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part 6: Global entrepreneurship class - culture

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part 6: Global entrepreneurship class - culture

part 6: Global entrepreneurship class - culture

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  • 1. Global Entrepreneurship Developing Global Mindset for Entrepreneurs
  • 2. Brian David Butler Teaching: Brian Butler is currently a professor with Forum-Nexus, which is co-sponsored by the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan. He teaches classes on International Finance and Global Entrepreneurship in brian.butler@forum-nexus.com Europe every July and January. briandbutler@gmail.com LinkedIn/briandbutler Skype: briandbutler In Miami, Brian has taught Finance, Economics and Global Trade at Thunderbird’s Global MBA program in Miami. He previously worked as a research analyst at the Columbia University Business School in New York City.
  • 3. Brian David Butler International: A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled brian.butler@forum-nexus.com extensively in Latin America, Asia, Europe and North briandbutler@gmail.com LinkedIn/briandbutler America. Skype: briandbutler Brian currently lives in Recife, Brazil where he is teaching classes on ―Global Entrepreneurship‖ at the university ―Faculdade Boa Viagem‖.
  • 4. Brian Butler: Founder of “KookyPlan.com” – the wiki for Entrepreneurs
  • 5. Exam Midterm today
  • 6. Schedule for today 1. First ½ - Midterm exam 2. After break ▫ Discussion about exam, doubts 3. Cross-cultural issues for Global Entrepreneurs
  • 7. Mid-term Exam – May 8th, 2010 -- 830 am-10am • 1.5 to take exam
  • 8. Global Entrepreneurship: developing the global mindset for entrepreneurs Class #6 Saturday May 8th , 2010 •Cross cultural issues for Global entrepreneurs
  • 9. Question: • Who thinks they might: 1. Start a company with business overseas? 2. Work with a foreign company someday? 3. Work with foreigners someday? ▫ Are you ready? How high is your cultural intelligence?
  • 10. Cultural Competence: • Goals: ▫ To be successful in business across cultures or in multicultural operations. ▫ Understand when you need to adapt. When working with employees from other cultures, a person has to determine how much they might need to adapt their behaviors around different business functions. ▫ To be able to succeed with people from different cultural backgrounds • But, beware: ▫ An employee’s success in a certain area does not mean they will be successful in the same area in another culture. http://globotrends.pbworks.com/culture
  • 11. Importance for global entrepreneurs • When ―localizing‖ foreign business models, you need to consider a PEST analysis • A big part of which involves CULTURE: ▫ What is different (from one country to next) ▫ What might make the business NOT work (if you transfer it without making modifications?)
  • 12. The “S” of “PEST(LE)” social • lifestyle trends • demographics • consumer attitudes and opinions • media views • law changes affecting social factors • brand, company, technology image CULTURE • consumer buying patterns • fashion and role models • major events and influences • buying access and trends • ethnic/religious factors • advertising and publicity • ethical issues
  • 13. National perspectives where you are influences what you see.
  • 14. Hofstede analysis • "Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster." ▫ - Dr. Geert Hofstede
  • 15. How similar are we?
  • 16. Cultural Orientation Index COI
  • 17. Cultural Orientations Indicator -COI • The COI generates an analysis of cultural gaps by comparing your COI cultural profile with national and regional cultural profiles, and it reveals ▫ similarities and differences ▫ as well as potential culture-based risk and success factors. • On the basis of these results, individuals can develop effective cross-cultural management and business strategies. http://globotrends.pbworks.com/culture
  • 18. Cultural Orientations Indicator- COI
  • 19. Cultural Orientations Indicator -COI • the COI incorporates 10 dimensions of culture, which each meet three criteria: ▫ 1. Each dimension recognizes an important aspect of business and social life. ▫ 2. Each dimension represents components found in every socio-cultural environment. It is a basic orientation and shared rationale for behavior. ▫ 3. Each dimension has practical value to anyone who needs to reconcile, integrate or transcend cultural difference in order to obtain a desired outcome. http://globotrends.pbworks.com/culture
  • 20. Areas of potential conflict circled
  • 21. NOTE: • One thing we need to remember is that cultures are never exclusively one or the other: cultures will likely be one and the other, but with a clear tendency toward one of these two extremes.
  • 22. Gap Analysis Q: will John Smith have trouble in Brazil?
  • 23. COI – Brazil vs.Analysis Gap USA
  • 24. More analysis • Lets look at the variables one-by one….
