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1
Multinational Management
In a Changing World
Learning ObjectivesDefine multinational
management.Understand the characteristics of a multinational
company.Understand the nature of the global economy and the
key forces that drive globalization.Know the basic classification
of the world’s economies.Identify the characteristics of the next
generation of multinational managers.

The Definition of
The formulation of strategies and management systems to take
advantage of international opportunities and respond to
international threats
The Nature of the Multinational Company
A multinational company is any company that engages in
business functions beyond its domestic borders. Such companies
may be large or small.Most multinational companies (MNCs)
are multinational corporations. The largest MNCs are all public
corporations.
Exhibit 1.1:

Largest Companies in the World
Source: Adapted from Fortune 2015. “Fortune Global 500.”
RankCompanyIndustryHeadquarters CountryRevenues
(US$ mil)1Wal-Mart StoresRetailingU.S.A476,2942Royal Dutch
ShellPetroleumThe Netherlands459,9993Sinopec
GroupPetroleumChina457,2014China National
PetroleumPetroleumChina432,0075Exxon
MobilPetroleumU.S.A.407,6666BPPetroleumU.K.396,2177State
GridPower
SupplyChina333,3868VolkswagonAutomotiveGermany261,5399
Toyota MotorAutomotiveJapan256,45410Glencore
InternationalManufacturingSwitzerland232,694
Exhibit 1.2:
Newcomers to Global 500 List
Name of Company
Country of Origin
2014 Global 500 Rank
Achmea
Netherlands
395

Agricultural Development Bank of China
China
491
Alimentation Couche-Tard
Canada
329
Antarchile
Chile
488
Bohail Steel Group
China
327
China Energy
China
349
China Development Bank
China
122
China Energy Engineering
China
465
China General Technology
China
469
Duke Energy
US
485
Enbridge
Canada
377
Energy Transfer Equity
US
213
Fuji Heavy Industries
Japan
494

Hanwha
South Korea
331
Itau Inobanco Holding
Brazil
138
Lotte Shopping
South Korea
464
Louis Dreyfus Commodities
Netherlands
150
Pacific Construction Group
China
166
Perusahaan Listrik Negara
Indonesia
477
Plains GP Holding
US
257
Qualcomm
US
480
Rolls-Royce
UK
489
Russian Grids
Russia
498
Samsung C&T
South Korea
460
Talanx
Germany
302

Unipol
Italy
439
VTB Bank
Russia
443
The Globalizing Economy: A Changing (but Not Always Stable)
Environment for Business (1 of 4)
Globalization: the world’s economies are becoming borderless
and interlinked.Companies are no longer limited by their
domestic boundaries, and may conduct any kind of business
activity anywhere in the world.Globalization creates a changing,
but not uniform, and not always stable, environment for
business.
Environment for Business (2 of 4)Negatives of globalizationNot

all economies benefit or participate equally.Terrorism, wars,
and economic stagnation have limited or reversed some aspects
of globalization.Globalization produces a scarcity of natural
resources, pollution, negative social impacts, and increased
interdependence of economies.Globalization may be widening
the gap between rich and poor countries.
Environment for Business (3 of 4)Benefits of
globalizationGlobalization results in lower prices in many
countries, as multinationals become more
efficient.Globalization benefits many emerging markets such as
India and China, as these countries enjoy greater availability of
jobs and better access to technology.Globalization is the main
reason why many new companies from Mexico, Brazil, China,
India, and South Korea are the new dominant competitors.
Environment for Business (3 of 4)7 key trends of the
globalizing economyFalling, disintegrating bordersGrowing

cross-border trade and investmentThe rise of global products
and global customersThe internet and information technology
(IT)Privatizations of formerly government-owned firmsNew
competitors in the world marketIncreased global quality and
production standards
Countries of the World:
The Arrived and the Arriving (1 of 4)
Developed Countries (the Arrived) have mature economies with
substantial per capita Gross Domestic Product (GDP),
international trade and investments.E.g., the United States of
America, Britain, Japan, Germany, and many others
Developing Countries (the Arriving) have economies that have
grown extensively over past two decades.E.g., Hong Kong,

