Cross-Cultural Management in Global Trade & Mergers

In the next few videos, the instructor discusses the increasing importance of global cultural interaction, driven primarily by increased globalization, international investment, and international trade.

Friends, in this case study, what we have tried to understand is that going global is not an easy task.

It is not the usual kind of merger, market entry, or business expansion.

Any kind of overseas interaction, business interaction, or international transaction is not an easy task because of the differences.

People are different, nations are different.

The sheer lack of awareness of cross-cultural differences, as this case study has very clearly indicated, can lead to major failures. It can severely impact the bottom line of a company to the extent that the brand or the company may vanish from the market.

And that is exactly what happened with UNP in this case study.

This case study will become a basis for us to understand the concepts of cross-cultural management in this course.

We will take it forward from here.

First things first.

In order to understand the importance of cross-cultural management, it should be noted that the number of people working for overseas companies around the world had already crossed 100 million in 2021, and it is increasing.

Why is it increasing? Why is the involvement of people with overseas companies growing?

That is the impact of globalization—for better opportunities, better salaries, and better working environments.

People choose between domestic companies and overseas companies.

For example, if you take the Indian market, there are Indian companies and there are foreign companies.

The first choice of many people in India is to work with a foreign company.

In totality, the whole package is better with overseas companies.

This is a general view in India.

Most fresh graduates and most talented people first give interviews for foreign companies, especially those from North America, Western Europe, and sometimes Japan.

With this first choice being overseas companies, it is obvious that the number of people working in overseas companies is increasing exponentially.

And because of globalization, companies also find it suitable, useful, and economically viable to have overseas operations.

What is the result of this?

We now have a multicultural workforce environment in these companies.

It has become the norm.

As I will tell you later in this course, there are certain theories that say the performance of a multicultural workforce is better than that of monoculture groups or a monoculture workforce.

These things are debatable, and a lot of research is still being done.

Your deeper study of diversity management and multicultural workforce management will be really useful.

Multicultural workforce management requires understanding and adapting to cultural differences.

First of all: What are the differences?

Secondly, how does the process of adaptation happen?

But adaptation is required.

Understanding is required.

In the next few videos, the instructor talks about the difficulties of fully understanding a complex subject like culture. The good news is that concepts offered by some researchers make it easy to at least understand the national cultures and national cultural differences and how to deal with these.

Friends, what exactly is culture?

Let me tell you, there are many definitions of culture, and probably you already know what culture is.

You may already have read about this topic in some courses, and you may already be aware of what culture means, but we will try to understand culture from the point of view of managing the multicultural workforce and managing international mergers, acquisitions, or any kind of business activity that we do beyond national borders.

Unique preferences, beliefs, and values—in a concise description, you can say that culture comprises these unique preferences, beliefs, and values.

It can also be described as the collective programming of the mind in a particular work environment or society.

Why collective programming?

Because there are many cultural elements—hundreds of them.

Culture is the total of many elements, like beliefs, societal rules, lifestyles, techniques, institutions, religion, ethnicity, artifacts, and numerous other factors such as hierarchies.

There are so many aspects in society that shape the social fabric of people—how they should work, how they behave, and how society actually functions.

Several elements define that shape.

This makes cultural understanding and the study of culture more complex and more complicated.

Let us see whether we can do something about understanding cultures, because it is not possible for businesspeople to know all the cultures of the world.

It is not possible because every culture is unique, just like every face in the world is unique.

It is very rare to find two people with the same looks.

You can always differentiate between the faces of one person and another. That kind of diversity exists in facial expressions.

The same kind of diversity exists in cultures. Even within countries, there can be different cultures.

But there has to be some way for businesspeople to categorize things, to make it simple, to understand cultures.

They should be able to categorize them in such a way that they can make international business decisions, manage multicultural workforces, smoothly integrate mergers or acquisitions, and smoothly carry out international trade.

For example, if we talk about the culture of one country, say the USA, it may have cultural elements one, two, three, four, five, and so on.

Similarly, the culture of Japan will have many cultural elements.

The culture of Germany will also have many elements.

Chinese culture has hundreds of elements.

