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Chapter 2 cross cultural management

cross cultural management

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Chapter 2 cross cultural management

  2. 2. Chapter Outline • Concept of Culture • Elements of Culture • Determinants of Culture • level of culture • Cross cultural theories • Cross Cultural Communication • Culture Shock
  3. 3. Concept of Culture • Culture is the configuration of learned behavior and result of behavior whose component elements are shared and transmitted among the members of a particular society. Culture is Relative that guide the behavior of people in a society / community and that are passed on from one generation to the next.
  4. 4. Elements of Culture • Culture has normative value. It prescribes Do’s and Don’ts which are binding on the members of a society. • Culture is a group Phenomenon. • Cultural practices are passed on from generation to generation
  5. 5. Elements of culture • Language • Nationality • Sex • Education • Profession • Ethnic group • Religion • Social class • Corporate culture • Family • Values • Norms • Attitudes • folkways • Customs
  6. 6. • Example: Women in Indian Society wear ‘Kumkum/Sindur’ on their foreheads because their parent told them to wear. The parents did the same because their parents had done so. • Eating cow’s meat is viewed critically by Hindu Society. While drinking liquor is common in the US, the same is prohibited in Saudi Arabia and is a punishable offence
  7. 7. Characteristics of Culture • Culture is learned • Culture is unconscious • Culture is shared • Culture is integrated • Culture is Symbolic • Culture is a way of life • Culture is Dynamic • Culture is Relative • Culture is universal
  8. 8. Determinants of CultureReligion Language Education Political philosophy Social structure
  9. 9. level of culture Dominant Culture Sub Culture Organizational Occupational pervasive and extends to the whole of a country practices of Punjabies are different from those obtain in Karnataka. TATA is different from that of INFOSYS while that of INFOSIS is not the same as that of WIPRO. An Account for example speaks the same financial language whether he or she is an Indian or an American. So is the case with a medical practitioner or an attorney.
  10. 10. Characteristics of Organization Culture • Centralized vs. decentralized decision making: • Safety vs. risk: in some so • Individual vs. group rewards • Informal vs formal procedures: • High vs. low organizational loyalty: • Cooperation vs. competition: • Short term vs. long term horizons • Stability vs. innovation
  11. 11. Cultural Sensitivity Knowing that cultural differences as well as similarities exist, without assigning values (i.e. better or worse, right or wrong) to those cultural differences.
  12. 12. Cultural Sensitivity • Communicate effectively with customers, suppliers, business associates and partners in other countries and foreign employees (expatriates). • Conduct negotiations and understand the nuances of the beginning postures of the other parties into a negotiation. • Predict trends in social behavior likely to affect the firm’s foreign operations. • Understand the ethical standards and concepts of social responsibility in various countries. • Build Foster relationships between union confederations and employee associations require cultural empathy. • Understand local Government policies and influences it for business promotion. • Conduct efficient meetings in different countries and encourage employees participation in management. • Understand how people interpret market research an other information. Therefore, every international manager need to know about cultural differences among nations in order to be able to:
  14. 14. An American family on assignment in Indonesia went to restaurant with their Pet dog. The restaurant manager politely greeted then at the door, took their dog and , 30Minutes later-family was shocked They had SERVED IT TO THEM The consumption of dog meat is associated with their culture, where dog meat is considered a festive dish usually reserved for occasions such as weddings and Christmas.
  15. 15. Cross cultural theories
  16. 16. Cross cultural Theories Organizational culture varies one from another based on 4 factors: • Organizational objectives and Goals. • Competitive Challenge • National variables and • Socio cultural variables like different religion, language, education etc. Cultural Diversity or Multi-Culturism
  17. 17. Hofstede’ Cultural Dimension Dutch Scientist, has analyzed cultural dimension in IBM Employees (1,16,000) in 70 countries and in 3 regions like E. Africa, W .Africa and Saudi Arabia. Hofstede tried to eliminate the impact of changing organizational cultures and analyzed the influences of different national cultures.
  18. 18. Hofstede provides a useful framework for understanding the workforce diversity. His main findings were: • Work related value are not universal • Underlying values continues when a multinational company tries to impose the same norms on all its foreign interests. • Local value determine how the headquarters regulations are interpreted; • By implication, a multinational that tries to insist on uniformity is n danger of creating morale problems and inefficiencies.