Singapore, Taiwan, Malaysia, Indonesia, Thailand.
Transition economies are countries that have changed from
mostly communist systems to market/capitalistic systems.E.g.,
the Czech Republic, Hungary, Poland, Russia
Emerging Markets are those countries whose economies are
growing rapidly. E.g., Brazil, Russia, India, & China (BRIC)

Exhibit 1.3:
Selected Economies of the WorldDeveloped
EconomiesDeveloping EconomiesTransition
EconomiesAustralia
Austria
Belgium
Britain
Canada
Denmark
France
Germany
Italy
Ireland
Japan
The Netherlands
Spain
Sweden
Switzerland
United StatesHong Kong
Singapore
Taiwan
Malaysia
Indonesia
Thailand
Czech Republic
Hungary
Poland
Russia

Exhibit 1.4:
Age Breakdown of Selected Economies
Exhibit 1.5:
The Globalizing Economy
Disintegrating Borders: The World Trade Organization and Free

Trade AreasIn 1947, nations met to reduce tariffs from 45% to
less than 7%; these negotiations resulted in the General
Agreement on Tariffs and Trade (GATT).In 1986, negotiations
began in Uruguay to continue reducing tariffs. The World
Trade Organization (WTO) succeeded GATT.WTO provides
structure for continued negotiations and settling trade disputes
among nations.
World Trade OrganizationIn 1997, WTO countries agreed to end
tariffs on software, computers and related products; hi-tech
exports to Europe from Asia and the US doubled. Since GATT,
world trade has grown at more than four times the output of the
world’s GDP. Some say WTO favors developed nations,
encourages environmental damage, and moves jobs from higher-
save countries to lower-wage countries.
Regional Trade Agreements
(1 of 2)Regional Trade Agreements are agreements among

nations to reduce tariffs and develop similar technical and
economic standards.The three largest account for half the
world’s trade: the European Union (EU) the North American
Free Trade Association (NAFTA), andthe Asia-Pacific
Economic Cooperation (APEC)
Regional Trade Agreements
(2 of 2)The European Union (28 European nations, and
growing) allows free movement of goods and services and a
common currency (EMU).The North American Free Trade
Agreement (NAFTA) linking the US, Canada, and Mexico,
allows the freer exchange of goods and services.The Asia-
Pacific-Economic Cooperation (12 Asian nations) with goals for
free trade by 2020.
Sell Anywhere, Locate Anywhere: Trade Growing, but Setbacks
(1 of 2)World trade grew an average of 6.5% per year between
1990 and 2000, slowed to 4% in 2004, grew again to 6% in 2005
and to 8.5% in 2006. WTO reports the global economy is

suffering from a very severe slowdown. EU countries are
suffering the worst debt crisis they have ever faced. Change in
imports & exports higher for developing and emerging
economies than for developed economies.
Sell Anywhere, Locate Anywhere: Trade Growing, but Setbacks
(1 of 2)The latest WTO report suggests a few trends:Emerging
markets continue to grow dramatically.Developing nations have
played a more important role in international production
networks known as Global Value Chains (GVC).Commodities
such as energy and minerals have doubled between 2003 and
2008.The world has never been more connected.
Sell Anywhere, Locate Anywhere: Foreign Direct Investment
(FDI)
(1 of 2)Foreign Direct Investment (FDI) occurs when a
multinational company from one country has an ownership
position in an organizational unit located in another
country.FDI increased by more than 36% from 1996 -

2000.Since 2001, there has been a decline in FDI, but FDI grew
to its highest level in 2007.Emerging markets will continue to
attract FDI.
Sell Anywhere, Locate Anywhere: Foreign Direct Investment
(FDI)
(1 of 2)Developing countries provide opportunities and
risks.MNCs should consider two types of risk:Economic risk:
includes all factors of a nation’s economic climate that may
affect a foreign investor.Political risk: anything a government
might do or not do that might adversely affect a company.
The Internet and Information Technology Are Making It All
Easier (1 of 3)Email and the internet allow multinationals to
communicate with company sites throughout the world.Text and
graphic information can flow to any part of the world almost
instantaneously. Headquarters, R&D, manufacturing can be
located anywhere in the world.Information technology is
spurring a borderless financial market.

