FAQ: International Management and Leadership

Transcription

1 Question 1: What is the Hofstede cultural dimension of power distance? Answer 1: Hofstede s culture model explains differences in our work culture and managerial behaviors based on a culture model of four dimensions: power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity. Power distance refers to the extent to which less powerful members of institutions and organizations accept that power is distributed unequally (Hofstede & Bond, 1984). In high power distance cultures, people blindly obey the orders of their superiors. In these countries, lower level employees follow directives as a matter of procedure. Strict obedience to order is also found among upper level employees in some societies such as Mexico, India, and South Korea. In low power distance countries, employees do not obey directives blindly and often question or challenge the ideas and thoughts expressed by superiors. The United States, Canada, Norway, New Zealand, and Australia are among the countries that have relatively low power distance. The power distance dimension affects the international management of human resources in several ways. Organizations in high power distance countries tend to be centralized and pyramid-like. These structures have a high degree of bureaucracy, and all decisions are centralized at the top. In countries with low power distance, organizational structures tend to be decentralized and flatter. These organizations also have a thin layer of supervisory employees, and lower level employees tend to be highly qualified. In contrast, organizations in countries with high power distance tend to have a thick layer of supervisory employees, and lower level employees are often semiskilled or unskilled workers. This kind of structure promotes inequality among people in different levels of the organization. Question 2: What is the Hofstede cultural dimension of uncertainty avoidance? Answer 2: Uncertainty avoidance is defined as the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try to avoid these (Hofstede, 1980). Uncertainty avoidance refers to cultures where people tend to not be risk takers and, instead, prefer security: 1

2 Risk taking is discouraged in the society. These countries also have a strong belief in experts and expert knowledge. Examples include Japan, Spain, and Germany. These countries have a great deal of structure in organizational activities, rules are clearly defined, and written rules are prevalent. Managers are also less risk taking, and the labor turnover is low as security is very important to these cultures. The employees in general tend to be less ambitious. On the other hand, the populations of countries with low uncertainty avoidance are more willing to accept risks associated with the unknown. They seek new opportunities, roles, and responsibilities. People change careers several times during their work life, and there is less structure in the organizational activities. There are also fewer written rules, and people are encouraged to take greater self-initiative and responsibility in getting the job done rather than being handed instructions. Managers are more likely to take risks and often seek business opportunities with known calculated risks. In these countries, organizations tend to have higher employee turnover as the employees are more ambitious and are constantly trying to achieve higher goals and fulfill higher needs. For example, in Japan there is a strong uncertainty avoidance, and Japanese businesses like to structure tasks so there is no doubt regarding what is to be done and how it is to be done. In Sweden, however, the uncertainty avoidance is low. Therefore, job descriptions, policy manuals, and similar work-related materials are open-ended or general as opposed to the detailed procedural manuals of the Japanese. Question 3: What is the Hofstede cultural dimension of individual/collectivism? Answer 3: Individualism is the tendency of the people to look after themselves and their immediate family only (Hofstede, 1980). Hofstede measures this cultural dimension with individualism at one end of the continuum and collectivism on the other end. The idea of collectivism is that people tend to support groups and look after each other in exchange for loyalty to the group. Countries can be high in collectivism or individualism or somewhere in the middle. Countries that are high in individualism tend to be wealthier. Examples include the United States, Canada, Australia, Sweden, and Denmark, among others. These countries have high gross domestic product (GDP) growth. In addition, these countries tend to support a protestant work 2

3 ethic and promote greater individual initiatives. Employees are rewarded for taking initiatives at their job level. Promotions are based on market values rather than seniority. Countries with low individualism (high collectivism) tend to have less support for the protestant work ethic. These countries also tend to be poorer. Examples include Pakistan and a number of South American countries (with lower GDP). The countries that do not promote individual initiative cultivate employees who simply do what is being asked by the management and expect promotions based on seniority rather than merit in return. For example, the Swedish show a moderately high degree of individualism reflected in their emphasis on individual decision making as opposed to group or collective decision making. Question 4: What is the Hofstede cultural dimension of masculinity/femininity? Answer 4: Masculinity is defined by Hofstede as a situation in which the dominant values in society are success, money, and things (Hofstede & Bond, 1984). On the other hand, the femininity dimension is defined as those values in the society that pay more attention to the care of others and promote quality of life. Countries with high masculinity, such as Japan, place great importance on earnings and wealth, titles, recognition in the job and personal life, advancement in the career, and challenge. Individuals are encouraged to be independent decision makers, and achievement is defined in terms of recognition and wealth. Due to the importance of these factors, there tends to be higher stress on the job. In fact, many mangers believe that their subordinates do not like their work and must be kept under some degree of control. For example, a great deal of importance is given to money and material symbols of success such as expensive cars, living in an expensive place, and more because of the high masculinity index in Japan. These countries also tend to favor large companies, and economic growth is given more importance. Industrial conflict is common in these countries as well. The education system is modeled toward encouraging high performance. Young men are expected to have careers, and those who do not have careers view themselves as failures. Women in these countries do not often hold 3