  19. 19. Hofstede’s framework for Assessing culture Hofstede’s studies of the interactions between national cultures and organizational cultures demonstrated that there are national and regional cultural groupings that affect the behaviors of societies and organizations, and that are very persistent across time
  20. 20. Dimensions of Hofstede’s framework of assessing culture: • Low and High Power Distance • Individual and collectivism • Masculinity v/s Femininity • Uncertainty avoidance • Long and short term orientation
  21. 21. Power Distance: unequal power of distribution. It is the distance between individuals at different levels of hierarchy. Hofstede observed two types of distance: 1. High power distance 2. Low power distance High Power distance Low power distance Countries in which people blindly obey the orders of their superior, employees acknowledge the boss’s authority simply by respecting that individual’s formal position in the hierarchy, and they seldom bypass the chain of command Countries which people (supervisors and sub ordinates) are apt to regard one another equal in power. Results • Less Harmony and less cooperation • Centralized order • Autocratic Leadership • Taller Organization structure • More harmony and cooperation. • Decentralized structure • Democratic leadership • Flatter organization structure Maxico, South Korea and India. Austria, Esrael, USA, UK, Denmark
  22. 22. Power Distance: unequal power of distribution. High Power distance Low power distance Countries in which people blindly obey the orders of their superior, employees acknowledge the boss’s authority simply by respecting that individual’s formal position in the hierarchy, and they seldom bypass the chain of command Countries which people (supervisors and sub ordinates) are apt to regard one another equal in power. Results • Less Harmony and less cooperation • Centralized order • Autocratic Leadership • Taller Organization structure • More harmony and cooperation. • Decentralized structure • Democratic leadership • Flatter organization structure Maxico, South Korea and India. Austria, Esrael, USA, UK, Denmark
  23. 23. Uncertainty Avoidance High uncertainty avoidance Low uncertainty avoidance Countries with a high level of uncertainty avoidance tend to have strict laws and procedures to which people adhere closely, and there is strong sense of nationalism. In a business context this value results in formal rules and procedures designed to provide more security and greater career stability In countries with lower levels of uncertainty avoidance nationalism is less pronounced, and protests and other such activities are tolerated. As a consequence, company activities are less structured and less formal. so • Managers have propensity for low risk decisions, • employees exhibit little aggressiveness • lifetime employment is common • Taller organization structure • Managers take more risk, and there is high job mobility • Peoples have risk taking attitude and high labour turnover. • Flatter organizational structure Japan, Israel, Austria, Pakistan India, USA, UK etc.
  24. 24. Individual and collectivism Individual collectivism Interest of Self and Family ‘I’ consciousness Independence of Individual from organization. Grater Individual Initiatives Promotions are based on Merit and performance Interest of Group ‘We’ consciousness Dependency on organization Less Individual initiatives Promotions are seniority based USA, UK, Australia Japan, Taiwan and Pakistan
  25. 25. Masculinity v/s Femininity Traditionally, ‘masculine’ values – assertiveness, materialism, aggressiveness and a lack of concern for others that prevail in society, femininity emphasizes feminine values – a concern for others, for relationships, nurturing, care for weak and for quality of life. The degree of masculinity affects in the following characteristics way: High Masculinity Low Masculinity • Career is considered as most important • Work needs take precedence • Individual decision-making is emphasized • Achievement is given importance and is defined in terms of money and recognition • Importance is placed on cooperation and friendly atmosphere. • Employee security gets precedence. • Group decision – making is emphasized • Achievement is defined in terms of human contacts and living environment Countries with high masculinity – India, Japan, USA, UK etc. Countries with low masculinity – Denmark, Norway, Sweden etc.
  26. 26. Kluckhohn - Strodthbeck This theory is based on the ‘Patterns of behavior and thinking’ in different cultures. The researchers distinguish and compare cultures based on the following dimensions
  27. 27. 1. What is the nature of people – Good, evil or mixed 2. What is a person’s relationship to nature – Dominant, Harmony, subjugation. 3. What is a person’s relationship to – Hierarchical, collectivist or others? Individualistic. 4. What is the modality of human activity? – Doing, being or containing 5. What is the temporal focus of human activity? Future, present or past. 6. What is the conception of Space? Private, public or mixed.
  28. 28. Halls and Halls Halls and Halls in 1987 provided another basis for cross cultural classification. They divided the world into two cultures: A) Low context Culture B) High context Culture
  29. 29. 􀂄 Members of high – context cultures depend heavily on the external environment, situation and non – verbal behavior in creating and interpreting communication. Members of this culture group learn to interpret the covert clues when they communicate – so much meaning is conveyed indirectly. 􀂄 Examples – Arabic, Chinese and Japanese, where indirect style of communication and ability to understand the same is highly valued. In low – context cultures like the US, Sweden, and Britain, the environment is les important, and non-verbal behavior is often ignored. 􀂄 Therefore, communication has to be explicit and clear. 􀂄 A direct and blunt style is valued and ambiguity is disliked in managerial communication.
