More clues can be found in formalized exchanges such as greeting rituals. The importance of these rituals should not be overlooked. Some countries, such as the United States, tend to pay less attention to protocol, but for others it is taken quite seriously. For example, failure to show respect by carefully exchanging and inspecting business cards in Japan can get business negotiations off to a very bad start.
In France, greetings are highly personal and individual. A general wave of the hand to say hello to everyone when arriving at the office, as in the United States, is considered insulting to French co-workers who expect to be greeted individually by name, Bonjor Nathalie, shaking hands and making eye contact. Should you say Bonjour again, when passing later in the hallway, you will be corrected: Re-Bonjour. Otherwise, you have signaled that you do not remember having greeted that person in the first place, and therefore that they are not important to you. Leaving rituals follow the same procedures.
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Another part of the ritual that generates a fair amount of confusion is the degree of body contact expected in greeting. Are women supposed to shake hands? Are men expected to embrace one another? One MBA student from Hong Kong was quite distressed and uncomfortable when her French male colleagues insisted on kissing hello and goodbye. The French are, however, taken by surprise when, in the United States, mere acquaintances might greet them with a hug. One Brazilian executive attending a seven-week international management seminar lamented the coldness of the farewell rituals - handshaking and kissing - missing the abruca (two-armed hug) that would have demonstrated for his the close feelings of comradery.
Another aspect of the initial encounter is the amount of physical space considered necessary to be comfortable. As described by Hall, northern Europeans tend to require a larger personal space or 'protective bubble' than their Latin European counterparts. Northern Europeans feel more comfortable with somewhat greater than arm's length distance. Southern Europeans want to move near within arm's length in order to feel the connection. A Latin European feels rejected when a northern European steps back to re-establish 'the bubble'.
A northern European feels uncomfortable when people are standing or for that matter driving too close for comfort. This can also be observed in queueing behavior. While standing in line, northern Europeans who leave a space for comfort should not be surprised if it quickly get filled by a Latin European. These cultural differences in queueing behavior where clearly evident at Disneyland Paris, posing problems for crowd control normally practiced in the United States. The northern Europeans and Anglo-Saxon guests became quite annoyed with the Latin Europeans filling in the gaps, as they interpreted it to be breaking in line.
The idea of intrusion is not just physical. It is also psychological. Thus, what many North Americans consider a perfectly friendly line of questioning may be deemed impertinent or overly familiar by non-Americans. This difference is particularly likely to manifest itself at the 'getting to know each other' stage of an international negotiation or prospective collaboration.
For example, French executives will not appreciate inquiries into their personal lives, their family circumstances, or how they spent the weekend. Their professional life and their personal life are regarded as quite separate domains. A senior HR executive at Disney Paris expressed Surprise at a French executive who, in 18 months of working there, had not once brought his family to visit the park - this in spite of the provision of free passes and the staging of events for family members. Nor was this due to lack of time. The executive in question had no intention of mixing family and work, even though the corporate culture actively encouraged it.
Observations of how people get to know each other, the degree of formality and personal contact preferred, reveal underlying assumptions about what is considered to be public versus private space. Americans tend to be more open, informal, and easy to approach then Europeans or Asians. However, Europeans often complain that relationships with Americans tend to be superficial. While it may be more difficult to get to know a European, the relationship once established is often more enduring.
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Another cultural artifact, the prevailing dress, code, also differs in degree of formality and can serve as a subtle signaling mechanism. Northern Europe managers tend to dress more informally than their Latin counterparts. At conferences, it is not unlikely for the Scandinavian managers to be wearing casual clothing while their French counterparts are reluctant to remove their ties and jackets.
For the Latin managers, personal style is important, while Anglo and Asian managers do not want to stand out or attract attention in their dress. French women managers are more likely to be dressed in ways that Anglo women managers might think inappropriate for the office. The French, in turn, think it strange that American businesswomen dress in 'man-like' business suits (sometimes with running shoes).
Dress code may also signal task orientation. For example, rolled up shirt sleeves are considered a signal of 'getting down to business (United States) or 'relaxing on the job' (France).
Ideas currently in vogue regarding dress code include 'dressing down days' and 'dressing for the customer'. Some US companies have designated certain days, such as Friday, as days when people are encouraged to come to work in more casual clothes, like those they would wear at home.
Other companies are also encouraging workers to dress in ways to match the customer. Doing business with Levi-Strauss may mean going to head office wearing jeans (Levis of course), rather then a Chanel suit. However, efforts to encourage a particular dress code, at work or otherwise, may be rejected, particularly in France, where the style of dress is seen as an expression of the individual.
