What is the challenging role of a global manager? - Chapter 1

• Globalization is the process whereby worldwide interconnections in virtually every sphere of activity are growing. Some of these interconnections lead to integration and unity worldwide; others do not. The increase in interconnections is the result of shifts that have taken place in technological, political, and economic spheres.

• The elements of the global manager’s environment can be divided into four categories: economic, legal, political, and cultural. The first three categories provide the backdrop against which global managers must function. Culture is seen as uniquely important because the economic, legal and political characteristics are a manifestation of a nation’s culture. Furthermore, culture is largely invisible. Finally, the practice of management largely focuses on interpersonal interactions, which take place with individuals who are culturally different.

• Historical factors have perpetuated parochialism in management studies. Parochialism is a lack of awareness of alternative contexts, models, research and values. Culture influences the way scholars perceive and think about the world they are investigating. Three particularly aspects of the U.S. perspective that limit the ability of U.S. management theories to explain organizational phenomena in cultures with contrasting orientations are extreme individualism, a belief that individuals are in control of their own circumstances and can influence their environment and future events, and low-context communication. Most cross-cultural research must be carefully evaluated with the recognition of the limitations presented by the cultures involved and the method used.

What is culture and where does it come from? - Chapter 2

• Individuals carry in their mind three levels of programming about how they interact with their environment. At the broadest level, all human beings share certain biological reactions. At the narrowest level are the personality characteristics that are unique to each of us as individuals. Culture is a collective phenomenon that is about elements of our mental programming that we share with others in a society.

• The extent to which cultures around the world are becoming more similar or more different is also an important debate. The argument for convergence of cultures is based on the fact that nations are not static entities but develop over time. In addition, sociologists suggest that to participate effectively in a modern society, people must possess a core set of psychological characteristics. The profile of a modern person is conceptually similar to key concepts in descriptions of Western culture.

• One way in which cultures change is through the process of acculturation. Acculturation concerns the psychological and behavioral changes that occur in people because of contact with people from different cultures. Furthermore, it is used to describe the changes in people who relocate from one culture to another. It can either be individual or collective. The process takes time and the changes might be quite slow.

• Cultures are defined by members and nonmembers. This in-group, out-group distinction is useful in describing attitudes and behavior both within and across cultural group boundaries. However, cultures and social groups have two issues to consider. The characteristics of groups can change as members come and go, and membership in a cultural group helps individuals to determine how they perceive themselves, as much as how others perceive them.

How can we systematically compare cultural differences? - Chapter 3

• The Schwartz Value Survey (SVS) is a series of studies on the content and structure of human values. The content of values refers to the criteria people use to evaluate events and select courses of action. Structure is the organization of these values based on their similarities and differences. This study identified three universal human requirements, namely the nature of the relationship between the individual and the group, the preservation of the society, and the relationship of people to the natural world.

• Probably the most useful and powerful dimensions of cultural variation in explaining social behavior are individualism and collectivism. Individualism is the tendency to view oneself as independent of others and to be more about the consequences for oneself of a particular behavior. Collectivism is the tendency to view oneself as interdependent with selected others, to be concerned about the consequences of behavior for one’s reference group, and to be more willing to sacrifice personal interest for the good of this group.

• Vertical and horizontal dimensions relate to the way people view their status relationships with others. The vertical dimension is comparable with Hofstede’s power distance dimension and value orientations of hierarchy and harmony. The horizontal dimension suggests a certain equality between people. For example, in vertical individualism individuals are independent and different from others, while in horizontal individualism individuals are independent but much alike.

• Social axioms are basic truths or premises, or generalized expectancies that relate to a wide range of social behaviors across different contexts. They are another way to understand societal cultures. Social axioms can be categorized in four categories: psychological attributes, orientation toward the social world, social interaction and the environment.

• Cultural distance is an analogy with physical distance to consider how culturally different national cultures are from each other, based on the value orientations measured. Cultural distance is used as a quantitative measure, consisting of a formula. There were different problems with the concept of cultural distance, so the idea called cultural friction was introduced. This tries to capture the relationship between two different cultures as well as their distance, but this is a fairly new idea.

What are the fundamentals of cross-cultural interaction? - Chapter 4

• Schemas shape what people associate with everything from simple everyday aspects of life to social groups and even abstract ideas. Culture has effects on these schemas. A self-schema is the inner self of an individual that consists of thoughts and feelings that cannot be directly known by others. In Western cultures, people mostly have an independent self-schema, focused on thinking and acting as autonomous individuals with unique attributes. For people with an interdependent self-schema, individuality is connected to a group of other people.

• The process by which individuals interpret the message that they receive from their senses and give meaning to their environment, is called perception. Understanding perception is important for international management, because it is interesting to understand why there are differences in the ways people from different cultures perceive events and each other. A key element of perception is whether a person is categorized as a member of our in-group or out-group.

