Chapter 8
Intercultural Management
1. Cultural Factors in International Business
Management
1.1 The role of culture in international business
management
 Case study : At & T and MCI vs. Telefonos de Mexico
SA
 Cultural sensitivity/cultural empathy—an awareness
and honest caring about other individual's culture.
 Cultural awareness enables managers to develop
appropriate policies and determine how to plan,
organize, lead, and control in a specific international
setting.
1.2 Types of organizational culture
 Academy culture—highly skilled, stable environment,
e.g. universities, hospitals, large corporations
 Baseball culture—highly prized skills, fast-paced &
high-risk organizations,
e.g. investment banking, advertising
 Club culture—fit into the group, value seniority,
e.g. the military, law firms
 Fortress culture—massive reorganization, large
uncertainty with opportunities,
e.g. banks, large car companies
1.3 Joint venture culture
 Culture fulfills the following functions in joint
ventures:
1)Integration—a general consensus
2)Coordination—shared values and norms
3)Motivation—
4)Identification—we-feeing
1.4 The influence of national culture
 National culture is an important influence on
the development of joint ventures.
 National cultural differences are not
paramount factor but rather an extra limiting
variable in joint venture success.
 The different levels of culture— individual,
organizational, national —don’t exist in
isolation.
2. Corporate Culture
Definition
It is the way things work in a corporation. In general
terms, it is the look, the feel, the atmosphere of an
organization and people within it. It is based on one’s
perceptions and assumptions of how things get done
within that particular organization.
2.1 Understanding corporate cultures
 The culture of an organization is typically created
unconsciously, based on the values of the top
management or the founders of the organization.
(leader-centric)
 Culture’s inputs and outputs
Inputs—feedback from society, professions, laws,
stories, heroes, values on competition or service, etc.
based on our values, assumptions and norms
Outputs—organizational behaviors, technologies,
strategies, image, products, services, appearance, etc.
2.2 The contents of corporate culture
 Corporate culture operates at both conscious and
unconscious levels
Conscious/visible—artifacts ( cf. P159 last para.)
▼ Unconscious/invisible—deeply tooted beliefs,
value and norms shared by the members of the
organization
▼
3. Development of Teamwork
Teamwork means cooperation among employees
and employers. Team members must be flexible,
adaptable, and able to work together to further their
companies’ goals to succeed and stay competitive.
3.1 Selection of the team
1) the composition of the team needs to be appropriate to
the size of the team and the team’s objective.
2) the location of team members is another key
consideration.
3) functional expertise is not sufficient for the success of
a team. It is also complemented by excellent
interpersonal, communication, and leadership skills.
4)setting a global mindset is required to ensure
effectiveness.
5) an individual’s attitude towards continuous learning
should be a major criterion for selecting.
3.2 Establishment of credibility and trust
 Tasks of the team leader:
foster relationship and team consciousness, provide
direction, and ensure that the vision, mission, and goals
of the team are understood and shared.
 How soon trust is established:
Highly industrialized countries—trust is established
quickly
Other cultures—slowly, initial skepticism and distrust
 The effects of status, achievements and
performance on credibility building:
China, Japan, Spain, France, Germany—status helps
building credibility
US, UK, Sweden—credibility established by
performance
 Relationship and distance
Formal cultures—maintaining correct distance
Informal cultures—showing personal familiarity
(Study the case)
3.3 Conflict of the team
 The diverse perspectives, personalities, styles,
weaknesses, and strengths of the members will
always induce conflicts. In the two areas
conflicts often arise:
1) attitudes toward work and personal time
2) sharing and exchanging information
(Study the case and figure out what leads to
the conflicts.)
 3.4 Formation of team culture
 1) The team should have moved from a low-context to a
high-context communication style through personal ,
face-to-face communication with each other. A soiled
trust and credibility should have existed.
 2) The team should have established its identity, a high
degree of cohesion, and a sense of collectivism.
 3) The team should be aware of its tendency to exclude
“outsiders.”
4. Strategies for International Marketers
 Definition of Intercultural Marketing
The strategic process of marketing among
consumers whose culture differs from that of
the marketer's own culture at least in one of the
fundamental cultural aspects, such as language,
religion, social norms and values, education,
lifestyle.
 Relationship between culture and marketing
1) culture defines acceptable purchasing and
product-use behaviors for both consumers and
business.
2) each element of culture influences each
component of the marketing mix.
3) marketing also influences culture, esp. by
contributing to cultural borrowing and change.
4.1 Intercultural acculturation in
international marketing
 Intercultural acculturation is a dual process
— Marketers must thoroughly orient themselves to the
values, beliefs, and customs of the new society to
appropriately position and market their products.
—To gain acceptance of a culturally new product in a
foreign society, they must develop strategies that
encourage members of that society to modify or even
break with their own traditions.
4.2 Alternative multinational strategies:
global vs. local
 1) local strategy: use national borders as a segmentation
strategy
--modifying the product, the promotion mix, or any
other aspect of marketing strategy to appeal to local
cultures;
--examples: McDonald’s Levi’s, Nescafe
 2) global strategy: use shared needs and values as
segmentation strategy
--marketing a product in essentially the same way
everywhere in the world
--examples: Patek Philippe, Platex, GM, Gillette, Estee
Lauder, Unilever, Parker pen, Fiat
 3) mixed strategy: augment global strategies with local
executions