Hofstede proposes that five independent dimensions of national cultural differences, there are power distance, uncertainty avoidance, individualism/collectivism, masculinity/femininity, long-term/short-term orientation. Power distance and uncertainty avoidance can be identified:
Power distance to degree to which inequality is felt to be desirable or undesirable in a society, and the levels of dependence and the levels of dependence and interdependence. In countries with high power distance, the holding of power needs less legitimization than it does in countries with lower power distance.
Uncertainty and avoidance to degree to which uncertainty is perceived as a threat, leading to anxiety about the future and the protection of society through technology, rules, and rituals. In places with high uncertainty avoidance (such as France), there is a need for comprehensive rules and regulations, a belief in the power of experts, and a search for absolute truths and values, whereas in places with low uncertainty avoidance (such as US, South Africa), there is less emphasis on rules and procedures, a greater reliance on relativism and empiricism and more of the belief in generalists and common sense.
Given the differences in value orientations, Hofstede has long questioned whether American theories could be applied abroad and discussed the consequences of cultural differences in terms of motivation, leadership, and organization. He argued, for example, that organizations in countries with high power distance would tend to have more levels of hierarchy (vertical differentiation), a higher proportion of supervisory personnel (narrow span of control), and more centralized decision-making. Status and power would serve as motivators, and leaders would be revered or obeyed as authorities.
In countries with high uncertainty avoidance, organizations would tend to have more formalization evident in a greater amount of written rules and procedures. Also there would be greater specialization evident in the importance attached to technical competence in the role of staff and in defining jobs and functions. Managers would avoid taking risks and would be motivated by stability and security. The role of leadership would be more one of planning, organizing, coordinating and controlling.
Having ranked countries on each dimension, Hofstede then positioned them along two dimensions at a time, creating a series of cultural maps. He too found country clusters - Anglo, Nordic, Latin and Asian.
On such cultural map, is particularly relevant to structure in that it simultaneously consider power distance (acceptance of hierarchy) and uncertainty avoidance (the desire for formalized rules and procedures). Countries which ranked high both on power distance and uncertainty avoidance would be expected to be more 'mechanistic' or what is commonly known as bureaucratic. In this corner we find the Latin countries as traditional bureaucracy 'pyramid of people'. They were more likely to be centralized decision-making, coordination at the top, less delegation, 'Cloisonne' highly specialized, strong role of staff, analytic ability, informal relationships, 'Systeme D', Elitist (power and authority), input control. France also in this corner with 68 power distance index and 86 uncertainty avoidance index.
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In the opposite quadrant, countries which rank low both on power distance and uncertainty avoidance are expected to be more 'organic' - less hierarchic, more decentralized, having less formalized rules and procedures. Here we find the Nordic countries clustered and to a lesser extent, the Anglo countries. The image of Anglo/Nordic firms as village market with small power distance and weak uncertainty avoidance. They were more likely to be decentralized, generalist, people as free agents, entrepreneurial, flexibility, more delegation, coordination through informal, personal communication, output control. United States also in this corner with 40 power distance index and 46 uncertainty avoidance index.
In societies where power distance is low but uncertainty avoidance is high, we expect to find organizations where hierarchy is downplayed, decisions are decentralized, narrow span of control, specialist, technical competence, discretion limited by expertise, strong role of staff 'experts', top management team, industry and company knowledge, organized by function, compartmentalized (chimneys), coordination through routines and rules, structural solutions, throughput control, efficiency, rules and regulations are more formal, and task roles and responsibilities are more clearly defined. Thus there is no need for a boss, as the organization runs by routines. This is characteristic of Germanic cluster as well-oiled machine.
In societies where power distance is high but uncertainty avoidance is low, organizations resemble families or tribes. Here, 'the boss is the loss', and the organization may be described as centralized, paternalistic, loyalty, generalist, strong social versus task roles, personal relationships, social control. Subordinates do not have clearly defined task roles and responsibilities (formalization), but instead social roles. Here we find the Asian countries where business enterprise is often characterized by centralized power and personalized relationships. South Africa also in this corner with 49 power distance index and 49 uncertainty avoidance index.
Strategies for managing multicultural teams
Creating a Sense of purpose
One of the most important elements of successful teams is having a 'shared sense of purpose'. This purpose has to be developed within the team whether or not its mandate comes from on high. Often teams are formed with no clear idea of their rationale, other than it seemed like a good idea at the time. These groups quickly lose their motivation, unless about to turn the situation into one of defining their own reason for being. Yet creating a sense of shared purpose is not an easy task, particularly when first allegiances may be to functional, business, or country units. In addition, different cultures have different assumptions about the reason for teams: to share information and discuss problems, to make decisions and take actions, or to renew contact and build social relationships. This will determine issues such as the frequency of meetings and contacts, who should attend, when the meetings can take place thorough conference calls or need to be face to face, and the time needed to be set aside expressly for socializing.