  30. 30. Trompennars 7d cultural dimension model
  31. 31. Research produced five cultural dimensions that are based on relationship orientations and attitudes toward both time and the environment 􀂄 Individualism vs. collectivism 􀂄 Universalism vs. particularism (rules) 􀂄 Neutral vs. affective (emotion) 􀂄 Specific vs. diffused involvement 􀂄 Achievement vs. ascription (status) 􀂄 Past, present and future orientation 􀂄 Internal vs. external control (nature)
  32. 32. Universalism vs. Particularism Universalism - belief that ideas and practices can be applied everywhere in the world without modification Particularism - belief that circumstances dictate how ideas and practices should be applied and something cannot be done the same everywhere Focus on formal rules and rely on business contacts Focus on relationships, working things out to suit the parties
  33. 33. Individualism vs. Communitarianism 􀂃 Individualism - people regard themselves as individuals 􀂃 Communitarianism - people regard themselves as part of a group 􀂄 Rely on individuals to make decisions 􀂄 Seek consultation and mutual consent before making decisions Neutral vs. Emotional 􀂃 Neutral - culture in which emotions are held in check 􀂃 Emotional - culture in which emotions are expressed openly and naturally 􀂄 People try not to show their feelings 􀂄 People smile, talk loudly, greet each other with enthusiasm
  34. 34. Specific vs. Diffuse 􀂃 Specific - culture in which individuals have a large public space they readily share with others and a small private space they guard closely and share with only close friends and associates Diffuse - culture in which both public and private space are similar in size and individuals guard their public space carefully, because entry into public space affords entry into private space as well People often are open and extroverted People often appear indirect and introverted, and work and private life often are closely linked Work and private life are separate
  35. 35. Achievement vs. Ascription Achievement - culture in which people are accorded status based on how well they perform their functions Ascription - culture in which status is attributed based on who or what a person is For example, status may be accorded on the basis of age, gender, or social connections
  36. 36. Time 􀂃 􀂃 Sequential approach to time - people do one thing at a time, keep appointments strictly, follow plans to the letter 􀂃 􀂃 Synchronous approach - people do more than one thing at a time, appointments are approximate Environment 􀂃 Inner-directed 􀂃 People believe in controlling environmental outcomes 􀂃 Outer-directed 􀂃 People believe in allowing things to take their natural course Cultural Patterns or Clusters Defined groups of countries that are similar to each other in terms of the five dimensions and the orientations toward time and the environment
  37. 37. Andre Laurent’s Laurent analyzed the values of managers in nine European countries and the US in 1983 and 1989 in China, Indonesia and Japan.
  38. 38. Laurent used four parameters • Perceptions of the organizations • Authority systems • Role formulation systems • Hierarchical systems
  39. 39. • This research treated management as a process by which managers express their cultural values – like how far manager caries his / her status into the wider context outside the workplace Therefore, the international manager needs cross – cultural competence to manage multiculturalism. • Cross cultural competence includes skills, awareness and Knowledge. In order to be culturally competent, an individual needs to: 1. Possess a strong personal identity 2. Have knowledge of and facility with the beliefs and values of the culture; 3. display sensitivity to the effective process of the culture. 4. Communicate clearly in the language of the given culture group. 5. Perform specially sanctioned behavior. 6. Maintain active social relations within the cultural group 7. Negotiate the institutional structures of that culture.
  40. 40. Why needed ? 1. In global businesses, activities such as leading, motivating, decision making, problem solving, exchanging ideas and information depends on the ability of proper communication from one culture to another. 2. Mistakes in cross-cultural communication often go unnoticed by the communicators, but these mistakes have the potentials to cause damage to international relationships and negotiations. 3. Mistakes or misinterpretations of the subtle gestures of the hands, and face, the use of silence, what is said or not said, and the intricacies of dealing with age and status often provide PITFALLS for International Business.
  41. 41. Critical dimensions in Intercultural communication are: 1. Language and Culture 2. Difference between high and low context cultures 3. The use of interpreters 4. non-verbal communication
  42. 42. Culture shock
  43. 43. Culture shock is a term used to describe the anxiety and feelings (of surprise, disorientation, confusion, etc.) felt when people have to operate within an entirely different cultural or social environment, such as a foreign country. It grows out of the difficulties in assimilating the new culture, causing difficulty in knowing what is appropriate and what is not.
  44. 44. Phases of Culture Shock 􀂄 The "Honeymoon Phase" - During this period the differences between the old and new culture are seen in a romantic light, wonderful and new. 􀂄 "Negotiation Phase" - After a few days, weeks, or months, minor differences between the old and new culture are resolved. 􀂄 The "Everything is OK" phase - Again, after a few days, weeks, or months, one grows accustomed to the new culture's differences and develops routines. By this point, one no longer reacts to the new culture positively or negatively, because it no longer feels like a new culture. One becomes concerned with basic living again, as one was in their original culture. 􀂄 Reverse Culture Shock - Returning to one's home culture after growing accustomed to a new one can produce the same effects as described above.
