

An overview

Germany has established its management style after World War II with the sense of pro activeness and long term goals. Germans style of management is very rigorous. They believe in competition. They work as a team to win over the competition. They might compete for the same market but they believe in market dominance rather than market share. E.g. Daimler-Benz and BMW competing for a specific niche. Germans companies deride price competition as far as possible. They compete for excellence in their products and services

Germans do not compromise on product quality and product service. For them the customer satisfaction is the most important and hence they even are ready to customize the product according to the customers‘ requirement. They work on four watchwords

1 Quality

3

Dedication

4 Followup

German managers are very much production oriented and hence they intimately know their production line and

floor. Even the top managers are aware of their floor and working. They are the strong followers of rules and

regulations. They work in accordance with the government standards, policies and regulations. All German

products are subject to norms--the German Industrial Norms ―Deutsche Industrie Normen‖-DIN established through

consultation between industry and government. This is done by deriving the strong inputs from the management

associations, chambers of commerce, and trade unions.

In Germany they do not prefer any type of litigation. Therefore the commercial groups do not have many legal staffs; even the number of lawyers in Germany is also not much. They believe in open discussion on any type of misunderstandings or disagreement caused over the meeting, sometimes over a beer, or sometimes in a get- together called by a chamber of commerce or an industrial association. They try to resolve the differences with pacification.

8.1 MAKING APPOINTMENTS

1. Punctuality is very important in German business culture. Arriving even five to ten minutes late than the specific time is alleged as late particularly for the subordinate.

2. Germans do not entertain without appointment. It is important to take appointment well in advance preferably 1-2 weeks. If by any reason the person is coming late, it is expected out of him to inform his delay and the cause of it.

3. Letters should be addressed to the top person in the functional area, including the person's name as well as their proper business title.

4. If the appointment is taken through letter it should address to the top person in the functional area clearly indicating the person's name and the business title. The letter should be written in German.

5. The ideal times for business are between 10:00 a.m. and 1:00 p.m. or between 3:00 p.m. and 5:00 p.m.

6. Avoid scheduling appointments on Friday afternoons, as some offices close by 2:00 p.m. or 3:00 p.m. on Fridays.

7. Making changes in the time and place of appointment is not acceptable.

8. If you write to schedule an appointment, the letter should be written in German.

8.2

BUSINESS DRESS

8.2 BUSINESS DRESS 1. Business dress is formal with dark and conventional suits for both men

1. Business dress is formal with dark and conventional suits for both men and women.

2. Casual outfits like pants with a jacket or blazer will not be appropriate for the meeting especially if the person is meeting for the first time.

3. In East Germany female employees should not wear excess flamboyant ornaments as the standard of living in this part is lower than the west part of Germany part as it can cause resentment.

4. For social gathering informal dress can be worn, but not very informal clothes. Men can attend without jacket and tie. But formal invitation means formal.

8.3

COMMUNICATION

1. The newcomer should introduce first to the group. German culture is highly

fact oriented and hence do not facilitate emotional comfort or social networking to

the new comers.

2. The Germans are not in the notion where they mingle with the strangers. The rationale behind this is that they have the ―village community‖ mentality against the ―settlement community‖ of the Europeans and Australians. Therefore if one sees the party of Germany one can find that the people who are acquainted with each other are found interacting and hanging out together and they do not give chance to the strangers to meet and interact.

3. Germans are interested in the academic credentials of the person to do the business.

4. German‘s are very formal in communication. They do not have believed in the concept of an open-door policy. They keep the doors of their workplace closed. They believe in written communication so that they can have back up to make the decisions and to maintain a record of decisions and discussions.

5. In German business protocol compliment giving is not the part of business, especially if its given in a very casual acquaintances then it is taken with suspicion.

6. In Germany it is considered bizarre and irritating to ask question while moving without waiting for the answer. Most people will love to give the detail reply of the question asked.

