INTERNATIONAL

BUSINESS
UNDERSTANDING THE CROSS-
CULTURAL FACTOR
 Overview of Lecture
Part I
Culture and International Business
Part II
Theories & Models
 - Kluckholm and Strodbeck (Cultural Orientation)
 - Hall (Cultural Context)
 - Laurent (Culture, Status and Function)
 - Hofstede (and the Workplace)
 - Trompenaars (Consultatn’s Contribution)
Part III
Cross-cultural Management Communication

- Appropriate Business Communication Across Cultures

- A Transaction Model
 PART I

Culture and International

Business
 Why study intercultural
communication in business
contexts?
http://www.ess.uci.edu/~oliver
/silk.html
 Difficulties in developing globalized
products:
 Diversity of taste and demand
Hoecklin, L. 1995. Managing Cultural
Differences: Strategies for Competitive
Advantage, The Economist Intelligence
Unit / Addison Wesley.
 Diversity of worldwide industry standards
 Difficulty in managing global companies
and the lack of agreement on
organizational structures and systems
 Subsidiaries need to develop their own
abilities, talents and local knowledge
Think Globally. Act Locally.

~ Derek Torrington,
1994
Where does culture fit
into the business
equation?
 Business
Environment
Decisions taken by a company are usually
influenced by:

• internal factors such as strategy, goals,

scope of operations, internal resources
including management systems and
organizational culture

• and factors in the external business

External Factors
Mead, Richard, 1998. International
Management: Cross cultural
dimensions. 2nd Edition. Blackwell.
Pp 15.
Cross-cultural Management
Skills
•understand the nature of culture
and how it influences behaviour
in the workplace
•learn about specific cultures –
the other’s and your own
•recognize the differences
between cultures
•Implementation of structures
Beamish, P. W. and Calof, J.
L., 1989. International
business education: a
corporate view. Journal of
International Business
Studies, Fall, pp 553-64.
 Ignoring Cultural Diversity
This policy is followed when:
•the management lack skills and
resources to handle the diversity
•the task offers no opportunities
for deriving positive effects from
diversity
•the negative effects outweigh the
positive effects
•refusing to recognize diversity
seems likely to minimize the
negative effects
 PART II

Theories and Models

 1. Kluckhohn and
Strodtbeck on Cultural
Orientations

Kluckhohn, F. R. and
Strodtbeck, F. L. 1961.
Variations in Value
Orientations, Peterson, New
York.
 Cultural Orientations
Orientations Range of Variations

3. What is the nature of Good

people? (changeable/unchangeab
le)
Evil
A mixture of good and evil
7. What is the person’s
relationship to
nature? Dominant
In harmony
Subjugation
10. What is the person’s
relationship to other Lineal (hierarchical)
people?
Collateral (collectivist)
 Cultural Orientations
Orientations Range of
4. What is the Variations
modality of human Doing
activity? Being
Containing

5. What is the Future

temporal focus of
human activity? Present
Past

6. What is the Private

conception of Public
space? Mixed
 Critique of the
Kluckhohn-Strodtbeck
Weaknesses
Model

• the authors were not centrally

concerned with management studies
and did not describe the implications
for management

• the orientations and variations are not

precisely defined

• interpretations are bound to be

subjective
Strength
s • cultures can be compared along
distinct dimensions

• comparative models apply to cross-

cultural management

• analysis of predominant variations

within the national culture does not
accurately predict: - the values of sub-
cultural minorities; the values
practiced in different industries and
organizations and the values
practiced in exceptional cases.
2. Edward T. Hall and
Cultural Contexts

Hall, E. T., 1976. Beyong

Culture, Anchor Press /
Doubleday
 Characteristics of High-
Context cultures
 long lasting relationships

 communication is economical, fast

and efficient

 wider
range of communicative
expressions

 peoplein authority are personally

responsible for the actions of
 In high-context cultures
…
 Agreements between persons
are spoken rather than written

 Insidersand Outsiders are

distinguished

 Cultural
patterns are ingrained
and relatively slow to change
 Characteristics of Low-
Context Cultures
 shorter relationships

 messages are made explicit

 authority is diffused

 agreements are written rather

than spoken
 In low-context cultures…

 Insidersand Outsiders are less

closely distinguished

 Culturalpatterns are relatively

fast to change
 Critique of Hall’s
Model
 qualitative
insights rather than
quantitative data

 useful
in understanding how
members of different cultures
develop business relationships
 3. André Laurent:
Culture, Status &
Function