Indian culture will have its own set of cultural elements—religion, society, societal fabric, societal rules, institutions, infrastructure, working style, and management style.

So many cultural elements are there. On the basis of these cultural elements, it is next to impossible for a businessperson to understand culture.

It is not possible.

My idea is to tell you that it is really complicated to understand culture in its raw form.

The complexity of culture is further increased by the behavior of individuals and their interpersonal relationships with colleagues, society, or the external environment.

And of course, institutions, organizations, community relationships, communication between organizations, and systems of nations add more layers—federal, state, and local regulations, laws, and the built environment, such as public works and infrastructure.

The kind of ecosystem that exists around an individual makes this understanding of culture very complex.

Let me give you an example.

In the same country, even in the same city, there are regions and parts of the city with different economic strata.

Demography is different. In another part, the demography is different for many reasons.

Infrastructure is one of them.

Because of infrastructure and the types of people who have settled in particular parts of a city, you will find that the behavior of people in the same city, in the same country, may be different.

They behave differently.

This fact is well understood.

Everybody knows it. Anyone who has been to an urban area anywhere in the world knows that within the same city, you have different blocks, parts, and regions, for many reasons.

That was just one idea.

That was just one example I gave you to make you understand that cultural complexity in its raw form is very intense and unmanageable.

For businesspeople, it doesn’t work.

Businesspeople cannot really understand culture in its raw form.

It is not possible.

Friends, we just talked about globalization and its impact on the increasing importance of understanding and managing cultural differences across work teams with different cultural backgrounds.

What we now understand from this module is that globalization has really changed the composition of workplaces, or we can say the profile of workplaces around the world, in terms of cultural differences.

We now have more and more multicultural teams, and even remote teams, with highly multicultural work groups in place.

This is largely due to globalization and the growing significance of global trade.

More and more people are now working with foreign companies, either in their own country or abroad.

The preference of most people, especially from developing countries, is to work for foreign companies.

For example, in India, there is a definite preference for foreign companies.

There has also been an increased migration of both skilled and unskilled workers, the flow of which has significantly risen in the last few decades.

The most advanced and wealthy countries are seeing an inflow of foreign workers, both skilled and unskilled.

This situation has led to an increasing emphasis on understanding cultural differences and learning effective ways to manage intercultural work teams in multicultural workplaces.

In this module, we also learned that culture itself is a very complex concept to study.

It has to be understood from several perspectives, and this complexity increases with an infinite set of factors attached to the dynamically changing macro and micro environments around local cultures.

Despite modernism and materialism, traditional cultures remain preserved, as people still hold on strongly to their local ways of life.

Finally, individuals themselves have their own traits, which further adds to the complexity of understanding culture.

We also learned in this module that it is, in fact, good news that it is possible to understand world cultures and cultural differences, to the extent that such understanding can actually help in carrying out international trade, international business, and in making strategic international business decisions.

That is a very comforting situation for us, as it shows that in spite of the complexity of culture, it is possible to move forward.

In the course, we will see how we can carry out this understanding and use different cultural models and tools to manage cross-cultural teams and increase cross-cultural competency.

These were the main points.

If you think there are any more takeaways, do share them in the Q&A section of this course.

I am pleased to offer complimentary copies of two of my published books on the theme of this course. You can download your copy from the resource section of the next lecture.

Hi there!

I hope you are doing well and making great progress in this course.

I wanted to take this small moment to congratulate you on your remarkable progress in this course.

Your dedication and commitment to learning have truly impressed me.

I have been following you and your journey closely, and I must say, I am delighted with the efforts you are putting in. As a token of appreciation for your hard work, I would like to offer you a complimentary copy of my recent book on a similar topic to what you are learning in this course, which I believe will further strengthen your learning and your grip on the course.

You can download this PDF copy of the book from the resource section of this lecture.

This course is part of the VJ Export Import Mastery Courses Series, a collection of 25 different courses in the area of export management, designed to equip you with the knowledge and skills needed to excel in the field of export and international trade.

On my part, I am committed to helping you expand your learning journey by providing access to more courses in the series. But at the same time, on your part, I have a small request as well.

