Chap 14
Chap 14
Chap 14
CHAPTER 14
Managing Behavior and Interpersonal
Business
After studying this chapter, students should be able to:
LECTURE OUTLINE
The opening case reviews the crisis at Firestone when its Wilderness tires (standard
equipment on the popular Ford Explorer) were found to be defective. The case
describes differences in crisis management styles between U.S. (Ford) and Japanese
(Firestone) managers.
Key Points
• Ono's quiet and reserved style helped Firestone build revenues and market
share throughout the 1990's.
• When the crisis occurred in 2000, Ono's reserved and quiet management style
(typical in Japan) was perceived as aloofness and indifference by Westerners.
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CHAPTER SUMMARY
Chapter 14 examines the behavior of managers and employees in different cultures, and
the impact of managerial behavior on international business. The chapter begins with a
discussion of Hofstede’s work concerning individual behavioral differences, then relates
his ideas to motivation, leadership, and decision-making. Finally, issues related to
creating and managing cross-cultural teams are discussed.
Individual differences are reflected in personality traits. Attitudes, perception and stress
also are factors in influencing individual behavior.
• Attitudes are complexes of beliefs and feelings that people have about specific
ideas, situations, and other people.
can be monitored. Nail Murzakhanov, a small local Internet provider has refused to
comply with the law and has therefore become a folk hero. So far, at least, the
government has not forced him to comply.
Motivation is the overall set of forces that cause people to choose certain behaviors
from a set of available behaviors.
• Understanding needs (the things an individual must have or wants to have) and
values are a starting point in understanding motivation. Primary needs are things
people need for survival, while secondary needs are more psychological and
learned.
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• There are three basic categories of motivation: need based models attempt to
identify the specific needs or set of needs that result in motivated behavior; process-
based models focus on the conscious thought processes people use to select one
behavior from among several; and the reinforcement model deals with how people
assess the consequences of their behavioral choices and how that assessment
affects the future choice of behaviors and incorporates the roles of rewards and
punishment in maintaining or altering existing behavioral patterns.
• Expectancy theory suggest that people are motivated to behave in certain ways
to the extent that they perceive that such behaviors will lead to outcomes they find
personally attractive.
• Little empirical research has been done on expectancy theory, but it appears that
it could have wide applicability, except when explaining behavior in collectivistic
cultures. The text notes that the theory helps to explain Sony’s success.
• The reinforcement model, which states that behavior that results in a positive
outcome will probably be repeated under the same circumstances in the future, has
not been extensively tested in different cultures, but may be a useful tool for
managers as they try to understand motivation across cultures.
• Cultural factors can be difficult and complex to assess, yet critical in determining
leader effectiveness. Leadership behavior must fit the situation if it is to be
successful.
Decision making is the process of choosing one alternative from among a set of
alternatives in order to promote the decision makers’ objectives.
• Managers may make decisions in two very different ways. The normative model
of decision making suggests that managers apply logic and rationality in making the
best decisions. In contrast, the descriptive model argues that behavioral processes
limit a manager’s ability to always be logical and rational. Show Figure 14.3 here.
• The normative model suggests that managers make decisions by initially
recognizing that a problem exists and a decision has to be made. Second, they
identify potential solutions. Third, they evaluate each alternative in light of the
original problem. Fourth, they select the best alternative. Fifth, they implement the
chosen alternative. Finally, they follow-up and evaluate. The text provides an
example of the process by examining a recent decision made by Shell.
• The descriptive model suggests that in reality managers are affected by two
behavioral processes. First, the model suggests that individuals are limited by
bounded rationality, that they are constrained in their ability to be objective and
rational by limitations of the human mind. Second, the model suggests that
managers satisfice, that they sometimes adopt the first minimally acceptable
alternative they identify, even though there may be a better alternative.
• At this point, there is little research exploring the behavioral process of bounded
rationality and satisficing across different cultures. However, all managers need to
understand that different modes of decision making may not be effective in other
cultures.
