Summary of Chapter 1-10 of the book 'Cross-Cultural Management, Essential Concepts' by David C. Thomas and Mark F. Peterson.
Course: cross-cultural management
Globalization
- Globalization: dramatic shifts in economics, politics and technology.
Growing economic interconnectedness
- 1990s: free-trade areas.
- Local economic conditions are no longer the result of purely domestic influence.
- FDI doubled between 1997 and 2014.
- Developing countries that rely heavily on commodity exports have been strongly
affected by declines.
- Organizational boundaries are also affected by globalization.
o Location-specific advantages.
o Less hierarchical relationships.
o Virtual organizations.
- Economic globalization connects countries and organizations in a network of
international linkages that shape the environment in which global managers must
function.
More complex and dynamic work environment
- Downsizing, privatization, team-based management.
- The number of permanent migrants is changing the composition of the workforce.
- Recent trends in migration:
o Greatest immigration in 2014 is of war refugees.
o Number of women migrants has expanded and contracted.
o Today’s migrants are more likely to be highly skilled.
- Privatization enables formerly government-controlled enterprises to be available for
purchase by foreign firms, thus reducing boundaries. Major changes are required to
meet global standards of quality and efficiency.
Increased use and sophistication of information technology
- Multinational firms can now communicate all types of information throughout their
geographically dispersed enterprise instantaneously.
- With computer technology, it is possible to establish a business that is almost
entirely unconcerned with traditional boundaries and barriers.
More and different players on the global stage
- The players on the international business stage were originally the firm and its
foreign constituency, which were soon joined by home- and host-country
governments, special interest groups, international agencies and economic alliances.
- Improvements in transportation, telecommunications and international finance have
promoted the activities of transnational crime and terrorist groups.
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, - One key result of globalization is that global managers face an external environment
far more complex, more dynamic, more uncertain and more competitive.
Environment of global management
- Four categories of global manager’s environment: economic, legal, political, cultural.
- Culture is singled out as uniquely important to international management:
o Economic, legal and political characteristics of a country are a manifestation
of a nation’s culture.
o Culture is largely invisible.
o The practice of management largely focuses on interpersonal interactions,
with individuals who are culturally different.
What global managers do
- Henri Fayol, 1916: to manage is to plan, organize, coordinate, command and control.
- Mintzberg, 1973: managers have formal authority over their organizational unit and
this status divides their activities into interpersonal, informational and decision role
categories. Involves interactions with other people.
How global managers carry out their role: sources of guidance
- Managers rely on own judgement, other people, role set and norms.
- Role set members and norms provide sources of ideas, principles, and other ways of
thinking that managers use to guide their understanding of the events.
Organizational context, culture and managerial roles
- The manager’s role relates directly to the constraints and demands of the national
and organizational environment and involves choices in which roles are emphasized.
- Managers from different cultures make different choices about their roles.
- The roles and work behaviors of managers are the result of both the national and
organizational context, which establishes demands and constraints on choices.
- Culture also affects the roles and behavior of managers indirectly.
Evaluating cross-cultural management studies
Limitations in present management studies
- The questions to which management scholars seek answers are a product of the
time in which they are studied.
- Management theory does not appear to be universal.
- Three particularly pervasive aspects of the US perspective that limit the ability of US
management theories in explaining organizational phenomenon in cultures with
contrasting orientations:
1. Extreme individualism.
2. Belief that individuals can control own circumstances, environment, future
events: free will.
3. Low-context communication.
Types of international management research
Category Description Cultural assumptions Research questions
Domestic Studies in a single Culture ignored, or How can be explain and
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, country universality of theory pedict the behavior of
is assumed people in organizations?
Replication Study repeated in Universality is Does this theory that
another country questioned; no theory applies in culture A also
available to predict apply in culture B?
effect of culture
Indigenous Individual studies in Cultural differences How can we explain and
one or many cultures are assumed to exist, predict the behavior of
indigenous theory is people in organizations in
needed to explain country X?
behavior
Comparative Study conducted in Similarities and What similarities and
two or more differences exist; differences exist in the
countries there may or may not behavior of people in
be a theory to predict organizations? Is this
the effect of culture theory universal?
Internationa Studies of Similarities and How do organizations
l multinational differences exist, or that operate in multiple
organizations culture is ignored countries function?
Intercultural Studies of Specific aspects of How is this theory
intercultural culture are part of the influenced by cultural
interactions in theoretical framework differences, and how is it
organizations underlying the study universal?
- It is important to recognize the boundary conditions that might be associated with a
cross-cultural study and that affect is applicability.
Methodological issues in cross-cultural research
- Equivalence: cannot be assumed at any stage of a cross-cultural study. It must be
established at three key points:
o Conceptualization of theoretical constructs.
o Study design.
o Data analysis.
o Conceptual / construct equivalence: extent to which concepts have the same
meaning in different countries.
o Method equivalence: similarities in differences in the way to which the
cultural groups being studied respond to measurement instruments in
general. Threats:
Acquiescence: tendency for some cultural groups to agree or disagree
with all or most questions asked.
Extremity bias: extent to which cultural groups systematically choose
the extreme points or the middle points on rating scales.
o Metric equivalence: extent that questions have similar measurement
properties across different groups. Nonequivalence can result from:
Poor item translation.
Complex item wording.
Culture-specific aspects of the way questions are phrased.
Different levels of familiarity with the construct being studied.
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, Physical conditions surrounding data collection.
Communication between researcher and participants.
- Sampling: goal is to conduct research with a small number of participants who
accurately represent a clearly identifiable population.
- Sample comparability is usually compromised by differences in the social
implications of many sample characteristics.
- Approaches to assessing the effects of sample differences:
o Document relationships between different studies that measure similar
concepts that are designed to be similar but that are based on different
samples gathered at different times.
o Document within-country differences in the cultural characteristics of
subgroups so that those differences can be taken into account in studies that
compare the countries.
- Data collection: questionnaires, interviews. Differences:
o Literacy rates.
o Participants can view researches as an agent of management, union, or
government.
o No frame of reference with which to respond to questions.
- Key disadvantage of interviews: interaction between interviewer and respondent.
Critiques of international and cross-cultural research
- Questionable theoretical base: relying too heavily on a very small set of dimensions
about a society’s cultural values, not capturing a broad enough view of culture.
- Parochialism: domestic conclusions are assumed to be universal.
- Samples that assume country homogeneity.
- Lack of relevance.
- Reliance on a single method.
- Bias toward studying large companies.
- Reliance on a single organizational level.
- Limited to a small number of locations.
Chapter 2 – Describing Culture
- Culture: the subjective perception of the human-made part of the environment.
- Hofstede, 1980: culture consists of shared mental programs that control individuals’
response to their environment.
Features of culture
- Culture is shared.
- Culture is transmitted between generations (learned).
- Culture is systematic and organized.
Culture is shared
- Shared: most members intuitively understand the basic values, norms, or logics that
underlie what is acceptable in a society.
- Individuals living in a society have very little personal choice about whether or not
they are thoroughly familiar with the central cultural values and norms of society.
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