• Stereotypes are learned, so we have more complex stereotypes about groups we are familiar with. Therefore, the perception of our own culture consists of the most complex mental schemas. This explains why we see people from a different group as more similar. New information about a different group is therefore more extremely evaluated than new information about a group we are familiar with.

• Attributions help us understand and react to our environment by linking the observation of an event to its causes. The search for the causes of the observation or event is a mental process that is similar in many different cultures. The causes can be divided in two categories: internal causes and external causes.

• Motivation consists of the reasons people take or persist in a particular action. People with independent self-schemas will be more motivated to express internal needs. People with interdependent self-schemas will be more receptive to others and adjust to their needs. Cultural differences are therefore expected in motivation based on an individual’s internal representation of self.

What are the cross-cultural dimensions of decision-making? - Chapter 5

• The goal of rational decision-making is to make an optimal choice between specific, clearly defined alternatives. The model of rational decision-making consists of six steps: problem definition, identify decision criteria, weight the criteria, generate the alternatives, evaluate the alternatives and select the optimal solution.

• Heuristics are rules of thumb (cognitive tools) that people use to simplify decision-making. It can result in biases in the decision, but often the increased speed of decision-making outweighs the loss in decision quality. People are unaware of using heuristics. There are three general heuristics that are used to make decision-making simpler: availability, representativeness, and anchoring and adjustment.

• Decision-makers with an interdependent self-concept are more influenced by social motives, or motives that are related to others. There is also a culturally based difference in the extent of the need for consistency between internal attitudes and external behavior. If people evaluate themselves as unrealistically positive for example, there will be more chance of a decision bias.

• Cultural relativism means that moral concepts are legitimate only to the extent that they reflect the habits and attitudes of a given culture. Thus, ethical standards are specific to a particular culture, and any cross-cultural comparison is meaningless. It leaves the opportunity open to attribute a wide range of behavior to cultural norms, and to accept that every culture has a different understanding about what is right and wrong.

• Cognitive moral development is an approach to understanding ethical decision-making that focuses on the mental determination of right and wrong based on values and social judgements. It suggests that all people pass through all stages of moral development and that ethical behavior can be understood by identifying a person’s level of moral maturity. There are six stages in this moral development, which are related to age-based stages in human development, but also to factors as intelligence and degree of ethical training.

How do managers communicate and negotiate across cultures? - Chapter 6

• Cross-cultural communication is more difficult and demanding than communication within a single culture, because there is less grounding information. The term cultural field means in this context that there is a field of culturally based elements of a person’s background that influence communication. How effective the cross-cultural communication is, depends on the lack of distortion.

• The difficulty with translations is that the translators may know the meaning of words and how to use grammatical rules, but still effective communication is often not achieved. The diversity of languages means that an important issue in cross-cultural communication is finding a common language that both parties can use to work effectively. In real life, this means that at least one of the parties has to use a second language. This can cause several problematic implications.

• Communication behaviors are based on the values and norms of the cultures they belong to. Culturally based rules influence the style, conventions, and practices of language use. Therefore, cultures differ greatly in terms of communication.

• Nonverbal communications convey important messages and are produced more automatically than words. Nonverbal behaviors are therefore very important, and have the same functions across cultures. However, nonverbal systems of communication can be very different across cultures. The same nonverbal behavior can have different meanings across cultures, and different nonverbal cues can be used to address the same meaning across cultures.

• An important application of cross-cultural communication for the international manager is face-to-face negotiation. All negotiations share some universal characteristics. They involve two or more parties who have conflicting interests but a common need to reach an agreement. The efforts to understand cross-cultural negotiation fall into one of three types, namely descriptive approaches, cultural dimension approaches, and holistic approaches.

How are motivation and leadership related across cultures? - Chapter 7

• One of the most difficult tasks that international managers face is the need to motivate and lead individuals from different cultures. Motivation is the willingness of individuals to exert effort toward a goal. The concept is studied in different types of theories.

• Individual work motivation is influenced by why people engage in work and what they value in their work. It is important to know the interest that people have in different work goals, which differs across societies. Studies show that if people’s basic needs are not met, work goals as pay and job security become more important.

• The Western definition of leadership is the ability of individuals to influence organization members toward the accomplishment of goals. The meaning and importance of leadership vary across cultures. In examining leadership across cultures, several questions need to be addressed.

• Leadership theory is often described as having progressed through four distinct periods, each with a dominant theoretical approach. The approaches are trait behavioral, contingency, and implicit theories.

• There are three non-Western theories of leadership: the performance-maintenance theory, the theory about leadership in the Arab world, and paternalism.