• The use of teams is attractive to companies because theory suggests that people
working together should accomplish more than they can working alone.
• A mature team generally has certain characteristics: it develops a well-defined
role structure; it establishes norms for its members; it is cohesive; and some teams
identify informal leaders among their members who can lead and direct the team.
• If a team has these characteristics, then it will be effective from the firm’s point of
view. The text provides an example of an effective team, Sony’s computer
development group.
• Teams may also be affected by other cultural factors including members’ social
orientation, power orientation, uncertainty orientation, and goal orientation.
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Adidas-Salomon Runs to Catch Up
Adidas, a German apparel company founded in 1948, once dominated the athletic
sportswear business. However, a series of mistakes caused the company to lose its
leadership position to Nike and Reebok.
Key Points
• Adidas’ first big problem arose when family squabbles resulted in both the
founder’s brother and son leaving the company to start their own companies.
Although the founder and son later reconciled, their reconciliation came too late. The
son died two years after he took over the company, leaving a critical void. The
company was sold to a French financier in 1989.
• The company however, was losing market share at an incredible rate, dropping
from 70% to just 2%. The new owner promised to inject a substantial amount of
capital into the firm, but failed to do so. He was later found guilty in a soccer fixing
scandal, and landed in jail where he declared bankruptcy.
• Adidas was taken over by its creditors in 1993. The company at this point was
losing $100 million a year. The creditors found a new leader, Robert Louis-Dreyfuss,
another French financier. The new leader, shocked at the archaic management
practices followed by the firm, promptly fired the firm’s top management team, and
began to streamline the business.
• High cost European factories were closed in favor of cheaper Asian operations,
and marketing efforts were stepped up. Today, the company is once again an
important player in the athletic apparel business.
Case Questions
1. What role has leadership played in both the decline and recovery at Adidas-
Salomon?
It can be argued that the company’s success and failures seem to go hand-in-hand
with its corporate leadership. The company was initially a dominant force in the
marketplace, but family squabbles resulted in the departure of both the founder’s
brother and son. After their departure, the company began to go downhill. Upon the
return of the son to the company, Adidas briefly showed signs of a turnaround,
however his death created more difficulties. The company, after being sold to a
French financier, suffered from neglect, and probably would have gone out of
business entirely had its creditors not hired Louis-Dreyfuss to lead it.
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When responding to this question, students may find it easier to establish a clear
perspective of German decision making, and then compare and contrast activities at
Adidas to that perspective.
3. How do you think Adidas-Salomon’s current success is affecting the motivation of its
employees?
Most students will probably suggest that motivation at Adidas should be up. The
company has evidently survived a critical downturn, and is now nipping at the heels
of Reebok, the number 2 firm in the market. However, other students may point out
that despite its current success, Adidas will probably continue to try to improve its
market position, and that effort might involve further plant closings and layoffs, and
additional management streamlining. Consequently, some employees might be wary
of Louis-Dreyfuss and his management practices.
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1. Define personality and explain how personality differences affect individual behavior.
Personality is the relatively stable set of psychological attributes that distinguish one person
from another. Five fundamental personality differences (agreeableness, conscientiousness,
emotional stability, extroversion, and openness) affect individual behavior. In addition, locus
of control, self-efficacy, authoritarianism, and self-esteem are important influences in an
individual’s personality.
Attitudes, the complexes of beliefs and feelings that people have about specific ideas,
situations, or other people, are important because they are the mechanism through which
people express their feelings. Attitudes can vary greatly across cultures; for example, the
text provides the results of a study that shows that Japanese workers are less satisfied than
their American counterparts. Students may also bring out points from the opening case in
their response to this question.
Managing Behavior and Interpersonal Relation > 230
3. Discuss basic perceptual processes and note how they differ in different cultures.
Perception is the set of processes by which an individual becomes aware of and interprets
information about the environment. Stereotyping is one common perceptual process that
occurs when an individual makes inferences about someone because of one or more
characteristics they possess. Perceptions also influence how an individual feels about
political or other forms of risk. The text provides numerous examples of how perceptions
differ across cultures, and students will probably be able to generate additional examples.
