ASSIGNMENT OF CROSS

CULTURAL MANAGEMENT

SUBMITTED TO:Dr.(cdr) SATISH SETH SIR SUBMITTED BY:VENKATESH KUMAR PGDM 6-A ROLL NO-60

Q1. What is meant by the term culture? In what way can measuring attitudes about the following help to differentiate between cultures: centralized or decentralized decision making, safety or risk, individual or group rewards, high or low organizational loyalty, cooperation or competition? Use these attitudes to compare the United States, Germany, and Japan. Based on your comparisons, what conclusions can you draw regarding the impact of culture on behavior?

Ans:- culture is defined as the shared patterns of behaviors and interactions, cognitive constructs, and affective understanding that are learned through a process of socialization. Culture is the acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior (Hodges, 2005). Centralized versus decentralized cultures are different in which the top managers or leaders make all the important decisions in a centralized culture and in a decentralized culture, the decisions are made throughout the levels. Safety and risk in some cultures are frowned upon because the results are unpredictable yet other cultures are riskier and encourage risk taking on all levels. The same can be said about individual versus group rewards. Some societies or organizations reward individually and other only based on the group effort. High or low organizational loyalty in cultures are different in which the high loyalty in an organization is where the person identifies himself as an employee of the company and the low organizational loyalty will identify with their profession instead of the organization. Cooperation and competition varies with organizations where it depends on how the organization does. Some encourage competition yet others discourage it. The US, Germany and Japan all have different organizations in which the centralized and decentralized decisions are made. More companies

in the US promote decentralized versus in Japan, a centralized decision making group is used. In Germany and the US, risks are taken frequently and encouraged at various levels of the organization yet Japan has a much more formal risk taking strategy. Japan has much more group rewards versus the counterparts in the US and Germany in which individual bonuses are common. Germany and parts of the US have organizations which frequently spell out the details of a project or plan but in Japan, it is considered rude and not done. In Japan and most of Germany, the loyalty of the employee is high and they frequently identify themselves as a member of an organization but in the US, titles are more frequent and people identify themselves based on their occupation.

Q2. What is meant by the term Value? Are cultural values the same worldwide, or are there marked differences? Are these values changing over time, or are they fairly constant? How does your answer relate to the role of values in a culture?
ANS:- Values are basic convictions that people have regarding

what is right and what is wrong, good and bad, important and unimportant. Research shows that there are both differences and similarities between work values and managerial values of different cultural groups. Cultural differences worldwide are very different. For example, in the US, we promote individuality, freedom, competition, directness, and openness yet in Japan, the opposite can be said. They promote belonging, group harmony, group consensus, indirectness, and go-betweens. These values are individual to each country and culture and it is what defines them as a culture.

Q3. What are the four dimensions of culture studied by Geert Hofstede? Identify and describe each. What is the cultural profile of the United States? Of Asian countries? Of Latin American Countries ?Based on your comparisons of these profiles, what conclusions can you draw

regarding cultural challenges facing individuals in one group when they interact with individuals in one of the other groups?

ANS:- Geert Hofstede - Dutch researcher Geert Hofstede found that there is four dimensions of culture that help explain how and why people from various cultures behave as they do. These dimensions are; (1) power distance; (2) uncertainty avoidance, (3) individualism, and (4) masculinity. Power Distance - The extent to which less powerful members of institutions and organizations accept that power is distributed unequally. 3) Uncertainty Avoidance - The extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these. 4) Individualism vs. Collectivism - Individualism is the tendency of people to look after themselves and their immediate family only. Collectivism is the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty. 5) Masculinity vs. Femininity - A culture in which the dominant values in society are success, money, and things scores high on masculinity. A culture in which the dominant values in society are caring for others and quality of life scores high on femininity. 6) Integrating of Dimensions - A description of the four dimensions of culture is useful in helping to explain the differences between various countries, and Hofstede's research has extended beyond this focus and showed how countries can be described in terms of pairs of dimensions.

