Chapter 04 – International OB: Managing across Cultures
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CHAPTER FOUR: International OB: Managing across Cultures
LEARNING OJBECTIVES
See Slides 4-2, 4-3
When you finish studying the material in this chapter, you should be able to:
• Define the term culture, and explain how societal culture and organizational
culture combine to influence on-the-job behavior.
• Define ethnocentrism, and explain how to develop cultural intelligence.
• Distinguish between high-context and low-context cultures, and identify and
describe the nine cultural dimensions from Project GLOBE.
• Distinguish between individualistic and collectivist cultures, and explain the
difference between monochronic and polychronic cultures.
• Specify the practical lesson from the Hofstede cross-cultural study, and explain
what Project GLOBE researchers discovered about leadership.
• Discuss the results and practical significance of the recent Bloom and Van
Reenen study of national management styles.
• Explain why US managers have a comparatively high failure rate on foreign
assignments.
• Summarize the research findings about North American women on foreign
assignments.
• Identify four stages of the foreign assignment cycle and the OB trouble spot
associated with each stage.
CHAPTER SUMMARY
Chapter 4 defines societal culture and discusses how individuals can develop cultural
intelligence. Key dimensions of societal culture, including high versus low context
communication, individualism versus collectivism, perceptions of time, interpersonal
space, and religion are described. Finally, suggestions for having a more effective
foreign assignment and ways of avoiding culture shock are discussed.
Societal culture is a set of beliefs and values about what is desirable and undesirable in
a community of people, and a set of formal or informal practices to support the values.
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Culture has both prescriptive and descriptive elements. Culture is learned by observing
and imitating role models and it is passed from one generation to the next. Since
cultural assumptions are unquestioned, they generally remain below the threshold of
conscious awareness. People in every culture are unaware of their cultural
assumptions. As illustrated in Figure 4-1, societal culture, organizational culture and
organizational behavior are interrelated. Employees bring their societal culture to work
with them in the form of customs and language. In turn, organizational culture affects
the individual’s values, ethics, attitudes, assumptions, and expectations. Managers
need to consider individual employee’s societal culture, the organizational culture, and
any interaction between the two.
Managers must be careful that their decisions aren’t influenced by ethnocentrism, which
is the belief that one’s native country, culture, language, and modes of behavior are
superior to all others. People can effectively deal with ethnocentrism through education,
greater cross-cultural awareness, international experience, and a conscious effort to
value cultural diversity. Cultural intelligence is the ability to interpret ambiguous cross–
cultural situations accurately. A person with cultural intelligence understands cultural
paradoxes whereby there are always exceptions to the rule. A person with cultural
intelligence understands that cultural differences refer to tendencies and patterns rather
than absolutes and he or she can adjust to the situation when a foreign national does
not fit an expected cultural pattern.
Cultures can be compared across many criteria, including high/low context, the
dimensions of Project GLOBE, individualism/collectivism, perceptions of time,
interpersonal space, and religion. High-context cultures rely heavily on situational cues
for meaning when perceiving and communicating with another person. Nonverbal cues
such as one’s official position or status convey messages more powerfully than do
spoken words. In low-context cultures, written and spoken words carry the burden of
shared meaning. Project GLOBE has conducted research on nine cultural dimensions:
power distance, uncertainty avoidance, institutional collectivism, in-group collectivism,
gender egalitarianism, assertiveness, future orientation, performance orientation, and
humane orientation. Individualistic cultures tend to place primary emphasis on personal
freedom and choice whereas in collectivist cultures shared goals are viewed as more
important than personal goals. Monochronic time is characterized as linear, ordered,
and precise. Polychronic time is characterized as cyclical, flexible, fluid, and
multidimensional. Proxemics is the study of cultural expectations about interpersonal
space. The four interpersonal distance zones are intimate, personal, social, and public
distances. Religious beliefs can profoundly affect cross-cultural relations and there are
differences across religions regarding the most important work-related value.
Cross-cultural management involves understanding and teaching behavioral patterns in
different cultures. Although cross-cultural management research historically has
focused almost exclusively on cultural differences, it is important to study similarities as
well as differences. Three streams of cross-cultural management research are the
Hofstede study, the GLOBE project, and research by Nicholas Bloom and John Van
Reenen.
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The Hofstede study examined nations along four dimensions: power distance,
individualism-collectivism, masculinity-femininity, and uncertainty avoidance. Power
distance represents the extent to which people expect inequality in social situations.
Individualism-collectivism represents the strength of the bond between individuals and
societal groups. Masculinity-femininity represents the extent to which people embrace
competitive masculine traits or nurturing feminine traits. Uncertainty avoidance
measures the extent to which people prefer structured or unstructured situations. A
practical lesson learned from the Hofstede cross-cultural study is that there is no one
best way to manage across cultures. Management theories and practices need to be
adapted to the local culture.
