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Before going in to details of given topic , first of all we should understand what does culture means , when it is simply says, culture: a society's (group's) system of shared, learned values and norms; these are the society's (group's) design for living
Values: abstract ideas about the good, the right, the desirable
Norms: social rules and guidelines; guide appropriate behavior for specific situations
Folkways: norms of little moral significance Customs; dress code; table manners; timeliness
Mores: norms central to functioning of social life bring serious retribution: thievery, adultery, alcohol
Do nations have cultures? Within each of the 'management disciplines' there is a significant literature which assumes that each nation has a distinctive, influential, and describable culture (C:\Documents and Settings\rperera\Desktop\THE FALLACY OF NATIONAL CULTURE IDENTIFICATION.htm)
There are so many definition available for culture, we first need a clear definition of culture , although a culture is a widely recognize world defining the concept of culture is challenging . one simplified definition is, it's a interrogated coherent logical system ,the parts of which are interrelated . This cultures is more than a random collection of customs , its an organized systems of values attitudes, beliefs , and behavioral managing related to each other cultures. Since there are so many different definition of the term culture , flowing is the widely accepted definition, which integrates many of these perspectives ,
According to Clyde kluckhohn (1962) , culture consist of patterned ways of thinking , fleeing , and reacting ,acquired and transmitted mainly by symbols , constituting the distinctive achievement of human group , including there embodiment in artifacts : the essential core of culture consist of traditional ideas and specially there attached values. From a more psychological perspective , Trandis ( 1972) presents culture as the subjective perception of the human made part of the environment ,this includes the categorization of social stimuli , associations , belief , attitudes , roles , and values that individuals share, A complimentary view is that of Hofstede (1980),who suggests that culture consists of shared mental program that control individual's response to there environment , ( Essentials of Int . Management - David C. Thomas)
There are different types of cultures across the world and each culture has its unique essence. While defining the term 'culture', there are several elements that together constitute as the culture of a particular region or the culture of particular people. These are the elements of culture.
Language: The various languages are essentially an important part of the culture.
Norms: Every society or every civilization has a set of norms, which are an inseparable part, and an important element of the culture. This can include the folkways, mores, taboos and rituals in a culture.
Values: The social values of a particular civilization are also considered as an element of the culture. The values of a culture often refer to the things to be achieved or the things, which are considered of great worth or value in a particular culture.
Religion and Beliefs: The religion and the beliefs of the people in a civilization play an important role in shaping up of the culture as well..
Social Collectives: Social collectives refer to the social groups, organizations, communities, institutions, classes, and societies, which are considered as symbolic social constructions.
Statuses and Roles: A status or a social role is nothing but a slot or position within a group or society, which gives an overall idea of the social structure and hence is an important element of culture. This can also include traditional gender-based or age-based roles.
Cultural Integration: This includes the degree of harmony or integration within the various elements of culture. This can include elements like sub-cultures, local cultures and the difference between historical and cultural traditions.
However, these definitions are presented many of concepts, we can understand that it has implication of relationship between cultural issues and international management . particular consequence are culture as shared ,culture as a learned , and culture as systematic and organized , when we describe culture as shared , as Hofstead ( 1991) makes this point well when he describe a mental programming that lies between human nature on one side and personality on the other , culture is something shared by members of a particular group , individuals carry in there mind three levels of programming about how they interact with there environment , when take individuals , we have unique personality characteristics but when we take broadest level , all human ,all human beings share certain organic reactions. Second features of culture describe as culture is transmitted through the process of learning and interacting with the environment , languages , systems of government forms of marriage and religious systems all are functioning with the people in the society and they develop pattern of ways interact with their environment. A third defining element is that cultures are integrated coherent logical system , the part of which are interrelated , its an organized system of values , attitudes , believes and behaviors meaning related to each other and to the environment context.
For those who work in international business, it is sometimes amazing how different people in other cultures behave. We tend to have a human nature that 'deep inside' all people are the same - but they are not. Therefore, if we go into another country and make decisions based on how we operate in our own home country - the chances are we'll make some very bad decisions. The 21st century is an era of the globalization of world economy. Cross-national business is facing great challenges in cultural differences. In one survey entitled. What is the biggest barrier in doing business in the world market, cultural differences ranked first in all eight items including "law, price competition, information, language, delivery, foreign currency, time differences, and cultural differences. Hofstede (1993) believes that the spread of businesses onto the global stage brings the issue of national and regional differences to the fore. "There is something in all countries called 'management', but its meaning differs to a larger or smaller extent from one country to another" (Hofstede, 1993).