The perceived purpose of the team will determine who needs to be involved. In task-oriented cultures, only those who are directly concerned, and with the appropriate knowledge and skills will be invited. The objective is to get the job done. In cultures where hierarchy is important, members may be assigned to teams because of their power and influence in the organization, rather than their knowledge per se. The presence of powerful members may signal the importance attached to the team, as swell as the likelihood of a decision being made. The idea of team members being drawn from more or less the same hierarchical level, so as not to have any one member pull rank, would seem like a bizarre idea.
In relationship-oriented or collectivist cultures, more members are likely to be included, regardless of whether their knowledge is relevant to the task at hand. The purpose of the team is to create a sense of belonging, to reaffirm relationship, and to reinforce identification with the group. Being left out would create malaise, as it could be experienced as social ostracism.
Structuring the task
Teams have to decide on how they will structure the task : setting agendas, when and where to have meetings, what needs to be done by when, and who needs to do what. Setting agendas is one area where cultural differences can be a source of potential confusion and friction. Indeed cultures differ in expectation as to whether an agenda is set at all, or whether the flow of the meeting should take its own course.
French do not appreciate the systematic, one agenda item at a time, approach. They tend to advance discussion and prefer to consider all the issues together. In polychronic cultures, rigid agendas are likely to be perceived as inhibiting creativity in meetings, deadlines serve more as guidelines than unalterable facts, and it is, on the whole, more acceptable for several people to talk at the same time without it being experienced as chaos.
American is monochromic cultures, agenda items are expected to be dealt with systematically, decisions taken, deadlines respected, and one person speaks at a time.
Assigning roles and responsibilities
Teams also need to decide who is to do what. This means assigning roles and responsibilities within the team. In more individualistic cultures, team members often prefer a 'go it alone' approach and are eager to split up the tasks so that every one can go off and work on their own. In more collectivist cultures, assigning individual responsibility seems somewhat strange. They expect the work of the group to be done together, interdependently. The idea that each goes off and does their own work independently makes no sense.
The roles and responsibilities of team leaders and members also differ significantly between cultures. France based on the power and political influence he or she holds with the organization. Many prescriptions from American gurus stress the importance of choosing a team leader with good interpersonal skills and who can serve as a facilitator, particularly warning against choosing team leaders on the basis of narrow, task-specific knowledge or hierarchical position.
Thus multicultural groups have to actively negotiate the task strategies in order to arrive a common approach to working together. They also have to explicitly negotiate process issues, which have more to do with the way members interact than with how and task is structured.
MAKING ECONOMIC VERSUS MORAL SENSE
True concern for society or another way to increase corporate profit? Debate of 'the business of business is business'. Ethical behavior provides the moral underpinnings of a free society and a free economy and can thereby be justified as an imperative of globalization. Clearly embedded in this imperative are assumptions of universalism and fairness. Being fair means providing equal opportunities and access to markets, not playing favorites, nor protecting home interests.
Defined as 'the notion that corporations have an obligation to constituent groups in society other than stockholders and beyond that prescribed by law or union contract'. Corporate social responsibility therefore means that a firm's actions must take into account not only the well-being of the stockholders but also the well-being of the community, the employees, and the customers. Acts of corporate social responsibilities may in fact be the consequence of profitability rather than the cause. It is easy to be magnanimous when things are going well. The real test is when there is a choice between acting ethically and making a profit, as Levi-Strauss, to pull its $40 million business out of the lucrative Chinese market in protest again human rights violation. And tried to take on the problem of child labor in Bangladesh by paying children to go to school. This reflects a long-term commitment to developing business while contributing to society.
WHAT IS CORRUPTION
Corruption can be defined as 'the misuse of authority as a result of considerations of personal gain which need not monetary and includes bribery, nepotis, extortion, embezzlement, and utilization of resources and facilities which do not belong to the individual for his own private purposes.
ETHICS / CODE OF CONDUCT
Many cultures establish informal ethical principles or moral standard that define 'right' and 'wrong' conduct. However, what is right or wrong is difficult to define conclusively and agree upon in any culture. In US, some Americans believe legal abortion is right, others think it is wrong. And what is right or wrong is far more difficult to define conclusively and agree upon among the different cultural environments around the globe. This is because different societies are confronted with different opportunities and constraints, and to cope, each society develops a unique culture and standard of ethics.
Ethical values : Individuals' moral judgments about what is right or wrong
Universalism: Perspective that widespread and objective sets of ethical guidelines exist across countries.
Cultural relativism : Perspective that ethical behavior in a country is determined by its own unique culture, laws and business practices.
Code of Conduct : To provide guidelines and are being developed within companies as well as across countries. A statement setting down corporate principles, ethics, rules of conduct, code of practice or company philosophy concerning responsibility to employee, shareholders, consumers, the environment or any other aspects of society external to the company.