Easier (2 of 3)Information technologies make available many
new tools that facilitate business operations: Worldwide
communication using Voice-Over-Internet Protocol (VOIP)
systems such as Skype, MSN Messenger and AOL is cost-
effective. Collaborative networks can be provided by WIKI
firms at very low cost. Information can be obtained by
increasingly sophisticated search engines like Google.
Easier (3 of 3)Information technology presents multinationals
with many new opportunities.Developments in computing
technology mean that the manufacturing sector will no longer
see hammers, lathes, drills, and stamping presses.One of the
most significant recent technologies is the 3D printer.The
potential for the 3D printer to revolutionize multinational
operations is tremendous.

The Rise of Global Products and Global CustomersThe needs of
customers for many products and services are growing more
similarE.g., McDonald’s, Boeing, Toyota.Global customers
search the world for their supplies without regard for national
boundaries.These factors link economies because companies can
produce one product for everyone, and anyone can buy anything
from anywhere.
New Competitors Are Emerging (1 of 2)Two new forms of
competitors are having dramatic influences on global
business.First, experts now recognize the existence of powerful
emerging market competitors.Secondly, companies worldwide
will increasingly have to contend with formidable state
competitors.

New Competitors Are Emerging (2 of 2)Emerging market
multinationals: Global companies born in emerging
marketsThese multinationals often have the tenacity to succeed
at business challenges that developed world multinationals have
avoided.State multinationals: Multinationals from emerging
markets that can rely on state support.These enterprises have
often been very successful while relying on state support.
The Rise of Global Standards (1 of 2)When a product standard
is accepted globally or regionally, companies can make one or
only a few versions of a product for the world market rather
than hundreds.Products are developed to accommodate different
regional standards, such as electrical currents & plugs.The
company that can establish its standard as dominant has a
tremendous strategic advantage.
The Rise of Global Standards (2 of 2)The drive for consistency
in quality led to the International organization for

standardization (ISO) in Geneva, Switzerland. ISO developed
technical standards known as ISO 9001:2000, adopted by law in
Europe. Many large European MNCs now require ISO
certification.
Corporate Social Responsibility and Business Ethics (1 of 2)
Despite their size and clout, MNCs face increased pressure to be
socially responsible from both the media and the public.Mindful
of rankings on ethics, proactive MNCs pay close attention to
these issues, and take appropriate action.
Corporate Social Responsibility and Business Ethics (2 of
2)Some MNCs are becoming more proactive in responding to
social and ethical issues that arise from their overseas
operations.Some issues are:Climate changeEnvironmental
degradation and pollutionSweatshop conditions for laborBribery

Exhibit 1.7:
Ranking the World’s
Most Ethical Companies
Source: Adapted from Ethisphere Institute, 2015. World’s Most
Ethical Companies;
http://www.ethisphere.comIndustryCompanyNationalityApparel
H&MSwedenAutomotiveCummins, Inc.U.S.ABankingNational
Australia BankAustraliaBusiness ServicesDun &
BradstreetU.S.AComputer SoftwareSymantec
CorporationU.S.AConsumer ProductsHenkel
AGGermanyEnergy: ElectricIberdrola, S.A.SpainEnergy:
WaterNorthumbrian Water GroupU.K.Food &
BeveragesKelloggU.S.A.Health & BeautyL’OrealFranceIT
ServicesRicoh Company, LTDJapanIndustrial Manufacturing3M
CompanyU.S.A.Oil & GasDCC, Plc.IrelandRetailMarks &
SpencerU.K.

The Next Generation of Multinational Managers (1 of 3)The
successful Multinational Manager needs these characteristics:A
global mindset Emotional intelligenceA long-range
perspectiveThe talent to motivate all employees to achieve
excellence
The Next Generation of Multinational Managers (2 of
3)Characteristics of the successful Multinational Manager
(continued): Accomplished negotiation skillsA willingness to
seek overseas assignmentsAn understanding of national cultures
The Next Generation of Multinational Managers (3 of
3)Research suggests that you need three forms of capital to
become a successful international leader.Intellectual capital:
willingness to learn and build you knowledge base regarding
cultural differences and how to adapt to such differences.
Psychological capital: Ability to be receptive to new ideas and
experiences. Social capital: Ability to develop networks of
individuals who are different from you.

