Management Across Cultures

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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.cambridge.org/management_across_cultures.

RICHARD M. STEERS is Professor of Organization and Management in the Lundquist

College of Business, University of Oregon, USA.

CARLOS J. SANCHEZ-RUNDE is Professor of People Management at IESE Business

School, Barcelona, Spain.

LUCIARA NARDON is Assistant Professor of International Business at the Sprott School

of Business, Carleton University, Canada.

Management Across Cultures

Challenges and Strategies

RICHARD M. STEERS

CARLOS J. SANCHEZ-RUNDE

LUCIARA NARDON

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

First published in print format

ISBN-13 978-0-521-51343-2

ISBN-13 978-0-521-73497-4

ISBN-13 978-0-511-68356-5

© Richard M. Steers, Carlos J. Sanchez-Runde, and Luciara Nardon 2010

2010

Information on this title: www.cambridge.org/9780521513432

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.

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.

Published in the United States of America by Cambridge University Press, New York

www.cambridge.org

Paperback

eBook (Dawsonera)

Hardback

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

MANAGER’ S NOTEBOOK: 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

MANAGER’ S NOTEBOOK: 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

Are management patterns converging? 115

MANAGER’ S NOTEBOOK: 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

MANAGER’ S NOTEBOOK: 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

MANAGER’ S NOTEBOOK: 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

MANAGER’ S NOTEBOOK: 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

MANAGER’ S NOTEBOOK: Leadership and global teams 270

vi CONTENTS

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

MANAGER’ S NOTEBOOK: 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

MANAGER’ S NOTEBOOK: 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

MANAGER’ S NOTEBOOK: 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

CONTENTS vii

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.g., Australia, Canada, UK, US) 141

viii

5.6 Centralized decision making (e.g., China) 142

5.7 Consultative decision making (e.g., Japan) 143

5.8 Collaborative decision making (e.g., 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

7.7 Interdependent learning 230

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

LIST OF EXHIBITS ix

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

x LIST OF EXHIBITS

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

LIST OF EXHIBITS xi

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. It is the thesis of this book that a

major part of this knowledge base for managers rests on developing a fundamental, yet

flexible, understanding of how business management works in different regions of the

world. More specifically, our aim is to develop information and learning models that

global managers can build upon to pursue their careers and corporate missions.

As managers increasingly find themselves working across borders, their list of

cultural lessons – do’s and don’ts, must’s and must not’s – continues to grow.

Consider just a few examples: most French and Germans refer to the EU as “we,”

while most British refer to it as “they”; all are members. While criticizing heads of state

is a favorite pastime in many countries around the world, criticizing the king in

Thailand is a felony punishable by fifteen years in jail. Every time Nigerian-born

oncologist Nkechi Mba fills in her name on a form somewhere, she is told that she

should write her name, not her degree. In Russia, companies frequently pay public

officials to raid business rivals and subject them to criminal investigations. In Korea, a

world leader in flexible IT networks, supervisors often assume employees are not

working unless they are sitting at their desks in the office. And in a recent marketing

xiii