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Cross Cultural & Diversity Management

Fore School of Management

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Introduction to the subject Why do we need to understand cross-cultural issues, be

sensitive to those from other cultures, to be comfortable with & make others equally so in culturally diverse situations? Discussion.

There is a need to understand cross-cultural issues in the organizational setting; cultural dimensions directly affect organizational performance;

This course aims to enhance knowledge, sensitivity and even the practice of appropriate behaviours in the cultural context.

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Session plan Introduction to culture: meanings, coverage, dimensions

and concepts. The nature of culture, quiz. Cultural diversity & priorities. Assigning of country-wise

group projects on important points, issues & comparisons with India. Hofstede’s cultural dimensions.

Ethics & social responsibility. Group discussion on Ethics. Mid-term assessment (objective-type testing)

Managing across cultures. A self-appraisal. Group presentations.

Organizational culture & diversity. Types of organizational culture.

Working through communication barriers in diverse organisations & countries. Training take-aways & interaction session.

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Evaluation method & weightage

Group work on Indian culture: 10 marks Country-wise project: 20 marks Group discussion: 10 marks

Internal assessment: 40 marks Mid-term assessment: 20 marks End term assessment: 40 marks

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Ground rules Punctuality No cross talking Mobile phones Forming of groups & marking process Asking questions

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Culture: meanings, coverage, dimensions and concepts

The global economy has arrived & along with the excitement is the increased need to be culturally sensitive & aware of cross cultural issues.

Some instances of a protected economy & the dramatically different scene today.

A major challenge of doing global business is to adapt effectively to different cultures. Common blunders.

Even small blunders can have huge negative effects, so awareness & sensitivity are not options any longer but rather imperatives.

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The nature of culture The word is taken from the Latin cultura, related

to cult or worship, also meaning to cultivate. For purposes of our study, culture is acquired

knowledge that is used to interpret experience & generate social behaviour. Such knowledge forms values, creates attitudes & influences behaviour.

Division into groups & group work on ‘Issues which create Indian culture as it is today – religion, society, family, festivals, cuisine, clothes, literature, activity, sports, television & cinema.’

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The nature of culture The characteristics of culture: it is

Learned Shared Trans generational Symbolic (e.g., language, art, religion) Patterned: this means that culture has

structure and is integrated; a change in one part will being changes in another.

Adaptive: Regardless of the genes we inherit, we humans adapt. (e.g., through changing times, influences, marriage, etc.)

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The nature of culture Personal examples of how cultural awareness

has helped, or a lack of it has hindered. Work-related examples - our lack of knowledge

about the culture of lands and religions which are not our own.

Something as simple as a handshake.

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Cultural diversity Why is knowledge & awareness of culture important?

Cultural impact on international management is reflected by these basic beliefs and behaviours.

Examples how culture can directly affect management approaches: Centralized vs. decentralised decision making Safety vs. risk Individual vs. group rewards Informal vs. formal procedures High vs. low organizational loyalty Cooperation vs. competition Short term vs. long-term horizons Stability vs. innovation.

None of these is right or wrong, good or bad; just different. Being aware of differences and honouring them is what is important.

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What do you think? Are juniors the same kind of people as management? Should the boss know all the answers? Should he/she make

all the decisions as well? If a team succeeds, is it right to give special rewards to the

ones who worked very hard, or to the whole team? If an employee has tried to achieve a breakthrough for the

company through an idea that is somewhat risky, should he/she be reprimanded?

Is it okay for the boss to have privileges such as drinking coffee on the job, which others may not have?

Is it okay to call a boss by his/her first name? Which kind of boss do you think is best – one who is

autocratic, persuasive, paternalistic or democratic? Do people from all cultures shake hands in a similar way?

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A simple handshakeEven something as simple as a handshake is different in different countries. Culture Type of handshake

United States:Firm Asian: Gentle (shaking hands is unfamiliar & uncomfortable

for some with the exception of the Korean, who usually has a firm handshake.)

British: Soft French: Light and quick German: Brisk & firm Latin American: Moderate grasp; repeated

frequently Middle Eastern: Gentle; repeated frequently.

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Session 3: Cultural priorities Various cultures have varying priorities. (Discussion)

Countries have varying priorities too. Please look at the attached table and note down relevant points in the ‘India’ column.

The need for sensitivity – group feedback.

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Session 4: Hofstede’s cultural dimensions

Researchers trying to understand why people behave as they do, have provided a composite picture of culture by examining its subparts or dimensions.

The Dutch researcher Hofstede identified four such dimensions. Power distance, which is the extent to which less

powerful members of organizations accept that power is distributed unequally.

Uncertainty avoidance: The extent to which people feel threatened by unclear situations, creating beliefs and institutions that try to avoid these.

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Hofstede’s cultural dimensions

Individualism: The tendency of people to look after themselves & their immediate family only. Also collectivism, which is the tendency of people to belong to groups and to look after each other in exchange for loyalty.

