IB - Module 4

convergence

countries are coming together economically, politically and culturally; product of globalization

diversity

results from different historical developments, sometimes referred to as a path dependency

implications of convergence for managers

1. global scale of production (economies of scale), 2. global operations (managers and staff can be easily transferred around), 3. ideas and techniques are easily transferable

culture

all human activity that is socially transmitted, including norms, values, and beliefs

culture levels

1. visible culture (artefacts, goods, and institutions), 2. deeper level culture (beliefs of right and wrong), 3. deepest level culture (basic assumptions)

Hofstede's 6 levels of cultural differences

1. Broad cultural differences between countries, 2. Regional differences, 3. cultural differences between genders, 4. Differences between generations, 5. Differences in social class, 6. Different organizational cultures

high context cultures (Edward Hall)

information is regarded as an extension of a person; long-term relationships of the people communicating is more important than the content of the message; e.g. in Latin America, Japan

low context cultures (Edward Hall)

message of communication is more important because it carries a clear and unambiguous meaning

Hofstede's 6 dimensions of cultural variables

1. Power Distance, 2. Individualism/Collectivism, 3. Uncertainty Avoidance, 4. Masculinity/Feminity (masculine=achievement, different gender roles; feminine=quality of life), 5. Long/Short term orientation, 6. Indulgence/Restraint

Anglo-Saxon Model

liberal approach, competitive, individualistic, less state intervention; e.g. in USA, UK, Australia, New Zealand, Canada

Social Market Model

legal state regulation of business decisions in a free market, private and state ownership, less flexible labour, bureaucracy; e.g. in Germany, France, The Netherlands, Scandinavia

Asian/Japanese Model

strong state intervention in a (supposedly) free market, bureaucracy, weak trade unions, stable stock markets; e.g. in Japan

Coordinated Market Economy (CME)

stable stock market, stable and less flexible labour market, employee involvement and commitment, cooperation between competing firms, greater integration with supply chains, a long term apporach to investment-"patient capitalism"; in Germany, Japan

Liberal Market Economy (LME)

volatile stock market, labour mobility and flexibility, top down decision in decision making, contactual relations between employees and the firm, competitive capitalism, short term approach to investment - return on investment; USA, UK

Hofstede's levels of culture

circular model (from the smallest to the biggest): values and principles, rituals (socially important collective activities), heroes (persons with highly prized characteristics), symbols (words, gestures, pictures of objects carrying a particular meaning)

cultural clusters

western, latin, african, islamic, orthodox, indian, chinese, japanese, buddhist