  • 25. • Individualism: ▫ How individuals define their identity. ▫ This dimension ranges from those on one end, such as many Americans, who see themselves as individuals first and as members of a community second, to those on the other end of the spectrum, such as many Asians, who see their interests as tied first and foremost to being members of a community. http://culturallyteaching.com
  • 26. • Individualism: • Individualistic vs. Collectivistic cultures ▫ Where do you see Brazilian vs. US culture with relation to individualist vs. collectivistic comparison?  (example from previous class: group at Disney world) http://culturallyteaching.com
  • 27. Areas of potential conflict circled
  • 28. Brazil + USA - Key differences: • Individualism: ▫ USA: very individualistic, universalistic ▫ Brazil: sort-of -collectivistic, particularistic
  • 29. Univeralistic vs. Particularistic Cultures • Univeralistic – rules are fair, and apply to everyone, regardless of circumstances • Particularistic – rules might not be fair, and special circumstances might mean they should not apply to me in this circumstance…
  • 30. Q: will John Smith have trouble in Brazil?
  • 31. • Power: How individuals view different power relationships. ▫ North American cultures typically value equality between people, especially in the US. In many other cultures, especially in Asia, age and status associated with it and position are venerated, and hierarchy is paramount. http://globotrends.pbworks.com/culture
  • 32. • Power: ▫ Hierarchy vs Equality ▫ How do you think the US + Brazil are different on this dimension? http://globotrends.pbworks.com/culture
  • 33. Areas of potential conflict circled
  • 34. Brazil + USA - Key differences: • Power: ▫ USA: more towards - equality ▫ Brazil: more towards - hierarchy
  • 35. Q: will John Smith have trouble in Brazil?
  • 36. • Power: • Hierarchy – flat equalitarian vs. hierarchy ▫ Question: is it ok to publicly challenge your boss, or to chastise an employee? ▫ Can decisions be made by the lowest of employees? ▫ Do low-level employees think ―I'm just as good as the boss‖? ▫ Famous Quote: ―we hold these truths to be self –evident that all men are created equal‖ Thomas Jefferson, US Declaration of Independence http://globotrends.pbworks.com/culture
  • 37. • Basically, Power Distance refers to inequality. • Does a culture find inequality okay and in fact necessary to maintain societal structure (high Power Distance)? Or does a culture find inequality wrong and strive to reduce inequality (low Power Distance)? ▫ 104 Slovakia (= high Power Distance) ▫ 94 Philippines ▫ 90 Romania ▫ 81 Mexico ▫ 67 Colombia ▫ 57 Spain ▫ 49 South Africa ▫ 45 Jamaica USA is NOT the extreme of equality- ▫ 40 USA orientation!!! ▫ 39 Canada ▫ 36 Australia ▫ 35 Great Britain ▫ 18 Denmark (= low Power Distance) http://culturallyteaching.com
  • 38. • In LOW power distance cultures, ▫ people are considered as existentially equal. The inequality is just one in roles, and is not existential. ▫ Merit, what you do with yourself, is more important than the family that you were born in. ▫ In organizations, subordinates most often expect their managers to ask for their input. ▫ Privileges and status symbols tend to be frowned upon. http://culturallyteaching.com
  • 39. • Power Distance have to do with Education? • Low Power Distance culture: ▫ Teachers expect initiatives from students in class ▫ Teachers are experts who transfer impersonal truths ▫ Students treat teachers as equals http://culturallyteaching.com
  • 40. • Power Distance have to do with Education http://culturallyteaching.com
  • 41. • Power Distance have to do with Education http://culturallyteaching.com
  • 42. • Competitiveness: ▫ How individuals are motivated. This dimension measures what motivates people in regard to others ▫ Cooperation? Or cut-throat competitiveness? ▫ How do you think Americans and Brazilians are different in this respect? http://globotrends.pbworks.com/culture
  • 43. Areas of potential conflict circled
  • 44. Brazil + USA - Key differences: • Competitiveness: ▫ USA: competitive ▫ Brazil: collective / competitive (in group / out) • Americans, for example, are motivated by competitive factors, such as getting ahead and succeeding personally. • In other cultures, the prevailing cultural emphasis is on succeeding through cooperating with others and moving the larger enterprise ahead.,
  • 45. Q: will John Smith have trouble in Brazil?