The researchers from the GLOBE project sought to discover which, if any, attributes of
leadership were universally liked or disliked. Table 4-3 identifies leadership attributes
which were universally liked and those which were universally disliked across 62
nations. Project GLOBE indicates that visionary and inspirational charismatic leaders
who are good team builders generally do the best while self-centered leaders seen as
loners or face-savers generally receive a poor reception worldwide. Nonetheless,
managers are still advised to use a contingency approach to leadership by applying
their cultural intelligence.
The results of Nicholas Bloom and John Van Reenen’s 17-country study further validate
Hofstede’s conclusion that management practices are country and culture specific.
They found country differences in the use of 18 effective management practices,
classified into three categories: monitoring, targets, and incentives. Countries each
have their own distinctive mix of emphasis of these categories and there is no one best
worldwide style of management. Managers working in a foreign country must be
flexible and adapt their style to local preferences by using a culturally-appropriate
balance of emphasis on monitoring, targets, and incentives.
As the reach of global companies continues to grow, so do the opportunities for foreign
assignments. The term expatriate refers to anyone living and/or working outside his or
her home country. Expatriates have a poor track record for success and many US
managers sent abroad return home early because of personal and family adjustment
problems and homesickness. The number of North American women on foreign
assignments is increasing but women need to overcome their own tendencies to self–
disqualify and management’s assumption that women would not be welcome in foreign
cultures. The foreign assignment cycle presented in Figure 4-4 is fraught with OB
trouble spots in each of the four stages. It is important that expatriates possess cross-
cultural competencies and that they have effective cross-cultural training. They should
also receive realistic job previews (RJPs) that balance the good news with the bad news
about their upcoming assignment. Effective cross-cultural training, including intensive
language study, is an important aspect of avoiding culture shock, the anxiety and doubt
caused by an overload of unfamiliar expectations and social cues. Host-country
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sponsors can provide valuable support during the early stages of a foreign assignment.
Expatriates need to be aware of the challenges they will face during the repatriation
process and how they may face reentry shock when returning to their native culture.
LECTURE OUTLINE
I. Culture and Organizational Behavior
i) Societal Culture Is Complex and Multilayered
(1) Culture: beliefs and values about how a community of people
should and do act. See Slide 4-5
(2) Elements of culture are prescriptive (what people should do) and
descriptive (what they actually do).
(3) Cultural lessons are learned by observing and imitating role
models—family, friends, teachers, coworkers, and business
leaders.
(4) Culture is difficult to grasp because it is multi-layered.
(5) Trompenaars and Hampden-Turner offer an analogy: “Culture
comes in layers, like an onion. To understand it you have to unpeel
it layer by layer…..”
(6) Values and norms in a society that are not directly visible are
deeper layers within the “onion,” and are more difficult to identify.
ii) Culture Is a Subtle but Pervasive Force
(1) Culture generally remains below the threshold of conscious
awareness because it involves taken-for-granted assumptions
about how one should perceive, think, act, and feel.
(2) People in every culture are unaware of their cultural assumptions.
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iii) A Model of Societal and Organizational Cultures
(1) Figure 4-1: Cultural Influences on Organizational Behavior
shows that culture influences organizational behavior in two ways:
See Slides 4-6, 4-7
(a) Employees bring their societal culture to work in the forms of
customs and language.
(b) Organizational culture, a by-product of societal culture, in turn
affects the individual’s values/ethics, attitudes, assumptions,
and expectations.
(2) Managers need to consider individual employee’s societal culture,
the organizational culture, and any interaction between the two.
II. Developing Cultural Intelligence
i) Ethnocentrism: A Cross-Cultural Roadblock
(1) Ethnocentrism: belief that one’s native country, culture, language,
and behavior are superior to all others. See Slide 4-8
(2) Ethnocentrism is often not attributable to prejudice as much as to
inexperience or lack of knowledge about foreign cultures and
situations.
(3) People can effectively deal with ethnocentrism through education,
greater cross-cultural awareness, international experience, and a
conscious effort to value cultural diversity.
ii) Cultural Paradoxes Require Cultural Intelligence
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(1) Cultural differences need to be viewed as tendencies and patterns
rather than as absolutes, as cultural paradoxes are going to exist—
individuals who do not fit the expected cultural pattern for their
culture.
(2) Our original characterizations of other cultures are best guesses
that we need to modify as we gain more experience with specific
individuals of that culture to avoid stereotyping.