7. While conversation there are certain topics that they love to talk about such as Sports, particularly soccer , travel, recent holidays, current events, politics, Work and professions, previous experiences and travels in Germany and other parts of Europe, beer is over and over again a good topic of conversation.

8. Germans do not feel comfortable in discussing about topics of World War II, personal questions viz-a- viz salary, cost of personal objects, work and family life.

9. Prefixes are used before the name to call a person. Only family members and friends are called by the first name.

8.4 SELECTING AND PRESENTING BUSINESS GIFT

the first name. 8.4 SELECTING AND PRESENTING BUSINESS GIFT 1. In German culture offering a small

1. In German culture offering a small gift at the time of first meeting is courteous, preferably pens, classy office stuff, or imported liquor.

3. Gifts are generally offered when invited for social occasions such as dinner and it should not be very expensive. Gifts can include a bunch of roses, fine chocolates or a good wine. Gifts should be properly wrapped.

4. Avoid giving lilies as it is used in funerals. Dresses, perfumes etc has to be avoided as it can be considered as too personal.

5. Beer is not considered as a good gift, as Germany itself is the producer of finest brands of the world.

8.5 GERMAN NEGOTIATION STYLE

of finest brands of the world. 8.5 GERMAN NEGOTIATION STYLE 1. One should carry enough business

1. One should carry enough business cards if dealing with the Germans. The business card should be detailed carrying all the information like the first name, title or position that the person is holding and also the degree earned from the university.

2. Meetings are always formal presided by the chairperson. Germans are very straightforward in their communication so if the person is new should clarify all the doubts to prevent any type of misunderstandings or complications.

3. German meetings are agenda based as they are very schedule-oriented. The discussions are based on facts and information. They are very analytical and work on the facts to come up with the decision.

5.

Germans see all the details while dealing so it is required to do detailed planning and preferably schedule few informal initial mini-meetings so as to make the party aware of the issues or rules and regulations.

6.

Germans don‘t get impressed by ostentatious presentations. Presentations should be substantial and should have more technical data and fact.

7.

Germans are very direct in disagreement and criticism. They can say no directly.

8.

Germans will not compromise easily rather they will like to look for common ground. This may become the best route to make progress when negotiations reach a deadlock. Any attempt of assertiveness and confrontational with a significant German company are usually counterproductive.

9.

Germans are generally very formal but they become very emotional if their sense of order and routine becomes challenged.

8.6

GERMAN MEETINGS

and routine becomes challenged. 8.6 GERMAN MEETINGS 1. Germans are generally very private people. They don‘t

1. Germans are generally very private people. They don‘t like to discuss personal matters during business negotiations.

2. Germans need more time to form relationships on a personal level. At the beginning of a new relationship, an excessive efforts to force a personal level of contact can leave the other with an uncomfortable feeling of obligation to you.

made spontaneously at the table. However, once a decision is finally made, it is extremely difficult to change.

4. In German culture, rules of any kind are meant to be taken seriously.

5. At the end of a meeting or presentation, Germans often signal their approval or thanks by gently rapping their knuckles on the tabletop instead of applauding.

6. Germans look for a very detailed agenda for the meeting and will work efficiently point by point with very little time given to small talk or other secondary points which they considered unimportant. This efficient and time-managed way of conducting meetings result in very typical communication patterns, especially if the intercultural communication language is German.

7. Questions are often very hard and fast after a brief introduction of persons. One may often be interrupted in the middle of the answer, once the other party has received a satisfactory answer to his question, and he will move on to the next question.

8. Interruptions are also quite common if the other person is getting off topic. They focused on the logic and integrity of the facts of an argument and feel no restraint in carrying out his or her point. Persons from highly relationship-oriented cultures, where emotional comfort and the preservation of ―face‖ has priority over truth-based issues, must therefore be careful of being ―run over‖ in meetings and discussions with fact-oriented communicators.

9. Though interruptions are effective tactics in a discussion, but Germans will continue to speak, or even louder in order to avoid being interrupted by someone else. In such cases, one continues to speak until the other simply gives way.

