Comparative & Cross-cultural
management for IBA - Lecture notes
Lecture 1
Elements of the course
● Comparative and cross-cultural management →
studies differences in management styles and
organizational approaches between countries
○ Explains differences from social characteristics
Contingency factors
● Contingency approach in organization theory:
characteristics of management & organization depend on
task environment & related contingency factors
● A contingency: a circumstance or condition that may or may not apply
○ Be aware of the danger of “cultural attribution”
● When looking for the influence of differences in institutional/cultural environment, always
control for differences (eg. Organization size;age / Industry; technology / etc)
● 2 strategies for dealing with contingency factors in empirical research:
○ Inclusion of control variables
○ Matching of samples
Strategy of “matched samples”
● Select narrow, but comparable subjects in the cultures to be compared
● Draw conclusions from this comparison regarding differences between cultures in
general
● Assumption: differences between the narrow samples are representative for the general
differences
What is globalization?
● A qualitative shift towards a global economic system that is no longer based on
autonomous national economies but on a consolidated global marketplace for
production, distribution and consumption
● Globalization process slowing down, or even reversing?
,Forces promotion (further) globalization
● Decrease of transportation costs
● Decrease of communication costs
● Integration international financial markets
● Mass media, social media
● International migration
Forces impeding (further) globalization
● Economic: lower company profits outside home market; decreasing economic gains of
trade liberalization
○ At the country level, globalization has 2 effects:
■ Wealth creation
■ Wealth redistribution
○ The redistributive effects get larger relative to the wealth creation as the level of
trade liberalization increases
○ What if the losers from free trade need compensation?
● Social: unbalanced distribution of benefits
○ Ordinary workers in the USA have not profited from globalization
● Cultural: search for cultural authenticity
○ The issue of ‘cultural appropriation’
● Political limits of democracy
○ The trilemma of globalization, sovereignty, and
democracy → pick 2, any two
4 scenarios of globalization
● Scenario 1: convergence
○ The anglo-american version of capitalism will be adapted worldwide
○ Contradicted by successes of eg Japan, Korea, China
● Scenario 2: specialization
○ Economies will specialize in where they have a comparative advantage
○ But, a large proportion of trade is intra-industry trade
● Scenario 3: incremental adaptation
○ Countries tend to evolve in the direction of the most efficient system & practices
○ However, cultures and institutions constrain countries & firms in this process
● Scenario 4: hybridization
○ Parts of the economy/society become part of the global system
○ Other parts resin largely unaffected (health care, education, personal services.
construction)
,Lecture 2
What is culture
● Difficult to define → encompasses many elements:
○ Ideas and values / patterns of behaviour / artifacts / symbols /etc.
● A synthetic definition: culture consists of patterns, explicit and implicit, of and for
behaviour acquired and transmitted by symbols, constitution the distinctive
achievements of human groups, including their embodiments in artifacts; the essential
core of culture consists of traditional (=historically derived and selected) ideas and
especially their attached values; culture systems may, on the one hand be considered as
products of action, on the other hand as conditioning elements of further action
● Another synthetic definition: culture is a property of a group. It is a group’s shared
collective meaning system through which the group’s collective values, attitudes, beliefs,
customs, and thoughts are understood. It is an emergent property of the member’s
social interaction and a determinant of how group members communicate… Culture may
be taken to a consensus about the meanings of symbols, verbal and nonverbal, held by
members of a community
The concept of “culture” (1)
● Maslow’s “hierarchy of needs” is an example of the cultural
relativity of values
● What are beliefs?--> propositions about objects/concepts/
relations between objects/concepts
○ EG: causality (working hard leads to success), confucianism (CH:
individuals have the potential to self-cultivate ), Feng shui (CH: the layout of
Intern the physical environment influences good and bad luck)
alize Ow
d Sit
n
uat