Your feedback is incredibly valuable in refining this course and ensuring it remains world-class and is refined to its best.

I kindly ask you to leave a rating for the course along with your honest feedback if you have not yet done so.

Your input will help me continue to improve and tailor the course to meet your needs and those of future learners.

Thank you once again for your dedication and enthusiasm.

Keep up the fantastic work that you are doing, and remember, I am here to support you every step of the way.

Together, let's continue on the journey of learning and growth.

With the objective of easily understanding the national cultural differences, some popular models of cultural differences are discussed in the next few videos. Also demonstrated is the method of using these models in practical work.

Friends,

Do you know that the study of culture and human behavior, attitudes, beliefs, and norms requires a group of the following types of experts?

A variety of experts are required who are expected to work in tandem to gain understanding and results.

To understand culture, people like psychologists, social scientists, anthropologists, demographers, historians, and field research specialists are needed.

They are the most common types of experts to carry out long-term research on understanding cultures.

Culture can only be understood through surveys and field studies.

The Globe Implicit Leadership Research Study was a ten-year-long, survey-based research project.

It was such a long study that it really took a lot of time.

More than 200 researchers from almost 62 countries studied almost 100,000 respondents to carry out this very large research.

Geert Hofstede, a Dutch social scientist, developed his original model as a result of using factor analysis to examine cultural study results from a worldwide survey of IBM employees, from 1967 until 1973. Many of his new dimensions came later.

Such long studies were involved in obtaining these insights and results on cultural differences and the understanding of those differences.

To make it easier, they look for cultural models because those are easy to understand. They can find some differences, some ways of categorizing world cultures and national cultures, using these cultural models. There are hundreds of models available in the market, but I am going to discuss the most popular ones that are practically used in business. To start with, I will take up a very popular but very simple model that describes world cultures and national cultures in the context of communication, meaning they are either low-context or high-context cultures. Let's talk about it in the next lecture.

What is required, friends?

How is it done in business? They look for cultural models because those are easy to understand.

They can find some differences, some ways of categorizing world cultures and national cultures, using these cultural models.

There are hundreds of models available in the market, but I am going to discuss the most popular ones that are practically used in business.

To start with, I will take up a very popular but very simple model that describes world cultures and national cultures in the context of communication, meaning they are either low-context or high-context cultures.

What do they display?

There is a continuum that describes a particular culture. Where does it exist on this continuum—whether it is a very low-context culture, a moderately low-context culture, a moderately high-context culture, a neutral culture, or a high-context culture?

This is one of the simplest models for understanding world culture.

The higher or lower the context of the culture, the more it signifies how communication is done by the people belonging to those cultures.

Low-context cultures communicate in a more specific, detailed, and precise way.

This model is based on the observations and experiences of businesspeople. It indicates weaknesses in terms of the ability to decode unspoken messages.

People from low-context cultures find it very difficult to understand body language because they are more black and white.

For them, communication is verbal.

What you say, they will believe.

If you say “yes” but your body language says “no,” they will take it as “yes.”

They will not have any doubts.

They will say it is “yes” only because you said so, even if your body language or facial expression indicates otherwise.

This is their weakness. The lower the context, the more difficult it is for them to interpret unspoken messages and body language.

A very good example is of businesspeople who go to Japan.

That is a very high-context culture—Japanese culture.

It is very distinct.

Businesspeople often find it really difficult to deal with Japan when it comes to business.

It becomes very challenging. In spite of Japan being a very lucrative market, most foreigners find it difficult to exploit it.

The higher the context of the culture, the less direct the communication is.

Emphasis is on human relations.

For example, in Japan, there are things like keiretsu.

What is keiretsu? It is a business network—business clusters or groupings.

These are relationships of local people in such a way that they give first preference for backward integration, purchases, or any kind of financial or business dealings within the group, within the keiretsu.

In certain cases, these groups even have financial stakes in each other’s companies.

Their business depends on human relations or organizational relations, and it is less direct.

Why do they do this?

You may never understand.

How does it help?

It is by experience—there is no formal theory behind it.

They will not be able to explain why they do it this way.

That is Japanese culture.

