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2CultureandMultinationalManagementLearningObjectives(1of2)Definecultureandunderstandthebasiccomponentsofculture.Identifyinstancesofculturalstereotypingandethnocentrism.Understandhowvariouslevelsofcultureinfluencemultinationaloperations.LearningObjectives(2of2)ApplytheHofstede,GLOBE,and7dmodelstodiagnoseandunderstandtheimpactofculturaldifferencesonmanagementprocesses.Appreciatethecomplexdifferencesamongculturesandusethesedifferencestobuildbetterorganizations.Recognizethecomplexityofunderstandingnewculturesandthedangersofstereotypingandculturalparadoxes.WhatisCulture?(1of2)Pervasiveandsharedbeliefs,norms,values,andsymbolsthatguidetheeverydaylifeofagroup.Culturalnorms:bothprescribeandproscribebehaviorsWhatwecanandcannotdo.Culturalvalues:whatisgood,whatisbeautiful,whatisholy,andwhatarelegitimategoalsforlife.WhatisCulture?(2of2)Culturalbeliefs:representourunderstandingsaboutwhatistrue.Culturalsymbols,stories,andrituals:communicatethenorms,values,andbeliefsofasocietyoragrouptoitsmembers.Cultureispervasiveinsociety:affectsallaspectsoflife.Cultureisshared:similarityinvalues,beliefs,norms.ThreeLevelsofCulture(1of2)Nationalculture:thedominantculturewithinthepoliticalboundariesofthenation-state.Buttheremaybesubcultureswithinthenationalculture.Businessculture:norms,values,andbeliefsthatpertaintoallaspectsofdoingbusinessinaculture.Tellspeoplethecorrect,acceptablewaystoconductbusinessinasociety.ThreeLevelsofCulture(2of2)3.OccupationalandorganizationalcultureOccupationalculture:thenorms,values,beliefs,andexpectedwaysofbehavingforpeopleinthesameoccupationalgroup,regardlessofemployer.Organizationalculture:thesetofimportantunderstandings(oftenunstated)thatmembersofanorganizationshare.Exhibit2.1:

ThreeLevelsofCultureCulturalDifferencesand

BasicValuesThreediagnosticmodelstoaidthemultinationalmanager:HofstedemodelofnationalcultureGlobalLeadershipandOrganizationalBehaviorEffectiveness(GLOBE)project7dculturemodelHofstede’sModelof

NationalCultureFivedimensionsofbasicculturalvalues:PowerdistanceUncertaintyavoidanceIndividualismMasculinityLong-termorientationHofstede’sModelAppliedtoOrganizationsandManagement

(1of2)FivemanagementpracticesconsideredinthediscussionofHofstede’smodelinclude:1. HumanresourcesmanagementManagementselectionTrainingEvaluationandpromotionRemunerationHofstede’sModelAppliedtoOrganizationsandManagement

(2of2)2.Leadershipstyleshowleadersbehave3.Motivationalassumptionsbeliefsrehowpeoplerespondtowork4.Decisionmakingandorganizationaldesignhowmanagersmakedecisionsandorganize5.StrategyeffectsofcultureonselectingstrategiesPowerDistance(1of2)Powerdistanceconcernshowculturesdealwithinequalityandfocuseson:Normsthattellsuperiors(e.g.,bosses)howmuchtheycandeterminethebehavioroftheirsubordinatesThebeliefthatsuperiorsandsubordinatesarefundamentallydifferentkindsofpeoplePowerDistance(2of2)Highpowerdistancecountrieshavenorms,values,andbeliefssuchas:Inequalityisfundamentallygood.Everyonehasaplace:somearehigh,somearelow.Mostpeopleshouldbedependentonaleader.Thepowerfulareentitledtoprivileges.Thepowerfulshouldnothidetheirpower.Exhibit2.2:

ManagerialImplications:

PowerDistanceUncertaintyAvoidanceUncertaintyAvoidance:Norms,values,andbeliefsregardingtoleranceforambiguity:Conflictshouldbeavoided.Deviantpeopleandideasshouldnotbetolerated.Lawsareveryimportantandshouldbefollowed.Expertsandauthoritiesareusuallycorrect.Consensusisimportant.Exhibit2.3:

ManagerialImplications:

UncertaintyAvoidanceIndividualismIndividualism:Focusisontherelationshipbetweentheindividualandthegroup.Countrieshighonindividualismhavenorms,values,andbeliefssuchas:Peopleareresponsibleforthemselves.Individualachievementisideal.Peopleneednotbeemotionallydependentonorganizationsorgroups.CollectivismCollectivism:Collectivistcountrieshavenorms,values,andbeliefssuchas:One’sidentityisbasedongroupmembership.Groupdecisionmakingisbest.Groupsprotectindividualsinexchangefortheirloyaltytothegroup.Exhibit2.4:

ManagerialImplications:

Individualism/CollectivismMasculinityMasculinity:Tendencyofaculturetosupporttraditionalmasculineorientation.Highmasculinitycountrieshavebeliefssuchas:Genderrolesshouldbeclearlydistinguished.Menareassertiveanddominant.Machismoorexaggeratedmalenessinmenisgood.People–especiallymen-shouldbedecisive.Worktakespriorityoverotherduties,suchasfamily.Advancement,success,andmoneyareimportant.Exhibit2.5:

ManagerialImplications:

MasculinityLong-Term

(Confucian)Orientation(1of2)Long-TermOrientation:Orientationtowardstimethatvaluespatience.Managersareselectedbasedonthefitoftheirpersonalandeducationalcharacteristics.Aprospectiveemployee’sparticularskillshavelessimportanceinthehiringdecision.Trainingandsocializationforalong-termcommitmenttotheorganizationcompensateforanyinitialweaknessesinwork-relatedskills.Long-Term