Multinational Management:
A Strategic Approach (1 of 2)You may well find yourself a
multinational manager; foreign competition and doing business
in foreign markets are daily facts of life for today’s managers.
Competing successfully requires a strategic approach; formulate
and implement your strategy. Multinational strategies must
include maneuvers that deal with operating in more than one
country and culture.Position yourself for an evolving global
economy.
Multinational Management:
A Strategic Approach (2 of 2)In formulating your strategy,
consider the trends that will shape the future business
environment: Blurring of industry boundariesThe need for
flexibility more than sizeThe need to find your
nicheHypercompetitionEmphasis on innovation and the learning
organization

Summary and ConclusionsChapter 1 provides key background
information to support study of multinational
management.World economies are increasingly linked, creating
both threats and opportunities.New competitors are coming from
developing nations in Asia, the Americas, and Eastern
Europe.Multinational managers need a global mindset, and
strategies for succeeding in different nations and cultures.
*
Name of Company Country of
Origin
2014 Global
500 Rank
Achmea Netherlands 395
Agricultural Development Bankof China China
491
Alimentation Couche-Tard Canada 329
Antarchile Chile 488
Bohail SteelGroup China 327
China Energy China 349
China Development Bank China 122
China Energy Engineering China 465

China General Technology China 469
Duke Energy US 485
Enbridge Canada 377
Energy Transfer Equity US 213
Fuji Heavy Industries Japan 494
Hanwha South Korea 331
Itau Inobanco Holding Brazil 138
Lotte Shopping South Korea 464
Louis Dreyfus Commodities Netherlands 150
Pacific Construction Group China 166
Perusahaan Listrik Negara Indonesia 477
Plains GP Holding US 257
Qualcomm US 480
Rolls-Royce UK 489
Russian Grids Russia 498
Samsung C&T South Korea 460
Talanx Germany 302
Unipol Italy 439
VTB Bank Russia 443
Name of Company
Country of
Origin
2014 Global
500 Rank
Achmea Netherlands 395
Agricultural Development Bankof China China
491
Alimentation Couche-Tard Canada 329
Antarchile Chile 488
Bohail SteelGroup China 327
China Energy China 349
China Development Bank China 122
China Energy Engineering China 465
China General Technology China 469

Duke Energy US 485
Enbridge Canada 377
Energy Transfer Equity US 213
Fuji Heavy Industries Japan 494
Hanwha South Korea 331
Itau Inobanco Holding Brazil 138
Lotte Shopping South Korea 464
Louis Dreyfus Commodities Netherlands 150
Pacific Construction Group China 166
Perusahaan Listrik Negara Indonesia 477
Plains GP Holding US 257
Qualcomm US 480
Rolls-Royce UK 489
Russian Grids Russia 498
Samsung C&T South Korea 460
Talanx Germany 302
Unipol Italy 439
VTB Bank Russia 443
Price and Channel Strategy [due Mon]
Top of Form
Bottom of Form
Assignment Content
1.
Top of Form
Purpose of Assignment
This assignment is designed to help students analyze and
understand how price setting and go to market (distribution) are
interrelated and affects the profitability and growth of the
business. It has been designed to be a short overview on
purpose: the concepts of pricing and distribution are complex
and a general understanding is what should be absorbed in one
week of study.
Assignment Steps

Resources: Marketing Plan and Outline
Construct a minimum 700-word plan for setting price and a
distribution model (place/distribution) in Microsoft® Word.
This plan should address at least three elements (from the Price
and Place/Distribution list below) of the Price and
Place/Distribution section of the marketing plan.
· Price and Place/Distribution:
· Distribution Strategies
· Channels, Mass, Selective, Exclusive
· Positioning within channels
· Dynamic/Static Pricing Strategies
· Channel tactics (Pricing)
· Daily pricing, promotion pricing, List pricing
Note: Charts/graphs/tables do not count toward the word count.
The plan will be a continuation of your global or multi-regional
business you chose in Week 1 (Which is a business selling
yogurt to Starbucks and must be incorporated into paper. This
will be incorporated into your overall marketing plan for Week
6.
Chapter
2

Culture and
Learning Objectives (1 of 2)
Define culture and understand the basic components of
culture.Identify instances of cultural stereotyping and
ethnocentrism.Understand how various levels of culture
influence multinational operations.
Learning Objectives (2 of 2)Apply the Hofstede, GLOBE, and
7d models to diagnose and understand the impact of cultural
differences on management processes. Appreciate the complex
differences among cultures and use these differences to build
better organizations.Recognize the complexity of understanding
new cultures and the dangers of stereotyping and cultural
paradoxes.