Perception, the set of processes by which an individual becomes aware of and interprets
information about the environment, is an important attitude determinant. An individual’s
perceptions may result in stereotyping. Perceptions also influence an individual’s attitude
toward risk.
6. Identify some of the basic issues managers must confront when attempting to motivate
employees in different cultures.
Motivation refers to the overall set of forces that encourage people to select certain
behaviors from a set of available behaviors. Managers attempting to motivate employees in
different cultures face a complex task because the factors that motivate individuals in one
culture may be very different from the factors that motivate individuals in another culture.
Managers must determine whether employees are individualistic or collectivistic, what their
beliefs are about power and uncertainty orientation, and whether they demonstrate
aggressive or passive goal behaviors before motivation techniques can be implemented.
Understanding needs (the things an individual must have or wants to have) and values are a
starting point in understanding motivation. Primary needs are things people need for
survival, while secondary needs are more psychological and learned. Values are influenced
by family, peers, experiences, and culture. Consequently, both needs and values will reflect
local social and cultural norms.
8. Summarize the steps in the normative model of decision making and relate each to
international business.
The normative model of decision making implies that managers make logical and rational
decisions. The model starts with the identification of a problem and the realization that a
decision needs to be made, then possible alternatives to address the problem are identified
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and evaluated, and finally, the best alternative is selected. Students may relate the model to
the example given in the text or to some other situation.
9. Why are teams so important? What are the basic implications of teams for an international
business?
1. Which do you think is a more powerful determinant of human behavior, cultural factors or
individual differences?
Students will probably respond to this question in one of two ways. Some students will
probably argue that individual differences are at the root of human behavior, and are
therefore a more powerful determinant of how an individual will act. Other students,
however, may suggest that an individual’s differences will be influenced by and reflect the
local culture. Students taking this perspective will argue that cultural factors are a more
powerful predictor of human behavior.
Teaching Note:
Instructors may want to ask students to identify traits within themselves that are clearly a
reflection of their local culture, as well as traits that they feel are a result of their own
individual differences. Students can then discuss their analyses with others, and look for
similarities and differences in interpretations of culture and behavior.
2. Think of two or three personality traits that you believe are especially strong in your culture,
and two or three that are especially weak. Relate these to Hofstede’s cultural dimensions.
Most U.S. students will probably identify individualism and personal achievement as
particularly strong traits in the U.S. culture. Responses by foreign students are likely to be
different.
3. Assume you have just been transferred by your company to a new facility in a foreign
location. Which of your own personal dimensions do you think will be most effective in
helping you deal with this new situation? Does your answer depend on which country you
are sent to?
Most students will probably suggest that the best way to assess the foreign country’s culture
is through either direct or indirect research. Depending on which country students analyze,
most will propose that depending on their findings, their behavior should be modified when
negotiating, leading, motivating, and so forth, to adapt to the new culture. Students may
also note that being transferred to a fairly similar culture will require less adaptation than
being sent to a very different culture.
Managing Behavior and Interpersonal Relation > 232
Teaching Note:
Instructors may want to rephrase this question to identify a specific
country or countries so that students can actually assess another
country’s culture along Hofstede’s dimensions.
Perception is the set of processes by which an individual becomes aware of and interprets
information about the environment. An individual’s cultural background will play a role in
how a person interprets their environment. Thus, for example, while an American may see
money as a clear way to motivate employees, people from other cultures that do not value
money in the same way an American does, may see a raise as a poor way to motivate
workers.