4 higher level jobs, but they find it necessary to be assertive in the workplace. On the other hand, countries with low masculinity index (high in femininity) tend to place great importance on cooperation. People are encouraged to work together in teams and share greater responsibilities together. The atmosphere in the workplace is friendly, and organizations provide employment security to the employees. Group decision making is a norm, and achievement is fulfilled and defined in terms of human contacts and the living environment. The workplace tends to be characterized as a low-stress environment because there is little industrial conflict. Managers view their employees as responsible for their work and allow them more freedom. These countries also tend to favor small companies, and the education system is modeled toward social adaptation. Some men and women in these countries want careers and others do not. Women generally do not find it necessary to be assertive in the workplace. For example, Swedes score low on the masculinity scale, which means interpersonal relations and the ability to interact with other workers and discuss job-related matters are very important for the people of this country. Question 5: What are some of the issues and challenges involved in doing business in countries like China and India? Answer 5: China and India hold great opportunity for growth and other opportunities. However, many European and U.S. multinationals have found that doing business in China can be a challenging, grueling process that can often lead to failure. Although many firms are trying to grab a piece of the Chinese economy, they are yet to make serious profits. However, there have been lots of benefits resulting from cheap manufacturing and mass production of the manufacturing work from China. The challenges and issues faced by multinational corporations mostly result from the reason that many of the multinational corporations (MNCs) do not completely appreciate the role of Chinese culture and its impact on doing business in India. For example, to experienced Chinese businesspeople, technical competency is considered very critical to doing business. The Chinese place great importance on value and principles above money and convenience. Chinese do not like to get to the business right away on 4

5 meeting the other party. Business meetings typically start with pleasantries such as tea and general conversation about the other party's trip to the country, inquiries about the local accommodations, and questions about family. The Chinese also like to give an indication to the other party as to the appropriate time to start the discussion of business in the meeting. The proper time to conclude is indicated to the guest as well. The Chinese are slow in formulating a plan of action; however, once they get started, they make fairly good progress in moving things ahead with the project. Once a decision has been made about who the best partner is among different possible business partners and what the best way in which to implement the project or any activity, the Chinese tend to stick with these decisions. In negotiations, Chinese follow the policy of give and take. In other words, reciprocity is very important in negotiations. If the Chinese provide some discounts or concessions, then they expect the same from the other party in the negotiation as well. Chinese do not like to lose face in any business meetings. They are aware that oftentimes in business negotiations one party has the upper hand to the other and a win-win situation does not necessarily take place in every deal. Hence, they like to conduct the whole process of negotiations through intermediaries. Chinese do not like to express excessive emotion of any kind. Expression of anger, frustration, or impatience can be viewed as disruptive and rude. Of course, just as in every negotiation, ones with the Chinese should be viewed with a long-term perspective. The MNCs that realize they are investing in a long-term relationship are often successful in doing business with the Chinese. Doing business with and in India is different due to the different dynamics of that culture. Foreign trade is critical to India's economy, and its growth is critical to the world economy. Since the liberalization policies introduced in the early 1990s, India has been particularly interested in promoting exports and creating import substitutions. In India, the government plays an important role in this process in approval for investments. It is also highly protective and selective and typically granting businesses and contracts only on a case-by-case basis. There are also some cultural issues to keep in mind while doing business in India. Contrary to the popular belief that Indians are not time conscious, it is very important to be on time for meetings in India. Even if the Indian counterparts do not actually start the meeting on schedule, it is critical that the guest be on time. It is advisable not to ask any personal questions unless the other individual is a friend, family, or close associate. Status quo is very important to Indian people, so titles are a very important factor when 5

