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Management
, Ninth Edition
Robert Kreitner, Arizona State University
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| | Chapter Summaries
Chapter 4:
International Management and Cross-Cultural Competence
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The study of international management is more important than ever as the huge global economy continues to grow. Doing business internationally typically involves much more than importing and/or exporting goods. The six stages of the internationalization process are licensing, exporting, local warehousing and selling, local assembly and packaging, joint ventures, and direct foreign investments. There are three main guidelines for success in international joint ventures: (a) Be patient while building trust with a carefully selected partner; (b) learn as much and as fast as possible without giving away key secrets; and (c) establish clear ground rules for rights and responsibilities.
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The main distinction between global companies and transnational companies is the difference between reality and a futuristic vision. A global company does business simultaneously in many countries but pursues global strategies administered from a strong home-country headquarters. In contrast, a transnational company is envisioned as a decentralized global network of productive units with no distinct national identity. There is growing concern about the economic and political power of these stateless enterprises as they eclipse the power and scope of their host nations.
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Experts, noting that American managers generally are prepared only for domestic service, recommend that present and future managers begin to think globally and cross-culturally. According to Howard Perlmutter, management may have any of three general attitudes about international operations: an ethnocentric attitude (home-country-oriented), a polycentric attitude (host-country-oriented), or a geocentric attitude (world-oriented). Perlmutter claims that a geocentric attitude will lead to better product quality, improved use of resources, better local management, and more profit than the other attitudes.
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Communication in high-context cultures such as Japan is based more on nonverbal and situational messages than it is in low-context cultures such as the United States. People in individualistic me cultures emphasize the individuals rights and goals, whereas loyalty and duty to the well-being of social units such as family and organization are primary in collectivist we cultures. People in monochronic time cultures perceive time to be linear and divided into standard units. They believe time should be used efficiently. In contrast, people in cultures based on polychronic time consider time to be flexible and multidimensional. International managers need to be aware of cultural differences in interpersonal space, agreements, language, and religion.
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Comparative management is a new field of study concerned with how organizational behavior and management practices differ across cultures. A unique study by Geert Hofstede of 116,000 IBM employees in 40 nations classified each country by its prevailing attitude toward power distance, uncertainty avoidance, individualism-collectivism, and masculinity-femininity. In view of significant international differences on these cultural dimensions, Hofstede suggests that American management theory and practice be adapted to local cultures rather than imposed on them.
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Ouchis Theory Z describes a hybrid type of American company that exhibits a combination of typical American and Japanese characteristics. Theory Z firms rely heavily on Japanese-style consensus and participation during decision making. But Theory Z organizations prefer an American-style emphasis on individual responsibility. Cross-cultural studies of work goals and leadership styles uncovered a great deal of diversity. Thus international contingency approaches to motivation and leadership are recommended.
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Compared with European and Japanese companies, U.S. multinationals have a much higher expatriate failure rate. Family and personal adjustment problems to foreign cultures, not lack of technical expertise, are the leading causes of this failure. Systematic cross-cultural training is needed to help solve this costly problem, though use of local managerial talent is also a possible solution, depending on the situation.
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North American women fill a growing but still small share of foreign positions. The long-standing assumption that women will fail on foreign assignments because of foreigners prejudice has turned out to be false.Women from the United States and Canada have been successful on foreign assignments but face two major hurdles at home: self-disqualification and prejudicial managers. Culture, not gender, is the primary challenge for women on foreign assignments. The situation for African Americans parallels that of women.
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