• The cross-cultural model of leadership has as its basis a cognitive information processing approach to leadership. The perception of the influence of the leader on others is therefore very important. The theory consists of three key elements of the theory: leader’s image; individual and group processes; and substitutes for leadership.

What is the challenge of multicultural work groups and teams? - Chapter 8

• Four distinctive characteristics of work groups in organizations have been identified. Work groups are social systems that have boundaries with members who have different roles and are dependent on each other. Both people within the group and those on the outside will recognize the group’s existence. The groups have a task to perform and work groups function in an organizational context.

• To understand the complex group dynamics, we have to look at different variables that influence the process and performance of work groups. These variables are the external or contextual conditions, the resources of group members, the structure of the group, the group task, the group process and the composition of the group.

• Many organizations deal with globalization by forming work groups with members from different areas. These are called virtual teams. These work groups are possible because of recent technological development. The distance between the members can also cause challenges. These challenges can be categorized in terms of communication, relationship building and conflict management, and task management.

• The dominant characteristics of the organization influence the types of goals and methods that are acceptable for work groups. In addition, management controls the resources required for work groups to be effective. Key organizational factors that influence the effectiveness of work groups are level of management support, the extent to which individual rewards come from the group, the status afforded the group, the amount of training, and the extent to which the organization allows groups to be self-managed.

• Even if it were possible to determine the optimal cultural mix in a particular work group situation, it is unrealistic for managers to control the cultural composition of work groups. Therefore, they must try to maximize the positive consequences of both homogeneity and diversity. Several ideas come up to deal with this multicultural management challenge.

What is the challenge of international organizations? - Chapter 9

• Organizations are social systems intentionally structured to achieve goals. They are not independent of their surroundings but are open systems that continuously take inputs from the environment, transform them, and then return output to the environment in the form of products, services, or knowledge.

• Informal organization refers to the elements of an organization that help to reduce individual variability in the behavior of organization members but is not reflected in a formal organization chart. Organizational culture produces both functional behaviors that contribute to the goals of the organization and dysfunctional behaviors that have negative effects.

• The need for multinational organizations (MNOs) to coordinate and control operations across multiple environments led to several approaches to placing foreign activity within the broader organizational structure. The approach taken can depend on the location and type of foreign subsidiaries, the impact of international operations on corporate performance, and the path through which the firm’s international operations have developed over time.

• The formal and informal structure of the organization have effect on the way in which members of the organization perceive their relationship to the organization as a whole. There are two ways to look at this relationship of individuals to multinational organizations, namely the roles of managers and the psychological contract.

What is the challenge of international assignments? - Chapter 10

• Individual staffing decisions reflect the overall firm-level staffing strategy mentioned previously, whether or not this strategy is made explicit. Some consistency across firms exists. Research found that firms transferred personnel internationally for one of three reasons: to fill a technical requirement, to develop the manager, or to develop the organization. However, there might exist variation between cultures in which of the three reasons is most influential for them to make use of an expatriate.

• Firms and expatriate employees are concerned with the success of an overseas assignment. However, the definitions of success vary widely. Three outcomes are very important in the research in the area of expatriate experience: turnover, adjustment, and task performance.

• The adjustment-performance relationship might be more complicated than has often been assumed. Research support for a positive relationship between adjustment and performance is somewhat equivocal. Some studies have found performance negatively related to expatriates’ perceptions of the intensity of their adjustment to the new culture. Several different effects of this relationship have been found, depending on the facet of adjustment and the measure of performance used.

• To assess expatriate success, very many factors have an important influence on outcomes of an overseas assignment. These factors can be categorized as individual, organizational, and environmental variables.

• Research found that repatriation adjustment was facilitated by such factors as the amount of clarity and discretion the expatriate had in the new role but negatively affected by the time spent overseas, social status, and housing conditions. These factors can also have the opposite effect; those that facilitate expatriate adjustment can in turn inhibit repatriation.

What are challenges of managing across culture in the future? - Chapter 11

• Globalization is characterized by growing worldwide connections between organizations and their various constituencies, by rapid and discontinuous change, by growing numbers and diversity of actors involved in global activities, and by greater managerial complexity. There are four trends important for setting the stage for management in the future, namely the uneven development in the world, the increased influence of economies in transition, the continued influence of information and communication technology, and the growing pressure on the natural environment.

• The four trends that are important in the change of the future environment for international managers, have effects on organizations as well as individuals. Three categories of adjustment to our thinking about cross-cultural management are understanding the context of managers in MNOs, the future of the organization of work, and the development of global managers.

• Future managers should be able to deal with the more complex organization context that globalization brings to their jobs. They need specific competencies that allow them to compete in a cross-cultural and competitive context. Three issues with regard to the development of global managers are the changing nature of international management careers, the development of skills and abilities related to effective intercultural interactions, and the role of multicultural individuals.