Unit 1: Introduction to cross-cultural management

Culture is the collective programming of the mind that distinguishes the members of one group or category of people from another (Geert Hofstede). It is learnt, shared, transmitted across generations, symbolic and adaptive.

Elements of culture

• Language — verbal and non-verbal (gestures, eye contact, personal space).
• Religion and beliefs — holidays, dietary rules, work days.
• Values and attitudes — towards time, work, authority, change.
• Customs and manners — greeting, gift-giving, dining.
• Education and social organisation — family, caste, class.
• Aesthetics — colours, design, music.

Cultural dimensions (overview)

• Hall's context: high-context cultures (India, Japan, Arab countries) rely on implicit messages and relationships; low-context cultures (USA, Germany) rely on explicit words and contracts.
• Hall's time orientation: monochronic (one thing at a time, punctual — Germany) vs polychronic (many things at once, flexible — India, Latin America).
• Kluckhohn and Strodtbeck: relation to nature, time orientation, human nature, activity orientation, relationships among people.
• Trompenaars' seven dimensions: universalism vs particularism, individualism vs communitarianism, specific vs diffuse, neutral vs emotional, achievement vs ascription, sequential vs synchronic time, internal vs external control.

Significance

• Avoids costly misunderstandings and failed deals.
• Helps manage diverse workforces and global teams.
• Improves expatriate success and reduces premature returns.
• Builds brand acceptance in foreign markets.
• Supports innovation through diverse perspectives.

• Market entry: cultural distance influences the choice of country and mode (exports, joint venture, wholly owned subsidiary). Greater distance often favours a local partner.
• Product and marketing strategy: standardisation vs adaptation (glocalisation).
• Organisation design: centralised vs decentralised control of subsidiaries.
• Mergers and acquisitions: cultural due diligence; many cross-border mergers fail due to culture clash (Daimler–Chrysler).
• Decision style: individualistic cultures decide quickly through individuals; collectivistic cultures decide slowly through consensus (Japanese ringi system).
• Risk-taking: high uncertainty-avoidance cultures prefer detailed planning and rules.

Organisational culture is the shared values, beliefs and practices within an organisation. National culture shapes it through employees' upbringing and expectations.

• Power distance affects hierarchy and how freely employees speak up.
• Individualism affects whether rewards are individual or team-based.
• Uncertainty avoidance affects rules, procedures and tolerance for ambiguity.
• Laurent's study (1983): managers from the same multinational kept their national differences on views of hierarchy — national culture often outweighs corporate culture.
• Convergence vs divergence debate: convergence says globalisation and technology make management practices similar; divergence says national cultures persist; crossvergence says a new hybrid emerges.

International HRM (IHRM) is the HR activities of an organisation operating across national borders, managing three types of employees: parent-country nationals (PCNs), host-country nationals (HCNs) and third-country nationals (TCNs) (Morgan's model: HR activities × country types × employee types).

Factors increasing IHRM complexity (Dowling)

• More HR activities (international taxation, relocation, administrative services).
• Need for a broader perspective.
• More involvement in employees' personal lives.
• Changes in emphasis as the workforce mix varies.
• Higher risk exposure (expatriate failure, terrorism, kidnapping).
• Broader external influences (government, economy, culture).