8.7 GERMANS ACCEPTABLE PUBLIC CONDUCT

1. In German one has to be careful in addressing a person in English. Though they speak very good English but may well feel affronted at the presumption especially among the age group of 45 to 60.

2. Germans do not accept the greetings of the strangers in the formal official environment even though they make an eye contact with each other. The reason is that they believe that, ―since I don't know this person, there is no relationship, so there is no need to get into superficial pleasantries‖.

3. Germans rather prefer to have a third-party introduction. This communication behavior has evolved from the historical ―village mentality‖ as they do not expect to be greeted by a stranger and even they will not greet the strangers. Small talk is hard to get hold of for Germans. They talk so affectionately

when they get to know each other well which is generally reserved for a close circle of family and friends.

4. In Germany the organizational culture is known as a ―middle hierarchical‖ culture as there is well defined organizational hierarchy which they observe very strictly.

5. At the time of arrival and departure they go for firm and brief handshakes in both business and social relationships. But when it is among good friends and family members hugging and kissing on both cheeks are common (hand-shaking between parents and grown children, or between adult siblings is not at all uncommon).

6. When the person is interacting or talking eye contact during the introduction is taken as very important and it should be maintained as long as the person is addressing.

7. Germans despite of having high value of rules and social conduct do not have that trait in public life like, queuing or waiting for the turn.

8.8 Case study: IBM Germany

(Gaby Spaeker/Hans-Juergen Weissbach)

Introductory

IBM was awarded with the "Innnovationspreis der deutschen Wirtschaft 1991" (German business prize for innovation) for its plant agreement concerning the introduction of "Außerbetriebliche Arbeitsstätten" (off-site working places).

Off-site working-places enable the employees to work partly at home. The IBM case can be regarded as a typical kind of 'alternating' telework (in other words, a combination between work at home and at the company's working place). Thus, the characteristic for this type of work is not so much the technology used but rather the place where the tasks are fulfilled. IBM categorises this type of work consciously against the traditional terms of "homework" and "telework", because the first one suggests an unqualified type of working at home, whereas the second is often used to refer to sales representatives equipped with a laptop.

Arrangements for off-site working have existed since 1988, when IBM started to test the possibilities by means of three pilot projects, in the areas of development, management and monitoring of the computer centre. Evaluation studies concerning the pilot projects came to the conclusion that this way of working could positively benefit the company, its clients and also the employees themselves.

The plant agreement was initially limited to a two year period. However, in the light of first experiences it became clear in 1993 that further negotiations were necessary, as new ways of working off-site began to develop which were not covered by the original agreement, and the plant agreement was subsequently extended. Nevertheless the official number of participants dropped from about 180 in 1992 to less than 140 by June 1993).

Why was the off-site working places agreement introduced in 1991? According to one early participant: "The time was ready for innovation. It was obvious that certain tasks can be undertaken at home. For example, it doesn't make sense to be on call at work for a whole night, and have to travel to and from work as well, if problems which crop up can easily be solved at home during a few minutes." The organisational implications of off-site working were researched by the company's personnel department, in advance of a decision by management to proceed.

One major reason given for the policy's introduction by IBM was the company's desire to ensure that it was attractive as an employer to potential new employees. This might seem paradoxical, given that the company began a process of shedding several thousand jobs over a period of years only a short time after the introduction of this type of telework. But IBM's plan is to maintain a commitment to full employment practices, albeit at an overall lower basis, once it has reduced the number of employees by early retirement arrangements.

Another company motive for off-site working was stated as the need for increasing productivity. Increased personnel costs should be compensated by increases in creativity and motivation.

The company is engaged in a business sector which is subject to permanent change, and which as a consequence requires new training initiatives and new qualifications from its employees. Recently, there has been a shift of emphasis from production to information services, so that system software knowledge and user programming becomes more and more important.

