Culture: What is it?
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Culture: What is it?
• Value system
• Norms, beliefs, behaviors
• Common way of thinking
• Society’s communicable knowledge
• Society’s characteristics passed on generation by generation
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General Issues
• Differences in culture
• Measurement
• Adaptation and Acculturation
• Similarities in culture
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Hofstede’s Dimensions of CulturePower Distance• Small - trusting, less formal organizations• Large - mistrusting, hierarchical organizations
Uncertainty Avoidance• Weak - risk is non-threatening; diversity is appreciated• Strong - risk averse, diversity is threatening
Individualism• Collectivist - belonging to groups ideal; group decision making• Individualist - individual initiative and achievement; leadership is the ideal
Masculinity• Feminine - quality of life; people and relationships come first• Masculine - performance; money and transactions come first
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Communication and Meaning(Aside from Language)
ME
AN
ING
Explicit:Written/Spoken
Context:Surroundings/
Non-verbalHigh
Context
LowContext
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Implications for ManagementINTERPERSONAL
• Punctuality
• Interpersonal distance
• Tempo of business
• Negotiations
• Bribery
• Linear vs. circular communication
• High vs. low context communication
ORGANIZATIONAL• Organizational structure• Decision making• Leadership• Adaptation of products• HRM policies• Entry mode choice• Location of value-creating
activities
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Leadership
• Perceived levels of power
• Quality/characteristics of exchange with subordinates
• Communication patterns
• Trust (both ways)
• Delegation of tasks
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Organizational Structures/Systems
• Formality of policies and rules
• Hierarchical vs. “flat” organizations
• Mechanistic vs. organic
• Authoritative vs. consensual decision making
• HRM systems
• Accounting systems
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Interpersonal Relationships
With …
• Customers
• Suppliers
• Subordinates/superiors
• Co-workers
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Motivation and Reward
• Formation/role of setting goals
• Achievements
• Compensation system
• Job satisfaction
• Organizational commitment
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Principal Research Question:Japanese-American Context
CulturalDifferences
?• Job dissatisfaction• Lack of commitment
towards company• Propensity to quit
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Evidence of a Problem?• “If Americans ‘fail’ on a project, they are never
given another chance. Yet, Americans are rarely explicitly told what their authority is.”
• “In Japan, formal job descriptions don’t exist. This can lead to role ambiguity in the U.S.”
• “One source of frustration for Americans is the lack of input in decision making.”
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• “Our engineers leave because of the constraints placed on innovativeness and flexibility”
• “I seem to have several bosses, which can be confusing.”
• “My supervisor doesn’t spend enough time preparing me for this position.”
• “There’s a lack of open, honest communication.”
• “I can’t make your meeting, Wally, because two of our section leaders just quit.”
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Not ALL bad...
• “My Japanese boss is the best I ever had.”
• “The Japanese Vice President’s treatment of people is excellent. I am proud of him and respect him.”
• “Our company is excellent in terms of communication and human resources.”
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Leadership is the Key:
• “The most necessary training is…how to work with and manage and American workforce.” TMM Executive
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NegativeAttitudinalOutcomes
Culture and the Causal Chain
CulturalDifferences
IntermediatePerceptions
SupervisorySupervisoryBehaviorsBehaviors
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Supervisory Behaviors• Mentoring
– Psycho-social
– Career-related
• Delegation– Authority-specific
– Task-related
• Communication– Effectiveness
– Formalization
• Monitoring– General
– Corrective
– Intrusive
• Interpersonal Exchange– Exchange Quality
– Acculturating Exchange
– Abusive Exchange
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Communication ModelProcedural
Justice
Trust
RoleAmbiguity
RoleConflict
JobSatisfaction
Commitment
LowPropensity
to Quit
CulturalDifference
CommunicationEffectiveness
FormalizedCommunication
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Delegation Model
Procedural Justice
Trust
RoleAmbiguity
RoleConflict
JobSatisfaction
Commitment
LowPropensity
to Quit
CulturalDifference
AuthorityDelegation
TaskDelegation
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Mentoring Model
Procedural Justice
Trust
RoleAmbiguity
RoleConflict
JobSatisfaction
Commitment
LowPropensity
to Quit
CulturalDifference
Psycho-social
Mentoring
Career-related
Mentoring
Job-related
Feedback
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Monitoring Model
Procedural Justice
Trust
RoleAmbiguity
RoleConflict
JobSatisfaction
Commitment
LowPropensity
to Quit
CulturalDifference
InvasiveMonitoring
GeneralMonitoring
CorrectiveMonitoring
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Personal Exchange Model
Procedural Justice
Trust
RoleAmbiguity
RoleConflict
JobSatisfaction
Commitment
LowPropensity
to Quit
CulturalDifference
ExchangeQuality
AcculturationExchange
AbusiveExchange
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NegativeAttitudinalOutcomes
How to Address Cultural Problems
CulturalDifferences … basics commonly understood.
IntermediatePerceptions …”teachable”?
SupervisorySupervisoryBehaviors … receive scant attention inBehaviors … receive scant attention in most training programsmost training programs
“Chain of causality” often neglected
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International Alliances:Strategic Considerations
• Choice of Entry Mode• Resource Pooling
– Redundant
– Complementary
• Learning• Strategic Options• Impact of Culture
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International Alliances:Managerial Considerations
• Contract vs. Equity• Structure• Learning:
– Codifiable vs. Tacit Knowledge
– Combinative Capability
– Absorptive Capacity
• Impact of Culture
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1984: The NUMMI Alliance
GM Toyota
NUMMI
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1986: Application of Knowledge I GM Toyota
NUMMI
TMM-K
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1990: Application of Knowledge II GM Toyota
NUMMISaturn
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1999: The Fuel Cell Alliance
GM Toyota
Alliance
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Learning Race(s)
GM
Toyota
Ford
DaimlerChrysler
Race 1:Market
Race 2:Market
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Rate of Learning in Alliances
• Codified vs. tacit knowledge • Absorptive capacity• Combinative capability• Organization of learning
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BuyoutBuyout DissolutionDissolution
EquityAlliance
External Forces
Internal Forces
Strategic Option View of Alliances
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Alliances and Culture
• Entry: JVs preferred when:– Target country-market culturally different (CD)– Initiating firm high UA
• Structure: Majority ownership preferred when:– Initiating firm high PD
• Learning: Equity preferred when:– Initiating firm high PD
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• Longevity: JVs terminate faster/earlier when:– Partners are culturally different (CD)
• Mistrust: Suspicions of poor performance when:– Initiating firm high UA
• Trust: Expectations of good performance when:– Partners are culturally similar
Alliances and Culture cont.
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Culture and Alliances as Options• Partnership buyouts more likely when:
– Initiating firm high PD and UA
• Alliance portfolios:– Japanese hold equity alliances longer– Japanese hold larger number of smaller alliances– Japanese more likely to invest further/acquire partner– Americans more likely to spin off partners (success)– Americans faster to terminate alliance (failure)