They believe in human relations.

They are more sensitive and very strong in non-verbal aspects.

For example, in Japan, when you work there, you have to “understand the air.” That is what they say.

It is a common local saying. You need not rely on your ears or spoken words from the Japanese, even if they are your employees or well-wishers.

They will not tell you verbally what is to be done.

You have to “read the air.”

They are very sensitive to non-verbal gestures, communication, and the feelings of others.

Even within business, they will try to read the air—your feelings, their feelings, and whether you are on the right track. If you are not, things are likely to go wrong.

When we consider the case study of UNP, where the organizations involved were from North America, Sweden, and Italy, it was still manageable.

It was simpler to manage, though UNP failed.

It was not as difficult because, after all, they were Western countries with certain historical connections.

But if one of the entities had been from Japan in this particular case study, the situation would have been even worse.

And if a Japanese company had been acquired by an American company, that is exactly what happened when Vodafone acquired the third-largest telecom company in Japan, J-Phone.

I will share with you the case study of the acquisition of J-Phone in the Japanese market by Vodafone for more than $20 billion.

Something similar happened there as in the case of UNP.

This distinction between low-context and high-context cultures plays a very important role.

It has to be understood.

Friends, as I just mentioned to you, let us take one small case study about investment in Japan. One of the major opportunities in Japan is mergers and acquisitions, and that is a big opportunity available now.

The government of Japan is also open to many industries for mergers and acquisitions.

Vodafone acquired J-Phone in the early 2000s. J-Phone was Japan's third-largest telecom operator, and the value of the transaction was almost $20 billion.

It was a very big-ticket investment by Vodafone, and since a 100% stake was involved, it was fully acquired by Vodafone.

J-Phone was the first company in Japan to introduce a camera phone. That was a very major innovation by J-Phone, which became a huge success factor.

But Vodafone failed in Japan after years of making mistakes and wasting time, not understanding the market, making several assumptions about the Japanese market, local people, and locally recruited staff, and failing to prepare and understand the Japanese customer.

Vodafone eventually failed in Japan and finally sold the Japan Telecom–J-Phone–Vodafone K.K. combination to SoftBank at a much lower price and with heavy losses.

Now we have to look at the most interesting part of this story: the facts.

The fact is that Vodafone’s failure had nothing to do with the closed nature of the Japanese government, which is generally alleged. Most foreign companies, when they fail in Japan, blame the Japanese government.

On a case-by-case basis, it has to be understood what role the closed nature of the Japanese government plays in the failure of different companies and their involvement in Japanese business.

But as far as Vodafone’s case is concerned, it had nothing to do with government restrictions. The fact that SoftBank turned the company around within six months of acquisition proves this.

It was not that SoftBank had any special consideration from the Japanese government, nor was it planned like this. Nothing of that sort.

It was purely about commercial decision-making—where Vodafone failed.

I will tell you about the two main reasons why Vodafone failed in Japan. You can read many research papers and analyses on this topic, and most of them boil down to these two reasons.

The first reason was Vodafone’s failure to make further investments—in particular, investment in creating a much larger mobile network infrastructure.

What was required was big coverage, new equipment, and new technology. But probably because they had already invested $20 billion, they did not have the possibility of further investment.

This was a planning failure: paying such a huge amount to acquire a company, but not leaving scope for critical investment in network infrastructure.

The second failure of Vodafone was its inability to offer mobile handsets that matched the expectations of Japanese customers, who are very demanding.

Since J-Phone was known for introducing camera phones, the Japanese customer expected that Vodafone, after acquiring J-Phone, would introduce even better features.

It was possible for Vodafone to observe, read the air, and understand what type of new mobile handsets were required in light of competitors and the actions of the other two major operators. But they failed to do so.

SoftBank, on the other hand, realized this very quickly. These were the two gaps where SoftBank invested money and offered the right type of mobile handsets. Within six months, the company turned around.

It was a major success story for SoftBank—a very successful transaction.

The question is: what actually went wrong behind the scenes?

How is it possible that a company like Vodafone, with the best talent, global experience, and presence in many countries, failed to understand such simple things as these two factors—the network infrastructure requirement and the expectations of Japanese customers?