This has meant that the importance of off-site working arrangements should be enhanced:

The percentage of jobs which include data processing tasks will increase to nearly 60 % until the year 2000 according to cautious estimates. These are jobs which are suited for working at home.of off-site working arrangements should be enhanced: The technical possibilities of working at home have improved

The technical possibilities of working at home have improved as well. Faster PCs and communications links mean that tasks can be performed quicker and cheaper.These are jobs which are suited for working at home. Organisational aspects Looking at the expected

Organisational aspects

Looking at the expected increase in productivity in conjunction with the extra costs of providing equipment for home workplaces meant that there have been restrictions imposed on the types of work considered suitable for this sort of working. In practice, it has primarily been highly qualified staff who have been able to benefit from this form of teleworking. Though the plant agreement explicitly covers all employees (in contrast to IBM agreements in other countries), clearly the opportunity to undertake work tasks at home is much greater in the service and software development departments than in the production division.

The most relevant factor remains the potential increase of productivity brought about by home-based working, and this is more likely to be possible for highly qualified creative staff than for an employee engaged, say, in typing work.

The use of home-based teleworking developed slowly and step by step, because IBM wanted to adopt innovations cautiously, and to meet the company's real needs of the time. By October 1992, a year after the agreement had been concluded, 180 homes of employees had been equipped as working places. This process was under the responsibility of a number of separate departments, which had to finance off-site working out of their budgets. Each equipped home cost (depending on the hardware installed) between DM 6.000 and DM 30.000 per year, a figure

which includes the monthly telecommunication charges and a small reimbursement of DM 40 to the employee for electricity expenses and for the use of private accommodation for work.

It is not only the financial arrangements for teleworking which have been decentralised within the company. The decision to allow an employee to telework is taken by that person's immediate line manager, who considers both the individual's aptitude to work in this way and the nature of the jobs they are undertaking. Both the employee and the manager can initiate a proposal to telework. Two central principles of the plant agreement are that teleworking is only to be undertaken voluntarily and that there is a right to return to the company workplace at any time. This means that the company maintains the previous working site of the teleworking employee; in the longer term, IBM hopes to save office space, but this is not currently an explicit objective of the off-site working agreement.

At least once a week the teleworker is expected to visit the company's office, in order to stay in contact with colleagues and to discuss arrangements with their line manager. The manager is supported by a co-ordinating person (one for each sector), who has the particular task of handling the administrative aspects of the maintenance of the off-company working places. This person serves as a connecting link between the department, with its 10-20 teleworking employees, and the administration.

The decentralisation process introduced for off-site working means that it is the line manager who has the key role in ensuring its success. IBM does not plan to monitor the programme at a higher level within the company. An external evaluation study - carried out by the University of Tuebingen in co-operation with the Fraunhofer-Institut fuer Arbeitswirtschaft und Organization (IAO) - has been undertaken but its findings are not fully published. Therefore an assessment of cost savings and levels of satisfaction by participants engaged in off-company work is not available. Some indication of the scheme's success with employees can be gauged from the fact that no-one has yet asked to leave off-site working to return to the workplace.

Technological background

An online-connection is available for all home-based workers. This is not necessarily a dedicated data line, but (depending on the requirements and cost) may be a standard phone line or ISDN line. Some employees (for example those engaged in word processing) manage without an on-line connection, simply using their PC for their work.

All the technical equipment necessary (hardware, software and data links) and furniture was provided by IBM. An external company carried out a security check, and undertook to arrange for new telecoms links to be installed, if required. IBM employees were already familiar with e-mail, which has been available for several years and since working processes did not change with the introduction of off-site working, training for employees beginning the programme was not considered necessary.

Control and management

"Management by objectives" has been part of the entrepreneurial culture at IBM Germany for some years, combined with the decentralisation of responsibility and the long established principle of time management based on flexitime working models. As one staff member put it, "The employees of IBM are not paid for presence, but for the individual performance."

Supervision focused on success in meeting set objectives has been the basis for individual agreements between employees and line managers by which aims and standards of performance are fixed and monitored by an assessment process. Within a yearly framework of individual performance objectives which are defined "in dialogue" between employee and manager, shorter-term objectives are monitored through a monthly report. This system of management control is as applicable to part-time work at home and work at the office. Off-site working has not altered this procedure, except to the extent that the monitoring of working hours is now undertaken at home by means of a diary.