(Confucian)Orientation(2of2)Easternculturesrankhighestonlong-termorientation.Valuesynthesisinorganizationaldecisionsratherthansearchforcorrectanswer.Designedtomanageinternalsocialrelationships.Investmentinlong-termemploymentskills.Focusonlong-termindividualandcompanygoals.Short-termOrientationShort-TermOrientation:focusisonimmediatelyusableskillsWesterncultures,whichtendtohaveshort-termorientations,valuelogicalanalysisintheirapproachtoorganizationaldecisions.Designedandmanagedpurposefullytorespondtoimmediatepressuresfromtheenvironment.Wantimmediatefinancialreturns.Exhibit2.6:

ManagerialImplications

Long-termOrientationExhibit2.7:

PercentileRanksfor

Hofstede’sCulturalDimensionsGLOBENationalCultureFrameworkGLOBE(GlobalLeadershipandOrganizationalBehaviorStudies)involves170researcherswhocollecteddatafrom17,000managersin62countries7of9dimensionsofGLOBEaresimilartoHofstedeGLOBE’s2Uniquedimensions:PerformanceorientationHumaneorientationPerformanceOrientationPerformanceOrientationreferstothedegreetowhichthesocietyencouragessocietalmemberstoinnovate,toimprovetheirperformance,andtostriveforexcellence.E.g.,theUnitedStatesandSingaporehavehighscoreswhileRussiaandGreecehavelowscoresonthedimension.HumaneOrientationHumaneOrientationisanindicationoftheextenttowhichindividualsareexpectedtobefair,altruistic,caring,andgenerous.Needforbelongingnessandaffiliationisemphasizedmorethanmaterialpossessions,self-fulfillment,andpleasure.Lesshumane-orientedsocietiesaremorelikelytovalueself-interestandself-gratification.MalaysiaandEgypthavehighhumaneorientationscores,whileFranceandGermanyhavelowscores.Exhibit2.8:

ManagerialImplications:

PerformanceOrientationExhibit2.9:

ManagerialImplications:

HumaneOrientationExhibit2.10:

GLOBEModelofCulture7dCulturalDimensionsModel

(1of3)Buildsontraditionalanthropologicalapproachestounderstandingculture.Cultureexistsbecausepeopleneedtosolvebasicproblemsofsurvival.Challengesinclude:HowpeoplerelatetoothersHowpeoplerelatetotimeHowpeoplerelatetotheirenvironment7dCulturalDimensionsModel

(2of3)5ofthe7dimensionsofthismodeldealwithrelationshipsamongpeople:Universalismvs.ParticularismCollectivismvs.IndividualismNeutralvs.AffectiveDiffusevs.SpecificAchievementvs.Ascription7dCulturalDimensionsModel

(3of3)The2remainingdimensionsdealwithhowaculturemanagestimeandhowitdealswithnature:Time:Past,Present,Future,orMixtureNature:Controlofvs.AccommodationwithNatureExhibit2.11:

The7dModelofCultureUniversalismvs.ParticularismTheseconceptspertaintohowpeopletreateachother:Universalism:

Basedonabstractprinciplessuchasrulesoflaw,religion,orculturalprinciples.Particularism:

Rulesareonlyaroughguide.Eachjudgmentrepresentsauniquesituation,whichmusttakeintoaccountwhothepersonis,andhisrelationshiptotheonemakingthejudgment.Exhibit2.12:

ManagerialImplications:Universalism/ParticularismIndividualismvs.CollectivismSimilardistinctionstoHofstede’sviewCollectivistsocieties:Focusonrelationships.“Deals”areflexible,basedonsituationandperson.Contractsareeasytomodify.Individualistsocieties:Focusonrules.“Deals”areobligations.Contractsaredifficulttobreak.Exhibit2.13:

ManagerialImplications:

Individualism/CollectivismNeutralvs.AffectiveConcernstheacceptabilityofexpressingemotions.Neutral:

Interactionsshouldbeobjectiveanddetached.Focusismoreontasksratherthanemotionalnatureofinteraction.Affective:Emotionsareappropriateinalmostallsituations.Preferredtofindimmediateoutletforemotions.Exhibit2.14:

ManagerialImplications:

Neutralvs.AffectiveSpecificvs.DiffuseAddressestheextenttowhichanindividual’slifeisinvolvedinworkrelationshipsSpecific:BusinessissegregatedfromotherpartsoflifeContractsoftenprescribeanddelineaterelationshipsDiffuse:BusinessrelationshipsencompassingandinclusivePrefertoinvolvemultiplelifeareassimultaneously.Exhibit2.15:

ManagerialImplications:

Specificvs.DiffuseAchievementvs.AscriptionAddressesthemannerinwhichsocietyaccordsstatusAchievement:PeopleearnstatusbasedonperformanceandaccomplishmentsAscription:CharacteristicsorassociationsdefinestatusE.g.,statusbasedonschoolsoruniversitiesExhibit2.16:

ManagerialImplications:

Achievementvs.AscriptionTimeOrientationTimeHorizon:Howculturesdealwiththepast,presentandfutureFuture-orientedsocieties,suchastheU.S.,considerorganizationalchangeasnecessaryandbeneficial. Believeastaticorganizationisadyingorganization.Past-orientedsocietiesassumethatlifeispredeterminedbasedontraditionsorwillofGod. Reverestabilityandaresuspiciousofchange.Exhibit2.17:

ManagerialImplications:

TimeHorizonInternalvs.ExternalControlConcernedwithbeliefsregardingcontrolofone’sfateBestreflect

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