cultur beh
e atti ion
avio
tud Beh
ur
Value es avio
s ur
Perc of
Belief eptio oth
s ns Sit
ers
uat
Psyc Culture Interg
ion
holog is here roup
ical concept of “culture”persp
The (2)
persp ectiv
● Culture is formed in interactions with the social environment
ectiv e
e
, ● Around adolescence one’s values and beliefs are rather firmly set
● Behaviours of others that do not fit our values can be seen as “strange” or “bad”; this
may lead to unproductive behaviours in intercultural settings
● Being “culturally intelligent” allows one to understand that there are multiple ways of
seeing social reality
○ Move from naíve automatic interpretation to thoughtful, deliberate interpretation
of others’ behaviour
● Dual processing theory: humans process information in 2 distinct ways:
Implicit system Explicit system
● Not conscious ● Conscious
● Automatic ● Controllable
● Fast ● Relatively slow
● Parallel processing ● Sequential processing
● High capacity ● Limited capacity
● Effortless ● Effortful
“Cultural dummy” “Culturally intelligent individual”
Origins of culture: adaptation
● Cultures are responses to environmental conditions and have ‘survival value’
○ Cultures are systems of socially transmitted behaviour patterns that serve to
relate human communities to their ecological settings
○ Cultural change is a process of adaptation and natural selection
○ Culture change often begins with adaptation to changes in economic lives
○ Ideas tend to support survival-enhancing behaviours
Origins of culture: differentiation
● Human groups increase differences w other groups: mark in-group/out-group distinctions
● Homophily: the tendency of people with similar triads (incl. Physical, cultural, attitudinal
characteristics) to interact with one another more than with people with dissimilar traits
○ Value homophily: interacting with people with the same beliefs justifies opinions
○ Status homophily: we feel more comfortable in interacting with people with similar
cultural background
○ Induced homophily: interactions over time tend to make individuals more similar
● Social identity dynamics → individual identity (what distinguishes me from others) vs
social identity (what do I have in common with specific others)
○ Self-categorization and categorization of others
● Culture can be a salient characteristic to emphasize the bond with a specific
group/category and to differentiate oneself from other groups
● Culture in producing social identity can be linked to nationality, ethnicity, religion etc
● Social identity dynamics often lead to intergroup competition (tajfel’s minimal group experiments)
management for IBA - Lecture notes
Lecture 1
Elements of the course
● Comparative and cross-cultural management →
studies differences in management styles and
organizational approaches between countries
○ Explains differences from social characteristics
Contingency factors
● Contingency approach in organization theory:
characteristics of management & organization depend on
task environment & related contingency factors
● A contingency: a circumstance or condition that may or may not apply
○ Be aware of the danger of “cultural attribution”
● When looking for the influence of differences in institutional/cultural environment, always
control for differences (eg. Organization size;age / Industry; technology / etc)
● 2 strategies for dealing with contingency factors in empirical research:
○ Inclusion of control variables
○ Matching of samples
Strategy of “matched samples”
● Select narrow, but comparable subjects in the cultures to be compared
● Draw conclusions from this comparison regarding differences between cultures in
general
● Assumption: differences between the narrow samples are representative for the general
differences
What is globalization?
● A qualitative shift towards a global economic system that is no longer based on
autonomous national economies but on a consolidated global marketplace for
production, distribution and consumption
● Globalization process slowing down, or even reversing?
,Forces promotion (further) globalization
● Decrease of transportation costs
● Decrease of communication costs
● Integration international financial markets
● Mass media, social media
● International migration
Forces impeding (further) globalization
● Economic: lower company profits outside home market; decreasing economic gains of
trade liberalization
○ At the country level, globalization has 2 effects:
■ Wealth creation
■ Wealth redistribution
○ The redistributive effects get larger relative to the wealth creation as the level of
trade liberalization increases
○ What if the losers from free trade need compensation?
