In a world which companies are increasingly global, understanding cultures has be-

come a necessity for sustainable development. Very often companies behave in international business in the same way as they do in their original culture. Nevertheless, members of different societies have different priorities and values when they make decisions. Such differences can be observed in the approach of nature itself, in the approach of time and in the approach to success. Culture can never been ignored, even when its influence is indirect. Therefore, international managers need to understand not only their own culture but also international culture. This seminar paper shall be a guideline for managers, starting in international business. It gives some important definitions and it explains why there are “different behaviours in different societies”. Moreover, it states some advices, to help increasing efficiency in doing global business.

3  Karl Bickel Cross-Cultural Management  

Contents

1.  Definitions  4

1.1.  Culture  4

1.1.1.  Culture and the Group  5

1.1.2.  Predictable Reactions  5

1.1.3.  Culture is learned  6

1.1.4.  Values  6

1.1.5.  Other Aspects of the Culture  6

1.2.  International Business  7

1.2.1.  Globalization  7

1.2.1.  Business Environment in Global Business  8

2.  How to increase efficiency in Transnational Business  9

2.1.  Generalizations and Stereotypes  9

2.1.1.  Advice Number 1: Stereotypes  9

2.2.  Language  10

2.2.1.  Advice Number 2 Improve your Language-Skills  10

2.3.  Cultural Competence  11

2.3.1.  Advice Number 3 Open Attitude  11

2.3.2.  Advice Number 4 Self-Awareness  11

2.3.3.  Advice Number 5 Other Awareness  12

2.3.4.  Advice Number 6 Cultural Knowledge  12

2.3.5.  Advice Number 7 Cross-Cultural Skills  12

2.3.5.1.  Needs Analysis (issues to be trained)  13

3.  Cross Cultural Training  14

3.1.  Advice Number 8 Cross-Cultural Training  14

4.  Varying Customs  15

5.  Last Advice  16

6.  Bibliography  17

  Fachhochschule Vorarlberg IUF  03

1. Definitions

1.1. Culture

There are some hundreds of definitions of culture for sure. One of the perhaps bestknown definitions is from Hofstede (1984):

“Culture is the collective programming of the mind which distinguishes the members of one human group from another culture, in this sense, includes systems of values; and values are among the building blocks of cultures.”

Mead writes in his book “International Management” that above mentioned definition implies that

a culture is particular to one group and not others;

it influences the behaviour of group members in uniform and predictable ways; it is learned, and is not innate. It is passed down from one generation to the next;

culture includes systems of values (Mead 1994, p. 4)

Each country has its own traditions, norms and taboos. Culture could be seen as the “earned distinctive way of life of a society” (Kotler, Armstrong, Saunders, Wong 1988) However, we have to learn that there are barriers between different cultures.

The challenge is to build synergy between what sets us apart and leverage differences for competitive advantage (Walker, Walker, Schmitz 2003, p. 34)

In a multinational company, the organization has to:

Replicate successful approaches to business used by the domestic companies in the countries where it operates.

Rely on its subsidiaries to understand the local, national and international cultures Develop cross-cultural competence at the headquarters to conduct business effectively with the subsidiaries.

(Walker, Walker, Schmitz 2003, p. 18)

1.1.1. Culture and the Group

Culture is particular to one social group and not others. This means that different social groups have different cultures and may respond different to similar situations (Mead 1994, p. 4). Let me give some examples:

When British executives exchange business cards, each usually gives the

other’s card a cursory glance and stuffs it in a pocket for later reference. In Japan however, executives dutifully study each other’s card during a greeting, carefully noting company affiliation and rank. They hand their card to the most important person first. In the United Kingdom and the United States, business meals are common. In

Germany, these are strictly social. Foreigners are rarely invited to dinner and such an invitation suggests a very advanced association.

(Kotler, Armstrong, Saunders, Wong 1988)

1.1.2. Predictable Reactions

If you understand the other culture, you can reasonably predict the behaviour of its members in routine situations. That means, if you know culture X you are able to predict how

the culture X workforce will respond to new incentive schemes; a culture X negotiator will respond to threats and to concessions; culture X management will respond to expatriate management

Nevertheless, do not forget, that your understanding is never entire. The accuracy of your predictions can never be guaranteed (Mead 1994, p. 8).