Presented at the International Conference "Global Business Model Innovation" on October 4, 2013 at Shanghai Dianji University by Dmitry Shtykhno. Paper summarizes findings of research which mostly contributed to author's consultancy in the field of international business and comparative management: the impact of culture on managerial work values and cultural determinants of learning styles. Paper covers issues of convergence vs. divergence of culture values, pay values and allocative behaviors, and handling uncertainty in China, USA and Russia. Article also reflects different research investigating the relationship between cultural values and the learning style preferences of students of business administration.
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Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
1. Developing Cultural Savvy for Success in
Global Business:
Case of China, USA and Russia
Global Business Model Innovation: An International Conference
Shanghai Dianji University 60th Anniversary, October 2013
by Dmitry Shtykhno, Ph.D.
Dean of the School of Business,
Plekhanov Russian University of Economics
2. Contents
• Introduction: most popular questions regarding
managerial issued of cross-cultural decision-
making
• Studies of the impact of culture on managerial
work values
• Studies of the cultural determinants of learning
styles
• Conclusion: convergence, crossvergence and
divergence of cultural valuesenhance the cultural
compatibility between learner and the learning
environment
2 of 23Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
3. Introduction (1)
• With the growth of globalization, cultural
sensitivity and understanding in dealing with
global complexities involved in conducting
business in host countries have been
expanding
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia 3 of 23
4. Introduction (2)
• Culture…
– way of organizing life, of thinking, and of conceiving the
underlying assumption about the family, the state, the
economic system, and even Man himself (Hall, 1959)
– every aspect of life: know-how, technical knowledge,
customs of food and dress, mentality, values, language,
symbols, socio-political and economic behavior,
indigenous methods of making decisions and exercising
power, methods of production and economic relations,
and so on (Verhelst, 1990)
– "software of mind“ which povides a guide for humans
on how to think and behave; it is a problem solving tool
(Hofstede , 2001)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia 4 of 23
5. Introduction (3)
• An essential skill for managing people and processes
in other nations is "cultural savvy" which is mangers
having a working knowledge of the cultural variables
affecting management decisions (Risks, 1983)
• Cultural sensitivity or cultural empathy is the
recognition and sincerely caring about other people's
cultures (Joinson, 1998)
• Cultural awareness enables managers to develop
appropriate policies and determine how to plan,
organize, and control in a specific international
organization (Khairullah, 2013 )
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia 5 of 23
6. Introduction (4)
• Two major issues of developing cultural savvy for
success in global business:
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
the impact of
culture on
managerial work
values (what to
teach);
cultural
determinants of
learning styles (how
to teach).
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7. Impact of culture on managerial work values (1)
• As many international companies consider
trying to become global organizations in
the sense of having a seamless or
borderless approach to organization, the
issues of convergent/divergent values
becomes more relevant. Those
organizations that strive to become global
enterprises envision a unified approach to
business that transcends cultural
differences (Porter, 1986).
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• With a global approach to organization, not only must the
organization understand the diverse values systems of its multi-local
operation, but, if it is to create a seamless/borderless organization,
it must now try to integrate these diverse value systems into a
common corporate culture (Yip, 1992).
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8. Impact of culture on managerial work values (2)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
Business environment ideology and country
culture have been identified as the primary
forces that shape one's values
Convergence theory: the
ideology of the workplace
drives values
Divergence theory: country
culture, not workplace
ideology, drives values
Crossvergence theory: work ideology and country culture
interact to create a new and unique value system that is
based on the melding of both cultural and ideological
influences
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9. Impact of culture on managerial work values (3)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
The Hofstede (1980) typology is often
used as a starting point in developing a
framework for contrasting the work
values of the countries.
Country Power
Distance
Individualism Masculinity Uncertainty
Avoidance
Long Term
Orientation
USA
Russia
China
40 L
95* H
80* H
91 H
50* M
20* L
62 H
40* L
50* M
46 L
90* H
60* M
29 L
10* L
118 H
H(igh) = top third, M(edium) = medium third, L(ow) = bottom third
* - estimated
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10. Impact of culture on managerial work values (4)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
Extreme collectivist
orientation with some
shift away from
collectivist values
towards individualist
values,a change in
emphasis away from
political/social goals
towards economic
goals.
Individualism with
preferences for
equity in which
distributions are
proportionate to
individual
contributions
More "collectivist"
than the USA,
although to a much
lesser degree than
China, a less
deeply-rooted
collectivist
orientation than in
China
Individualism,
capitalism, and income
differentiation
The combination of
collectivism, socialism
and egalitarian pay
practices
Egalitarianism traced to
Confucian principles
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11. Impact of culture on managerial work values (5)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
Study of the impact of
culture and ideology on
managerial work values
conducted by David A.
Ralston, David H. Holt,
Robert H. Terpstra and
Yu Kai-cheng (1997)
used well-developed set
of 10 subdimensions
and three higher-order
dimensional continua
that are comparable to
SVS - The Schwartz
Value Survey (Schwartz,
1992)
individualism
collectivism
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12. Impact of culture on managerial work values (6)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
The individualism/collectivism continuum clearly follows the
crossvergence with culture-dominant hypothesis.
The openness-to-change/conservation dimension also
suggests a crossvergence effect while neither culture nor
ideology appears dominant for the openness dimension.
The self-enhancement/self-transcendence dimension is
interesting because in part it supports crossvergence, while in
part supporting convergence.
Russia is more likely to adopt the current Western capitalism
ideology than China.
Nonetheless, that is not to suggest that China will not develop
its own form of capitalism, but more likely one that is uniquely
compatible with the Chinese value system.