Laurent, A., 1983. The cultural

diversity of Western conceptions
of management, Internnational
Studies of Management and
Organization, 13 (1-2), pp 75-96.
Adler, N.J., Campbell, N. C., and
Laurent, A., 1989. In search of
appropriate methodology: from
outside the People’s Republic
of China, Journal of
International Business Studies,
Spring, pp 61-74
 Laurent’s 4
parameters
1. Perceptions of the organization
as political systems

• Authority systems

• Role formulation systems and

• Hierarchical relationship
systems
3 points:

•how far the manager carries

his/her status into the wider
context outside the workplace

•the manager’s capacity to

bypass levels in the hierarchy

•the manager as expert in

contrast to the manager as
facilitator
 “through their professional
activity, managers play an
important role in society”
 Denmark 32%
 UK 40%
 Netherlands 45%
 Germany 46%
 Sweden 54%
 USA 52%
 Switzerland 65%
 Italy 74%
 France 76%
~ Laurent,
1983:80
 “in order to have efficient work
relationships, it is often necessary to
bypass the hierarchical line”
 Sweden 22%
 UK 31%
 USA 32%
 Denmark 37%
 Netherlands 39%
 Switzerland 41%
 Belgium 42%
 France 42%
 Germany 46%
 Italy 75%
 China 66%
~ Laurent, 1983:86 and Adler et all,
1989:64
“it is important for a manager to have at hand
precise answers to most of the questions that

his subordinates may raise about their work”

 Sweden 10%
 Netherlands 17%
 USA 18%
 Denmark 23%
 UK 27%
 Switzerland 38%
 Belgium 44%
 Germany 46%
 France 53%
 Italy 66%
 Indonesia 73%
 China 74%
 Japan 78%
~ Adler et al, 1989:69
 4. Geert Hofstede:
Culture & the
Workplace
Hofstede, G., 1980. Cultures Consequences:
International Differences in Work-related
Values, Sage

Hofstede, G., 1984. Cultures

Consequences: International Differences in
Work-related Values, abridged edn, Sage,
Beverly Hills

Hofstede, G., 1991. Cultures and

 Hofstede’s Model
• power distance – the distance between
individuals at different levels of a
hierarchy in an organization.

• uncertainty avoidance – more or less

need to avoid uncertainties about the
future

• individualism vs collectivism – the

relations between the individual and his
/ her fellows

• masculinity vs femininity – the division

 Critique of Hofstede’s
Model
Weaknesses

 assumes that National Territory are

the limits that culture correspond to

 informants also worked within a

single industry

 technical difficulties
 Hofstede’s Model
Strengths
 most practical to management
problems

 comparisons between national

cultures possible

 highly relevant
 Sondergaard, M., 1994.
Research note:
Hofstede’s
Consequences: a study of
reviews, citations and
replications,
Organizational Studies,
15(3), pp 447-56
 Smith, P. B., Dugan, S.,
and Trrompanaars, F.,
1996. National culture
and the values of
organizational
employees: a dimensional
analysis across 43
nations, Journal of Cross-
cultural Psychology. 27,
pp 231-64
5. Fons Trompenaars and
the Consultant’s
Contribution

Trompenaars, F., 1993. Riding

the Waves of Culture. Nicholas
Brealey, London
 Trompenaars’s
parameters:
4. Relationships and rules;
Universalism vs Particularism

5. The group and the individual;

Collectivism vs Individualism

6. Feelings and relationships;

Neutral vs Emotional

7. How far we get involved; Specific vs

Diffuse
 Trompenaars
Parameters:
8. How we accord Status

9. How we manage Time

10. How we relate to Nature

Critique of Trompenaars’
Parameters
 advantage of this approach is that it
draws together and applies ideas
contributed by a range of scholars

 disadvantage like in the value of

Trompenaars own research. The pool
of informants is vaguely defined and
lacks homogeneity
 PART III
Cross-cultural
Management
Communication
 What is appropriate
communication in different
cultures?
When communicating, consider the
following:

 WHO
 TOWHOM
 WHAT
 HOW
 WHEN
 WHERE
The Transactional Model

Participant A Participant
 decides what to B
communicate  decides what to
 encodes a communicate
message  encodes a
 transmits the message
message  transmits the
 decodes B’s message
message  decodes A’s
message

situational
influences
situational
 Situational Influences
 Non-verbal signaling

Hall, E. T., 1959. The Silent Language.

Doubleday.

 Stance

 Gesture

 Voice quality
Group Work

Cheryl M. Cordeiro
cordeiro@ling.gu.se