  45. 45. Sign of Culture Shock: • Irritability • Fluctuating appetite • Moodiness • Disrupted sleep • Homesickness • Spending time alone • Avoiding the locals • Reading all day • Boredom • low energy • Confusion • Anxiety • Negativity • Alienation • Depression • Physical illness • Depression
  46. 46. OCTAPACE The most important aspect of organizational culture are the values it practices. Eight values may be examined to develop the profile of an organizational culture that is called OCTAPACE. OPENNESS CONFRONTATION TRUST AUTHENTICITY PROACTIVELY AUTONOMY COLLABORATION EXPERIMENTING.
  47. 47. a) Openness - the comparative openness in the system should influence the design of HRS. Organizations can be classified in continuum from completely open to completely close. No orgn may be on the two extremes of the continuum. However, they will tend to be towards one or the other end. The degree of openness of the orgn will be an imp factor in determining the nature of the various dimensions of HRD being designed, as well as the way in which these dimensions should be introduced. orgn which are fairly open may start with several confronting designs of HRS . b) Confrontation - this term is used in relation to problem putting the front rather than the back to escaping the problems. A better term would be confrontation exploration that implies facing a problem and working jointly with other concerned to find its solution. If an organization encourages people to recognize a problem, bring it to people concerned, explore with them to under it and search possible ways of dealing with it.
  48. 48. c) Trust - which introducing the HRD in an orgnization trust in another factor which should be considered along with openness. If the level of trust is low, the various dimensions of HRS are likely to be seen with suspicion and therefore the credibility of the system may go down. in such a case the system if introduced may become a vital and cease to perform the main functions for which it meant. d) Authenticity- is the value underlying trust. It is the willingness of a person to acknowledge the feelings he /she has, and accept imself / herself as well as other who relate to him/her as persons. Authenticity is reflected in the narrowest gap between the stated vales and the actual behavior. This value is important for the development of a culture of mutuality. e) Proactive - can be contrasted with the term react. It in the later action is in response to an act from some source, while in the former the action is taken independently of act form the other source. Proaction means anticipating issues in advancing to take advantage of this undertaking conflict or responding to needs of the
  49. 49. f ) Autonomy - nothing but willingness to use power without fear and helping other to do same. It multiplies power in system and the basis is collaboration. g) Collaboration - involves working together during one another strengths for a common cause. Individuals instead of solving their problems by themselves share their concerns with one another ands prepare strategies working out plan of actions and implement them together. h) Experimenting - as a value emphasizes the importance given to Innovating and trying out new ways of dealing with problems in the organization. A profile of an organization. on these aspects may help to decide what elements of HRS should be introduced in what sequences in the organization.
  50. 50. Flag UAEUAE United Arab Emirates
  51. 51. Dressing
  52. 52. Food Culture
  53. 53. Food Culture – No No • Pork Muslims are prohibited from eating pork so it is not included in Arab menus. There are substitutes for the same. • Alcohol Alcohol is generally only served in hotel restaurants and bars. Exceptions are some clubs (e.g. golf clubs) and associations.
  54. 54. Doing Business in the UAE Working Practice Companies Structure Working Relation Business Practices Social Customs
  55. 55. Working Practice • Saturday – Wednesday (Traditional Working Week) • Meetings should be scheduled advanced with extra time allocation • Attitude to time is comparatively relaxed
  56. 56. Structure & Hierarchy of Companies • Strong vertical Hierarchy • Age Money & Family – Determining factors of Personal Status • Status is important & must be recognized Titles : Shaikh – Chief, Ustadh – Professor
  57. 57. Working Relation • Prefer to do Business in Person • Prefer to do Business with those who they know • Family & Friends come before anything else
  58. 58. Business Practice • Customary greeting is “As-salam alikum” with reply “Wa alaikum as- salam” • Initial business meeting – Way to become acquainted with your counterparts • Business Cards are common but not essential. If intended ensure English and Arabic printed information.