● Social: unbalanced distribution of benefits
○ Ordinary workers in the USA have not profited from globalization
● Cultural: search for cultural authenticity
○ The issue of ‘cultural appropriation’
● Political limits of democracy
○ The trilemma of globalization, sovereignty, and
democracy → pick 2, any two
4 scenarios of globalization
● Scenario 1: convergence
○ The anglo-american version of capitalism will be adapted worldwide
○ Contradicted by successes of eg Japan, Korea, China
● Scenario 2: specialization
○ Economies will specialize in where they have a comparative advantage
○ But, a large proportion of trade is intra-industry trade
● Scenario 3: incremental adaptation
○ Countries tend to evolve in the direction of the most efficient system & practices
○ However, cultures and institutions constrain countries & firms in this process
● Scenario 4: hybridization
○ Parts of the economy/society become part of the global system
○ Other parts resin largely unaffected (health care, education, personal services.
construction)
,Lecture 2
What is culture
● Difficult to define → encompasses many elements:
○ Ideas and values / patterns of behaviour / artifacts / symbols /etc.
● A synthetic definition: culture consists of patterns, explicit and implicit, of and for
behaviour acquired and transmitted by symbols, constitution the distinctive
achievements of human groups, including their embodiments in artifacts; the essential
core of culture consists of traditional (=historically derived and selected) ideas and
especially their attached values; culture systems may, on the one hand be considered as
products of action, on the other hand as conditioning elements of further action
● Another synthetic definition: culture is a property of a group. It is a group’s shared
collective meaning system through which the group’s collective values, attitudes, beliefs,
customs, and thoughts are understood. It is an emergent property of the member’s
social interaction and a determinant of how group members communicate… Culture may
be taken to a consensus about the meanings of symbols, verbal and nonverbal, held by
members of a community
The concept of “culture” (1)
● Maslow’s “hierarchy of needs” is an example of the cultural
relativity of values
● What are beliefs?--> propositions about objects/concepts/
relations between objects/concepts
○ EG: causality (working hard leads to success), confucianism (CH:
individuals have the potential to self-cultivate ), Feng shui (CH: the layout of
Intern the physical environment influences good and bad luck)
alize Ow
d Sit
n
uat
cultur beh
e atti ion
avio
tud Beh
ur
Value es avio
s ur
Perc of
Belief eptio oth
s ns Sit
ers
uat
Psyc Culture Interg
ion
holog is here roup
ical concept of “culture”persp
The (2)
persp ectiv
● Culture is formed in interactions with the social environment
ectiv e
e
, ● Around adolescence one’s values and beliefs are rather firmly set
● Behaviours of others that do not fit our values can be seen as “strange” or “bad”; this
may lead to unproductive behaviours in intercultural settings
● Being “culturally intelligent” allows one to understand that there are multiple ways of
seeing social reality
○ Move from naíve automatic interpretation to thoughtful, deliberate interpretation
of others’ behaviour
● Dual processing theory: humans process information in 2 distinct ways:
Implicit system Explicit system
● Not conscious ● Conscious
● Automatic ● Controllable
● Fast ● Relatively slow
● Parallel processing ● Sequential processing
● High capacity ● Limited capacity
● Effortless ● Effortful
“Cultural dummy” “Culturally intelligent individual”
Origins of culture: adaptation
● Cultures are responses to environmental conditions and have ‘survival value’
○ Cultures are systems of socially transmitted behaviour patterns that serve to
relate human communities to their ecological settings
○ Cultural change is a process of adaptation and natural selection
○ Culture change often begins with adaptation to changes in economic lives
○ Ideas tend to support survival-enhancing behaviours
Origins of culture: differentiation
● Human groups increase differences w other groups: mark in-group/out-group distinctions
● Homophily: the tendency of people with similar triads (incl. Physical, cultural, attitudinal
characteristics) to interact with one another more than with people with dissimilar traits
○ Value homophily: interacting with people with the same beliefs justifies opinions
○ Status homophily: we feel more comfortable in interacting with people with similar
cultural background
○ Induced homophily: interactions over time tend to make individuals more similar
● Social identity dynamics → individual identity (what distinguishes me from others) vs
social identity (what do I have in common with specific others)
○ Self-categorization and categorization of others
● Culture can be a salient characteristic to emphasize the bond with a specific
group/category and to differentiate oneself from other groups
● Culture in producing social identity can be linked to nationality, ethnicity, religion etc
● Social identity dynamics often lead to intergroup competition (tajfel’s minimal group experiments)