In my understanding, and as per my research, Vodafone’s main failure was not realizing that they were dealing with a high-context culture.

This means the Japanese are very sensitive to non-verbal communication and body language.

They do not give precise or detailed answers to questions.

Vodafone had long dealt with low-context cultures. The extent of high context in Japan resulted in Vodafone’s failure to integrate with J-Phone.

As a result, local employees could not guide Vodafone effectively on the infrastructure issue or on understanding Japanese customers.

Even if Vodafone conducted Western-style market surveys, they failed to realize that Japanese customers would not directly divulge what they were thinking, what they liked, or what their preferences were.

What was required was the ability to understand from the air, from the market, body language, non-verbal cues, and even written communication.

It is a very clear case of Vodafone’s failure to understand a high-context culture, failure to integrate, and failure to understand customer preferences.

Let us talk about a very popular cultural model—the second most popular cultural model—a little more complicated than the low-context, high-context culture model. This model is extremely popular, in spite of being a little more complicated. Let us see it in the next few lectures with a few examples.

Now, friends, let us talk about a very popular cultural model—the second most popular cultural model—a little more complicated than the low-context, high-context culture model.

This model is extremely popular, in spite of being a little more complicated.

It was suggested by a Dutch social scientist, Geert Hofstede, and it is called the Geert Hofstede Cultural Dimensions Model.

What Hofstede did, instead of categorizing world cultures based on low context or high context, or based on cultural elements, was to list out certain dimensions of culture, certain characteristics of culture, and certain features of culture. These are useful for people involved in mergers and acquisitions, international business decisions, market entry decisions, or any kind of international operations.

According to him, and based on his research, the first very important dimension was Power Distance, which indicates either a low score or a high score.

A high score means that people in cultures with a high power distance embrace hierarchy, while cultures (i.e., national cultures) with a low power distance score embrace egalitarianism.

I will tell you more details about this dimension in my next slide.

The second dimension is called Collectivism versus Individualism.

A high score in this dimension describes an individualistic culture, while cultures with low scores are described as collectivist cultures.

For example, Japan has a reasonably low score, less than the average score, in this dimension. It is very much collective when compared with many other cultures.

The third dimension is called UAI (Uncertainty Avoidance Index).

A high score in UAI indicates discomfort among people in that culture when faced with uncertain outcomes of their work or actions. They feel very uncomfortable about being unable to face unexpected results.

They tend to do a lot of planning. They spend a lot of time in pre-planning, organizing activities, and trying to avoid wrong or awkward results. These cultures are less risk-taking.

On the other hand, cultures indicating a low score on the Uncertainty Avoidance Index are much more comfortable with uncertainty and are risk-takers. They are ready to face bad results or failures and treat failures as steps toward future success.

The fourth dimension is Femininity versus Masculinity.

A high score on this dimension indicates that cultures in these countries recognize the importance of power and masculine characteristics, as opposed to cultures with a low score, where more importance is given to nurturing workers, creating a positive workplace environment, and displaying feminine characteristics.

I will tell you more details about this dimension in later slides.

The fifth dimension is Short-Term versus Long-Term Orientation.

This clearly indicates that cultures with a high score are future-oriented, focusing on long-term planning, vision, and sustainability—for the organization, product line, country, or society.

Certain societies have a very long-term view, as well as detailed long-term planning.

Cultures with a low score on this dimension, however, are more traditional and short-term in nature. They are bound by traditions, rituals, and historical thinking—an old-school mindset.

The sixth and final dimension is Indulgence versus Restraint.

A high score in indulgence indicates the importance given to overall satisfaction, which is considered positive. Indulgence is supposed to be good.

On the other hand, a low score in this dimension indicates normative repression and restraint.

A lot of research was conducted for this model. More than 50,000 company employees were surveyed, and Hofstede has been conducting these surveys for many years.

The latest data is easily available online free of cost, and you can find the scores of different countries on these dimensions.

If you fully understand these dimensions, you will be able to compare two different cultures on these very limited cultural dimensions, instead of trying to analyze an infinite number of cultural elements.