Good leadership skills will vary by culture. In collectivistic cultures, the group is important,
therefore an organization trying to enhance leadership capabilities might emphasize the
development of skills that preserve group harmony. In contrast, in a culture that is
individualistic, organizations might focus on developing leaders that are skilled in allowing
employees to set their own goals. Similarly, in power oriented cultures, organizations may
identify individuals that show direct, structured behaviors and place a lesser value on the
development of caring and interpersonally oriented behaviors.
6. Do you think it will ever be possible to develop a motivation framework that is applicable to
all cultures? Why or why not?
Most students will probably agree that it would be difficult to develop a motivation framework
that is applicable to all cultures simply because cultures place different values on different
things. Americans, for example, are usually motivated by money; consequently, companies
will frequently use pay raises as a means of motivating employees. However, this type of
motivating factor would not succeed in a culture that does not place a high value on money.
Corporate culture refers to the idea of “the way we do things around here.” Two critical
dimensions of corporate culture are motivation and leadership. To fully understand the role
of these two dimensions, students may want to develop a chart depicting different types of
cultures (individualistic versus collectivistic, and so on), and then identify what types of
motivation and leadership one would find in an organization in each type of culture.
Teaching Note:
The following two questions can generate a fair amount of interesting
discussion (and usually laughter) if they are acted out in class rather than
simply discussed. For example, instructors can ask students to play the roles of the
Japanese, Australian, and Italian managers who are being transferred to the U.S.
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8. What advice would you give to a Japanese, an Australian, and an Italian manager just
transferred to the United States?
Most students will probably focus on identifying the differences that Hofstede has suggested
exist between the Japanese, Australian, Italian, and U.S. cultures. Students will probably
use these differences to make specific suggestions relating to leadership, negotiating,
motivating, and so forth.
9. Assume you are leading a team composed of representatives from British, Mexican,
Brazilian, and Egyptian subsidiaries of your firm. The team must make a number of major
decisions.
a. What guidelines might you develop for yourself for leading the team through its decision
making process?
Most students will probably focus on the idea that if they can learn as much as possible
about the other cultures, they will be better prepared to handle each individual in the
appropriate manner. Thus, many students will in effect suggest treating the foreign
managers individually rather than as a group so that the leader can modify his/her behavior
according to each situation. However, other students will probably point out that these
individuals are meant to be part of a team, and that the idea of teamwork should be
stressed.
b. What steps might you take to enhance the team’s cohesiveness? How successful do you
think such an effort would be?
Most students will probably recognize that a team made up of British, Mexican, Brazilian,
and Egyptian will be a heterogeneous one, and one that may have conflict, poor
communication, and so forth. Students may suggest that making team members aware of
the cultural differences that may impact their behavior would be a start to enhancing the
team’s cohesiveness, but will probably conclude that such an effort will be difficult to
manage.
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Essence of the exercise
This exercise is designed to show students the process of learning about another culture, and
incorporating aspects of that culture into one’s own behavior. Students working in teams of two
are asked to research a culture of their choice and, assuming the role of an individual from the
other culture, negotiate a contract for the sale of a product.
1. How easy or difficult was it to model the behavior of someone from another country?
Most students will probably agree that it is not easy to model the behavior of someone from
another country. Students will probably find that they forget certain aspects of the other
culture, and without thinking about it, revert to their own culture or self-reference criterion.
2. What other forms of advance preparation might a manager need to undertake before
negotiating with someone from another country?
Students will probably have various suggestions for how a manager could prepare for a
meeting with someone from another country. Typically, suggestions include complementing
library research with advice from someone from the other country, meeting with a consultant
specializing in the other culture, and obtaining advice from a colleague whom has
experience negotiating in the other country.
Other Applications
This exercise deals with differences in cultural behavior that can affect international
business. It asks students to identify another culture and model that culture’s behavior. An
interesting exercise to complement this one is to ask students, working in groups of 4 or 5,
to research a culture of their choice and then develop a skit to perform for the rest of the
class. The rest of the class can then attempt to identify the particular culture being shown.
In this manner, students can appreciate the difficulties an individual might have when
confronted with a completely unknown culture.