Contents

Preface v
Acknowledgements

xi

1. Introduction to Cross-cultural Management

The Critical Role of Culture in International
Business 2
Introduction 3

Economic Risks 9
Infrastructure and Technology
National Culture 9

The Euro Disney Debacle 3

The Wal-Mart Failure 4
The Mismatched Merger of Daimler-Benz and
Chrysler 4

GlobalizationIncreasing Intercultural
Interactions 6
The International Business Environment

Legal Systems 8
Political Risks 8

Convergence of Cultures 10
CultureA Critical Variable 13
Cross-cultural Management 14
The Meaning of Culture 15

Conclusion 19
Understanding Culture and Managing across the
WorldDoing Business in China 24
Annexure 1.1: International Trading Blocs and
Cultural Diversity 26

2. The Dimensions of Culture

The Culture Quiz 33
Introduction 35
What Is Culture? 35
The Link between History, Geography, and
Management Practices 36
Culture and Management 37

Dimensions of Culture 39
Edward Hall Model 41
Language of Time 41
Language of Space 42
Language of Things 43
Language of Friendship 43

32
Language of Agreement 44
Halls High-Context and Low-Context
Cultures 44

Florence Kluckhohn and Fred Strodtbeck

Model 45
Influence of the Six Value Orientations on
Workplace Policies 47

Geert Hofstede Model

49

Power Distance Index 49

Individualism and Collectivism 52
Masculinity and Femininity 54
Uncertainty Avoidance 56

xvi Contents
Long-term Orientation 57

TrompenaarsSeven Dimensions of
Culture 58
Universalism vs Particularism 58
Individualism vs Collectivism 59
Neutral vs Affective 59
Specific vs Diffuse 60
Achievement vs Ascription 61
Sequential vs Synchronous 62
Inner-directed vs Outer-directed 62
Trompenaars Seven Cultural Dimensions and
Indian Culture 63

Other Classifications of Culture

65

GLOBE Project 65
Country Clusters 65

Professional Culture 67
Functional Culture 68
Corporate Culture 68
The Role of Founders in Corporate
Culture 68
Industry Culture 69
Managing Differences in the Cultures of
Industry 70

Cultural Challenges in the Modern Indian

Workplace 70
Conclusion 72
Case Study: Tapio OYJ in India 78
Understanding Culture and Managing across the
WorldDoing Business in Sweden 81
Annexure 2.1: GLOBE Project 82

The Interacting Spheres of Culture

Influences on Workplace Culture 66

3. Communicating across Cultures

Miscommunication Can Cause an International
Business Failure 92
Introduction 92
The Communication Process 93
Barriers to Cross-cultural Understanding 95
Definitions

95

Languages of the WorldImportance and

Influence 97
EnglishThe Language of International
Business 98

Greeting RitualsShaking Hands?

Embracing? Or Namaste ? 114

Presentation Styles across the World

102

115

Presentation Tips for All Countries 117

Using Non-discriminatory Language 103

Nonverbal Communication and Culture

Communication through the Use of

Time 110
Communication through the Use of
Space 110
Communication through the Use of
Environment 111
Nonverbal CommunicationConcluding
Remarks 112

Managing First ImpressionsGreeting

Etiquette 113

EnglishDifferent Forms of the Same

Language 100

Language and Culture

91

104

Communication through the Body 105

Communicating through Vocal
Characteristics 109

Conclusion 117
Case Study: Jayanth Gets the Blues 120
Understanding Culture and Managing across the
WorldDoing Business in the US 122

4. Culture and Marketing

Market Your Country, Then Market Your
Company, and Finally Market Your Product
The Entry of Maruti Suzuki in South
America 128
Introduction 129

127
History 132
Geography 132
Political Systems 133
Demographics 133

Approach to International Marketing

135

Contents

Cross-cultural Marketing Research

136

The Complexity of Pricing

Segmentation and Sampling 137

Data Collection 138
Interviews 138
Focus Groups 139
Observational Studies 139
Questionnaire Surveys 140

Culture and Consumer Behaviour

Products and Culture 143

157

Country-of-origin Effect on Pricing 158

Festivals 158
Perceived Value of Product 158
Differing Brand Equity 159
Culture of Bargaining and Haggling 159
Even-valued Pricing 159
The Structure of the Distribution System 159

141

Promotion

160

Advertisements 160
Customer Gifts 163
Direct Selling 163

The Core Product 144

Product Names 145
Product Packaging 146
ProductsStandardization vs Adaptation
Dilemma 148

Services and Culture 150

PlaceDiversity of Distribution Systems

151

Relationships with Dealers 152

Retailing and Culture 153
Sales Force Management 154

Conclusion 164
Case Study: Marketing Tej-Yamato Cars in
Africa 169
Understanding Culture and Managing across the
WorldDoing Business in Japan 171

5. Negotiating across Cultures

The Impact of Culture on NegotiationsAn
Analysis of the Japanese Language 179
Introduction 180
Principles of Negotiation 183

178
Negotiation Framework 189
The Influence of Organizational Culture and
Individual Personality 192
Organizational Culture 193
Individual Personality 194

Pre-negotiations 184
Post-negotiations 185

Intercultural Communication and the

Negotiation Process 185
Language 186
Interpreters, Translators, and Mediators
Business Etiquette 186
Shared Experience 187
Humour 187
Face 188
Agenda 188
Listening Skills 188
Pace 188
Time 188
Socializing 189

186

Culture and Emotions in Intercultural

Negotiations 195
Negotiation Styles in Different
Countries 196
Culturally Responsive Negotiations
Strategies 203
Conclusion 207
Case Study: Negotiating an Outsourcing Deal
in ChinaCanadian Outdoor Recreational
Equipment 210
Understanding Culture and Managing across the
WorldDoing Business in Nigeria 217