Chapter - 2 Organizational culture
Organizational culture is an idea in the field of organizational studies and management which describe the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has been defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.
This definition continues to explain organizational values, also known as "beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines, or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another. Corporate culture is the total sum of the values, customs, traditions, and meanings that make a company unique. Corporate culture is often called "the character of an organization", since it embodies the vision of the company's founders. The values of a corporate culture influence the ethical standards within a corporation, as well as managerial behavior.
Chapter -3 Brief on theories - Hofstead
This chapter is trying to describe on Hofsteads study which is more useful to understand the topic, Hofstead experimented four damnations which he could classify the 40 different countries represented for the study, these dimensions were named Individualism , collectivism , power distance , uncertainty avoidance, and masculinity -femininity .
Individualism Vs. Collectivism
Degree to which people in a country prefer to act as individuals rather than in groups
Describes the relations between the individual and his/her fellows
Degree of need to avoid uncertainty about the future
Degree of preference for structured versus unstructured situations
Structured situations: have tight rules may or may not be written down
High uncertainty avoidance: people with more nervous energy (vs easy-going), rigid society, "what is different is dangerous."
Masculinity Vs. Femininity
Division of roles and values in a society
Masculine values prevail:
assertiveness, success, competition
Feminine values prevail:
quality of life, maintenance of warm personal relationships, service, care for the weak, solidarity
Long time frames & persistence
Reciprocity --gifts and favors
Respect for status & tradition
Concerns for "Face"
Chapter -4 Brief on cross cultural management
This chapter is going to describe on the importance of cross cultural management in the international business , It is about culture. Basically human races came with different background. "Cultural background". The way of doing things in one culture may not be the way in other culture. what is good in one culture, may be bad in other culture. Some time the activities are all the same in two different cultures, but two different meanings, two different interpretations. When person from one cultural background, meet, interact with, understand and deal with person from other cultural background. That is cross-cultural management.
The economic revolution which has been going on through out the world forced the business managements to search for new areas in order to bring a new face and high stability to their business venture. As a part of the business development, the world of business needed a lot of experts in this field. In order to meet the fresh requirements people from various countries started to migrate to other places of the world and this enabled them to escape from the economic imbalance of the world by acquiring a comfortable and stable living means from the renewed business field.
These migrants have to mix and associate with the people of those countries having different culture and language as a part of dealing their business matters. The unawareness about the culture and beliefs of the people in a country has produced a lot of differences and misunderstandings between them and made their business field too much uncomfortable. Cultural competency is the ability to live across the culture and the cultural boundaries. The same can be obtained by making a serious and thorough study of specific cultures and beliefs of a country in a very elaborate way. Hence the cultural competency has become very important, since it can overcome the difficult and dangerous situation developed by the judgment on the culture of a country on the basis of stereotyping.
Cross cultural management articles, cross cultural perspectives.htm
Chapter -5 China national culture
Its has selected Chinese national culture to make inquiries on its nature (dimensions ) and how it Impact on international business origination behavioral patterns for my literature.
Culture is the way that we do things around here. Culture could relate to a country (national culture), a distinct section of the community (sub-culture), or an organization (corporate culture). It is widely accepted that you are not born with a culture, and that it is learned. So, culture includes all that we have learned in relation to values and norms, customs and traditions, beliefs and religions, rituals and artefacts (i.e. tangible symbols of a culture, such as the Great Wall of China)
The greatest challenge to international business today is how to manage business operations across cultural boundaries. This is especially true in the case of China, which has attracted a massive amount of foreign investment and international trade recently. This new study examines three main themes:* the partnership of management through joint ventures* the human resource aspects of management* the management of communication, co-operation and negotiation The crucial issue of trustworthiness, the different managerial practices in China and the West, the importance of being well-prepared and understanding Chinese negotiations are major contemporary issues.
