Cross Cultural Management
Lecture 1
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.
- Historical perspective
o Most recent wave: 1980 – present → now it is slowing down
- Forces promoting (further) globalization:
o Decrease of transportation costs
o Decrease of communication costs
o Integration international financial markets
o Mass media, social media
o International migration
- Forces impeding (further) globalization:
o Lower company profits outside home market
o Unbalanced distribution of benefits
o Search for cultural authenticity
o Limits of democracy
Globalization theory: four possible scenarios
1. Convergence of economies
a. Based on the success of the Anglo-American version of capitalism; weakened by later
success of Japan, Korea, China,…
2. Greater specialization
a. Economies specialize in where they have a comparative
advantage, e.g. based on Porter’s “diamond” factors →
3. Incremental adaption
a. Culture and institutions constrain countries & firms
in their adaptation to the most efficient practices
4. Hybridization
a. Part of economy/society adapts to global pressures; other part may remain unaffected
Cultures and institutions: self-evidency comes from:
- What we have been taught since we were very young
- What we believe without questioning
- What we have done in the past and worked
- What everybody else seems to see as normal
- What everybody else assumes to be true
➔ Culture functions as blinder
Culture is:
- Inherited ethical habit (Fukuyama) [not literally correct]
- The subjective perceptions all people possess to explain the world around them (North) [lacks
specificity]
- Collective programming of the mid (Hofstede) [useful metaphor]
Lecture 1
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.
- Historical perspective
o Most recent wave: 1980 – present → now it is slowing down
- Forces promoting (further) globalization:
o Decrease of transportation costs
o Decrease of communication costs
o Integration international financial markets
o Mass media, social media
o International migration
- Forces impeding (further) globalization:
o Lower company profits outside home market
o Unbalanced distribution of benefits
o Search for cultural authenticity
o Limits of democracy
Globalization theory: four possible scenarios
1. Convergence of economies
a. Based on the success of the Anglo-American version of capitalism; weakened by later
success of Japan, Korea, China,…
2. Greater specialization
a. Economies specialize in where they have a comparative
advantage, e.g. based on Porter’s “diamond” factors →
3. Incremental adaption
a. Culture and institutions constrain countries & firms
in their adaptation to the most efficient practices
4. Hybridization
a. Part of economy/society adapts to global pressures; other part may remain unaffected
Cultures and institutions: self-evidency comes from:
- What we have been taught since we were very young
- What we believe without questioning
- What we have done in the past and worked
- What everybody else seems to see as normal
- What everybody else assumes to be true
➔ Culture functions as blinder
Culture is:
- Inherited ethical habit (Fukuyama) [not literally correct]
- The subjective perceptions all people possess to explain the world around them (North) [lacks
specificity]
- Collective programming of the mid (Hofstede) [useful metaphor]