6 addressing someone in India. For example, lawyers, doctors, and professors should be addressed accordingly. In most cases, it is expected that junior management address the senior management as Sir or Madam. In India, social norms are very clear and well defined. For example, public displays of affection are considered inappropriate. Behaviors like touching others while talking or casually backslapping is not considered appropriate business behavior. The distance between the male and female genders is well defined and maintained in the workplace. Public gestures of beckoning are done with the palm turned down in India. Indians do not consider pointing at a person appropriate, so pointing is often done with the chin. The usage of the left and right hand is also well defined. The left hand is considered unclean, and the right hand is used for eating, offering, and accepting things. People greet each other in a formal environment with a gesture of joining the palms together (called namaste). Bargaining is considered a birth right of consumers in India. Hence, bargaining for goods and services is common. This contrasts with Western traditions where bargaining might be considered rude or abrasive. Question 6: What are some of the issues involved in doing business in the cultural environments of France and Russia? Answer 6: After the crumble of the Soviet Union in the late 1980s, the newly born Russian economy has experienced severe problems. However, Russia has huge potential for multinational corporations, and if MNCs follow certain guidelines in relating to the Russian culture, then they can reap potential opportunities. Contracts in Russia are not easy to enforce legally. When there are contract disputes between partners, there is little or no protection for an MNC because of the time and effort needed to legally enforce the agreement. Building good personal relationships with a Russian partner is a good strategy to follow for better protection in case any issues and challenges with Russian partner(s) arise. The Russian economy has gone through so much change, so the rules of business have changed in recent years. There is also the issue of business ethics in doing business in Russia. In the 6

7 United States, exchanging gifts with the person who wants to transact business is considered unethical and illegal. In Russia, it is tradition to give gifts to those with whom one wants to transact business. An experienced businessperson would say to always be patient; it takes a lot of patience to get something done in Russia. It often takes months of waiting in Russia before the business moves forward. Russians prefer exclusive arrangements, and often negotiate with just one firm at a time. This preference also adds to the time and the slow process. Russians prefer face-to-face meetings or deals rather than letters, phone, or faxes. They usually do not respond to negotiations that are not face-to-face. If a business is trying to work on a merger deal with a Russian firm, it should keep in mind that Russians prefer to keep financial information to themselves. Russians wait until they know their partner well enough and feel comfortable before sharing financial data. The Western idea of a win-win deal in negotiations also works well in Russia, and good negotiators will place emphasis on mutual gain. Language is also a big barrier in Russia. Most of the work has to be translated into Russian, so it is better to keep the terminology of the contract simple. The business leader should check and make sure that the other party clearly understands the proposal, knows what is expected and when, and is agreeable to the deal. Russians see compromise as a sign of weakness, so one should not agree to or settle things too quickly in business deals. Many people in the United States believe that it is more difficult to get along with the French than with other Europeans. The French culture is markedly different from that of the United States. One simple example is the handshake. Americans like to shake hands firmly and often hold the shake until names are exchanged. The French prefer a quick hand shake with some pressure in the grip. Being on time is also very important for both business and social meetings. On business visits, people should try very hard to be cultured and sophisticated. During lunch or any meal, personal questions and the subject of money should never be discussed. It is acceptable to engage in pleasant conversation about whether and other light topics. The French do not like to discuss personal or family details in the first few meetings. They tend to be suspicious of early friendliness, dislike using first names, and usually dress more casual (e.g., not wearing one's suit jacket in business). The French try to find out the aims and demands of the other party at the beginning of negotiations, but they reveal their own hand only late in the negotiations. They like to make decisions in their own familiar setting and do not like being rushed into making a decision. In fact, they 7