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13. Impact of culture on managerial work values (7)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• Study conducted by Jane K. Giacobbe-Miller, Daniel J. Miller,
and Vladimir I. Victorov (1999) examines pay values (meaning
the perceived fairness and appropriateness of pay allocations
within an organization) and allocative behaviors by organizational
type in China, Russia and the United States.
• Researchers assume that the introduction of Western managerial
systems (particularly pay systems) in both Russia and China
create the conditions in which convergence, crossvergence or
divergence might occur.
• Results relating to expressed values supported crossvergence
theory, whereas results relating to allocative behaviors
supported convergence theory for the Chinese managers and
crossvergence theory for the Russian managers.
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14. Impact of culture on managerial work values (8)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• Evidence of divergence and crossvergence seems most
apparent in allocative behaviors as opposed to expressed
values. While both Russian and Chinese managers (regardless of
organization type) appear "quite capitalist" in their expressed
rejection of equality and need-based rules, Russian managers in
state-owned enterprises and Chinese managers in both state-
owned enterprises and joint ventures/foreign-owned
enterprises allocated the bonus in a collectivist manner.
• In contrast, managers in Russian joint ventures/foreign-owned
enterprises and in the United States were significantly more
individualistic in their allocations.
• It is also necessary to note that expressed values are different
from allocative behaviors.
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15. Impact of culture on managerial work values (9)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• Study of Peter Smith, Mark Peterson, and Zhong Ming Wang
(1996) tested assumptions that managers from Asian and
Western cultures would differ in the extent to which they relied
on specific sources of guidance and support when responding to
uncertain work events.
• Managers in the US were found to rely most heavily on their
own experience and skills, especially when improving team work
or dealing with subordinates. In contrast, Chinese managers
were more likely to rely on rules and procedures.
• While US managers reported a low reliance upon peers, the
Chinese managers appear to be least likely to rely on their peers.
• All managers also reported a low reliance upon their
subordinates, with managers in the US reporting the least
amount of reliance upon subordinates.
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16. Impact of culture on managerial work values (10)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• Smith and his colleagues also found differences among the
managers in their reactions to the different types of work events.
• The US managers favored their own experiences in the most of
event types, but were also likely to rely on their subordinates,
particularly in improving teamwork. The US managers indicated a
reluctance to involve their superiors in improving work quality or
their peers in deciding how to use raw materials more effectively.
• The Chinese managers' reliance on their own experience was
generally less consistent and appeared to be viewed negatively in
events involving the changing of work procedures or rewarding
subordinates for good work. Chinese managers were also not
likely to rely on their subordinates when improving teamwork or
communicating with senior management, or their peers when
changing work procedures.
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17. Cultural determinants of learning styles (1)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
Kolb’s (1984)
classification of
learning styles is
based on the
assumption that
individual learning
can be
conceptualized as
a circular process
consisting of four
activity stages.
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18. Cultural determinants of learning styles (2)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• Dirk Holtbrügge and Alexander T. Mohr (2010) in their research
of the cultural determinants of learning styles develop
hypotheses that relate dimensions of culture to the likelihood
that individuals prefer one learning style over another.
• The study reveals a positive influence of individualism on the
odds that learners prefer a learning style characterized by active
experimentation and abstract conceptualization, that is,
Convergence.
• Masculinity was found to have a positive effect on the likelihood
that learners prefer a learning style characterized by abstract
conceptualization and reflective observation, that is,
Assimilation.
• The study provides no clear-cut evidence for an influence of
Power Distance, Long-Term Orientation, or Uncertainty
Avoidance.
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19. Cultural determinants of learning styles (3)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• It could be argued that individuals with a strong desire to
avoid uncertainty prefer abstract conceptualization, as this
allows for a reduction in uncertainty.
• At the same time, however, individuals with a very weak
desire to avoid uncertainty might also prefer this learning
style because abstract concepts may be adapted in a very
flexible way to new and unknown situations.
• Thus, individuals on the extreme poles of this cultural
dimension may be guided by two different ideals that both
favor abstract conceptualization: "The members of cultures
that fall in between may be relying on concrete experiences
as well to learn since they are not overburdened with ideals"
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20. Conclusion (1)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• Joint venture partners may rely upon different sources of
guidance when handling uncertain work events. Those
differences in managerial style may be viewed negatively by
joint venture partners, and potentially lead to conflict.
• Whether cultural differences soften as management
practices become internationalized or management
practices change to adapt to deeply-rooted cultural
differences remains to be seen.
• The phenomena of convergence, crossvergence and
divergence of cultural values may depend on
how deeply held the values are initially;
the degree to which the values differ from the "foreign"
ideology being introduced in the workplace.
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21. Conclusion (2)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• Educators may develop "toolboxes" of approaches to
teaching in order to enhance the cultural compatibility
between learner and the learning environment.
• Large universities might consider splitting student cohorts
and employing different pedagogical methods reflect
different learning styles of subgroups. It is necessary to
caution against such an approach on the grounds that
although individuals may show a preference for a specific
learning style, most research shows that students are often
multimodal.
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22. Conclusion (3)
Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia
• There is a need to increase learners’ and teachers’
awareness of the influence of cultural values on learning
style preference in order to improve their own learning in
the sense of metacognition.
• This awareness of the effects of cultural values on one’s
own and other’s learning styles may be enhanced through
discussion about learning styles, and might improve
learning in group work situations in which students are
made aware of existing differences in learning styles and are
enabled to build on these differences in a synergistic way in
order to enhance the overall learning experience of the
group.
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23. Developing Cultural Savvy for Success in Global Business: Case of China, USA and Russia 23 of 23
Plekhanov Russian University of Economics
sincerely congratulates
Shanghai Dianji University
with the 60th Anniversary!