However, the company is monitoring the experience of off-site working, to see if any modification of management style will be necessary. "Although leading by objectives already has a certain tradition, it makes a great difference whether the employee is permanently available in the office or not. A high degree of sensitivity is needed if the line manager has to assess the employee's ability for autonomous self-management, and his or her individual needs for contact and communication. But these features correspond to the conditions within the company. There are some colleagues who are known as self-managed workers and others who obviously need more direct supervision," said one member of IBM.

Clearly line manager and home-based employee have to trust in each other. "Control is good, trust is better" is the motto pursued. This trust is based on the assumption that the person who asks for greater freedom and autonomy in performing their work is aware of the need of reliability. "The more the line manager can trust the employee, the higher is the degree of independence he can offer him".

Selection of teleworkers

The aims and objectives of the company, and procedures for selecting teleworking employees, have already been considered above. Although covered in the preamble to the plant agreement, the scheme is not primarily intended for parents with little children. However, in many cases employees have requested off-company working for personal reasons and in these situations the economic case for or against home-working is not considered by their line manager. For example a parent who has worked reduced hours since the birth of a child could ask to telework.

However, if there are no good social reasons for beginning off-site working, the economics of the proposed working arrangement will be considered. This often means that part-time working off-site proves unrealistic. "If high investment is necessary, a part- time working place will not be economic".

Communication

Communication within the company has changed considerably through the use of technology. This is not true only of teleworked jobs. For example, e-mail has replaced the need to see colleagues as frequently as in the past. But differences cannot be denied between the style of communication between colleagues of the same team working within the office and working off-site. However, a general evaluation of this area is not yet possible.

The need for close personal communication can set a limit to the amount of off-site working possible. "Sometime we will perhaps learn to perform teamwork via electronic media, but currently a meeting will be more constructive," said one IBM staff member. The IBM principle is to establish organisational innovations such as off-site working only if effective communication within a team or office is guaranteed. According to the IBM experts, the risk of the

increasing isolation of domestic workers should be reduced with a consciously flexible time management system. The weekly attendance in the office is a minimum requirement, and it is up to line managers to decide if more regular communication and contact is considered appropriate.

Evaluation

The introduction of off-site home-based working has not, in itself, led to wider changes in management (the reduction of hierarchies at IBM has already come about for other reasons, and is the subject of a separate 1992 works agreement). However, the way in which work is divided between work colleagues has changed.

Employees off-site deal with their own letters, telephone calls and similar administrative tasks, which are no longer passed to a secretary to be undertaken. It is typical to find that, say, three employees have distributed their work between them in such a way that two are able to work partly from home, whilst their colleague deals with matters which need attention in the office.

Off-site working has not affected the employment status of employees. Under other collective agreements, home- based workers have the same rights to training as workplace based staff. The company requires initiative in this area, especially from highly qualified staff who are expected to decide their own training needs, but the study could find no evidence that teleworking staff were disadvantaged in this area.

The same career development opportunities are guaranteed for teleworkers as for normal office-workers. It might even be that they have better chances for promotion, since this depends mainly on the quality of performance, if it is true that productivity and motivation increase for home-based staff. However career progression could oblige off- site workers to return to the workplace and abandon their participation in the telework scheme.

No findings are available on the issue of overtime working at present. Further research is being carried out, and should be available in two years' time. The works council is not allowed to see the working diaries kept by teleworking staff, and in consequence cannot monitor how well the regulations on working hours are being obeyed. As a result, there are concerns that individual breaches of current limits will weaken these controls. However, this trend is as much a feature of office-based working as home-based working and despite the works council's efforts, is likely to be difficult to prevent in modern daily working life. 0

The question whether the mixing of family life and professional life creates a double burden for employees is not linked only to the issue of the location of work. "Qualified employees at off-site working places have in the past developed the ability to switch between profession and family, for many of them performed additional work at home," said one staff member. A sufficient degree of separation should be guaranteed, provided that the home- based location is appropriate and that the employee is competent at time-management: aspects which are considered when a proposal for off-site working is first approved.