  59. 59. Social Custom • Gifts – Sign of Generosity • Dining – Sign of respect – starts eating last – Host pays for it • Left Hand – Do not use or offer item with your left hand • Shoes – Follow the lead of your host
  60. 60. Business Etiquette Do’s  Address Emirati counterpart with appropriate titles  Dress Conservatively  Accept Invitation to a meal or social events  Politeness and courtesy Don’t • Expect a one-on-one meeting to only include yourself and the other person. • Assume that the person who asks the most questions in meetings holds the most Responsibility. • DON’T ask about a person’s wife or daughters. • Don’t speak Loud and with laughter
  61. 61. Tips for effective communication • Be clear and concise • Speak more slowly • Reinforce your message • Make presentations effective • Double-check understanding • Be open-minded
  62. 62. Doing Business in Latin America • Few people rush into business • Men and women congregate into separate groups at social functions • Latin Americans stand more closely to each other than North Americans when in conversation • Men may embrace
  63. 63. (Cont.) • Guests are expected to arrive late, with exception of American guests • Little concern about deadlines • Machismo - expectation that businessmen will display forcefulness, self-confidence, leadership with flourish • Fatalism
  64. 64. Doing Business in East Asia • Japan, Korea, China • Meetings devoted to pleasantries; serving tea, engaging in chitchat • Seniors and elders command respect • Consciously use slow down techniques as bargaining ploys • Business cards should be bilingual
  65. 65. Doing Business in Russia • Protocol-conscious • Do business only with highest ranking executives • Appear stiff and dull • More expressive in private than in public • Hard to draw up contracts due to language barriers • Have little advertising experience
  66. 66. Doing Business in the Middle East • Prefer to act through trusted third parties • Personal honor given high premium • Fatalism • Emotionally expressive • Intense eye contact • Guests should avoid discussing politics, religion, host’s family and personal professions
  68. 68. Differences between Indian Culture & Western Culture Basis Indian Culture Western Culture Belief in Faith & Luck Strong believers Believe in hard work & efforts Belief in Spiritualism Strong believers Believe in Materialism Public Appearance No body exposures. Considered obscene. Fashionable clothes the in thing Care of Old People Sons are expected to take care of their Parents. Old parents are not cared for. Respect for Women No religious ceremony is held without wife. Women given respect in traditional sense Relegated to Old Homes Women looked as objects of pleasure. Women are free in every aspect
  69. 69. Business Culture - India Relationships and feelings play a larger role in decisions in India. In general, Indians tend to take larger risks with a person whose intentions they trust. Thus, one's credibility and trustworthiness are critical in negotiating a deal. Showing hospitality is part of the negotiation process. Often meetings start by offering tea/coffee and snacks. It is courteous to accept the offer.
  70. 70. Business Culture - India Indians are inductive in their approach to understanding things. In the Indian psyche, reality can be understood only in its overall context. Knowing the personal, social and historical contexts [of people, events, ideas, etc.] are a precondition to comprehending them accurately. Therefore, one should be prepared for questions and enquiries, which may not seem to be directly related to the subject. To people coming from more deductive cultures, this behavior often appears to indicate a lack of focus and digression. Indians are 'polychronic' people, i.e., they tend to deal with more than one task at the same time. So be prepared for some distractions/ disturbances during the meeting, e.g., a secretary walking in to get some papers signed, or the conversation sometimes digressing into unrelated topics. One must appreciate that such behavior/occurrences do not show a lack of interest or attention.
  71. 71. Business Culture - India In general, Indians are cautious in accepting a new idea or proposal. Openness to a new idea depends not only on its quality, but also on its source and endorsement. That is, information about who else has implemented it or who has proposed it has a major influence on the decision about a new idea. In making a proposal, you must include such details accordingly. PowerPoint presentations are generally accepted to start the discussion. It is necessary, however, to send a more detailed proposal in advance. Often, the details of the proposal are vetted by some middle-level executive, who will then brief the superior about them.
  72. 72. Business Culture - India Bargaining for the price or additional concessions is normal in India. Indian negotiators expect and value flexibility in negotiation. Therefore, sometimes a straightforward offer may be perceived as a rigid stand. It is always advisable to build some buffers in one's initial offer, which allow for bargaining later. Indians usually do not express their disagreements openly and directly; doing so would be considered discourteous. Instead, when differences arise, they may circumvent them by statements such as 'we will discuss this later' or 'I will have to check with others about this.
  73. 73. Business Culture - India Do not insist on commitment in the first meeting. Making a decision, in Indian organizations, is often a long-drawn out process. This is not only because of the bureaucratic nature of many Indian organizations, but also because a decision may have to be ratified by people who may not be present at the negotiating table.
  74. 74. • Box of Sweets • Chocolates • Bouquet of Flowers • Household Items • Liquor, but . . . . Gifts
  75. 75. • Families • Tradition • Foreign Countries • Cricket • Politics & Religion Poverty Personal Matters Military Spending Topics of Conversation
  76. 76. Doing Business in India If there ever was an example of what a heterogeneous society looks like, it is India. The differences between people due to region, religion, language and caste make it very difficult for anyone to impart general observations on the country. Behavior, etiquette and approach are all modified depending on whom you are addressing and
  77. 77. Hierarchy One of the most significant cultural influences on Indian culture is that of hierarchy. You will see this manifest in many ways when doing business in India. For example, only the owner or the most superior person of a company will make business decisions. Even if you are dealing with a manager, they will always go to the boss for a final decision. • You may often find that, as a sign of respect, subordinates stand up when the boss enters a room. If you are unsure whether to rise or not, err on the side of caution and do so. • Women in business, especially in senior positions, executives, are a relatively new development. If you are a woman doing business in India, you will normally find people respectful and courteous, but not very comfortable in working with you for business deals. You may have to make extra efforts to get them to discuss business with you.