Masculinity: ‘a situation in which the dominant values in society are success, money & things’ & Feminity, where the dominant values in society are caring for others & the quality of life.

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Smallest space analysis Aside from the dimensions identified, researchers have

clustered countries into similar cultural groups to study similarities & differences. They have done this using the mathematic technique of smallest space analysis (SSA)

This tool maps the relationship among countries by showing the distance between each. When one looks at this two-dimensional map, it is possible to see those countries that are similar to each other & those that are not.

Ronen & Shenkar, who have provided perhaps the most integrative analysis of all available findings, found eight major clusters in terms of countries.

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Smallest space analysis The studies examined variables in four categories:

the importance of work goals need deficiency, fulfillment and job satisfaction managerial and organizational variables; and work role & interpersonal orientation.

Some say that studies had focused only on one part of the world – however, it still seems to be the best there is.

What is very clear is the fact that sensitivity to other cultures is imperative - when dealing with people, working with them or even associating with them prior to (& even subsequent to) forming a work relationship.

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Session 5: Ethics & social responsibility Why do we need to study this? Individual sharing

To understand the major ethical issues & problems confronting MNCs in selected countries;

To discuss pressures on & action taken by selected industrialized countries and companies to be more socially responsive to world problems; and

To explain initiatives for greater accountability to corporate conduct & limit corruption around the world.

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Ethics Ethics is the study of morality & standards of conduct.

Increasingly, MNCs have structured codes of ethics to guide the behaviour of their employees, to ensure their operations conform to these standards.

Some of the ethical problems and concerns include the following: Political & business scandals Hostile work environment issues Equal opportunity/gender issues Piracy, counterfeiting & industrial spying problems.

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Ethics – a discussion

Group discussion on “Suggestions for dealing with ethical issues in companies worldwide, particularly relating to India.”

Methodology: Understanding of the rules of group discussion Introduction to the topic Group discussion Wrap-up.

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Mid-term assessment Objective-type assessment on issues covered

so far in the course. Total marks for assessment: 20.

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Session 7: Managing across cultures Multinational corporations use 4 basic human resources:

Home country nationals: managers who are citizens of the country where the MNC is headquartered. When working away from home, they are also called expatriates or expats, meaning that they live and work outside their home country.

Host country nationals: These are local managers hired by the MNC.

Third country nationals: These include managers who are citizens of countries other than the country in which the MNC is headquartered or the one in which managers are assigned to work, by the MNC.

Inpatriates: Those from the host country or third country nationals, assigned to work in the home country.

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Working with foreigners – some tips Understand the work ethic of the home country

of the MNC, use your own input, then clarify your strategy with your seniors.

For example, American managers make fast decisions in comparison with those from some other countries. They are also taught to operate without giving much direction.

This may be contrary to the ways managers from other countries are used to, & it is important to understand their predominant ways of working.

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Working with foreigners – some tips Many managers in the west go home from work

around 5 p.m., often taking work home with them. Managers from other countries often work late, almost as a habit. People from one nationality may need to convince others that while the ways of working may be different, that they generally work just as hard as the others.

The use of discipline is used differently in different cultures – it is important to know & understand each.

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Criteria for overseas assignments

What criteria should companies use when selecting their executives for a foreign assignment? Some suggestions: Ability to adapt/desire to work overseas Technical competence & human resource skills Family circumstances & adaptability Previous overseas work experience Understanding of host country culture Academic qualifications/Knowledge of language Understanding of/open to home country culture

Also physical & age-related issues & of course the appropriate leadership abilities.

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Self-evaluation

I would be good for a foreign assignment because………..

I would not be good for a foreign assignment because………..

(Please give thought to the earlier learning & state two points each.)

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Session 8: Group presentations Group presentations based on country-wise

projects on the following: Important points relating to culture Country-related issues Comparisons with India.

Internal component marks: 20.

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Session 9: Organisational culture & diversity Some questions to ask ourselves:

What is organisational culture? What are the guidelines for establishing a

strong organisational culture in the presence of diversity.

Companies & countries have their own culture. Additionally, people who come into an organisation bring in their own cultural input. Employees of MNCs are expected to fit in. Adhering to the culture of the company is key, for managers to be successful.

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The nature of organisational culture

It consists of the shared values & beliefs that enable members to understand their roles & the norms of the organisation. Some qualities of company culture: Observed behavioural regularities such as common

language, terminology & rituals; Norms, such as work to be done, cooperation

between management & employees; Dominant values (e.g. high product & service quality,

high efficiency, etc.) Corporate philosophy & rules (e.g. regarding

customers, behaviour within the organisation, etc.)

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Types of organisational culture

The researcher Trompenaars describes 4 different types of organisational culture: Family culture Eiffel Tower culture Guided missile culture & Incubator culture

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Types of organisational culture – Family Culture

Family culture is characterised by a strong emphasis on hierarchy & orientation to the person. In a family-type environment, the company is headed by a leader regarded as a caring parent who knows what is best for all.