Culture might be described as the complex pattern of living that humans develop and pass on from one generation to the next. It encompasses the norms and values of a society, including appropriate ways to treat one another. It defines the natural world and human nature. It establishes our assumptions and creates the world "taken for granted."
The more similar one's own culture is to another in history, language, religion, and even geography, the less difficult it is to work in that society. Even within a single nation there are regional, class, ethnic, and religious differences that may lead to misunderstandings. But when societies differ on most of these characteristics and have had minimal contact with each other, the potential for misunderstanding grows exponentially. For most Americans doing business in China, this potential is very high. In fact, you can be certain that there will be innumerable, unforeseen challenges, even when there is an honest effort to learn about and understand China and its people.
If someone considered a significant venture in China should spend time there to learn their approach to life and business. Reading about the country, watching films and videos, talking with other Americans who have spent time doing business there, spending time with Chinese nationals who are visiting or have moved to this country, are all helpful activities, but they cannot replicate the benefit that comes from on-site interest Explaining a culture to the inexperienced in words alone is very difficult. It is rather like explaining what an avocado tastes like to someone who has never eaten one. we can use analogies and adjectives, but our effort will be ineffective Similarly, we need to experience a culture to understand it.
As China continues to integrate with the outside world, business educators are looking at alternatives to the twin pillars of the previous Chinese managerial system. First is the "command" economic and managerial system in China, borrowed from the Soviet Union in the 1950s, and second is traditional Chinese culture, with its Confucian emphasis on the stability of society -- based on unequal relationships between people -- and on the interdependent family grouping as prototype for all social organizations. These two pillars of China's past are thought by many to be principal reasons for the implied passivity of the Chinese business manager.
With the ongoing shift toward a freer socialist market system, Chinese management educators see the need for more open communication, flatter hierarchical structures, and more independence and decision-making power for middle managers. As a leading party ideologist, Li Rui, said some time ago, "Appoint as fast as possible a generation of new people."
The cross-cultural aspect of Chinese management education has been one of the catalysts challenging both Soviet management models and traditional Chinese culture. With over 80,000 foreign joint ventures currently registered in China, and non-Chinese individuals regularly doing management teaching and training in China, there is a vital need to understand the cross-cultural dimension of management education.
Chapter -6 Elements of Chinese culture
To be written - such as Religious - language , beliefs , political etc,,,
Chapter - 7 Cross cultural issue when invest in china - By US investors
We have selected US investors issues when they invest in china and discuss with finding of Hofstead research . With the globalization of world business, China has become an appealing market for foreign investors. The problem of cross-cultural management arises as the cooperation between China and its culturally different Western partners continues to increase at an unprecedented rate. This is going to presents on the general cultural differences between America and China which was applied the cultural dimensions of Hofstede . It also discusses the impact of these cultural differences on their management practice from five aspects: cooperative strategies, conflict management, decision-making, work-group characteristics, and motivation systems.
The 21st century is an era of the globalization of world economy. Cross-national business is facing great challenges in cultural differences. In one survey entitled What is the biggest barrier in doing business in the world market, cultural differences ranked first in all eight items including "law, price competition, information, language, delivery, foreign currency, time differences, and cultural differences. Hofstede (1993) believes that the spread of businesses onto the global stage brings the issue of national and regional differences to the fore. "There is something in all countries called 'management', but its meaning differs to a larger or smaller extent from one country to another" (Hofstede, 1993).
It can also be observed that most of the failures faced by cross-national companies are caused by neglect of cultural differences. The globalization of the world economy, on one hand, has created tremendous opportunities for global collaboration among different countries; on the other hand, however, it has also created a unique set of problems and issues relating to the effective management of partnerships with different cultures.
With the increasing importance of the China market in the world economy, many international companies rushed and planned to enter China to explore business opportunities. They enter the huge market by forming joint ventures or participating in mergers and acquisitions. This has spurred the need for cross-cultural research in China. It was reported that the great barriers caused by cultural differences like difficulty of communication, higher potential transaction costs, different objectives and means of cooperation and operating methods, have led to the failure of many Sino-foreign cooperation projects. The questions like "how to understand China" and "how to do business with Chinese people" have occupied the minds of international business people who are planning to enter China.
