Session 10 international ob

1. International Organizational
Behavior

2. INTRODUCTION
•The International OB examines from an
international perspective and within the
international context.
•Firstly, the impact of culture on
International Organizational Behavior is
discussed to understand International
perspective of OB.

3. CULTURE
•Culture can be defined as the acquired
knowledge that people use to interpret
experience and generate social behavior.
•Its important to recognize the culture is
learned and it helps people in the efforts to
interact and communicate woth others in
the society.

4. IMPACT OF CULTURE
•For eg, US business people are assigned
to a foreign country, this expatriates
quickly learn that the values of US culture
are often quite different from those of
other countries.
•Cultural differences are 2 way streets. So
it should be clearly understood and
managers must be sensitive to them in
order to be successful in the global
economy.

5. CULTURAL BEHAVIOUR ACROSS
COUNTRIES- SOME EXAMPLES
1.The concept of an hourly wage plays a minor role
in Mexico. Labor law requires that employees
receive full pay for 365 days a year.
2.In Australia and Brazil, employees with one year of
service are automatically given 30 days of paid
vacation.
3.In Japan, remuneration levels are determined
using the objective factors of age, length of service
and educational background rather than skill, ability
and performance. Performance doesn’t count until
after an employee reaches 45 years of age.

6. 4. In the UK, employees are allowed upto 40 weeks of
maternity leave and employers must provide a
government mandated amount of pay for 18 of those
weeks. In India, a woman employee is entitled for full
wages during previous 6 weeks and subsequent 6
weeks period of pregnancy.
5. In 87% of large Swedish companies, the heads of HR are
on the board of directors.
THE DIFFERENCES ARE GLARING IN
PERFORMANCE APPRAISAL- A SENSITIVE AREA IN
OB.

7. INFLUENCE OF IOB
•How culture affects human performance
•How cultural differences can be used to enhance key
organizational functions
•Cultural values and major frameworks for
understanding culture
•Motivation and work values, communications,
negotiations and cross-cultural conflict resolution,
groups & teams, leadership, decision making,
ethics, and human resources management.

8. •The international context of OB is becoming
increasingly significant as organizations expand
beyond their national boundaries.
•Managers of multinational firms have to manage
a variety of social, political and economic
environments as well as unique individual
differences.
•The differences at the level of the individual
include individualism/collectivism, power
distance, uncertainty avoidance, and
masculinity/femininity, which are different in
different countries.
SIGNIFICANCE OF IOB

9. •Managers need to be sensitive to cultural
differences across different countries to achieve
their goals in the global economy.
•The various aspects that differentiate cultures
are people's perceptions, their relationship with
their environment, the time dimension, and the
importance attached to public and private space.
•Managerial leadership is the process of
influencing others to direct their efforts towards
the achievement of specific goals.
•Many factors influence the way in which
managers lead their employees - personal
values, interpersonal skills, background and the
decision-making skills of the manager.

10. •Employees who travel to a foreign country for
work find it difficult to adapt to the new culture
because of factors like parochialism,
ethnocentrism and culture shock.
•In some countries, the emphasis on production
rather than productivity becomes a barrier to the
improvement of the performance of the
organization.
•It is not possible to transfer business practices
directly from one country to the other.

11. •It is also not possible to use either the home
country practices or the traditional practices of
the host country. The best approach for
expatriate managers would be to operate within
the scope of home office policies, after adapting
them to fit the culture of the host nation.
•Traditional and conservative approach to
leadership cannot be used for organizations with
a global presence.
•Globally competent managers have a good
understanding of the worldwide business
environment and try to learn about various
cultures in order to carry out business
operations in different countries successfully.

12. ORGANISATIONAL CHARECTERISTICS IN
AN INTERNATIONAL CONTEXT
•Cross cultural influences are found to exist on-
3.Environment
4.Technology
5.Organizational structure and organizational change.

13. ENVIRONMENT ACROSS
COUNTRIES
•Environment across countries varies.
•Dissolving borders, growing cross- border trade and
investment, the rise of global products and
customers, privatization of companies formerly
owned by governments, the emergence of new
market, rise of global standards of quality and
production, and the growing sophistication of IT
have not only brought global business to sharp
focus but have altered the environment of business
everywhere dramatically.

14. TECHNOLOGY AND
INTERNATIONAL BUSINESS
•The technological environment is changing at lightening speed.
•For eg, while semi-conductor while semi-conductor firms are now
working to develop new memory chips for personal computers,
other high tech firms are creating technologies that will replace
creating technologies that will replace the PC with an even better
computing architecture. At the same time, computers, telephones,
televisions, and wireless forms of communication are being merged
to create multimedia products to allow users anywere in the world to
communicate with each other.
•In addition, a growing number of people have access to internet,
allowing them to obtain information from million of sources as the
number of websites is increasing sharply.
•That technology is changing very fast, accordingly organizations are
changing.