What is Culture? (1 of 2)
Pervasive and shared beliefs, norms, values, and symbols that
guide the everyday life of a group.Cultural norms: both
prescribe and proscribe behaviorsWhat we can and cannot
do.Cultural values: what is good, what is beautiful, what is
holy, and what are legitimate goals for life.
What is Culture? (2 of 2)Cultural beliefs: represent our
understandings about what is true.Cultural symbols, stories, and
rituals: communicate the norms, values, and beliefs of a society
or a group to its members.Culture is pervasive in society:
affects all aspects of life.Culture is shared: similarity in values,
beliefs, norms.
Levels of Culture (1 of 2)

National culture: the dominant culture within the political
boundaries of the nation-state.There may be subcultures within
the national culture.
Business culture: norms, values, and beliefs that pertain to all
aspects of doing business in a culture.Tells people the correct,
acceptable ways to conduct business in a society.
Levels of Culture (2 of 2)
3. Occupational and organizational cultureOccupational culture:
the norms, values, beliefs, and expected ways of behaving for
people in the same occupational group, regardless of
employer.Organizational culture: the set of important
understandings (often unstated) that members of an organization
share.
Exhibit 2.1:
Three Levels of Culture

Cultural Differences and
Basic ValuesThree diagnostic models to aid the multinational
manager:Hofstede model of national cultureGlobal Leadership
and Organizational Behavior Effectiveness (GLOBE) project7d
culture model
Hofstede’s Model of
National CultureA model mainly based on differences in values
and beliefs regarding work goalsFive dimensions of basic
cultural values:Power distanceUncertainty avoidance
Individualism Masculinity Long-term orientation

Hofstede’s Model Applied to Organizations and Management
(1 of 2) Five management practices considered in the discussion
of Hofstede’s model include:
Human resources managementManagement
selectionTrainingEvaluation and promotionRemuneration
Hofstede’s Model Applied to Organizations and Management
(2 of 2)
Leadership stylesHow leaders behave
Motivational assumptionsBeliefs about how people respond to
work
Decision making and organizational designHow managers make
decisions and organize
StrategyEffects of culture on selecting strategies
Exhibit 2.2:

Subject Matter Considered in Hofstede’s National Culture
StudiesSubject MatterIndividualGroupCountryChange
managementXLeadershipXXXHRMXXEntrepreneurshipXXConf
lict managementXXXWork-related attitudesXXAlliance
formation and joint ventureXX
Power Distance (1 of 2) Power distance concerns how cultures
deal with inequality and focuses on:Norms that tell superiors
(e.g., bosses) how much they can determine the behavior of
their subordinatesThe belief that superiors and subordinates are
fundamentally different kinds of people
Power Distance (2 of 2) High power distance countries have
norms, values, and beliefs such as:Inequality is fundamentally
good.Everyone has a place: some are high, some are low.Most
people should be dependent on a leader.The powerful are
entitled to privileges.The powerful should not hide their power.

Exhibit 2.3:
Managerial Implications:
Power Distance
Sources: Adapted from Hofstede, Geert. 1980 Culture’s
Consequences: International Differences in Work-Related
Values. London: Sage; Hofstede, Geert. 1991. Cultures and
Organizations: Software of the Mind. London: McGraw-Hill;
Hofstede, Geert. 1993. “Cultural Dimensions in people
management.” In Vladimir Pucik, Noel M. Tichy, and Carole K.
Barnette, Globalizing Management. Hoboken, NJ: Wiley, 129-
158.Management ProcessesLow Power DistanceHigh Power
DistanceHuman resources management Management
selectionEducational achievementSocial class; elite education
TrainingFor autonomyFor conformity/obedience
Evaluations/promotionPerformanceCompliance;
trustworthinessLeadership stylesParticipative; less direct
supervisionTheory X; authoritarian; close
supervisionMotivational assumptionsPeople like work; extrinsic
and intrinsic rewardsAssume people dislike work;
coercionDecision making/organizational designDecentralized;
flat pyramids; small proportion of supervisorsTall pyramids;
large proportion of supervisorsStrategy issuesVariedCrafted to
support the power elite or government