  78. 78. Meeting and Greeting •Handshakes are exchanged on meeting. Indians themselves use the namaste. This is where the palms are brought together at chest level with a slight bow of the head. However as a foreigner doing business in India you would not be expected to use it. •When addressing an Indian try and use the appropriate formal title, whether it is Professor, Doctor, Mr, Mrs followed by the family name. •Names speak volumes about an Indian’s background. For example, a Singh will usually (but not always) be a Sikh. The suffix “-jee” ( as in Banerjee) is a sign of a high caste. Arabic sounding names such as ‘Abdul’ will be used by Muslims. •When doing business in India, business cards should be exchanged at the first meeting. English is the language of business so there is no need to translate your cards. Be sure to receive and give with your right hand. Make sure the card is put away respectfully and not simply pushed into a trouser pocket.
  79. 79. Building Trust Doing business in India involves building relationships and establishing trust. It is vital that a good relationship is founded on two foundations. 1) on a business level, i.e. demonstrating strong business acumen, professionalism and qualifications and 2) at a personal level, i.e. relating to your partner and exhibiting the positive traits of trustworthiness and honour.
  80. 80. Meetings and Negotiations • Punctuality for meetings is expected, although being 10 minutes late will not have disastrous consequences. Flexibility is part of life! • When entering a meeting room you must always approach and greet the most senior figure first. Never get ‘down to business’. Meetings should always commence with some conversation – good topics of conversation include cricket, politics and film. • If your doing business in India involves negotiations, always bear in mind that they can be slow. If trust has not yet been established then concentrate efforts on building a rapport. • Indians do not base business decisions solely on statistics, empirical data and flashy PowerPoint presentations. They use intuition, feeling and faith to guide them. Always exercise patience, show good character and never exhibit frustration or anger.
  81. 81. Language Different states in India each have different official languages. Central government only recognizes Hindi as the official language of India. However, when doing business in India, English is the language of international commerce.
  82. 82. Foreign Investment • Most sectors follow the automatic approval route • FDI caps: Telecom up to 74 percent, Mining 74 percent, Private sector banking 49 percent, Insurance 26 percent. (The government is seeking to increase the FDI caps further) • FDI up to 51 percent in priority capital and intermediary goods sectors. • Non resident Indians and overseas corporate bodies allowed 100 percent equity in key areas.
  83. 83. The Characteristic of South Koreans
  84. 84. Meeting Etiquette
  85. 85. Don’ts • Introduce yourself to your partner • Use someone’s real name. • Write on someone’s business card • Insult or criticize in front of others • Show annoyed expression when you are in negotiations
  86. 86. Table Manners
  87. 87. Don’t • Point chopsticks • Pierce food with chopsticks • Pick up food with hands • Accept the first offer of second helping • Place chopsticks parallel across your rice bowl when you’re finished eating
  88. 88. • Do’s • Wrap gift in red or yellow paper • Use both hands when offering a gift • Don’ts • Wrap gifts in green, white or black paper • Sign a card in red ink • Opened the gift when received Gift Giving ETIQUETtE
  89. 89. Dos • Men should wear dark color, conservative business suits with white shirts • Women should dress conservatively and wear light color Don’ts • Man shouldn’t wearing jewelry other than a watch or wedding ring Dress Etiquette
  90. 90. Japanese company structure VS American company structure
  91. 91. Key concepts to understand Japanese Business system -Salary goes higher as you get older - Once you are hired by the company, you will work for it until you retire - You are assigned various kinds of jobs in different departments within the company
  92. 92. Salary • Japan -You get higher salary as you get older Salary you get now is not always related to your current performance • US Your salary is based on your current performance
  93. 93. Difference of salary you get and salary based on your performance 100000 200000 300000 400000 500000 600000 700000 800000 900000 1000000 22 30 40 50 60 Salary you get Salary base on your performance
  94. 94. Findings • You need to stay in the company until you retire to get the salary that you haven not received
  95. 95. Company system • Japan Cross functional Workers are assigned various jobs within a company Your career is developed within a company Ex)A marketing senior manager is promoted to a HR Vice president • US Vertical functional Workers are promoted within a department Your career is developed within a market
  96. 96. Recruiting and Promotion Decision makers • Japan HR department They have the function of recruiting and promoting of allover the company • US Each department There are recruiters but each department often has recruiting functions too Managers of each department usually has promotion functions