15. ORGANIZATIONAL
STRUCTURE
•International managers deal with many
different types of organizations in IB
dealings. Surprisingly, there are
similarities between organization designs
in different cultures. At the same time
there are differences.
•LIKE ORGANISTATIONS ACROSS
CULTURES- Different societies can be
similar. These are explained in the
convergence and culture free theories.

16. •CONVERGENCE-
Many management practices, specially those
related to strategy and structure, are becoming
increasingly similar. These growing similarity mgt
practices is called convergence. Firms competing in
the same industry tend to have similar structures
and strategies.
•THE CULTURE FREE THEORY-
The second theory on similarities in organizational
designs relates to organizational contextual factors.
Such factors include an organization's size,
technology, and strategy.

17. •ORGANIZATIONAL CHANGE-
The additional environmental complexities global
business face, it follows that organizational change
may be more critical to them than to purely domestic
business.
A second factor to be noted is that acceptance of
change varies across cultures.

18. INTERNATIONAL
ORGANISATIONAL
BEHAVIOUR

19. INTERNATIONAL
ORGANISATIONAL BEHAVIOUR
•“The modern business enterprise has no place to hide. It has no place
to go but everywhere”
•The worlds has entered an era of unprecedented global economic
activity, including worldwide production, distribution and increasingly
large number international joint ventures, multinational mergers and
acquisitions and global strategic alliances
E.g.:
•A new global operation and alliance abound, with most major firms
earning from their international; operations than from domestic
markets
•MNCs such as ABB, Honda, British petroleum, Seimens, Motorola and
Eastman Kodak each do business in more than 50 countries
•The assets of most MNCs are owned by different nationalities and
their employees hail from different countries
•Thus the modern business enterprise has no place to hide. It has no
place to go but everywhere

20. CULTURAL DIFFERENCES
AND SIMILARITIES
Four generalizations can be made in this
context:
•Behavior across cultures
•Culture determines behavior
•Cultural clusters
•Cultural diversity

21. Behavior across cultures
•Behavior in organizational settings varies across
cultures. Human resource practices too vary across
cultures. Here are some representative examples
•The concept of an hourly wage plays a minor role in
Mexico. Labor law requires that employees receive
full pay for 365 days a year
•In Australia and brazil, employees with one year of
service are automatically given 30 days of paid
vacation
•In Japan, remuneration levels are determined using
the objective functions of age, length of service and
educational background rather than skill, ability and
performance. Performance doesn’t count till an
employee reaches 45 years of age.

22. Behavior across cultures
•In UK, employees are allowed up to 40 weeks of
maternity leave, employees must provide a
government mandated amount of pay for 18 of
those weeks
•In India, a woman employee is entitled for full wages
during previous six weeks and subsequent six
weeks of period of pregnancy and the employee is
bound to Pay the amount
•In 87% of large Swedish companies, the heads of
human resources are on the board of directors
•The differences are glaring in performance
appraisal- a sensitive area in OB

23. Culture determines behavior
•Culture is an important factor for variation in
behavior. true, there are other factors like differing
standards of living and varied geographical
condition which can cause variations in behavior,
but culture is a determining factor
•Culture maybe understood as the pervasive and
shared beliefs, norms and values that guide the
everyday life of individuals. These beliefs, norms
and values are passed on to future generation
through cultural rituals, stories and symbols.

24. Culture determines behavior
–Cultural values tell us what is most dear to our hearts. For e.g.:
American, value freedom most –freedom to choose one’s own
destiny-whether it leads to success or failure.
–Japanese culture on the other hand, finds a higher value; in
belonging; one must belong to and support group in order to
survive. Belonging to group is more important than individualism.
–Arab culture on the other hand is less concerned with
individualism or group belonging, concentrating instead don their
own family security and relying on god for destiny. Individual
identity is usually based on the background and position of each
person’s family
–Cultural symbols, stories and rituals-it are most important to
communicate the norms, values and beliefs of a society or a group
to its members. Culture is passed from one generation to another
through its symbols, stories and rituals (religious ceremonies).

25. Culture determines behavior
•Culture is continuously reinforced when people see
symbols, hear stories and engage in rituals
•Marriage in India for e.g.: makes a woman wear
certain things like mangal sutra which a married
woman in western or American culture is not
expected to do.
•Cultural values also have a major influence on the
way people relate to each other and also to what
they aspire for in a job.

26. Cultural clusters
•Though cultures across countries vary,
there are similarities nevertheless. To the
extent that there are similarities, the need
to customize products to meet local
demands is minimized.
•Countries that are cultural similarities form
cultural clusters. Not that a cluster doesn’t
have differences, but the similarities are
predominant.