8 rarely make important decisions inside the meeting. Their approach is very logical and precise, and they will not make or offer concessions in negotiations unless they feel that their logic in not providing the promotions or concessions has been defeated. Question 7: How can cultural differences across countries affect the final marketing message received by a global customer? Answer 7: Cultural differences can affect the final message received by the global customer in several ways along the communication path. For example, a problem can arise at the information source because the global manager does not truly understand the needs and wants of the target foreign market. This is especially true if the global manager relies on the self-reference and makes the naive assumption that if it sells in one country, it would sell in another. For instance, the bicycles designed and sold in the United States to consumers to fulfill recreational and exercise needs cannot be successfully sold for the same reasons in a country where the primary use of the bicycle is transportation (such as villages and towns in China). The encoding step of the communication process can also cause problems because such factors as colors, values, beliefs, tastes, and other symbols utilized by the global manager do not correctly symbolize the message intended. The message channel may create problems because of the difficulty of effectively reaching target foreign markets in many countries. Problems such as illiteracy and the availability and types of media create problems at this level. Decoding problems are generally created by improper encoding. The decoding process is one in which the receiver interprets the message in terms of his own culture thereby receiving an incorrect message. For example, one product's slogan, Come Alive, was decoded by many as Come out of the grave. Sometimes decoding can create problems even when the encoder purposely attempts to develop a message with no symbolism. Another example is a brand that uses a ram as its symbol. The term "ram" decodes into a popular Hindu god worshiped by millions of Hindus in India. If the company tried to market their product in India without changing the name, it could lead to a huge boycott across India. Finally, the feedback step can create problems in the sense that companies do not use feedback to effectively measure their communication efforts and attempt to correct any problems that may have been created by the other steps. 8

9 The major problem is that the encoder is in one culture using his or her own self reference, and the message is decoded in another culture where the decoder is using his or her own self- reference. The encoder must be certain that the message is being encoded in such a manner that it will be decoded in the other culture in the manner in which it is intended. Question 8: How does Maslow s motivation theory apply to international management of human resources? Answer 8: Motivation is an important topic of interest in international management and human resource management. Many multinational corporation managers assume that they can motivate their offshore employees with the same plans and approaches that are used to motivate home country employees. While there are similarities across cultures, there are many differences that affect motivation. For example, in the United States, personal achievement is an important need, and individual success and more money may be an important goal. In China, group affiliation is an important need, and harmony is an important goal. The motivation process is the same, but the needs and goals may be different because of the differences in the two cultures. Abraham Maslow, a well-known American psychologist, developed a theory of motivation and postulated that everyone has five basic needs constituting a need hierarchy: physiological, safety, social, esteem, and self-actualization. Psychological needs are food, clothing, shelter, and other basic, physical needs. Safety needs are the desire for security, stability, and the absence of pain. Social needs are the need to interact and affiliate with others, and to feel wanted by them. Esteem needs are the need for power and status. Self-actualization needs are the desire to reach one's full potential by becoming everything one is capable of becoming. There are a number of basic assumptions with this theory of motivation. The first assumption is that lower level needs must be satisfied before higher level needs become motivators. A second assumption is that once a need is satisfied, it no longer serves as a motivator. A third assumption is that there 9

10 are more ways to satisfy higher level than lower level needs. These assumptions have driven much of the international research on Maslow s theory. Do people throughout the world have needs that are similar to those described in Maslow's need hierarchy? International research in this area shows that they do. Research has been mostly focused on managers and shows that all needs are important to the respondents across different cultures. In countries like Latin Europe, the United States, the United Kingdom, and Nordic Europe, the upper level needs of self-actualization were considered the most important. Research also shows that while selfactualization and esteem needs are more important for professionals and managers, security, earning benefits, and physical conditions are more important to the unskilled and lower level employees. When it comes to employee motivation, one can notice greater differences among job categories than among countries. In terms of motivating the employees in different countries, it is recommended that multinational corporations focus heavily on giving personal rewards to unskilled and lower level personnel, and developing and creating an environment of challenge for professional managers that can satisfy their self-actualization and esteem needs. This fosters cooperation between middle- and senior- level managers. However, it would be wrong to assume that high compensation packages are not motivating to the senior professionals. Question 9: Discuss the two-factor motivation theory of Herzberg in its application on international management. Answer 9: The research has shown that the need hierarchy theory is useful in helping identify motivational behaviors and factors for international human resource management. However, this theory itself is not enough to explain the motivational factor of international human resources management. Frederick Herzberg and his colleagues formulated the two-factor theory of motivation. The two-factor theory is closely linked to the need hierarchy of Maslow. Herzberg s theory holds that there are two sets of factors that influence job 10