  97. 97. Skills required • Japan General skills is required in a company Workers try to get overall skills that is necessary to fulfill various jobs in a company • US Special skills that is required for a job in the market Workers try to get special skills that is necessary to fulfill a specific job
  98. 98. Commitment • Japan: Lifelong (終身雇 用) Once you are hired to the company, basically you will work for the company until you retire Exception)Workers are sometimes sent to an another company that has relation with his/her company but mainly it is for making stronger connection between companies • US: Short term You change companies or jobs and proceed within the market Average Americans have 6-8 different jobs and 3-4 different occupations
  99. 99. Japan: Good points/ Bad points • Good  You are able to see overall company, which helps you to be a manager who is fully understanding the company  Insider CEOs care more about company future or reputation than their own reputation or benefit  Strong company culture and strong loyalty is developed -employees are thought to be assets rather than cost  You can save the cost for workers who quit jobs • Bad  It is not easy to leave a company which you find you do not fit  You might be assigned to a department that you do not desire  Not getting people who has experience in a different market makes companies more difficult to get new wind  It is not easy to fire low productive workers
  100. 100. US: Good points/ Bad points • Good  Flexible-you are able to change companies, jobs as you desire  You can fire low productive workers easily  Getting new workers who has experience of a different market or jobs brings new wind to a company • Bad  It is not easy to share company culture with new workers  It is expensive to advertise a job opening, recruit and train a new worker  Outsider CEOs care more about their own reputation or benefit than company reputation of future  Companies lay-off employees easily, employees quits easily -low trust
  101. 101. Business culture- China vs US Presentation Outline • Foundation of US ethics- basic discussion • Comparison of Business culture-China vs US • Strategies and Managerial Implications
  102. 102. Cultural Foundation of American Ethics • Foundation based on Judeo-Christian and Western socio-theological principles • intrinsic underlying truth • a sovereign moral authority--God • God declines “right or wrong” • Natural law -- “inalienable rights” • life, liberty and pursuit of happiness
  103. 103. American ethics (continued) • Limits on individual freedom are either (1) voluntary (2) lawfully imposed • Results -- individualism and contract • Individual’s right to choice is consistent with market economy • The functioning of a free market economy can be described as “nexus of contracts” • A business contract - spells out details of relationships and is enforced by law if violated
  104. 104. Comparison of Business Culture: China vs US • Business culture - time-tested and conventional practices • China and US have a different business culture -- result of different history and practices
  105. 105. Notion of Harmony China • Everything is in harmony • Change is viewed as disruptive • Reason -- too many people US • Efficiency and effectiveness • End result • logical reasoning on facts • change to get desired results
  106. 106. Importance of Relationship • China • 4 important social groups: relatives, schoolmates, personal friends, and the indirect relationship from the 3 • Importance of “guanxi” (connection) • US • constitutions guarantee the rights • a short history to inherit traditions • stress on individualism for personal achievement
  107. 107. Relationship (continued) • Agricultural state (small community mentality) • privacy is not highly valued • individualism is not singled out • “rule of man” over “rule of law” • Relatively few norms • melting pot • Increased tolerance on diversity • separate personal and business relationship • friendship can be formed and
  108. 108. Subtlety and Explicitness • US • Frank and open China • Build on subtlety • Language based on abstraction of ideas • Reduce confrontation • Outspoken --not norm (read the tea leaves- - observe body,
  109. 109. Subtlety and Explicitness (continued) • Courtesy (righteousness, ethics and honor)- virtues • Saving face • Do not say “no” easily • Hint to get help • Self-control makes people appear “shy”
  110. 110. Communication Style China • Silence for reflection • Not to exaggerate (implications on marketing a product) US • uncomfortable with gaps of silence • Some American feel ok to exaggerate • fluency and gift of gab--admirable
  111. 111. Communication-continued • Non-linear thinking • pragmatic thinking • rare physical contact • no eye contact • “Yes” means “I am listening” (not I accept) • Linear thinking • pragmatic and look for innovation • normal touching • eye contact is important (implying I have no harm) • Hi- means friendly
  112. 112. Negotiation • China US • contract is the end in itself • Americans think Chinese use banquet as the way to get upper hand • discuss openly costs and benefits
  113. 113. Rule of Banquet China • Much attention to eating and drinking • Private rooms in restaurant • round table with chopsticks • Seats assigned • Do not stretch arm for food US • using club members
  114. 114. Taboos • China • Concerns with numbers (symbol for luck) • Success factors: fate, luck, feng- shui,good deeds and knowledge US • Hard work
