Culture & International Business Part 2


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  • From Wikipedia: “ The object of the game is to control a larger portion of the board than the opponent. A stone or a group of stones is captured and removed if it has no empty adjacent intersections, the result of being completely surrounded by stones of the opposing color. Placing stones close together helps them support each other and avoid capture. On the other hand, placing stones far apart creates influence across more of the board. Part of the strategic difficulty of the game stems from finding a balance between such conflicting interests. Players strive to serve both defensive and offensive purposes and choose between tactical urgency and strategic plans.”
  • Culture & International Business Part 2

    1. 1. 2 Cultural classifications <ul><li>Edward Hall (1977) </li></ul><ul><li>Context-based culture </li></ul><ul><li>Hofstede (1984) </li></ul><ul><li>Five cultural dimensions </li></ul><ul><li>Most influential, similar approach by Trompenaars </li></ul><ul><li>GLOBE (1991) – Robert J House </li></ul><ul><li>Global Leadership & Organisational Behaviour Effectiveness: questionnaires for local managers </li></ul>
    2. 2. 2.1.1 Context based culture – nature of communication <ul><li>Japan </li></ul><ul><li>Many Asian countries </li></ul><ul><li>UK </li></ul><ul><li>USA </li></ul><ul><li>Germany </li></ul>High Context Low
    3. 3. <ul><li>Based on company study in late 1960s & early 1970s </li></ul><ul><ul><li>IBM employees (over 100,000) in 50 countries </li></ul></ul><ul><ul><li>Why just IBM? </li></ul></ul><ul><ul><li>Corporate culture (Edgar Schein) controls for the corporate culture element </li></ul></ul><ul><li>Originally four dimensions, later added a fifth: </li></ul><ul><ul><li>Long-term / short-term orientation </li></ul></ul><ul><li>Website </li></ul><ul><ul><li> </li></ul></ul>2.2.1 Hofstede’s dimension
    4. 4. 2.2.2 Hofstede's categories <ul><li>Individualism Collectivism </li></ul><ul><li>Large power distance Small power distance </li></ul><ul><li>(Is inequality accepted?) </li></ul><ul><li>High uncertainty avoidance Low uncertainty avoidance </li></ul><ul><li>Masculinity Feminity </li></ul><ul><li>Short-term orientation Long-term orientiation </li></ul>
    5. 5. 2.2.3 Groupings
    6. 6. 2.2.4 Cultural groups NB: Map and groupings precede liberalisation of Russia, E. Europe, and China
    7. 7. 2.3 GLOBE framework <ul><li>Discussed in two special issues of JIBS 2006 & 2010 </li></ul><ul><li>Based on Hofstede’s contribution </li></ul><ul><li>9 Dimensions </li></ul><ul><li>3 Hofstede Dimensions: Power Distance, Uncertainty Avoidance, Future orientation </li></ul><ul><li>Individualism-Collectivism now: Institutional and In-Group Collectivism </li></ul><ul><li>Masculinity vs. Feminity: Assertiveness, Performance Orientation, Gender Equality, Humane Orientation </li></ul>
    8. 8. <ul><li>3.1 Attitudes to culture in internationalisation of MNCs </li></ul><ul><li>3.2 International competitiveness & strategy </li></ul><ul><li>3.3 Personal behaviour in the workplace (expatriates / inpatriates) </li></ul><ul><li>Intra-company communication </li></ul><ul><li>Negotiations / contracts </li></ul><ul><ul><li>Single deals or long-term relationships? </li></ul></ul><ul><li>International projects and work groups </li></ul><ul><ul><li>Joint ventures between companies from different countries </li></ul></ul><ul><li>Accounting practices & corporate governance (institutions) </li></ul>3. How doe culture matter to businesses?
    9. 9. 3.1 Howard Perlmutter: Internationalization of MNCs <ul><li>Research approach </li></ul><ul><ul><ul><li>Observed what MNCs were doing (1969-...) </li></ul></ul></ul><ul><li>Internationalisation of MNC strategies: </li></ul><ul><ul><ul><li>1. Ethnocentric </li></ul></ul></ul><ul><ul><ul><li>2. Polycentric </li></ul></ul></ul><ul><ul><ul><li>3. Geocentric </li></ul></ul></ul><ul><li>How do MNCs manage multi-cultural workforces? </li></ul><ul><ul><ul><li>Who makes it up the ladder? </li></ul></ul></ul><ul><ul><ul><li>Ethnocentric: home country managers </li></ul></ul></ul><ul><ul><ul><li>Polycentric: subsidiaries led by locals, HQ by home country managers </li></ul></ul></ul><ul><ul><ul><li>Geocentric: international team of globally revolving high-performing, diverse staff </li></ul></ul></ul>
    10. 10. <ul><li>Nielsen (2005)*: </li></ul><ul><li>Western corporate strategy = Chess </li></ul><ul><li>Eastern corporate strategy = Go </li></ul><ul><li>Objective of Go is not to “kill” the opponents pieces, but to capture space. </li></ul><ul><li>The winner pre-empts competition in critical global markets: </li></ul><ul><ul><ul><li>Geographic territories </li></ul></ul></ul><ul><ul><ul><li>Control key suppliers, components, technologies & distribution channels (strangulation through encirclement) </li></ul></ul></ul><ul><ul><ul><li>Nielsen, Christine. &quot;The Global Chess Game . . . Or Is It Go? Market-Entry Strategies for Emerging Markets.&quot; Thunderbird International Business Review 47, no. 4 (2005): 397–427. </li></ul></ul></ul>3.2 International Strategy: Chess or Go?
    11. 11. 3.3 Expatriates & personal effectiveness
    12. 12. 4. Conclusion <ul><li>Culture & its definition </li></ul><ul><ul><ul><li>A holistic concept that deals both with intra-personal cognition, emotion and values, as well as inter-personal behaviour, rules & artifacts </li></ul></ul></ul><ul><ul><ul><li>Makes it hard to operationalise for business & management studies </li></ul></ul></ul><ul><li>Cultural categorisations </li></ul><ul><ul><ul><li>Hofstede etc. all have specific concepts about the “measurability” and “comparability” of culture </li></ul></ul></ul><ul><li>How does culture matter to business? </li></ul><ul><ul><ul><li>The day-to-day practice of business: team-work, internal communications, negotiations </li></ul></ul></ul><ul><ul><ul><li>Thinking like an anthropologist? Kate Fox’s Watching the English </li></ul></ul></ul>
    13. 13. Tutorial: Presentations & LG-Nortel JV case