11 satisfaction: hygiene factors and motivators. Motivators: These include the job content factors such as achievement, recognition, responsibility, advancement, and the work itself. In relation to Maslow s theory, these can be considered the selfactualization and esteem needs. Hygiene factors: These include the job context variables such as salary, interpersonal relations, technical supervision, working conditions, and company policies and administration. In relation to Maslow s theory, these are the social, safety, and physiological needs. According to the two-factor theory, if hygiene factors are not taken care of and well-provided for, there will be dissatisfaction among managers. However, if hygiene factors are taken care of, there may be no dissatisfaction as long as motivators are also provided. In short, this theory postulates that hygiene factors help to prevent dissatisfaction, but only motivators lead to satisfaction for the managers. According to this theory, motivation of human resources must include recognition, a chance to achieve and grow in the organization, advancement opportunity in the career, and constant interesting and challenging work. How does this theory fare in application to the international management of human resources? Research has been conducted on the application of Herzberg s theory, and in many cases, Herzberg s findings are supported. For example, George Hines surveyed 218 middle managers and 196 salaried employees in New Zealand using ratings of 12 job factors and overall job satisfaction. Based on the findings, he concluded that, the Herzberg model appears to have validity across occupational levels (Hines, 1973). A number of cross-cultural studies related to job satisfaction measures developed by Herzberg have also been conducted in recent years. This research and comparison shows that Herzberg's motivators tend to be of more importance to job satisfaction than are hygiene factors. Hygiene factors are factors that are controlled by the organization. Such factors include working conditions, working hours, salary, job security, benefits, and promotions. On the other hand, the motivators are those factors that are internally controlled by the employee. Such factors include responsibility of the work assigned, personal achievement, and the work itself. Question 10: How do motivational theories of job design, value of work, and 11

12 job satisfaction apply in different cultures? Answer 10: Job design: Assembly line employees in Japan will work at a rapid pace for hours and have very little control over their work activities. In Sweden, assembly line employees work at a more relaxed pace and have a great deal of control over their work activities. United States assembly line employees are somewhere in between Japan and Sweden less demanding than Japanese but more structured than Sweden. Why is job design so different in these countries? Job design is typically a function of the work done by an individual or a group and the way in which the management wants the job to be carried performed. Job design describes the job contents and the way in which the job relates to the others in the organization. Job design factors help explain why the same type of work may have a different impact on the motivation of human capital in different cultures, and it also results in different quality of life. All job designs tend to reflect the cultural values of the country. The biggest challenge for multinational corporations (MNCs) is to adjust the job based on each of the host country s cultural values. For example, when Japanese companies enter the United States, they are often surprised to find that people in the United States resent control. Japanese firms operating in Sweden find that the quality of life is the main concern of the employees there and that less structure and a more participative management style is needed to succeed in Sweden. Each country has a different cultural profile (as discussed in the Hofstede culture model) that helps explain why similar jobs may be designed differently from country to country. For example, in Japan, there is a strong uncertainty avoidance and desire to structure tasks, so there is no doubt regarding what is to be done and how it is to be done. The individualism is low, so there is a strong emphasis on job security, and risk taking is discouraged. The masculinity index is high, which puts a great deal of importance on money and material symbols of success. Japanese structure tasks so that the work is performed within these cultural boundaries. Value of work: Although work is an important part of the lifestyle of most people, there are still a large number of misconceptions held about other countries. For example, one reason that the Japanese work such long hours does not relate particularly to an extremely high value of work in the culture. 12

13 Rather, it is a very pragmatic reason: The cost of living is very high and hourly employees cannot afford to pass up the opportunity for extra money. In addition, salaried employees, such as managers who are not paid extra for working overtime, expect their subordinates to work long hours. Over the years, this culture has become a requirement of the job. Job satisfaction: In addition to the implications that value of work has for motivating human resources across cultures, another interesting contrast is job satisfaction. For example, recent evidence revealed that Japanese office workers may be less satisfied with their jobs than their U.S., Canadian, and European Union counterparts. Recent studies have also revealed that work has become a greater part of the average U.S. employee's life when compared to the Japanese worker s life. It is critical to keep in mind that effective motivation is also grounded in a sound understanding of culture. The way in which a manager motivates employees in one culture is often different from that which will be used in another culture. These findings suggest that MNCs should develop motivational packages that address the specific needs of a country s culture. References Hines, H. G. (1973, December). Cross-cultural differences in two-factor motivation theory. Journal of Applied Psychology, 376. Hofstede, G., & Bond, M. (1984, December). The need for the synergy among cross-cultural studies. Journal of Cross-Cultural Psychology,