6. Motivation and Leadership across Cultures

What Works in Aichi May Not Work in
GothenburgVignettes on Motivation and
Leadership Style 223

xvii

Introduction 226
Cultural Influences on Motivation 228
Content Theories of Motivation 231

222

xviii Contents
Maslows Hierarchy of Needs 231
Frederick Herzbergs Two-Factor
Theory 234
McClellands Theory of Learned Needs 236

Process Theories of Motivation and

Culture 237
Adams Equity Theory 237
Locke and Lathams Goal-Setting
Theory 238
Victor Vrooms Expectancy Theory 239
Indian Motivation Theories 240
Job Design 241
Meaning of Work 242

Leadership

244

Leadership and Culture 244

Theories of Leadership and Their Global

Relevance 248
McGregors Theory X and Theory Y 248
Traits Approach 248
Behavioural Approach 249

Contingency Leadership Approach

Approaches to IHRM and Cultural

Sensitivity 287

Recruitment and Selection

287

Legal Requirements 287

The Influence of Culture on Recruitment and
Selection 289

Employee Orientation 292

Training and Development 293
Guidelines for Training across Cultures 295

Performance Appraisal

296

GLOBE Project 256

Conclusion 259
Case Study: When Commoners Take Over the
RoyaltyMexCems Takeover of Royal British
Cement Company 264
Understanding Culture and Managing across the
WorldDoing Business in Brazil 270

277
The Challenges of Performance Appraisal in
International Management 297

Compensation and Rewards

300

The Influence of Culture on the Regulation of

Compensation 302
Culture and CEO Compensation 303
Labour Costs across Countries 303

International Labour Relations

304

Union Structure and Power 305

Collective Bargaining 305
Severance Pay 305
Vacation 306
Worker Participation 306

Conclusion 307
Case Study: Global Expansion at Linkideas
Inc.The Challenges of Global HRM 310
Understanding Culture and Managing across the
WorldDoing Business in Germany 313

8. Managing Global Teams

How Many Teams Does It Take to Manage a Global
Customer Account? 320

250

Nurturant Task-Participative Model of

Leadership 251
Pioneering-Innovative Style 251
Paternalistic Leadership Style 251
Theory Z 252
Performance Maintenance Leadership 253
Other Japanese Leadership Studies 253
Leadership Styles in Europe 254
Leadership in Southeast Asia 255
Leadership in the Middle East 255

7. Cultural Dimensions of HRM

The Complex World of IHRMThe Case of
Bharat Forge 278
Introduction 280
HRM in a Globalizing World 280
Factors Influencing IHRM 282
Differences between IHRM and Domestic
HRM 283
Staffing Policies 285

250

Leadership Theories in Other Cultures

319
Introduction 321
Global Business Teams

322

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Contents

Global TeamsPurposes 322

Differences between Traditional Teams and
Global Teams 322
Diversity in Global Teams 323
Challenges Created by Cultural
Differences 323
Basic DefinitionsGroups and Teams 324

The Process of Group Development

325

The Impact of Culture on Group

Development 326

The Fit between Teamwork and National

Culture 330
Scandinavian NationsSweden, Denmark,
and Norway 330
Japan 330
US 331
India 331

Team Strategies and the Influence of

Culture 332
Task Strategies and Culture 333
Creating a Sense of Purpose
Structuring the Task 333

333

Assigning Roles and Responsibilities 334

Reaching Decisions 334

Process Strategies

335

Team Building 335

Choosing How to Communicate
Eliciting Participation 337
Resolving Conflict 337
Evaluating Performance 338

336

Challenges Faced by Global Teams

339

The Inability to Cultivate Trust among Team

Members 339
Communication Barriers 340
Performance Management in Global
Teams 340
Managing Diversity 343
Virtual TeamsSpecial Challenges 345

Conclusion 346
Case Study: ERP Implementation at Maya
Steering Wheels Ltd 350
Understanding Culture and Managing across
the WorldDoing Business in the United
Kingdom 355

9. International Assignments and Expatriate Management

Sabyasachi Chaterjees Move to London 362
Introduction 363
Reasons for Using Expatriates 364
Control and Coordination 365
Local Expertise Unavailable 365
Complexity of Recruitment Processes in the
Host Country 365
Transfer of Knowledge and Organizational
Culture 365
Management Development 366
Ethnocentric Beliefs 366
Financial Considerations 366

Challenges Faced by Expatriates 367

Reasons for Declining an International
Assignment 368
Repatriation Issues

Expatriate Failure

371

372

Reasons for Expatriate Failure 372

Consequences of Expatriate Failure 373

Factors Influencing the Success of a Foreign

Assignment 374

Selection of Expatriates

361

378

Recommended Process for Selecting

Expatriates 378

Cross-cultural Training

379

Types of Cross-cultural Training

380

Performance Management and Reward

Systems 380
Performance Management 380
Reward Systems 382
Foreign AssignmentsCost Implications 382

Women as International Managers

Repatriation 384
Improving the Repatriation Process

383
387

Conclusion 389
Case Study: When Calm Meadows Turn Stormy
The Challenges of Being an Expatriate in
India 392
Understanding Culture and Managing across the
WorldDoing Business in Russia 396

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10. The Global Manager

Carlos GhosnThe Quintessential Global
Manager 403
Introduction 403
Competencies for Global Managers 406
Developing Competencies for a Global
Manager 408
Personality Development and Family
Background 409

Further Reading 424

Index 427

402
Professional Development 410
Organizational Support 412

Ethics and the Global Manager

413

Ethical Frameworks 415

Codes of Conduct for Ethical Business 417
Ethical Guidelines for Global Managers 418

Conclusion

419