African cultures involve many aspects of music, dance, art, and storytelling. With more than 1,000 languages spoken and many different religions and tribes, Africa is rich in cultural diversity. African American homes also have remarkable diversity, with notable differences across regions of the U.S. Families often include immediate and extended relatives, with a collectivistic worldview and sense of shard community. For this and other cultures that value a collective lifestyle, tactile learning and cooperative grouping instructional activities may be better as they parallel the context for learning found in their cultures. American Asians make up about 55 of the United states' population and are one of the fastest growing groups in North America. Asian Americans are highly diverse, with dozens of ethnic backgrounds and languages, including individuals from Chinese, Japanses, Korean, Indonesian, Laotion, Philippine, Thai, and Vietnamese ancestry. Asian Americans commonly face challenges in establishing cultural identity. This is expecially true of second-generation immigrants who struggle with the balance of traditional cultural ideas and the pressure of assimilating into the very different American cultural society. When working with individuals of Asian ancestry it is important to understand three of the main Eastern phiilosophies and their impact upon Asian culture: Buddhism, Confucianism, and Taoism. Within these philosophies families are highly structure, hierarchical, and paternally oriented. Family systems are also taught not to bring shame to one's family and that the welfare and integrity of the family are very important. The philosophies also teach principles of peace, balance, and harmony. This is one reason why some Asians may tend to avoid confrontation or appear passive, indifferent, or indecisive. Using indirect methods of communication may be appropriate for some Asians with strong ties to their ancestral culture.

Q4. What are the characteristics of each of the following pairs of cultural characteristics derived from Trompenaars research: universalism vs. particularism, neutral vs.

emotional, specific vs. diffuse, achievement vs. ascription? Compare and contrast each pair.
ANS:1) Universalism vs. Particularism a) Universalism - The belief that ideas and practices can be applied everywhere in the world without modification. b) Particularism - The belief that circumstances dictate how ideas and practices should be applied and something cannot be done the same everywhere. 2) Individualism vs. Communitarianism a) Individualism - Refers to people regarding themselves as individuals. b) Communitarianism - Refers to people regarding themselves as part of a group 3) Neutral vs. Emotional a) Neutral Culture - A culture in which emotions are held in check. b) Emotional Culture - A culture in which emotions are expressed openly and naturally. 4) Specific vs. Diffuse a) Specific Culture - A 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. b) Diffuse Culture - A 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. 5) Achievement vs. Ascription a) Achievement Culture - A culture in which people are accorded status based on how well they perform their functions. b) Ascription Culture - A culture in which status is attributed based on who or what a person is.

ASSIGNMENT -2
Q1. What do you understand by the EPRG model of CrossCultural Management as adopted by MNCs?
ANS:- Dr. Howard V. Perlmutter is a world authority on globalisation and pioneer on the internationalisation of firms, cities and other institutions. Trained as a mechanical engineer and as a social psychologist, Perlmutter joined Wharton's faculty in 1969. He specialised in the evolution of multinational corporations (MNCs) making predictions to how their viability and legitimacy would change.

Perlmutter is the first academic who identified distinctive managerial orientations of international companies. "The more one penetrates into the living reality of an international firm, the more one finds it necessary to give serious weight to the way executives think about doing business around the world". These organisational world views are shaped by a number or factors such as the circumstances during which the company was formed, the CEO's leadership style, its administrative processes, the organisational myths and traditions. Perlmutter stated that these cultural orientations determine the way strategic decisions are made and how the relationship between headquarters and its subsidiaries is shaped. In 1969 he bundled his insights by publishing the EPG model.

Perlmutter's EPG model states that senior management at an international organisation holds one of three primary orientations when

building and expanding its multinational capabilities:

1. ETHOCENTRIC (home country orientation) The general attitude of a firm's senior management team is that nationals from the organisation's home country are more capable to drive international activities forward than non-native employees working at its headquarters or subsidiaries. The practices and policies of headquarters and of the operating company in the home country become the default standard to which all subsidiaries need to comply. This mind set has as advantages that it overcomes a potential shortage of qualified managers in host nations by expatriating managers from the home country, creates a unified corporate culture and helps transfer core competences more easily by deploying nationals throughout the organisation. The main disadvantages are that an ethnocentric mindset can lead to cultural short-sightedness and to not promoting the best and brightest in a firm.