*
Uncertainty AvoidanceUncertainty Avoidance: Norms, values,
and beliefs regarding tolerance for ambiguity:Conflict should be
avoided.Deviant people and ideas should not be tolerated.Laws
are very important and should be followed.Experts and
authorities are usually correct.Consensus is important.
Exhibit 2.4:
Uncertainty Avoidance

158.Management ProcessesHigh Uncertainty AvoidanceLow
Uncertainty AvoidanceHuman resources management
Management selectionSeniority; expected loyaltyPast job
performance; education TrainingSpecializedTraining to adapt
Evaluation/promotionSeniority; expertise; loyaltyObjective
individual performance data; job switching for promotions
RemunerationBased on seniority or expertiseBased on
performanceLeadership stylesTask-orientedNondirective;
person-oriented; flexibleMotivational assumptionsPeople seek
security, avoid competitionPeople are self-motivated,
competitiveDecision making/organizational designLarger
organization; tall hierarchy; formalized; many standardized
proceduresSmaller organizations; flat hierarchy; less
formalized, fewer standardized proceduresStrategy issuesAverse
to riskRisk taking
Individualism/Collectivism (1 of 2)Individualism: Focus is on
the relationship between the individual and the group.Countries
high on individualism have norms, values, and beliefs such
as:People are responsible for themselves.Individual achievement
is ideal.People need not be emotionally dependent on

organizations or groups.
Individualism/Collectivism (1 of 2)Collectivism: Collectivist
countries have norms, values, and beliefs such as:One’s identity
is based on group membership.Group decision making is
best.Groups protect individuals in exchange for their loyalty to
the group.
Exhibit 2.5:
Individualism/Collectivism

158.Management ProcessesLow IndividualismHigh
IndividualismHuman resources management Management
selectionGroup membership; school or universityUniversalistic
based on individual traits TrainingFocus on company-based
skillsGeneral skills for individual achievement
Evaluation/promotionSlow, with group; seniorityBased on
individual performance RemunerationBased on group
membership/organizational paternalismExtrinsic rewards based
on market valueLeadership stylesAppeals to duty and
commitmentIndividual rewards/punishments based on
performanceMotivational assumptionsMoral
involvementCalculative; individual cost/benefitDecision
making/organizational designGroup; slow; preference for larger
organizationsIndividual responsibility; preference for smaller
organizationsStrategy issuesIncremental changes with periodic
revolutionsAggressive
MasculinityMasculinity: Tendency of a culture to support
traditional masculine orientation.High masculinity countries
have beliefs such as:Gender roles should be clearly
distinguished.Men are assertive and dominant.Machismo or
exaggerated maleness in men is good.People – especially men -
should be decisive.Work takes priority over other duties, such
as family.Advancement, success, and money are important.

Long-Term Orientation (1 of 3) Long-Term (Confucian)
Orientation: Orientation towards time that values
patience.Managers are selected based on the fit of their personal
and educational characteristics.A prospective employee’s
particular skills have less importance in the hiring
decision.Training and socialization for a long-term commitment
to the organization compensate for any initial weaknesses in
work-related skills.
Long-Term Orientation (2 of 3)
Eastern cultures rank highest on long-term orientation.Value
synthesis in organizational decisions rather than search for
correct answer.Designed to manage internal social relationships.
Investment in long-term employment skills.Focus on long-term
individual and company goals.

Long-Term Orientation (3 of 3) Short-Term Orientation: focus
is on immediately usable skillsWestern cultures, which tend to
have short-term orientations, value logical analysis in their
approach to organizational decisions.Designed and managed
purposefully to respond to immediate pressures from the
environment.Want immediate financial returns.
Restraint versus IndulgenceA sixth dimension of cultural values
that refers to the degree to which societies enjoy life based on
control or gratification of basic human desires Indulgent
societies tend to favor free satisfaction of human needs related
to "enjoying life and having fun.Restraint societies are much
more restrictive and places strict norms on gratification of
needs.Multinational managers can shape work environments to
take advantage of such preferences.