The question of whether home-based working means that employees are less able to be out of reach of their employer deserves a similar answer. Clearly it is more satisfactory is the company does not call by phone outside work hours in the evening or weekends, but sends information via e-mail instead, to be received when the PC is next switched on. Evidence suggests that the on-line link between company and home has not fundamentally changed the degree to which employees feel they area available to their employer.

From the end of 1992, IBM was engaged in a process of considerable job reduction. In theory, off-site workers should have been no more or less affected by this process of downsizing than their colleagues on site. However in practice, nearly 25% of the proposed off-site working arrangements were cancelled or postponed in 1993. It can be assumed that:

formal arrangements for off-site working were not approved, but employees continued to be able to work from home (the effect of this is that the company is not responsible for meeting equipment costs), and/orwere cancelled or postponed in 1993. It can be assumed that: employees may have left the

employees may have left the firm formally, but may be continuing to work for IBM as independent contractors, on an outsourcing basis.is not responsible for meeting equipment costs), and/or Participation of the works council Though the plant

Participation of the works council

Though the plant agreement gives employees the right to ask to begin off-site working, it does not give an automatic right for their requests to be granted. This means that the works council has no powers to intervene in the individual agreements between line managers and employees. Thus, its influence has been limited to formulating the original plant agreement, and negotiating the revised, broader agreement of 1993.

Concerning the issue of working time, the works council has been given limited rights of participation and control. The working hours at the office and at home are registered in a weekly plan in order to ensure the employee's

availability, but otherwise any time not included in the regular contractual working hours is at one's free disposal. However, because the works council can monitor only the time officially spent working, some members are concerned that existing working hours agreements will be under threat, and that Sunday working could reemerge as

a norm. The employer's counter-argument is that employees have autonomy and flexibility in fixing their own working hours.

Concerning questions of ergonomic standards and security, the same regulations apply for off-site working as do at the company's own premises. are used. Without the employee's permission, neither works council representatives nor management have the right to get access to home accommodation. Any increased risks of data security at domestic working places is discounted by experts.

The negotiations with the works council and the discussions with trade unions led to the integration of a number of proposals made by the union into the plant agreement on off-site working. Many trade union concerns and criticisms of telework do not apply in the case of IBM, because of the preservation of regular employment, the good communication links and the guaranteed quality of work corresponding with legal and social regulations.

Concluding remarks

In practice, the real number of telework jobs have not come up to the initial expectations held at the time when the agreement was first signed. The need to attract employees is no longer so acute, given the reduction in the number

of jobs in the company and the IT sector. Furthemore, irregular forms of telework have developed, where the

company has not compensated employees for the costs incurred. Today (1997) the limitations of the pilot project have been removed and off-site teleworking is regulated under a general plant agreement which includes all types of remote work including mobile work. In general, this agreement is less favourable for employees. Under the new agreement, it is believed that at least 4.000 to 5.000 employees are directly affected.

The IUK Institute reported on the project in 1993 (Fischer, Spaeker, Weissbach: Neue Entwicklungen bei der sozialen Gestaltung von Telearbeit, Dortmund, 1994) and 1995 (Weissbach, Lampe, Spaeker: Telearbeit, Marburg,

1997).

References:

http://www.kwintessential.co.uk/resources/global-etiquette/germany-country-profile.html

http://www.worldbusinessculture.com/German-Management-Style.html

http://www.worldbusinessculture.com/French-Management-Style.html

http://www.kwintessential.co.uk/resources/global-etiquette/france-country-profile.html

International Management, Culture, Strategy and Behavior (6th edition, Hodgetts-Luthans-DOH).