  • 46. • Environment: ▫ How individuals view and relate to the people, objects, and issues in their sphere of influence. ▫ The range is from those who want to control their environment on one end, such as Americans, to those who value harmony and constraint above all, on the other, such as many Asian cultures. http://globotrends.pbworks.com/culture
  • 47. Areas of potential conflict circled
  • 48. Brazil + USA - Key differences: • Environment: ▫ USA -control ▫ Brazil - harmony, control
  • 49. Q: will John Smith have trouble in Brazil?
  • 50. • Time: ▫ How individuals perceive the nature of time and its use. ▫ This has three axes—  one regarding focus, such as those who prefer to focus on one thing at a time to those who are multi-focused;  a second that measures those who see time as fixed versus those who see it as fluid; and  a third that captures a person’s predilection for viewing things in the present, the past, or the future. http://globotrends.pbworks.com/culture
  • 51. Time photo by badboy69
  • 52. Areas of potential conflict circled Why do you think TIME is not circled as a CONFLICT area?
  • 53. Brazil + USA - Key differences: • Time: ▫ USA - single focued, fixed ▫ Brazil - multi focused, fluid
  • 54. Q: will John Smith have trouble in Brazil?
  • 55. • Time, the way people use it, usually divides cultures in two categories: • 1. monochronic/linear (or ―clock time‖) 2. polychronic/flexible http://culturallyteaching.com
  • 56. • Time: ▫ For example,  many Americans are single focused, fixed time, and future oriented, which is why they often face challenges with Latin Americans, for example, who are multi-focused, see time as a fluid thing, and for whom the past is a key driver. http://globotrends.pbworks.com/culture
  • 57. • Action: ▫ How individuals view actions and interactions. ▫ This dimension measures one’s penchant for ―doing‖ versus ―being.‖ ▫ Again, Americans are very doing-oriented, while many other cultures, especially in the Middle East, are being- oriented. http://globotrends.pbworks.com/culture
  • 58. Brazil + USA - Key differences: • Action: ▫ How individuals view actions and interactions. This dimension measures one’s penchant for ―doing‖ versus ―being.‖ Again, Americans are very doing-oriented, while many other cultures, especially in the Middle East, are being-oriented. ▫ USA: doing ▫ Brazil: being
  • 59. cultural theory Have you noticed, for instance, that some characteristics of monochronic cultures fit very nicely with ideas highly valued in individualistic societies? Which also tend to be small power distance? In cross-cultural theory literature, the monochronic/individualist/small power distance cultures are considered doing cultures. At the other end of the spectrum, polychronic/collectivistic/large power distance cultures are called being cultures. http://globotrends.pbworks.com/culture
  • 60. “Doing” Cultures • Here are some very broad characteristics of doing cultures: ▫ Status is earned (e.g. the work you do in your job). It is not merely a function of who you are (e.g. birth, age, seniority). ▫ Status is not automatic and can be forfeited if one stops achieving (e.g. you quit your job). ▫ Great emphasis is placed on deadlines, schedules etc. http://globotrends.pbworks.com/culture
  • 61. “Doing” Cultures http://culturallyteaching.com/ photo by Susan_NYC
  • 62. “Doing” Cultures ▫ Tasks take precedence over personal relationships in most cases (e.g. your family may not like it but they understand if you have to miss a family birthday party because you have work to do). ▫ People are supposed to have a personal opinion, which they are expected to verbalize. • read more from CulturallyTeaching.com http://globotrends.pbworks.com/culture
  • 63. “Being” Cultures • And here are some very broad characteristics of being cultures: ▫ Status is built into who a person is. It’s automatic and therefore difficult to lose. ▫ Titles are important and should always be used, in order to show appropriate respect for someone’s status. http://globotrends.pbworks.com/culture
  • 64. “Being” Cultures http://culturallyteaching.com/ photo by nao.k
  • 65. “Being” Cultures ▫ Harmony should be maintained, and therefore direct confrontation or disagreement is to be avoided. Saving face is highly valued. ▫ Relationships often take precedence over tasks. Much time is spent on greeting and farewell rituals or getting to know someone before agreeing to do business with them • read more from CulturallyTeaching.com http://culturallyteaching.com
  • 66. Put your country on the doing/ being map… • The U.S. is definitely a doing culture. • Great emphasis is put on people being productive, including the times one is supposed to be ―off‖, such as on weekends. In this case, weekend productivity is measured in the amount of house chores, errands or other activities that people are able to do. http://culturallyteaching.com