2. POLYCENTRIC (host country orientation) This world view has as dominant assumption that host country cultures are different making a centralised, one-size-fits-all approach unfeasible. Local people know what is best for their operation and should b given maximum freedom to run their affairs as they see fit. This view alleviates the chance of cultural myopia and is often less expensive to implement than ethnocentricity because it needs less expatriate managers to be send out and centralised policies to be maintained. The drawbacks of this attitude are that it can limit career mobility for both local and foreign nationals, isolate headquarters from foreign subsidiaries and reduces opportunities to achieve synergy.

3. GEOCENTRIC (world orientation) This orientation does not equate superiority with nationality. Within legal and political limits, executives try to seek the best men, regardless of nationality, to solve the company's problems wherever in the world they occur. This attitude uses human resources efficiently and furthermore helps to build a strong culture and informal management networks. Drawbacks are that national immigration policies may put limits to its implementation and it might be a bit expensive compared to polycentrism. It attempts to balance both global integration and local responsiveness.

Perlmutter's observation was that most MNCs start out with an ethnocentric view, slowly evolve to polycentrism and finally adopt geocentrism as the organisation familiarises itself more and more with conducting business on a global playing field.

In 1979 Perlmutter and his collague David A. Heenan added a fourth orientation to create the EPRG model: the R stands for a regiocentric approach falling in between a polycentric and geocentric orientation. Regiocentric or regional orientation is defined as a functional rationalization on a more-than-one country basis. Subsidiaries get grouped into larger regional entities. Regions are consistent with some natural boundaries, such as the Europe, America and Asia-Pacific. Both polycentric and regiocentric approaches allow for more local responsiveness, with less corporate integration.

Q2. Elucidate the reasons for success and failure of joint ventures worldwide. Give five suitable examples in each case?
ANS:- Joint ventures are the most common means of getting goods into foreign countries. In a joint venture, a multinational teams up with a company in a host country to share risks and complementary capabilities. Although contractual agreements are similar to joint ventures, the latter differ in the amount of input and control the companies share. The company in the host country may provide important access to local channels of distribution, government contracts, and supply sources. Or, it may bring technological or marketing skills to the table, or serve as a source of capital. Often times, a joint venture allows the multinational to bypass trade restrictions and overcome nationalistic barriers to success in the foreign country. The primary risk inherent to joint ventures, in additional to normal market risk, is that the interests of both parties might conflict. This usually occurs because the local company is viewing the operation within a local context, while the multinational is looking at the venture as just one element of an overall global program. Discrepancies often arise over how much profit to plow back into the operation, how to handle transfer pricing issues (how much affiliated companies should charge each other for various goods and services), and product and market decisions. In a worst-case scenario, the partnership deteriorates to the point where one or both partners fail to benefit. For this reason, most successful joint ventures have a definite leader that maintains more control, and assumes more risk, in the venture. Businesses of any size can use joint ventures to strengthen long-term relationships or to collaborate on short-term projects.

A joint venture can help your business grow faster, increase productivity and generate greater profits. A successful joint venture can offer:

access to new markets and distribution networks increased capacity sharing of risks and costs with a partner access to greater resources, including specialised staff, technology and finance

Joint ventures often enable growth without having to borrow funds or look for outside investors. You may be able to use your joint venture partner's customer database to market your product, or offer your partner's services and products to your existing customers. Joint venture partners also benefit from being able to join forces in purchasing, research and development. A joint venture can also be very flexible. For example, a joint venture can have a limited life span and only cover part of what you do, thus limiting the commitment for both parties and the business' exposure. Joint ventures are especially popular with businesses in the transport and travel industries that operate in different countries.