Chapter - 8 General Cultural Differences between the West and China
China, as the largest market and possibly the most appealing market in Asia, is entering into global collaboration with a wide range of foreign partners. apart from the foreign direct investments, FDI, from Asian countries, the second and the third largest investors are from North America and Europe. It seems necessary to investigate the cultural differences between China and its international business partners in North America and Europe.
To clarify the differences between China and the West, we will refer to Hofstede's four cultural dimensions Among researchers who have given a variety of definitions of culture, Hofstede is one of the first to adopt a pragmatic problem-solving approach in the field and relates culture to management. He defines culture as a kind of "collective programming of the mind, which distinguishes the members of one category of people from another" (Hofstede, 1980). He explained that culturally-based values systems comprised four dimensions: power distance, individualism/collectivism, masculinity/femininity, and uncertainty avoidance.
By comparing some Western countries and China along these five dimensions according to their cultural dimension scores (Data source: Hofstede, 1991), some tentative conclusions may be drawn. First, Western countries seem to be generally lower (United States of America 40, Canada 39, United Kingdom 35, Germany 35, and France 68) than China (80) in power distance.
Second, in terms of individualism, Western countries are generally much higher (United States of America 91, Canada 80, United Kingdom 89, Germany 67, and France 71) than China (20). Third, Western countries seem to have short-term orientation while China is considered to be long-term oriented.
Among these Western countries, America is frequently investigated in cross-cultural research, partly because of its economic power, partly because of its cultural representativeness. To a certain degree, the United States is considered as representing the so-called "Western culture". Therefore, a comparison between USA and China seems to help clarify the cultural differences between the West and China and related cross-cultural challenges.
China and USA differ greatly with regard to their economic systems, political systems, social values, and laws, despite the substantial changes that have occurred in China during recent years. Data shows the cultural dimension scores of USA and China (Data source: Hofstede, 1993). Some differences can be found. First, in terms of power distance, the scores of China are twice as those of USA, which indicates that China is centralized (though it has shown some tendency toward decentralized power) while USA is relatively decentralized. Second, USA ranks first in individualism (strong individualism) while China is low in individualism (strong collectivism). Third, USA has higher value than China in masculinity, which indicates that USA is medium masculinity while China is medium femininity. Fourth, China has higher values for uncertainty avoidance than USA, which shows that Chinese are relatively risk-avoiding while Americans are relatively risk-taking. Last, USA has a short-term orientation while China has a long-term orientation.
It has been widely accepted that cultural differences greatly affect human thinking and behavior and thus business organizations in which people interact on the basis of shared values. Management is embedded in a wider societal setting, and is heavily influenced by local historical and cultural norms (DiMaggio and Powell, 1983). The significant differences between USA and China seem to affect some aspects of their management practice.
Impact of Cultural Differences on Cooperative Strategies
As discussed, USA is strong in individualism and medium masculine. They rely on their own view to determine what they should do. They tend to work alone and are reluctant to cooperate because their individualism and masculine culture view cooperation in general as a sign of weakness and place a high value on independence and control. China is strong in collectivism and medium feminism. The Chinese depend more on groups or institutions to determine what they should do and emphasize loyalty to the group. They are more likely to cooperate with others to avoid risks and reduce responsibilities. Their value systems appreciate duty to the group and harmony among its members while pursuing personal goals is viewed rather negatively in China.
In addition, in the process of cooperation, Americans place greater importance on contractual safeguards than the Chinese. They believe that contracts can ensure that their partners' tendencies to focus on individual goals and aspirations do not interfere with their own individual goals and aspirations. But the Chinese don't consider contracts as seriously as the Americans. They think there will always be changes and the contracts can be reasonably modified according to changes. Instead, they tend to pay more attention to relationships than contracts.
Impact of Cultural Differences on Conflict Management
The Chinese and Americans tend to resolve conflicts in different ways. Since the Chinese come from a strong collectivism and medium feminine society in which harmony and personal relationship are emphasized, they will try to use indirect ways to avoid direct and open conflict. When they face conflict, they prefer to use authority to suppress it, or settle things in private. They prefer to resolve conflict through negotiation and compromise. Individualistic and medium masculine American managers are used to confronting problems directly and bringing things out in the open. To resolve differences, American managers will prefer to use tactics that involve directly confronting others with rational arguments, factual evidence, and suggested solutions (Ting-Toomey, 1985). It is also consistent with the pragmatic short-term orientation and moderately low power distance in USA. Chinese managers use those tactics less than American managers, because using the tactics will provoke overt disagreement, which is considered highly undesirable.
