IBUS90003 Chap.9 Managing Across Cultures
Managing Across Cultures
Week 5 treats culture as part of every host country's operating environment and asks how MNE managers can work with it rather than stumble over it. Culture is a system of shared values, the abstract ideas about what is good and right, and norms, the folkways and mores that govern behaviour.
It grows out of religion, political and economic philosophy, education, language and social structure, so every business function, from marketing to human resources, is exposed to cultural difference. Language shapes perception and carries unspoken cues, as the seminar's examples of indirect refusal in Japan and the contrast between high-context and low-context communication show.
Hofstede's dimensions turn vague differences into comparable scores: power distance, individualism, masculinity, uncertainty avoidance and long-term orientation, illustrated with Australia and China, Denmark and Japan. The frameworks have limits, because individuals differ from national averages, sub-cultures exist within every country and cultures change, if slowly.
The chapter then turns to implications for business: advertising styles and incentive plans differ across countries, leadership styles collide, and managers can take ethnocentric, polycentric or geocentric stances towards host cultures.
Cultural differences weigh more heavily on joint ventures than on acquisitions because both parents keep their management, and careful partner choice, expatriate training and agreed conflict rules help. Tesco's experience, failing in culturally closer markets while succeeding in distant ones, closes the chapter with a warning against taking small distances for granted.
What this chapter covers
- 01
Values, norms and the determinants of culture
- 02
Language, indirect refusal and context
- 03
Hofstede's five dimensions with seminar scores
- 04
Limits of national cultural frameworks
- 05
Ethnocentric, polycentric and geocentric orientations
- 06
Culture inside international joint ventures
- 07
Tesco and the trap of assumed similarity
Worked example · free
Plan an incentive scheme for a regional sales team
- 2Diagnose the gap: in a collectivist culture people act for the in-group, so purely individual commissions may clash with how staff see their role.
- 2Diagnose the second gap: in a high power distance culture subordinates rarely challenge superiors openly, so meetings built on open challenge will produce silence rather than debate.
- 1Recommend adaptation: add a team-based element to rewards, gather feedback through private channels, and avoid an ethnocentric copy of the home scheme.
Key terms
- Power Distance
- How far the less powerful people in organisations and society accept, and even expect, an unequal spread of power.
- Uncertainty Avoidance
- How uneasy people in a culture feel about ambiguity and the unknown, and how far they build rules and rituals to control it.
- High-Context Culture
- A culture in which much of the meaning lies in the setting and relationships rather than in explicit words.
- Ethnocentrism
- The belief that one's own culture and values are superior, shown in MNEs by placing home-country managers in senior host roles.
- Geocentrism
- A management orientation that uses a global decision system and appoints the best person for each job regardless of nationality.
Managing Across Cultures FAQ
What are Hofstede's cultural dimensions?
They are scales used to compare national cultures on power distance, individualism, masculinity, uncertainty avoidance and long-term orientation, so that countries can be compared rather than simply called different.
Why did Tesco fail in markets similar to the UK?
In France and the United States it took an ethnocentric approach and entered with wholly owned modes, arguably assuming cultural closeness meant little adaptation was needed, while in Thailand and South Korea it researched more and used local partners.
Why do cultural differences matter more in joint ventures?
Both parent companies keep their own management in a joint venture, so differences affect communication, decision making and personnel every day, unlike an acquisition where one culture usually dominates.
Do national culture scores describe every person in a country?
No. They describe national averages. Individuals and groups can differ greatly, and every country contains sub-cultures based on ethnicity, region, class and generation, so a manager should treat the scores as a starting hypothesis.
Exam move
Start with the definitions of values and norms and the list of what shapes culture, then learn Hofstede's five dimensions with one sentence each and the seminar's scores for the country pairs. Practise computing the gaps, for example 44 points on power distance between China and Australia, because quoting a gap makes a case answer precise.
Next, rehearse the three management orientations as a short table with belief and staffing, and connect each to Chapter 10 on headquarters and subsidiaries. Build a short note on joint ventures listing the three areas culture affects and four ways to reduce friction. Then write out the Tesco puzzle and its explanation in your own words, since it is a ready-made example of cultural distance being misjudged.
In the exam case, look for clues about language, hierarchy, decision style and attitudes to risk, map them to dimensions, and use them to explain why a firm's practices are failing. Close every cultural argument with a concrete adaptation, not a general plea for sensitivity.
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