Managing Cultural

Differences
Strategies for Competitive Advantage

Lisa Hoecklin

The Economist
Jntelligence Unit

Prpntice Hall
FINANCIAL TIMES

An imprint oi Pearson Education

Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Singapore
Tokyo . Seoul • Taipei • New Delhi • Cape Town • Madrid • Mexico City . Amsterdam . Munich •
Contents

Overview ix

1 The impact of cultural diversity on international

business 1
Are cultures converging? " 2
Box 1.1: What is a considerate supervisor? 3
The costs of cultural mismanagement 5
Culture affects even 'ordinary' business practices 7
Are there universal management theories? 8
Box 1.2: The idea of separate categories or'modes'of thought 9
Morality is a movable feast 10
Perceptions of other cultures: USA - Europe 11
Box 1.3: An American executive in Paris 12
Creating a global organization out of diversity 15
The competitive advantage of culture 15
' Case 1.1: Using culture competitively at I'CI 18
Summary 21
References 21

2 Culture: what it is, what it is not and how it

directs organizational behaviour 23
What culture is 24
What culture is not 25
Different layers of culture 25
Definitions of culture 27
Attempts to classify national culture in terms of the importance
attached to different values 27
Box 2.1: Concepts of culture by some of the gurus 28
Box 2.2: Hofstede's four dimensions of culture-related values 29
vi Contents

Box 2.3: Difference in work ethos between an individualist

and a collectivist society 37
Fons Trompenaars's research 40
Box 2.4: Trompenaars's country abbreviations 40-
Culture and Dutchmen 47
Summary 48
References 48

The strategic value of cultural differences 50

Competitive requirements of internationalization 50
Creating sustainable sources of competitive advantage 52
Approaches to managing cultural differences 53
Four strategies for managing cultural differences 56
Case 3.1: Ikea 57
v
Case 3.2: Elf Aquitaine 63
Case 3.3: Emerson Electric 65
Case 3.4: Btihrmann-Tetterode 70
Asia/Pacific models of organization 71
The competitive advantage of cultures 74
Case 3.5: Siemens 77
Box 3.1: Cultural learning disabilities . 79
A model of cultural learning „ 80
Case 3.6: Cultural learning at Toshiba in the UK 81
Case 3.7: Cultural learning at Toshiba in the USA 84
Case 3.8: Cultural learning at Toyota in the USA 85
A value-added perspective on managing across cultures 89
Summary 90
References 91

Advertising across cultures 92

Do 'global' products exist? 92
Box 4.1: Critical lessons from early international marketing
experiences 93
Global products, global meanings? 94
Box 4.2: Views on global marketing 96
Case 4.1: Heineken beer - brewing a global brand 102
Box 4.3: The impact of culture on market research 104
Case 4.2: Johnson & Johnson baby products - the language
of love 105
A value-added approach to marketing and advertising across
cultures 106
Case 4.3: Unilever's fish-fingers 108
Case 4.4: Unisys Corporation - translating customer service
into a global message 109
Case 4.5: Steelcase Strafor 110
Summary 111
References 112
Contents vii

Managing human resources across cultures 113

The context 114
Articulating explicit company values worldwide 116
Box 5.1: Lotus-basic values 117
Box 5.2: Motorola-basic values and objectives 118
Box 5.3: Basic commitment of the Toshiba Group 119
'Every act of creation is an act of destruction' 120
•Selection - 122
Career development 125
Performance appraisal 131
The role of HRM professionals in a multicultural world 133
Summary 134
References 135

Managing alliances across cultures 136

Strategic rationale for alliances 136
Box 6.1: East European managers accuse Westerners of
aggressiveness 137
Box 6.2: Recommendations for successful cross-border
alliances 138
The role of culture in alliances across cultures 139
Case 6.1: Joint venture between Motorola and Toshiba 140
The interaction between national and corporate culture 145
Box 6.3: Cultural comparisons between a Californian
high-tech company and its European subsidiary 147
Case 6.2: Acquisition of Kyat (Spanish) by Syseca (French) 150
Box 6.4: Cultural approaches to negotiations 151
Managing the process 151
References 153

Index 155