That is the advantage of this particular model.

Friends,

The Power Distance Index indicates that cultures with a high power distance score tend to accept the existence of the most powerful people in society, their position, and their right to rule the masses, and they accept seniority.

For example, the score of Japan in this dimension is quite high, and you see a lot of hierarchy in Japan.

In my next few slides, I will show you the scores of several countries on this particular dimension, as well as on the other dimensions. Then we will talk about them.

I just want to tell you that this Power Distance Index actually indicates some important aspects of people management in business and organizations in a multicultural environment.

Certain cultures tend to accept the authority of people, while cultures with low scores on the power distance index will indicate a lack of acceptance of authoritarian ways of working in particular countries.

These things are very important for businesses and international operations.

If we talk in more detail about the second popular cultural dimension in Hofstede’s model, Individualism versus Collectivism, we find that societies with individualistic characteristics have a high score on individualism, while societies and cultures with low scores indicate collectivism.

What happens is that the way of working changes drastically. The management styles of countries change very significantly between individualistic societies and collectivist societies.

The differences are very stark.

In my next slide, I will give you a comparison of the management styles of Japanese businesses and the management styles of US businesses. That will help you understand that societies can have very starkly different management styles.

The traits of individualistic cultures include self-sufficiency, the uniqueness of work, independence, and freedom to work.

For example, the US has a very high score on the individualism dimension of the Hofstede model.

There is a lot of focus on individual freedom of work in US companies, and of course, autonomy. These are the traits of individualistic societies, which are quite different from collectivist societies.

In collectivist societies, some of the features include rewards and compensation for the team, and appreciation for the team rather than for individuals. This is very different from individualistic societies.

Uncertainty Avoidance in Hofstede’s cultural model indicates the propensity of societies to avoid any kind of uncertain or awkward results.

One of the most uncertainty-avoiding cultures in the world is Japan.

I will show you the scores of many countries, and we will make comparisons among them. Then you will understand better.

Japan is one of the most uncertainty-avoiding countries, where people are less willing to take risks.

In a society with a high score on uncertainty avoidance, there is a low tolerance for ambiguity. People who worry about the future are more loyal to their employers and accept seniority on the basis of leadership and position.

On the other hand, a low score on uncertainty avoidance indicates that the society welcomes risk-taking, welcomes change, and even welcomes rule changes if they are good for the organization.

Uncertainty avoidance is a very important dimension.

When we go further and do more comparisons among countries, you will get a better idea of how it works.

Hello, friends.

Do you agree that people behave very differently in terms of gender?

There are visible differences in the ways females and males behave and the traits they show. You can easily observe these differences.

If you can observe these differences between male traits and female traits, you might have realized that when you meet people internationally, sometimes people of a particular country, ethnicity, or region—whether male or female—show ways of working that are more feminine in nature.

You must have noticed this. Very rightly, Hofstede also realized that the cultures of the world display masculine or feminine traits.

There is a continuum: some cultures are highly masculine, while some cultures are highly feminine.

What are the traits that differentiate these cultures?

When we say a culture is more masculine, what are its ways of doing things? And when it is more feminine, how does that reflect?

Typically, in masculine cultures, people think men’s role is to rule and women’s role is to raise children.

Again, it depends on the level of masculinity. The stronger the masculinity in a country, the stronger these opinions will be.

At a national cultural level, it is easy to find out what people think about such aspects.

Scientists like Geert Hofstede used elaborate questionnaires to find out these opinions and differentiated the cultures of the world on these aspects.

Another belief common in masculine cultures is that gender differences exist, meaning gender roles are distinct, explicit, and concrete.

That again is a masculine trait.

In extreme cases, masculine cultures indicate that men should dominate in society.

Do you also think men should dominate in society?

Think about it and think about your own culture. What do the majority of people say in your country compared with other countries and cultures?

Do people around you—your colleagues, your friends—believe strongly that men should dominate in society?

Think about it.

Another characteristic of masculine cultures is the belief that independence is the highest ideal. Being independent, not depending on others, is considered essential.

Think about your culture, the people around you, and the culture of your country. Do you find such traits?