(3) Cultural intelligence: the ability to accurately interpret ambiguous
cross-cultural situations. See Slide 4-11
(4) An individual with a high degree of cultural intelligence possesses
knowledge of culture, practices mindfulness, and develops cross–
cultural skills. See Slide 4-12
(5) The Real World/Real People: Details Count When Doing
Business in Germany provides a list of cultural tips for interacting
with Germans.
III. Understanding Cultural Differences
i) High-Context and Low-Context Cultures See Slide 4-13
(1) Overview of Communication Context
(a) High-context cultures: rely heavily on situational cues for
meaning when perceiving and communicating with others.
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(b) Nonverbal cues such as one’s official position, status, or family
connections convey messages more powerfully than do spoken
words.
(c) Figure 4-2: Contrasting High-Context and Low-Context
Cultures identifies examples of high-context and low-context
cultures. See Slide 4-14
(2) Reading the Fine Print in Low-Context Cultures
(a) Low-context cultures: written and spoken words carry the
burden of shared meanings.
(b) Low-context cultures include Germany, Switzerland,
Scandinavia, North America, and Great Britain.
(c) In high-context cultures, agreements tend to be made on the
basis of someone’s word or a handshake, after a rather
prolonged get-acquainted and trust-building period.
(d) Low-context cultures see a handshake as a signal to get a
signature on a detailed, lawyer-approved, iron-clad contract.
(3) Avoiding Cultural Collisions See Slide 4-15
(a) Miscommunications and misunderstandings often are problems
in international business dealings when the parties are from
high- versus low-context cultures.
(b) Awkward situations can be avoided when both sides make an
attempt to understand and accommodate their counterparts.
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ii) Nine Basic Cultural Dimensions from the GLOBE Project See
Slides 4-16, 4-17, 4-18, 4-19, 4-20
(1) Project GLOBE Overview
(a) Project GLOBE (Global Leadership and Organizational Behavior
Effectiveness) was started by Robert J. House.
(b) The project represents an ongoing attempt to study the impact
of cultural variables on leadership behaviors and organizational
effectiveness.
(c) The nine basic cultural dimensions of the GLOBE project are:
1. Power distance: how much unequal distribution of
power should there be in organizations and society.
2. Uncertainty avoidance: how much people should rely
on social norms and rules to avoid uncertainty and limit
unpredictability.
3. Institutional collectivism: how much to reward loyalty
to the social unit, rather than pursuit of individual goals.
4. In-group collectivism: how much pride and loyalty
should individuals have for their family or organization.
5. Gender egalitarianism: how much to minimize gender
discrimination and role inequalities.
6. Assertiveness: how confrontational and dominant to be
in social relationships.
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7. Future orientation: how much to delay gratification by
planning and saving for the future.
8. Performance orientation: how much to reward
improvement and excellence.
9. Humane orientation: how much society should
encourage and reward people for being kind, fair,
friendly, and generous.
(2) What about Your Culture?
(a) Students can reflect on their own cultural roots, family traditions,
and belief systems and develop a personal cultural profile using
the GLOBE dimensions.
(3) Country Profiles and Practical Implications
(a) Table 4-2: Countries Ranking Highest and Lowest on the
GLOBE Cultural Dimensions can be used to determine
cultural patterns based on the GLOBE cultural dimensions.
See Slide 4-22
(b) Knowing the cultural tendencies of foreign business partners
and competitors can give you a strategic competitive advantage.
iii) Individualism versus Collectivism See Slide 4-23
(1) Overview of Individualism versus Collectivism
(a) Individualist cultures: characterized as “I” and “me” cultures,
give priority to individual freedom and choice.
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(b) Collectivist culture: characterized as “we” and “us” cultures,
rank shared goals higher than individual desires and goals.
(2) A Business Success Factor
(a) One can expect to encounter both individualists and collectivists
in culturally diverse countries such as the United States.
(b) Knowing the differences between individualistic versus
collectivistic cultures can mean the difference between success
and failure in cross-cultural business dealings, as Dave Murphy,
a Boston-based mutual fund salesperson learned.
(3) Allegiance to Whom?
(a) It is important to understand which unit of society predominates
in a collectivist culture.
(b) Key reference groups for members of a culture could include
their trade union, their family, their corporation, their religion,
their profession, or their nation.
iv) Cultural Perceptions of Time See Slides 4-25, 4–26
(1) Monochronic time: preference for doing one thing at a time
because time is limited, precisely segmented, and schedule driven.
(2) Polychronic time: preference for doing more than one thing at a
time because time is flexible and multidimensional.
(3) Low-context cultures tend to run on monochronic time while high–
context cultures run on polychronic time.
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(4) People in polychronic cultures tend to view time as flexible, fluid
and multidimensional.
v) Interpersonal Space
(1) People from high-context cultures prefer standing close when
talking to someone.
(2) People from low-context cultures prefer standing farther apart when
talking to someone.
