This page intentionally left blank Management Across Cultures Challenges and Strategies Management practices and processes frequently differ across national and regional boundaries. What may be acceptable managerial behavior in one culture may be counterproductive or even unacceptable in another. As managers increasingly find themselves working across cultures, the need to understand these differences has become increasingly important. This book examines why these differences exist and how global managers can develop strategies and tactics to deal with them.
Key features: c Draws on recent research in anthropology, psychology, economics, and manage- ment to explain the cultural and psychological underpinnings that shape managerial attitudes and behaviors c Introduces a learning model to guide in the intellectual and practical development of managers seeking enhanced global expertise c Offers user-friendly conceptual models to guide understanding and exploration of topics c Summarizes and integrates the lessons learned in each chapter in application- oriented “Manager’s notebooks” Companion website featuring instructional materials and PowerPoint slides is available at www.org/management_across_cultures. S T E E R S is Professor of Organization and Management in the Lundquist College of Business, University of Oregon, USA. SANCHEZ-RUNDE is Professor of People Management at IESE Business School, Barcelona, Spain. L U C I A R A N A R D O N is Assistant Professor of International Business at the Sprott School of Business, Carleton University, Canada.
Management Across Cultures Challenges and Strategies R I C H A R D M. SANCHEZ-RUNDE L U C I A R A N A R D ON CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi, Dubai, Tokyo Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www.org Information on this title: www. Sanchez-Runde, and Luciara Nardon 2010 This publication is in copyright. Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press.
First published in print format 2010 ISBN-13 978-0-511-68356-5 eBook (Dawsonera) ISBN-13 978-0-521-51343-2 Hardback ISBN-13 978-0-521-73497-4 Paperback Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate. Contents List of exhibits page viii Preface xiii 1 Global realities and management challenges 1 Globalization, change, and competitiveness 3 The new global realities 12 Challenges facing global managers 17 2 Developing global management skills 24 Traditional views of management 26 Global managers: variety of the species 28 Rethinking managerial roles 35 Rethinking managerial skills 36 M A N A G E R ’ S N O T E B O O K : Developing global management skills 39 3 Culture, values, and worldviews 45 Culture, socialization, and normative behavior 49 Core cultural dimensions: a starting point 55 Regional trends and cultural differences 64 Digging deeper: cultural complexities and contradictions 66 M A N A G E R ’ S N O T E B O O K : Culture, values, and worldviews 76 4 Inside the managerial mind: culture, cognition, and action 85 Culture, cognition, and managerial action: a model 88 Patterns of managerial thinking 91 The geography of thought 96 Culture and the managerial role 102 Management patterns across cultures 106 v vi CONTENTS Are management patterns converging? 115 M A N A G E R ’ S N O T E B O O K : Inside the managerial mind 118 5 Inside the organizational mind: stakeholders, strategies, and decision making 126 Stakeholders and strategic choice: a model 128 The strategy-structure nexus 134 Organizational decision making: a model 137 Decision strategies across cultures 139 M A N A G E R ’ S N O T E B O O K : Inside the organizational mind 149 6 Organizing frameworks: a comparative assessment 155 Culture and organization design: a model 157 US corporations 159 Japanese kaisha and keiretsu 165 Chinese gong-si 175 German konzern 181 Mexican grupo 186 M A N A G E R ’ S N O T E B O O K : Organizing frameworks 193 7 Communication across cultures 199 Eye of the beholder 201 Culture and communication: a model 202 Language, logic, and communication 204 Lingua franca and message comprehension 210 Cross-cultural communication strategies 214 Communication on the fly 228 M A N A G E R ’ S N O T E B O O K : Communication across cultures 232 8 Leadership and global teams 241 The meaning of leadership 245 GLOBE leadership study 253 Culture and leadership: a model 256 Global teams 261 Working with global teams 262 M A N A G E R ’ S N O T E B O O K : Leadership and global teams 270 CONTENTS vii 9 Culture, work, and motivation 279 The world of work 284 Work and leisure 290 Culture, motivation, and work behavior: a model 292 Culture and the psychology of work 295 Incentives and rewards across cultures 299 M A N A G E R ’ S N O T E B O O K : Culture, work, and motivation 310 10 Negotiation and global partnerships 317 Seeking common cause 321 Culture and negotiation: a model 328 The negotiation process: strategies, concessions, and contracts 330 Negotiation patterns across cultures 337 Building global partnerships 342 Managing global partnerships 346 M A N A G E R ’ S N O T E B O O K : Negotiation and global partnerships 350 11 Managing in an imperfect world 363 Rules of the game 364 Bases of cross-cultural conflicts 367 Ethics, laws, and social control: a model 373 Ethical conflicts and challenges 374 Institutional conflicts and challenges 384 M A N A G E R ’ S N O T E B O O K : Managing in an imperfect world 395 12 Epilogue: the journey continues 404 Learning from the past 405 Looking to the future 407 Appendix A Models of national cultures 411 Appendix B OECD guidelines for global managers 421 Index 430 Exhibits 1.1 The globalization enigma: contradictions and challenges page 8 1.2 The changing global economy 12 2.1 Global managers: expatriates, frequent flyers, and virtual managers 29 2.2 Building global management skills 37 2.3 The experiential learning cycle 40 2.4 A learning strategy for global managers 42 3.1 Hofstede’s culture ratings for Sweden and Bahrain 49 3.2 Levels of mental programming 51 3.3 Selected models of cultural dimensions 56 3.4 Core cultural dimensions 