GLOBE National Culture FrameworkGLOBE (Global
Leadership and Organizational Behavior Studies) involves 170
researchers who collected data from 17,000 managers in 62
countries7 of 9 dimensions of GLOBE are similar to
HofstedeGLOBE’s 2 Unique dimensions:Performance
orientation Humane orientation
Performance OrientationPerformance Orientation refers to the
degree to which the society encourages societal members to
innovate, to improve their performance, and to strive for
excellence.E.g., the United States and Singapore have high
scores while Russia and Greece have low scores on the
dimension.
Humane OrientationHumane Orientation is an indication of the
extent to which individuals are expected to be fair, altruistic,
caring, and generous.Need for belongingness and affiliation is
emphasized more than material possessions, self-fulfillment,
and pleasure.Less humane-oriented societies are more likely to
value self-interest and self-gratification.Malaysia and Egypt

have high humane orientation scores, while France and
Germany have low scores.
7d Cultural Dimensions Model
(1 of 3)Builds on traditional anthropological approaches to
understanding culture.Culture exists because people need to
solve basic problems of survival.Challenges include:How
people relate to othersHow people relate to timeHow people
relate to their environment
(2 of 3)5 of the 7 dimensions of this model deal with
relationships among people: Universalism vs.
ParticularismCollectivism vs. IndividualismNeutral vs.
AffectiveDiffuse vs. SpecificAchievement vs. Ascription

(3 of 3)
The 2 remaining dimensions deal with how a culture manages
time and how it deals with nature:Time: Past, Present, Future,
or Mixture Nature: Control of vs. Accommodation with Nature
Universalism vs. ParticularismThese concepts pertain to how
people treat each other:Universalism: Based on abstract
principles such as rules of law, religion, or cultural
principles.Particularism: Rules are only a rough guide. Each
judgment represents a unique situation, which must take into
account who the person is, and his relationship to the one
making the judgment.

Exhibit 2.14:
Managerial Implications: Universalism/Particularism
Individualism vs. CollectivismSimilar distinctions to Hofstede’s
viewCollectivist societies: Focus on relationships. “Deals” are
flexible, based on situation and person.Contracts are easy to
modify. Individualist societies: Focus on rules. “Deals” are
obligations. Contracts are difficult to break.
Exhibit 2.15:
Individualism/Collectivism

Neutral vs. AffectiveConcerns the acceptability of expressing
emotions.Neutral: Interactions should be objective and
detached.Focus is more on tasks rather than emotional nature of
interaction.Affective:Emotions are appropriate in almost all
situations.Preferred to find immediate outlet for emotions.
Specific vs. DiffuseAddresses the extent to which an
individual’s life is involved in work
relationshipsSpecific:Business is segregated from other parts of
lifeContracts often prescribe and delineate
relationshipsDiffuse:Business relationships encompassing and
inclusivePrefer to involve multiple life areas simultaneously.
Achievement vs. AscriptionAddresses the manner in which

society accords statusAchievement:People earn status based on
performance and accomplishmentsAscription:Characteristics or
associations define statusE.g., status based on schools or
universities
Time Orientation
Time Horizon: How cultures deal with the past, present and
futureFuture-oriented societies, such as the U.S., consider
organizational change as necessary and beneficial.
Believe a static organization is a dying organization.Past-
oriented societies assume that life is predetermined based on
traditions or will of God.
Revere stability and are suspicious of change.
Exhibit 2.19:
Time Horizon

Internal vs. External ControlConcerned with beliefs regarding
control of one’s fateBest reflected with how people interact
with the environmentDoes nature dominate us or do we
dominate nature?In societies where people dominate nature,
managers are more proactive and believe situations can be
changed.
Caveats and Cautions (1 of 2)Cultural paradoxes: when
individual situations seem to contradict cultural
prescriptionsStereotyping: assumes that all people within one
culture behave, believe, feel, and act the same.Ethnocentrism:
people from one culture believe that theirs are the only correct
norms, values, and beliefs.

Caveats and Cautions (2 of 2)Cultural relativism: all cultures,
no matter how different, are correct and moral for the people of
those cultures. Cultural Intelligence: ability to interact
effectively in multiple cultures, composed of three
componentsA mental component A motivational componentA
behavior component
SummaryThere are an immense variety of cultures in the
world.This chapter provides one approach to understanding
national cultures.Goal is to make one aware of complex and
subtle influences of culture on multinational
management.Astute managers realize that understanding
cultures is a never-ending learning process.

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