Rational / Economic View
Many of the strategic management frameworks mentioned above, including the prescribed tools and techniques, affirm the belief and value of a 'rational analytic' approach. This approach takes for granted certain assumptions. It assumes, for example, that the environment and the organization are objective realities that are similarly perceived and analyzed by intelligent managers.
Yet those managers making strategic decisions often find themselves confronted with environmental uncertainty, ill-structured problems, and socio-political processes. In fact, rather than taking them as objective realities, it can be argued that both environments and organizations are subjective realities that are perceived and enacted in different ways. This means that managers see different things, create different realities, and then act accordingly. Thus multiple interpretations of and responses to supposedly similar situations are likely. As such, national culture can play an important role in determining different types of strategic behavior.
The rational analytic approach also assumes that managers making strategic decisions follow a similar route, gathering all relevant information, generating all possible alternatives, evaluating the costs and benefits of each alternative, choosing the optimal solution, and then acting upon it. While widely acknowledged that managers and organizations are limited in their capacity to digest all this information, thus subject to 'bounded rationality', the precise ways in which rationality in decision-making is limited, or more specifically culture-bound, have remained unexplored. In other words, how does culture influence the way managers gather and interpret information, choose between decision alternatives, and establish criteria for action?
Clearly, much of the discussion to date regarding strategic management has been based on beliefs that environments and organizations are objective realities and that strategic decision-marking is a rational and analytic process. Digging deeper, we discover underlying assumptions that environments are intelligible and predictable, and that by taking action, or doing, strategic objectives can be achieved. This functionalist, instrumental view of the world, however, may be challenged in other cultures.
In accordance with Islamic principles - Strategy is a dynamic process, not a static perception, which is energized through feelings. It is not a bundle of facts, figures, and ideals assembled in order by the logical mind. Planning is the reflection of the flow of collective psyche synthesized with Purpose.
Underlying this notion of strategy we find dramatically different cultural assumptions. It highlights the role of feelings, or emotions, not just analytic rationality. It questions the nature of truth as determined by facts and figures, and logic, rather than by spiritual purpose. Furthermore, it views strategy as a collective process, and as dynamic - what is need is to go with the flow.
Different cultural assumptions are also clearly evident in the approach of Matsushita, known as the 'Seven Spirits of Matsushita', underlying assumptions regarding the relationship with nature (harmony), human nature (unlimited potential), and the nature of human relationship (collective prosperity and existence) are easily surfaced.
According to Pascale, coathor of The Art of Japanese Management, Japanese companies adopt a broader notion of strategy. They challenge the Western view of strategic management, considering these rational analytic approaches to be 'myopic' and oversimplification of reality, distrustful of a single strategy and peripheral vision,
Regarding the nature of truth and reality are different, that reality cannot be boxed into two-by-two matrices, and that truth cannot be determined by simplistic theories of cause and effect.
But other Western management scholars have also challenged the rational analytic approach. Consider these comments by Henry Mintzbery, who has been a rather out-spoken opponent to the strategic planning approach. Strategy formation is a process of learning only partially under the control of conscious through and strategy is considered as emergent, or as evolutionary. Strategies as such are thought to emerge and to evolve over time, as a pattern in a stream of decisions.
Most recently in the field of strategic management, there has been a growing interest in development organizational resources and capabilities. These resource-based and core competencies views suggest that building corporate character provides the capability and flexibility to respond to environmental events and reflect different underlying assumptions by placing the emphasis on what the company is versus what the company does. The focus is on having the right stuff or strategic traits, rather than necessarily making the right moves or strategic actions.
Controlling / Adapting
Different assumptions lead to different model of strategic management which can be categorized as controlling (rational) and adapting (dynamic).
Controlling VS Adapting
Scanning is Active search Monitoring
Focused and systematic Broad and sporadic
Centralized (scanning department) Decentralized
Planning is Formalized (systems) Informal (discussion)
Centralized (strategic planning department) Decentralized
Types and sources of information Quantitative Qualitative
Interpreting information relies on Formal models and methods Informal methods (home grown models)
Scenario planning Discussion and debate
People involved are Mostly at the top Across the ranks
Decisions are Made primarily at the top Made on the front lines
Tending to be political Consensual
Strategic goals and action plans are Clearly defined and articulated Broad and implicit
Explicitly measures and rewarded Vaguely monitored
Time horizons are Short term Long term
Action plans are Sequential Simultaneous
The two investors of FPD based from Vancouver and the background located in Florida, both in North America. The team should understand the US culture within which the business will operate. Such as language, customs, employment laws, and real estate regulations. These will very important in hiring local administrative personnel to support the business, and in locating an office. Controlling model is most appropriate for FPD due to the US culture is controlling model (rational / doing)