CHAPTER 9

British Style of Management

The United Kingdom is a nation of cultural and ethnic diversity consisting of four countries each with a clear identity:

England, Scotland, Wales and Northern Ireland. A thoroughly multicultural society, the UK continues to blend its rich cultural heritage with a modern and innovative outlook. Knowledge and an appreciation of the basic cultural, ethical and business values of the UK is crucial to any organization wanting to conduct business in such a varied yet traditional country.

The people of the UK are mainly Caucasian but in recent years immigrants from England's former colonial possessions now means people of Indian, African, Caribbean and Asian heritages now comprise ~5% of the population with about half of those born in the UK. This has led to a multi-cultural society that has seen some eruptions of race tensions in the poorer parts of society. Racial discrimination although illegal does exist in some parts of the society as it does in every society.

The heritage of the UK (particularly England) is very rich with world discoveries, colonial possessions, and the monarchy, civil and European wars and as such, tradition is a very strong component in the culture. The people can seem to be reserved and formal in interactions, not given to excessive behavior or expression of emotion. Nevertheless, if you ask people for help they will readily try to oblige. There is also a strong respect for individual privacy.

The tradition of the English culture has been a class system based on hereditary titles and bloodlines. Cultural aspects such as manner of speech, accents, educational backgrounds, dress, etc. are still evidence of the class structure. This culture is partly entrenched by the education system which has very wealthy private (called public) schools that the wealthier parts of society use. There still appears to be a disproportionate representation of the educated "elite" in the positions of power in Government and business that is referred to as "the old boy's network".

Britain you will find most people are kinder to you if you behave politely, respecting local people and customs. You may sometimes upset people by things that you say or do, even if these things seem perfectly normal in your own culture.

9.1 Appearance

Business attire rules are somewhat relaxed in England, but conservative dress is still very important for both men and women. Dark suits, usually black, blue, or gray, are quite acceptable. Men's shirts should not have
Dark suits, usually black, blue, or gray, are quite acceptable. Men's shirts should not have pockets; if they do, the pockets should always be kept empty. Additionally, men should wear solid or patterned ties, while avoiding striped ties. dress is still very important for both men and women. Men wear laced shoes, not loafers.
Men wear laced shoes, not loafers. Businesswomen are not as limited to colors and styles as men are, though it is still important to maintain a conservative image.pockets should always be kept empty. Additionally, men should wear solid or patterned ties, while avoiding

9.2 Behavior

Always be punctual in England. Arriving a few minutes early for safety is acceptable.as limited to colors and styles as men are, though it is still important to maintain

Decision-making is slower in England than in the United States; therefore it is unwise to rush the English into making a decision.

A simple handshake is the standard greeting (for both men and women) for business occasions and for

visiting a home.

Privacy is very important to the English. Therefore asking personal questions or intensely staring at another person should be avoided.

Eye contact is seldom kept during British conversations.

To signal that something is to be kept confidential or secret, tap your nose. Personal space is important in England, and one should maintain a wide physical space when conversing. Furthermore, it is considered inappropriate to touch others in public. Gifts are generally not part of doing business in England.

A business lunch will often be conducted in a pub and will consist of a light meal and perhaps a pint of ale.

When socializing after work hours, do not bring up the subject of work. When dining out, it is not considered polite to toast those who are older than yourself.

9.3 Communications

In England, English is the official language, but it should be noted that Queen‘s English
In England, English is the official language, but it should be noted that Queen‘s English

In England, English is the official language, but it should be noted that Queen‘s English and American English are very different. Often times ordinary vocabulary can differ between the two countries. Loud talking and disruptive behavior should be avoided.

One gesture to avoid is the V for Victory sign, done with the palm facing yourself. gesture.

This is a very offensive

If a man has been knighted, he is addressed as "Sir and his first name"

If

a man has been knighted, he is addressed as "Sir and his first name" example: Sir

9.4 British Culture - Key Concepts and values

Indirectness - The British, in particular the English, are renowned for their politeness and courtesy. This is a key element of British culture and is a fundamental aspect of British communication style. When doing business in the UK you generally find that direct questions often receive evasive responses and conversations may be ambiguous and full of subtleties. Consequently, it is important to pay attention to tone of voice and facial expression, as this may be an indication of what is really meant.