  • 67. Put your country on the doing/ being map… • What are some words or expressions that people in doing cultures tend to use most often? Words that have a positive connotation in doing cultures? Below you can find some that immediately come to mind: ▫ rights, negotiate, fairness, necessity, objectives, question, criticize, self, friendship, ―do your own thing‖, contract, litigation, self-interest, self-respect, individual, dignity, I, me, pleasure, adventure, privacy, truth, law, order, safe, predictable, tight, work, save, moderation, goal, permanent, future, economy, effort, invest, deadline, schedule* http://culturallyteaching.com
  • 68. Put your country on the doing/ being map… • being cultures? Here are a few: ▫ harmony, face, sacrifice, family (in a symbolic sense), tradition, respect, father (as a title), older brother, younger brother, wisdom, protect, pleasing, honor, duty, loyalty, relativity, unstructured, loose, flexible, relation, gift, today, yesterday, tradition* http://culturallyteaching.com
  • 69. Effect on communication styles • 1. The Doing (D) person is eager to get to the point. The Being (B) person would rather spend some time getting to know the person they’re speaking with, and talk about personal stuff before getting to the point. http://culturallyteaching.com
  • 70. Effect on communication styles • 2. Given the concern for deadlines and schedules of D people, they are very careful about the amount of details they include in a conversation. Only the details that are DIRECTLY related to the topic will make it. The others will be left out. This can be quite challenging for B people who need a much larger amount of details in order to fully understand an issue, and feel comfortable talking about it. http://culturallyteaching.com
  • 71. • Communication: ▫ How individuals express themselves. ▫ This dimension measures communication styles and predilections across four indicators: 1. context, which refers to how much the context of a situation drives the conversation (Americans typically say what they mean, which is low context; in a high context culture, such as Japan, you are supposed to surmise things from what’s not being said); http://globotrends.pbworks.com/culture
  • 72. • Communication: ▫ four indicators: 2. direct versus indirect communication styles (Americans are typically direct; Japanese are indirect); http://globotrends.pbworks.com/culture
  • 73. • Communication: ▫ four indicators: 3. expressive styles, which means using facial and hand gestures as part of communicating versus an instrumental style, in which a person is far less demonstrative when communicating; http://globotrends.pbworks.com/culture
  • 74. • Communication: ▫ four indicators: 4. and how much formality is required to communicate in a given culture. http://globotrends.pbworks.com/culture
  • 75. Areas of potential conflict circled Why do you think TIME is not circled as a CONFLICT area?
  • 76. Brazil + USA - Key differences: • Communication: ▫ USA: low context, direct, instrumental ▫ Brazil: high context, indirect, expressive
  • 77. • Communication: Americans are typically low context, direct, expressive, and informal in their conversational approach; on the other end of the spectrum, Japanese are high context, indirect, instrumental, and very formal in business communications. . http://globotrends.pbworks.com/culture
  • 78. • Space: • How individuals demarcate their physical and psychological space. • Americans typically treat their physical and psychological space as private and guard it against strangers; other cultures are conditioned to a more public approach to both aspects. • Hence, Americans are uncomfortable with customs in the Middle East in which men kiss each others’ cheeks in greeting and hold hands when walking together. http://globotrends.pbworks.com/culture
  • 79. Areas of potential conflict circled Why do you think TIME is not circled as a CONFLICT area?
  • 80. Brazil + USA - Key differences: • Space: ▫ How individuals demarcate their physical and psychological space. Americans typically treat their physical and psychological space as private and guard it against strangers; other cultures are conditioned to a more public approach to both aspects. Hence, Americans are uncomfortable with customs in the Middle East in which men kiss each others’ cheeks in greeting and hold hands when walking together. ▫ USA - private ▫ Brazil - private / public
  • 81. • Structure: ▫ How individuals approach change, risk, ambiguity, and uncertainty. ▫ This dimension ranges from those who like to work within orderly confines, to those who flourish in flexible situations. ▫ Many Americans are pre- disposed toward flexibility, while many Japanese prefer order. http://globotrends.pbworks.com/culture
  • 82. Brazil + USA - Key differences: • Structure: ▫ How individuals approach change, risk, ambiguity, and uncertainty. This dimension ranges from those who like to work within orderly confines, to those who flourish in flexible situations. Many Americans are pre-disposed toward flexibility, while many Japanese prefer order. ▫ USA & Brazil... both flexible. Finally, we agree on something!!