  115. 115. Strategies of Resolving Conflict • Avoiding • Forcing • Education and persuasion • Infiltration • Accommodation • Negotiation and compromise • Collaboration and problem solving
  116. 116. International Manners • Africa Present the card with right hand • Asia Offer the card with both hand and accept in the same way (China, Japan, • South Korea, India) • Australia & New Zeeland- Not so Important for them • Europe -Power breakfasts are become more popular (in France, Switzerland, England) • Middle East & Gulf Countries -Present Card with right hand with respect • Canada & USA It is acceptable to make a cold call ( calling a person without making an • introduction or appointment • Africa Be prepared for a large no. of people • Asia Decide before hand what tech. information they are willing to share and be sure everyone on your team knows • Australia & New Zeeland- To the point, specific and punctual • Europe Class conscious good manners are critical and ignorance is no excuse for bad manners • Middle East & Gulf Countries- Maintain Royalty and detail discussion, prefer local language or English • Canada & USA Meeting begin and end as scheduled. There is very little small talk at meetings
  117. 117. Topics to Avoid: • Africa Refer to people as Africans not Blacks • Asia Both men and women should avoid ‘ Going Negative’ in their clothing • choices. • Australia & New Zeeland-Over Introduction • Europe Never try to make a cold call to get an appointment, they don’t like to make business on phone/ call • Middle East & Gulf Countries- Other religion discussion, Political discussion • Canada & USA Unnecessary discussion and killing the time.
  118. 118. Gestures to Avoid: • Africa In rural areas, avoid strong eye contact • Asia Avoid Eye contact and touching the body • Australia & New Zeeland- Red eyes • Europe Hate shaking leg with dirty shoes and dirty dress • Middle East & Gulf Countries- • Do not walk in front of an Arab while he is praying and never step on a prayer met. Don’t hurry at the diner / lunch party, eat separately women and men at home. • Canada & USA Standing too close to a north American may be perceived as an invasion of one’s personal space
  119. 119. Corporate Gifts / Greetings • Africa A light warm handshake is acceptable form of greeting when anyone meet and anyone leave • Asia Bow down to each other • Australia & New Zeeland- During parties, host will introduce to the other guests, do not expect gifts from foreigners doing business with them • Europe Shake hands with a firm grip when any one meet and anyone depart • Middle East & Gulf Countries- Gift should be presented publicly to the group after a deal is closed. In addition to hand shake , they may touch other arms & shoulder, and embrace when they are so close • Canada & USA Hand shake is a full – hand grip
  120. 120. Meetings and presentations • Africa Be prepared for a large no. of people • Asia Decide before hand what tech. information they are willing to share and be sure everyone on your team knows • Australia & New Zeeland- To the point, specific and punctual • Europe Class conscious good manners are critical and ignorance is no excuse for bad manners • Middle East & Gulf Countries- Maintain Royalty and detail discussion, prefer local language or English • Canada & USA Meeting begin and end as scheduled. There is very little small talk at meetings
  121. 121. Doing business in China 1. The focus of reform in China is primarily on the state owned enterprises (SOE). 2. The managers are official, not entrepreneurs, there is no real incentives for them. 3. Business meetings typically start with pleasantries such as tea and general conversation about the guest’s trip to the country, local accommodations, and family. 4. The Chinese host will give the appropriate indication for when a meeting is to begin and when the meeting is over. 5. Once the Chinese decide who and what is best, they tend to stick with these decisions. Although slow in formulating a plan of action, once they get started, they make fairly good progress. 6. In negotiations, reciprocity is important. If the Chinese give concessions, they expect some in return. 7. Because negotiating can involve a loss of face, it is common to find Chinese carrying out the whole process through intermediaries. 8. During negotiations, it is important not to show excessive emotion of any kind. Anger or frustration is viewed as antisocial and unseemly (indecent). 9. Negotiations should be viewed with a long-term perspective. Those who will do best are the ones who realize they are investing in a long-term relationship.
  122. 122. Doing business in India 1. It is important to be on time for meetings. 2. Personal questions should not be asked unless the other individual is a friend or close associate. 3. Titles are important, so people who are doctors or professors should be addressed accordingly. 4. Public displays of affection are considered to be inappropriate, so one should refrain from backslapping or touching others. 5. Beckoning is done with the palm turned down; pointing often is done with the chin. 6. When eating or accepting things, use the right hand because the left is considered to be unclean. 7. The namaste gesture can be used to greet people; it also is used to convey other messages, including a signal that one has had enough food. 8. Bargaining for goods and services is common; this contrasts with Western traditions, where bargaining might be considered rude or abrasive.
  123. 123. Thank You