'Stiff upper lip' - This is a term often used to describe the traditionally British portrayal of reserve and restraint when faced with difficult situations. In British culture open displays of emotion, positive or negative are rare and should be avoided. During meetings, this means your British colleagues will approach business with an air of formality and detachment.

Humour - A vital element in all aspects of British life and culture is the renowned British sense of humour. The importance of humour in all situations, including business contexts, cannot be overestimated. Humour is frequently used as a defense mechanism, often in the form of self-depreciation or irony. It can be highly implicit and in this sense is related to the British indirect communication style.

The United Kingdom is renowned for its colorful history and strong sense of tradition that has been shaped by a colonial empire, both civil and European wars and an constitutional monarchy. The fourth largest trading nation, the UK is fast becoming Europe's leading business centre. Supported by a long-established system of government and

economic stability, the UK is an attractive base for overseas business, offering skills in areas such as research, development and technology. However, in order to operate successfully in the UK business environment, there are a number of important issues to take into consideration both before and during your time there.

9.5 UK Business Part 1 - Working in the UK

Working practices in the UKyour time there. 9.5 UK Business Part 1 - Working in the UK o In accordance

o

In accordance with British business protocol, punctuality is essential at any business meeting or social event.

o

When making business appointments it is best practice to do so several days in advance.

o

The British are inclined to follow established rules and practices; therefore decision-making is often a slow and systematic process.

Structure and hierarchy in UK companiesdecision-making is often a slow and systematic process. o Today, UK businesses maintain relatively "flat"

o

Today, UK businesses maintain relatively "flat" organisational hierarchies. The principal divide is between managers and other ranks.

o

In general, the board of directors is the principal decision-making unit. Major decisions are made at the very top.

o

The British prefer to work in the security of a group-established order with which they can identify.

Working relationships in the UKof a group-established order with which they can identify. o UK managers generally favour the establishment

o

UK managers generally favour the establishment of good working relationships with their subordinates.

o

The boss often takes the role of a coach, creating an atmosphere of support and encouragement.

o

Teamwork is very important, however there exists a strong feeling of individual accountability for implementation and error.

9.6 UK Business Part 2 - Doing business in the UK

Business practices in the UKand error. 9.6 UK Business Part 2 - Doing business in the UK o Business meetings

o

Business meetings in the UK are often structured but not too formal and begin and end with social conversation.

o

First names are used almost immediately with all colleagues. Exceptions are very senior managers. However, you should always wait to be invited to use first names before doing so yourself.

o

Business cards are an essential prop and are usually exchanged.

o

Negotiations and decisions are usually open and flexible. Your British counterparts will favour a win/win approach.

9.7 British business etiquette (Do's and Don'ts)

DO respect personal space. The British value their space and keeping an acceptable distance is advised.9.7 British business etiquette (Do's and Don'ts) DO remember to shake hands on first meetings. It

DO remember to shake hands on first meetings. It is considered polite to do so.their space and keeping an acceptable distance is advised. DO make direct eye-contact with your British

DO make direct eye-contact with your British counterpart, however remember to keep it to a minimum or it could be considered impolite or rude.hands on first meetings. It is considered polite to do so. DON'T ask personal questions regarding

DON'T ask personal questions regarding your British counterpart's background, occupation or income.it to a minimum or it could be considered impolite or rude. DON'T underestimate the importance

DON'T underestimate the importance of humour in all aspects of business in the UK.British counterpart's background, occupation or income. DON'T forget that instructions are often disguised as

DON'T forget that instructions are often disguised as polite requests.background, occupation or income. DON'T underestimate the importance of humour in all aspects of business in

In accordance with British business etiquette, when entering a room allow those of a higher rank to enter first.In the UK, the number 13 is considered extremely unlucky. Sitting with folded arms during

In the UK, the number 13 is considered extremely unlucky.