  • 83. • Thinking: ▫ How individuals conceptualize. ▫ This dimension measures how people think, 2 measures:  from inductive to deductive reasoning  Inductive reasoning goes from the specific to the general. Deductive reasoning goes from the general to the specific. http://globotrends.pbworks.com/culture
  • 84. Areas of potential conflict circled Why do you think TIME is not circled as a CONFLICT area?
  • 85. Brazil + USA - Key differences: • Thinking: ▫ How individuals conceptualize. This dimension measures how people think, from inductive to deductive reasoning to linear to systemic patterns of data collection and analysis. Many Americans are inductive, linear thinkers who like short, relevant statements and anecdotal examples, to Germans, who like theoretical concepts and abstractions. ▫ USA: Inductive, linear ▫ Brazil: deductive, syste
  • 86. • Thinking: ▫ How individuals conceptualize.  Many Americans are inductive, linear thinkers who like short, relevant statements and anecdotal examples, to Germans, who like theoretical concepts and abstractions. http://globotrends.pbworks.com/culture
  • 87. Areas of potential conflict circled Why do you think TIME is not circled as a CONFLICT area?
  • 88. • Thinking: ▫ How individuals conceptualize. ▫ This dimension measures how people think, 2 measures:  from inductive to deductive reasoning  to linear to systemic patterns of data collection and analysis. http://globotrends.pbworks.com/culture
  • 89. Inductive thinking • Inductive reasoning is making a conclusion based on a set of empirical data. If I observe that something is true many times, concluding that it will be true in all instances, is a use of inductive reasoning. • Example: ▫ All sheep that I've seen are white ▫ All sheep must be white • This example makes inductive reasoning seem useless, but it is in fact very powerful. Most scientific discoveries are made with use of inductive reasoning. A majority of mathematical discoveries come about from conclusions made with inductive reasoning, or observation. But the key word is "discovery." With induction something can be discovered but not proven.
  • 90. Deductive thinking • Deductive reasoning starts with a general rule, a premise, which we know to be true, or we accept it to be true for the circumstances. Then from that rule, we make a conclusion about something specific. • Example: ▫ All turtles have shells ▫ The animal I have captured is a turtle ▫ I conclude that the animal in my bag has a shell
  • 91. Deductive thinking • Another example of a deductive argument : ▫ All men are mortal ▫ Socrates is a man ▫ (Therefore,) Socrates is mortal Seems ok, but : ▫ Everyone who eats steak is a quarterback. ▫ John eats steak. ▫ [Therefore,] John is a quarterback. (?) Prejudice – watchout ―all Chinese are good at math.‖, He is chinese, so he must be good at math… (?) -- deductive thinking can get you in trouble!
  • 92. …while Being Wary of Stereotypes • Just as there are Americans and Australians who are fluid time-oriented and are indirect communicators, so too are there Brazilians who attend meetings at the time agreed upon, and Japanese who are direct communicators. ▫ ―by assigning particular cultural orientations to national cultures, a generalization is created and is only a starting point for further inquiry, which is subject to review, validation and change. The keydifferences among cultures are the emphasis and the expression given to one over the other depending on the situation.‖ http://www.thunderbird.edu/wwwfiles/pdf/executive_education/consulting _network/knowledge_center/thought_pieces/kinsinger_2009_ucoi_ci.pdf
  • 93. Resources to learn more • http://globotrends.pbworks.com/Culture- issues-in-Brazil • Thunderbird here Download the PDF » • see the TMC site here: http://www.tmcorp.com/
  • 94. Resources to learn more • Attitudes ▫ Brazil's Attitude Towards Diversity ▫ Brazil's Attitude Towards Change ▫ Attitudes Towards Authority ▫ Attitudes Towards Family ▫ Attitudes toward material wealth • • Business/Industry ▫ Brazilian Deal or No Deal ▫ Brazil's Business Etiquette ▫ Business meeting etiquette in Brazil ▫ Brazilian Communication Patterns ▫ Brazilian Sports Industry ▫ Brazillian Coffee Industry ▫ Business and Religion in Brazil ▫ Brazilian Music Industry ▫ Jeito
  • 95. International IQ moment What is happening in Greece? - discussion
  • 96. Athens Greece – at the heart of a Athens Greece European Crisis?
  • 97. Athens Greece • What is happening in Greece? – discussion for next class?
  • 98. Homework part #1– due Wednesday for feedback, or at next class • Typically, cultural factors drive the differences in business etiquette encountered during international business travel. • Using the globalEdge Website, find five tips regarding business etiquette in Greece.