58 3.5 Anchors for core cultural dimensions 60 3.6 Central tendencies of core cultural dimensions across regions 65 3.7 Cultural complexities and contradictions 69 4.1 Culture, cognition, and managerial action 90 4.2 Culture and patterns of managerial thinking 92 4.3 Looking outside: patterns of East-West cognitive differences 99 4.4 Looking inside: patterns of East-West cognitive differences 100 4.5 Cultural differences and the ideal managerial role 103 4.6 Culture and actual managerial characteristics 104 4.7 Cultural influences on managerial roles 105 4.8 Culture and management trends: France, Malaysia, and Nigeria 108 4.9 Convergence and divergence in future management patterns 117 5.1 The strategic management cycle 130 5.2 Centralized versus distributed stakeholder models 131 5.3 Cultural influences on participation in decision-making 139 5.4 Management challenge: approaches to participation and decision making 140 5.5 Centralized decision making (e., Australia, Canada, UK, US) 141 viii LIST OF EXHIBITS ix 5.6 Centralized decision making (e.7 Consultative decision making (e.8 Collaborative decision making (e., Germany, Netherlands, Sweden) 146 6.1 Cultural influences on organization design 158 6.2 Culture and organization design: country examples 159 6.3 Design of a typical US corporation 163 6.4 Design of a typical Japanese horizontal keiretsu 169 6.5 Keiretsu network for Mitsubishi’s Kirin Holdings Company 171 6.6 Design of a typical Japanese vertical keiretsu 172 6.7 Kongfuzi’s five cardinal virtues 176 6.8 Design of a typical Chinese family-owned gong-si 179 6.9 Design of a typical German konzern 183 6.10 Germany’s dual system of vocational training 186 6.11 Design of a typical Mexican grupo 190 6.12 Management challenge: working with different organizing frameworks 193 6.13 Patterns of organization design and management practice: a summary 194 7.1 Cultural influences on the communication process 202 7.2 Cultural logic in cross-cultural communication 209 7.3 Challenges facing non-native speakers 211 7.4 High-, mid-range, and low-context cultures 218 7.5 Protocols governing appropriate formalities 222 7.6 Protocols governing appropriate behaviors 223 7.8 Management challenge: communicating effectively across cultures 232 7.9 Management strategies: improving cross-cultural communication 235 8.1 GLOBE leadership dimensions 255 8.2 Cultural influences on leadership 257 8.3 Global teams: functions, advantages, and drawbacks 262 8.4 Challenges to global team effectiveness 263 8.5 Types of national and global teams 264 8.6 Characteristics of co-located and virtual teams 265 8.7 Special challenges facing virtual global teams 266 8.8 Management challenge: focusing global team efforts 270 x LIST OF EXHIBITS 8.9 Management strategies for leading global teams 272 8.10 Management strategies for leading virtual global teams 275 9.1 Personal work values and employee behavior 285 9.2 Top four work preferences for employees in select countries 287 9.3 The psychological contract 289 9.4 Vacation policies in select countries 291 9.5 Cultural influences on work motivation and performance 294 9.6 Ratio of average CEO compensation to average employee compensation 303 9.7 Wage gaps between men and women across nations 304 9.8 Expectations, rewards, and job attitudes 307 9.9 Average job satisfaction levels for select countries 308 9.10 Management challenge and strategies: motivating a global workforce 310 10.1 Cultural influences on the negotiation process 329 10.2 Competitive and problem-solving bargaining strategies 331 10.3 Information exchange and initial offers by culture 333 10.4 Sequential and holistic bargaining strategies 334 10.5 Contracts and the doctrine of changed circumstances 336 10.6 Negotiating tactics in Japan, Brazil, and the US 338 10.7 Negotiating strategies in Japan, Brazil, and the US 339 10.8 Management arrangements for global partnerships 347 10.9 Can people be trusted? 352 10.10 Management challenge: developing mutual trust 353 10.11 Management challenge: aligning corporate cultures 356 10.12 Management strategies: conflict resolution in global partnerships 358 11.1 Sources of cross-cultural conflict 368 11.2 Normative beliefs, institutional requirements, and social control 373 11.3 Levels of understanding of cross-cultural ethical conflicts 376 11.4 Universalism, particularism, and truthfulness 379 11.5 Corruption index for various countries 387 11.6 Management challenge: OECD bribery and corruption guidelines 389 11.7 Management challenge: OECD employee relations guidelines 391 11.8 Management challenge: OECD environmental stewardship guidelines 393 LIST OF EXHIBITS xi A.1 Kluckholn and Strodtbecks’ cultural dimensions 412 A.2 Hofstede’s cultural dimensions 413 A.3 Hall’s cultural dimensions 413 A.4 Trompenaar’s cultural dimensions 414 A.5 Schwartz’s cultural dimensions 415 A.6 GLOBE project’s cultural dimensions 416 A.7 Common themes across models of national cultures 418 B.1 OECD guidelines for global managers 422 Preface We live in a turbulent and contradictory world, where there are few certainties and change is constant. In addition, over time we increasingly come to realize that much of what we think we see around us can, in reality, be something entirely different. We require greater perceptual accuracy just as the horizons become increasingly cloudy.
Business cycles are becoming more dynamic and unpredictable, and companies, insti- tutions, and employees come and go with increasingly regularity. Much of this uncer- tainty is the result of economic forces that are beyond the control of individuals and major corporations. Much results from recent waves of technological change that resist pressures for stability or predictability. And much results from individual and corporate failures to understand the realities on the ground when they pit themselves against local institutions, competitors, and cultures.
Knowledge is definitely power when it comes to global business and, as our knowledge base becomes more uncertain, companies and their managers seek help wherever they can find it.