27. Cultural clusters
•International businesses utilize the culture-clustering
approach in formulating their global strategies.
•Many firms from New Zealand focus their first exporting
efforts on Australia. Hong Kong firms have been very
successful in exploiting Chinese markets. Canadian firms
are more comfortable working with British partners than
are Japanese firms
•Improvements in communication and transportation have
made clustering possible. Thanks to cable and satellite
TV, people in different parts of the world watch and enjoy
the same entertainment programs and serials
•Lower air fares generated by increased airline
competition mean that more tourists can learn fast about
other culture

28. Cultural diversity-source of
energy
•Cultural diversity can be an important source of
energy in enhancing organizational effectiveness
•More and more organizations are realizing the
virtues of cultural diversity, but surprisingly, little do
they know how to manage it
•Organizations that adopt multinational strategies
can become more than a sum of their parts
•Operation in each culture can benefit from
operations in other cultures through an enhanced
understanding of how the world looks and works

29. Multicultural teams
•Can be divided into three types
•Token teams- only one member is form another culture. Eg: Japanese retailers
and a British attorney who are looking into the benefits and shortcomings of
setting up operations in Bermuda
•Bicultural teams-have members form two cultures: 4 Mexican and 4 Canadians
who have formed a team to investigate the possibilities of investing in Russia
•Multicultural teams-have members from three or more cultures. Eg: a group of 3
Americans, 3 Germans, 3 Uruguayans and 3 Chinese managers who are looking
after mining operations in Chile
•Managing culturally diverse teams-properly managed diverse groups can result
in several benefits such as better hiring efforts, increased sales and market
shares, increased innovation and creation and higher productivity
•Some of the ways to better manage multicultural teams are task related
selection, establishing a vision, equalizing power and creating mutual respect.

30. Negotiating globally
•Negotiation is the process of bargaining with
one or more parties to arrive at a solution
that is acceptable to all
•Business negotiation often involve one party
attempting to influence another to make a
particular decision or sign a contract
•Negotiation is not always the best approach
to doing business. Many times, such
strategies as ‘take it or leave it’ or bargaining
become more effective
•Negotiation is generally the preferred
strategy for creating win-win solution in
global business

31. Steps in negotiation
•The negotiation steps include
• preparation,
•building the relationship,
• exchanging information and
• present the first offer,
•persuasion,
•concessions and
•agreement

32. Communicating across cultures
•Successful international negotiations require effective
cross cultural communication
•Additionally, in global business, activities such as
leading, motivating, decision making, problem solving
and exchanging ideas and information depend on the
availability of employees and managers from one culture
to communicate successfully with colleagues, clients and
suppliers form other cultures
•General crucial invest in international communication
are: language and culture, differences between high and
low context cultures, use of interpreters, non verbal
communication and attribution errors
•If these are taken care of, inter cultural communication
will be effective

33. Leadership across cultures
•A multinational leader needs to posses certain unique
qualities apart from those listed in trait theory to become
successful in global settings
•What an international manager needs is emotional
intelligence
•Emotional intelligence refers to a set of five individual
and social competencies including-1.self awareness
2.self regulation 3.motivation 4.empathy 5. Social skills
•Self awareness-is the ability to recognize and
understand one’s moods, emotions and drives as well as
their effects on other people
•Self regulation-the second quality, is the ability to control
or redirect disruptive impulses and moods-ability to think
before doing. leaders with a high level of self regulation
exhibit trustworthiness, integrity, comfort with ambiguity
and openness to change

34. Leadership across cultures
•Motivation –this is reflected in passion to work that go
beyond money or status. Leaders high on motivation
exhibit remarkable organizational commitment, drive to
achieve and optimism (even in circumstances of failure)
•Empathy- refers to understanding the emotional make up
of other people and skill in treating people according to
their emotional reaction. Leaders with high level of
empathy exhibit an ability to build and retain talent in
their organization, how cross cultural sensitivity and
become known for offering great service to clients and
customers
•Social skills-refers to proficiency in managing
relationships and building networks, along with an ability
to find common ground and to build support. Leaders
with a high level of social skills are effective at leading
change, show a superior ability to build and lead teams
and become known for their persuasiveness

35. Universalism in leadership
•Transformational leadership is projected as an
approach which can cut across all cultural
barriers and be effective in any organization
anywhere in the world and represents a higher
level of leadership
•Specially the transformational leader
–Articulates a vision
–Breaks form status quo (current affairs)
–Provides goals and plans
–Gives meaning or purpose to goals
–Takes risk
–Builds a power base-expertise, respect and the
admiration of followers
–Demonstrates high ethical and moral standards