In addition, American managers are reluctant to invest the time and effort required to enlist the help of other people (Yukl, Falbe, and Youn, 1993), when they have conflicts or problems with another party. In contrast, the strong collective orientation and uncertainty avoidance values in China encourage Chinese managers to use indirect forms of influence that involve the assistance of a third party (Bond, 1991).
Impact of Cultural Differences on Decision-making Risk-taking/Risk-avoiding
Chinese and American managers differ greatly in the attitudes toward risks when they make decisions for their different values in uncertainty avoidance. High uncertainty- avoidance Chinese managers usually lack the adventurous spirit and the sense of risks. They dare not make immediate decisions if they feel the circumstance is uncertain, which may deprive them of the opportunity to compete in the market. In most cases, they would like to make comparatively safer and less risky decisions at the expense of the business opportunity. In contrast, low uncertainty-avoidance American managers are more likely to consider risks as natural and are volunteer to take the risks, especially in terms of developing new products, open a new market and applying new technology.
Levels of Participation in Decision-making
Managers from an individualistic or a collectivistic country prefer different levels of participation in decision-making. Another related cultural dimension is power distance. Individualistic American managers prefer making decisions individually or deferring to their supervisors instead of consulting with others. They come from a low power distance culture, and they value personal equality and believe in decentralization and empowered subordinates. But the situation in China is a little complicated. Some researchers propose that decisions are typically participatory in collectivistic-high power distance countries (Smith et al, 1994). Other researchers think that employees in those countries should readily accept decisions handed down by their supervisors, and even resist participation in decision-making because of their unquestioning attitudes toward their supervisors (Graf et al, 1990).
Chinese employees seldom have the chance to really participate in the decision-making process. Fortunately, things are getting better after 20 years of reform in China. Participatory decision-making is beginning to be adopted in a number of modern Chinese companies.
Impact of Cultural Differences on Work-group Characteristics
China is a relational-oriented country in which people place great importance on personal relationship. Chinese managers may initially focus more effort on building social and interpersonal relations (guanxi) before entering into business or contractual relationship. They would like to spend time developing and maintaining guanxi during the process of interaction and consider it as a prerequisite to do business. In contrast, American managers may encourage their group members to learn from each other, to focus on task rather than on social and interpersonal relations, and to build the confidence required for superior performance (Sosik and Jung, 2002). They place a much higher importance on the task or business deal and hope to focus very quickly on specific business matters. They are achievement oriented, that is "work first". They don't think establishing personal relationship is necessarily involved in the work.
Living in a collectivism society, the Chinese view people differently as "in-group" and "out-group". They have much higher confidence in "in-group" members than "out-group" members. But the passing of time, and the development of guanxi, the out-group members may turn into in-group members. If American managers want to do business with Chinese managers, they should give their Chinese partners enough time to know themselves and develop a personal relationship with them. Only when Chinese managers believe that they can trust their partners and consider them as part of the in group, will the business deals follow smoothly.
Impact of Cultural Differences on Motivation Systems
The method of distributing pay to motivate employees may also depend on cultural values (Leung, 1997). As Aguinis (2002) stated, employees can be rewarded according to their performance (principle of equity), equally (principle of equality), or based on their needs (principle of need). In general, the equity principle is common in individualistic cultures while the equality principle is widely used in collectivistic cultures.
Another is that personal and communal goals are not aligned in individualism but closely aligned in collectivism. These two may account for the great difference in motivation systems generally preferred by American companies and Chinese companies, pay for performance in American companies, and pay equity in Chinese companies.
In American value systems, great emphasis is placed on individual achievement, and they are expected to achieve success only by their individual efforts. They value competition, achievement and personal goals, and therefore, desire to have plans that recognise individual contributions. They generally see success as contingent upon their own efforts, so they prefer "pay for performance" systems which imply that an individual is solely responsible for what he has accomplished even though he may have had help from others. They consider these systems as effective means to motivate employees. The talents and job performance of employees will be considered first by their superiors for salary increases and promotion.