Cross-cultural management - IB
Lecture 1
What is cross-cultural management?
Three layers of analysis – Williamson (1996)
A general framework to better understand the “cross-cultural” in cross-cultural management
• The institutional environment forms the framework in which human action takes place
• Formal rules make up a small part of constraints, that shape behavior; the
governing structure is overwhelmingly defined by codes of conduct, norms of
behavior, and
convections.
,The institutional framework
• Formal and informal institutions:
o “Institutions are the rules of the game in a society or, more fundamentally, are the
humanly devised constraints that shape human interaction” North (1990)
o “An institution is a system of rules, beliefs, norms, and organizations that
together generate a regularity of a (social) behavior” Greif (2005)
o “Institutions are a set of formal and informal rules, including their
enforcement arrangements” Richter/Furubotn (1998)
• Institutions include social rewards and sanctions
• Institutions build the common grounds for interacting and decision-making
> managers might have to know implicit rules (informal institutions) of particular frameworks
What is culture?
• “Culture consists in patterned ways of thinking, feeling and reacting, acquired and
transmitted mainly by symbols, constituting the distinctive achievements of human groups,
including their embodiments in artefacts; the essential core of culture consists of
traditional ideas and especially their attached values”
• “Culture is shared mental software, the collective programming of the mind, that
distinguishes the members of one group or category of people from another”
(Hofstede,
2001)
• “While human nature is biologically innate and universal, culture is learned and may
vary from one society to another” (Inglehart, 1990)
• Individual behavior is guided by images and mental models individuals have in their mind
and these images and models are externally defined by the specific social group an individual
is embedded and the group’s cultural norms and values
• Cultural norms and values are created and transmitted via socialization
Management in the context of different institutional environments
,Coleman’s (1984) logic of purposive action (Coleman’s ‘boat’ or ‘bathtub’)
A general framework on micro conditions and macro-outcomes
• The framework is one of the most useful tools for thinking about macro-micro-macro
relations going from macro (e.g. institutions) to the conditions of individual actions,
which then give rise to individual actions that in turn aggregate up to macro outcomes.
Cross-cultural management is …
• A framework on how cultural values are related to individual values and actions
• A framework on how cultural values are related to international management
, Why is cross-cultural management important?
• Firms’ international business activities constantly increased in the last decades
• In the Netherlands, Germany and other internationally oriented countries every third
person is working in an internationally active firm
Why is it still important during and after the SARS COV-19 pandemic?
• Is it possible to significantly reduce the internationalization of businesses?
• Is cross-cultural management still relevant in times of social distancing?
• What effect do other grand society challenges have on the cross-cultural environment
of firms?
• Previous natural disasters have in some cases resulted in an even stronger
international diversification
• There is a variety of cross-cultural interactions with different challenges, dynamics,
and specifics
o Where does the encounter take place?
▪ Manager – manager/employee – employee
▪ Manager – employee
▪ Board member – manager
▪ Shareholder – board member
▪ Client – employee
▪ Expat family – local living conditions
▪ Offline – online
• The pandemic will change how we work and most likely will reduce the number of face-
to- face meetings and international business traveling
• Video conferences in an international context will create new cross-cultural challenges
Lecture 2
What is culture?
Levels of culture – a multi-level model of culture
• Erez and Gati propose a multi-level model of culture, consisting of structural and
dynamic characteristics that explain the interplay between various levels of culture
• Structural dimension: nested structure of culture from the most macro level of a global
culture, through national, organizational and team cultures, and down to the
representation of culture at individual level
• Dynamic dimensions: the dynamic nature of culture conveys the top-down-bottom-
up processes where one culture level affects changes in other levels of culture
• The model proposes that globalization, as the macro level of culture, affects, through
top- down processes, behavioral changes of members in various cultures
Lecture 1
What is cross-cultural management?
Three layers of analysis – Williamson (1996)
A general framework to better understand the “cross-cultural” in cross-cultural management
• The institutional environment forms the framework in which human action takes place
• Formal rules make up a small part of constraints, that shape behavior; the
governing structure is overwhelmingly defined by codes of conduct, norms of
behavior, and
convections.
,The institutional framework
• Formal and informal institutions:
o “Institutions are the rules of the game in a society or, more fundamentally, are the
humanly devised constraints that shape human interaction” North (1990)
o “An institution is a system of rules, beliefs, norms, and organizations that
together generate a regularity of a (social) behavior” Greif (2005)
o “Institutions are a set of formal and informal rules, including their
enforcement arrangements” Richter/Furubotn (1998)
• Institutions include social rewards and sanctions
• Institutions build the common grounds for interacting and decision-making
> managers might have to know implicit rules (informal institutions) of particular frameworks
What is culture?
• “Culture consists in patterned ways of thinking, feeling and reacting, acquired and
transmitted mainly by symbols, constituting the distinctive achievements of human groups,
including their embodiments in artefacts; the essential core of culture consists of
traditional ideas and especially their attached values”
• “Culture is shared mental software, the collective programming of the mind, that
distinguishes the members of one group or category of people from another”
(Hofstede,
2001)
• “While human nature is biologically innate and universal, culture is learned and may
vary from one society to another” (Inglehart, 1990)
• Individual behavior is guided by images and mental models individuals have in their mind
and these images and models are externally defined by the specific social group an individual
is embedded and the group’s cultural norms and values
• Cultural norms and values are created and transmitted via socialization
Management in the context of different institutional environments
,Coleman’s (1984) logic of purposive action (Coleman’s ‘boat’ or ‘bathtub’)
A general framework on micro conditions and macro-outcomes
• The framework is one of the most useful tools for thinking about macro-micro-macro
relations going from macro (e.g. institutions) to the conditions of individual actions,
which then give rise to individual actions that in turn aggregate up to macro outcomes.
Cross-cultural management is …
• A framework on how cultural values are related to individual values and actions
• A framework on how cultural values are related to international management
, Why is cross-cultural management important?
• Firms’ international business activities constantly increased in the last decades
• In the Netherlands, Germany and other internationally oriented countries every third
person is working in an internationally active firm
Why is it still important during and after the SARS COV-19 pandemic?
• Is it possible to significantly reduce the internationalization of businesses?
• Is cross-cultural management still relevant in times of social distancing?
• What effect do other grand society challenges have on the cross-cultural environment
of firms?
• Previous natural disasters have in some cases resulted in an even stronger
international diversification
• There is a variety of cross-cultural interactions with different challenges, dynamics,
and specifics
o Where does the encounter take place?
▪ Manager – manager/employee – employee
▪ Manager – employee
▪ Board member – manager
▪ Shareholder – board member
▪ Client – employee
▪ Expat family – local living conditions
▪ Offline – online
• The pandemic will change how we work and most likely will reduce the number of face-
to- face meetings and international business traveling
• Video conferences in an international context will create new cross-cultural challenges
Lecture 2
What is culture?
Levels of culture – a multi-level model of culture
• Erez and Gati propose a multi-level model of culture, consisting of structural and
dynamic characteristics that explain the interplay between various levels of culture
• Structural dimension: nested structure of culture from the most macro level of a global
culture, through national, organizational and team cultures, and down to the
representation of culture at individual level
• Dynamic dimensions: the dynamic nature of culture conveys the top-down-bottom-
up processes where one culture level affects changes in other levels of culture
• The model proposes that globalization, as the macro level of culture, affects, through
top- down processes, behavioral changes of members in various cultures