An example of a successful joint venture that later soured involved Xerox Corp. In an effort to broaden its global presence, Xerox entered into a 50-50 joint venture in the 1950s with Rank Organization of the United Kingdom. Xerox signed an agreement that essentially gave Rank-Xerox the exclusive rights to manufacture and sell Xerographic machines outside of North America. As time progressed, Xerox outgrew its markets in North America and wanted to sell its machines in other countries. Because it had signed away its valuable rights to conduct business overseas, it was forced to slowly buy back those rights at an estimated cost of $300 million over 20 years. Cingular (the cell phone provider) was a joint venture between SBC and BellSouth. (SBC then bought AT&T, rebranded itself as AT&T, then bought BellSouth, so Cingular is now AT&T Wireless).

Aera Energy is a joint venture between Exxon and Royal Dutch Shell. Morgan Stanley and Citigroup are currently forming a joint venture between their brokerage units Morgan Stanley and Smith Barney. successful its nokiasiemens and virgin and tata tele services and unsuccessful is philips and lucent technologies

Q3.

The

three

major

areas

critical

to

expatriate

preparations are cultural training, language instruction, and familiarity with everyday matters. Elucidate this statement.

ANS:- cultural training deals with the manifestations of culture in the workplace and has many applications. Its main purpose is to evaluate and constructively tackle the challenges cross cultural differences can bring to the workplace. A few examples of the courses we cover can illustrate the different applications of cross cultural awareness training: Cross Cultural Team Building Training will aim to raise team members' awareness of each other culturally in order to foster mutual trust, respect and understanding. The result of which will be clearer lines of communication. Cross Cultural Management Training aims to equip management staff with the knowledge and skills to effectively supervise a multicultural staff. Cross cultural awareness training results in a more convivial and understanding work environment.

Cross Cultural Negotiation Training assists negotiators involved with foreign clients or customers with whom they are discussing possible terms and conditions. Cultural Diversity Training offers HR staff support in helping them understand their responsibilities to ethnic minority staff and/or look at ways of nurturing harmonious inter-personal relationships at work. Culture Specific Training is generally aimed at individuals or teams that regularly visit a foreign country or who frequently interact with overseas clients or colleagues. Such training usually focuses on areas such as values, morals, ethics, business practices, etiquette, protocol or negotiation styles with reference to one country. This better equips participants with the key skills that will help in building successful business relationships. Language instruction emphasizes spoken vocabularies and pronunciation, covering grammar and written language only when required. From the first lesson, students learn by listening to and speaking in the foreign language, getting immediate feedback and guidance. The courses tolerate incorrect pronunciation and guide students extensively on how to improve it. Acting as comprehensive cultural tutors, the courses teach practical cultural knowledge, sensitivity and awareness including non-verbal gestures, etiquette, and norms of politeness that are critical for successful communication. Students play fun, immersive, interactive 3D video games that simulate real-life communication by role playing with animated "socially intelligent virtual humans" that recognize students' intent, speech, gestures and behavior. If students speak and behave correctly, the virtual humans become trustful and cooperative, and provide information that students need to advance. Otherwise, the virtual humans are uncooperative and prevent students from "winning" the game. For example, in one scene in the Iraq Arabic course students can speak perfect Arabic and still offend their virtual Iraqi host by not asking him to enter the house first or by later talking to his wife without observing Iraqi cultural protocols.

We promote extensive levels of engagement, motivation and practice by providing "free form" storylines with very wide ranges of game-play paths, interactive dialogs and action options. The storyline's drama, exploration and elements of surprise include opportunities to learn from getting into trouble and trying to gracefully get out of it. Not all virtual humans are the same; each behaves according to its individual personality, emotions and intent, consistent with the storyline and in response to student actions. For example. in another Iraqi Arabic scene, the student's disrespect towards two virtual Iraqis elicits a passive response from one and insults from the other, but students can fix the problem if they know how to react to the Iraqi's complaints. Numerous exercises, quizzes and tests continuously monitor progress and measure the students' level of proficiency, helping them stay motivated. Courses adjust themselves automatically to the students' rate of progress, letting them advance at their own pace.