In such a culture, people respect those in charge & look to them for guidance & approval. In return, the paternal relationship ensures they are treated well & continually employed.

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Types of organisational culture – Eiffel Tower Culture Eiffel Tower Culture has a strong emphasis on

hierarchy & orientation to the task. Jobs are well defined, employees what they are supposed to do, everything is coordinated from the top.

This culture, like the tower it is named after, is steep, narrow at the top, broad at the base.

The person holding the top position in this culture can be replaced at any time, & this would not affect the work that others might be doing.

Like a formal hierarchy, it is impersonal & efficient.

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Types of organisational culture – Guided Missile Culture

The guided missile culture strongly emphasises equality in the workplace & task orientation.

Unlike the Eiffel Tower culture where assignments are fixed, here people do whatever it takes to get the job done. All types of people work in close harmony & it is not known in advance as to whose contribution will be most crucial to the job.

Those working in this culture are motivated intrinsically for the job on hand rather than just for money & benefits.

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Types of organisational culture – Incubator Culture

Incubator Culture is a culture characterised by strong emphasis on equality & orientation to the person. It is based on the premise that the role of organisations is to serve as incubators for the self-fulfillment of their members.

Such a culture has little formal structure. Those in it perform roles such as confirming, criticising, developing or helping complete an innovative product or service, creating environments where they thrive on an intense, emotional commitment.

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Organisational culture

The four types of cultures are described in their ‘pure’ form – most company cultures being mixed to various extents.

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Understanding cultural differences

Even though country clusters indicate regional similarities, most countries have varying cultural highlights. Those of some countries are given here.

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Doing business in China Perhaps because of its long tradition of

isolation, doing business in China is a long process. Values & relationships rated highly.

The primary criterion for doing business in China is technical competence.

The Chinese are punctual. However, they will take their time making decisions.

When negotiating a contract, the Chinese may ask many questions & nod their assent at the responses. The nodding generally means that they understand or are being polite, not that they agree.

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Doing business in China In negotiations, the Chinese give concessions &

also expect some in return. An important dimension of Chinese culture is

guanxi, which means good connections. This can result in lower costs for doing business, increased business & sales. Who you know is important.

The Chinese do not depict nor like excessive emotion of any kind.

Being a collective society, the Chinese pride themselves on being members of a group. This is a contrast to the West.

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Doing business in Russia Personal relationships & friendships with partners

are more important than business laws & contracts. Because the rules of business have changed a lot in

Russia, it is good to use local consultants who have been there & understand the local business climate.

The definition of ethical behaviour may be different as compared to other countries.

Decision-making is generally a long process. Russians like to negotiate with just one firm at a

time.

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Doing business in Russia They also like doing business face-to-face. The Russians are not forthcoming with financial

information until they know their partner well enough.

When starting a business relationship, it is important to: Stress mutual gain Clarify terminology (to be sure both understand) Not compromise or settle too quickly – often

considered a sign of weakness. Reinforce written contracts with reminders of deal

benefits. Celebrate with a nice dinner afterwards!

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Doing business in France It is important to know that the French are very

status-conscious, unlike those from other cultures. They are also friendly, funny & sarcastic, & may admire people who disagree with them.

While the French work very hard, they are not motivated by competition.

French firms are often highly centralised, making decision-making a long process.

Some etiquette-related issues to remember: When shaking hands, use a quick shake with some pressure

in the grip. Be on time for meetings & social occasions.

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Doing business in France Conversation is acceptable during a meal, not

personal conversation. Early friendliness is not okay – this includes first names, speaking of personal or family details, etc.

In negotiations, the French try to find out all of the other side’s demands & aims are. They reveal their own, however, only late in the deal.

They do not like being rushed into making a decision & rarely make important decisions at meetings.

They are logical & precise in their approach, not given to making compromises.

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Doing business in Arab countries The sense of time in Arab countries is vastly

different from that of western nations. This is important to remember.

Also important is the sense of destiny people believe in, that a higher power dictates the outcome of important events.

The Arabs often act based on emotion rather than logic. Their meetings may be constantly interrupted & those new to their culture will need to accept this state of affairs.

Business meetings typically conclude with an offer of coffee or tea.

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Doing business in Arab countries

While titles are most often not in general use on the Arabian peninsula, the Arabs give much importance to status & rank.

They do not appreciate others putting on a show of self-importance, nor taking credit for joint efforts.

Red tape can generally not be avoided, making patience critical to success in business dealings

Connections are extremely important, making well-connected people get jobs done fast.

Important decisions are generally made in person.

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Session 10: Communication barriers – perceptions

Advertising messages: The way we understand or misunderstand someone, advertising messages may or may not communicate the desired message.

Language differences in advertising (page 190) Message misinterpretation when not adhering

to the culture of the country (e.g. presenting business cards, bowing, attire, etc.)

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Training takeaways Individual bullet-point sharing on what you are

taking from the training; Revision – a group exercise; Good luck to all of you!