(3) Proxemics: the study of cultural expectations about interpersonal
space. See Slide 4-27
(4) Edward Hall specified four interpersonal distance zones: intimate
distance, personal distance, social distance, and public distance.
(5) Figure 4-3: Interpersonal Distance Zones for Business
Conversations Vary from Culture to Culture profiles cultural
differences in the ranges for interpersonal distance zones.
See Slide 4-28
vi) Religion
(1) Religious beliefs can profoundly affect cross-cultural relations.
(2) There are differences across religions regarding the most important
work-related value.
(3) The Real World/Real People: Arizona Hospital Blends Modern
Medicine with Navajo Traditions profiles how one hospital
accommodates Navajo traditions.
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IV. Practical Insights from Cross-Cultural Management Research
i) Overview of Cross-Cultural Management Research
(1) Cross-cultural management: understanding and teaching
behavioral patterns in different cultures. See Slide 4-29
(2) Although cross-cultural management research historically has
focused almost exclusively on cultural differences, it is important to
study similarities as well as differences.
ii) The Hofstede Study: How Well Do US Management Theories
Apply in Other Countries? See Slides 4-30, 4-31
(1) Hofstede Study Overview
(a) Researcher Geert Hofstede used data from 116,000 IBM
employees from 53 countries to investigate cultural differences.
(b) The key cultural dimensions in the Hofstede study include:
(i) Power distance: how much do people expect inequality in
social situations?
(ii) Individualism-collectivism: how loose or tight is the bond
between individuals and societal groups?
(iii)Masculinity-femininity: to what extent do people embrace
competitive masculine traits or nurturing feminine traits?
(iv)Uncertainty avoidance: to what extent do people prefer
structured versus unstructured situations?
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(c) Practical lessons from the Hofstede study are:
(i) Management theories and practices need to be adapted to
the local culture.
(ii) Individuals and nations can no longer afford cultural
arrogance in a global economy.
(2) Leadership Lessons from the GLOBE Project
(a) Researchers from the GLOBE project set out to discover which,
if any, attributes of leadership were universally liked or disliked.
(b) Among the practical implications:
(i) Visionary and inspirational charismatic leaders who are good
team builders generally do the best.
(ii) Self-centered leaders seen as loners or face-savers
generally receive a poor reception worldwide.
(iii)Leaders should use the contingency approach and their
cultural intelligence to understand local people and culture.
(c) Table 4-3: Leadership Attributes Universally Liked and
Disliked across 62 Nations summarizes the GLOBE findings.
See Slide 4-32
(3) Countries Have Differing Management Styles
(a) Recent research by Nicholas Bloom and John Van Reenen
indicates there is no one best worldwide style of management.
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(b) Bloom and Van Reenen’s research rated the use of 18 effective
management practices, classified into three categories, in a 17-
country study.
(c) They found that the 17 countries each have their own distinctive
mix of emphasis on “monitoring,” “targets,” and “incentives.”
(d) The key practical lesson from this study tells managers working
in a foreign country to be flexible and adapt their style to local
preferences; a culturally appropriate balance of emphasis on
monitoring, targets, and incentives will yield the best results.
V. Preparing Employees for Successful Foreign Assignments
i) Why Do US Expatriates Fail on Foreign Assignments?
(1) Expatriate: anyone living and/or working outside their home
country. See Slide 4-34
(2) An individual is said to be expatriated when transferred to another
country and repatriated when transferred back home.
(3) U.S. expatriate managers are usually characterized by being
culturally inept and prone to failure on international assignments.
(4) Research shows that expatriates tend to leave their assignments
early due to job dissatisfaction and problems adjusting to the
culture of the host country.
ii) A Bright Spot: North American Women on Foreign Assignments
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(1) The proportion of corporate women from North America on foreign
assignments has increased in recent years.
(2) Self-disqualification and management’s assumption that women
would not be welcome in foreign cultures are barriers for potential
women expatriates.
(3) Women who desire a foreign assignment need to be proactive by
becoming culturally intelligent and announcing their desire for a
foreign assignment.
iii) Avoiding OB Trouble Spots in the Foreign Assignment Cycle
(1) Overview of OB Trouble Spots
(a) Figure 4-4: The Foreign Assignment Cycle (with OB Trouble
Spots) illustrates that firms need to focus on common OB
trouble spots in each of the four phases of the foreign
assignment. See Slide 4-36
(b) The first and last stages of the cycle occur in the home country
while the middle two stages occur in the foreign or host country.
(2) Avoiding Unrealistic Expectations with Cross-Cultural Training
See Slide 4-35
(a) Realistic job previews (RJPs) have proven effective at bringing
people’s unrealistic expectations about a pending job
assignment down to earth by providing a realistic balance of
good and bad news.