By the end of this module, you will already know how to compare your cultural traits with those of other countries.

In masculine cultures, people who achieve success are considered worthy of admiration. Success matters in such cultures.

For example, in India, if a company launches a new product, it will often use a very successful and famous person like Amitabh Bachchan in its advertisements. He is a well-known actor, has been successful all his life, and even at over 75 years old, continues to earn huge amounts. He is rich, powerful, and famous—and such a person can bring business to a brand.

This works in India because Indian society highly admires successful people. That is a masculine trait.

Look at your own country, your own people, and especially advertisements. What kind of personalities or influencers are used in your country’s ads? Are they highly successful people, or people admired for other qualities?

In masculine cultures, there is also a general belief that ambition leads to action. Ambition motivates people to achieve great heights.

It is not that feminine cultures do not have ambition, but ambition in masculine cultures is often linked with achieving power, wealth, or status.

The belief is that without ambition, people will not act and may become lazy.

In masculine cultures, the saying is “the great and the fast are beautiful.” Look at Hollywood movies—big-budget, action-packed, fast-moving films. They are widely admired in masculine societies.

By contrast, in feminine cultures, the opinion is that gender roles are interchangeable. Men are also involved in raising children, and roles are not rigid.

Culture is not gender-biased, and responsibilities are shared.

Look at your culture. Are gender roles interchangeable in your society? Compare it with others and you will find differences.

For example, in countries like Afghanistan or in parts of the Islamic world, gender roles are not interchangeable, reflecting a more masculine culture.

This is also reflected in Hofstede’s model.

In feminine cultures, the belief is that genders should be treated equally. Mutual dependence is the main ideal, unlike masculine cultures, where independence is considered the highest ideal.

In feminine cultures, people who handle adversity and do good for society deserve admiration. They are liked more than people who simply achieve personal success.

Advertisements in such cultures often feature people who have contributed to society or shown resilience, rather than celebrities who are just rich and powerful.

For example, in Scandinavia—Sweden, Finland, Denmark—this feminine cultural trait is very visible.

Another key difference is motivation. In masculine cultures, ambition is the motivator, while in feminine cultures, service is the motivator. People work to help others and contribute to society.

The slogan of masculine cultures is often “you live to work,” while in feminine cultures, it is “you work to live.”

In masculine societies, work is almost like a religion, while in feminine societies, work is for a better, enjoyable, and balanced life.

These differences do exist.

Think about your own culture—do you see them?

If you would like, you can share your observations in the Q&A section of this course or message directly.

When sharing your opinion, please mention which country you belong to.

Now, friends, just think about it.

Do you think that there is something that differentiates one person from another in terms of foresight, long-term thinking, and short-term thinking?

Do you see those differences around you?

If you see those differences around you, the existence of such differences among people in our society also means that, among national cultures on a global scale, you will find the same differences. You will find people of one particular culture differing from people of another culture.

It is also very interesting to note that the type of differences that may be noted with very big gaps within cultures are also found on an international level, when you compare cultures of different countries. You also find similar differences on a much broader scale.

That is what Hofstede captured, slowly and steadily. In the same line, he also picked up this dimension in his popular model.

And that is long-term thinking versus short-term thinking.

According to Geert Hofstede, there are national cultures that are very short-term thinking cultures.

Short-term thinking means they adhere more to rituals and old thinking, and they do not really want to innovate or invest in the future of society.

Such societies will not think about long-term benefits. They will focus on short-term benefits.

Generally, these societies tend to get triggered by small problems.

You might have heard about riots, for example, in the USA—the Capitol Hill riots.

The US society is proven to be a short-term thinking society. With a little instigation by a head of state, the population of the USA even went for riots at the apex political building of the country.

Thinking is so short-term.

But there are countries like Japan, China, and many European countries that think long-term.

Germany is another country that has a culture of thinking long-term.

In such countries, you will not find people who are instigated by small cues or small triggers. It does not happen in those cultures.

Those differences exist, and short-term thinking versus long-term thinking has business implications.

This dimension has been a very important one.

I will talk a little bit more about it when I take the example of the comparison of certain countries in the next few slides. Then we will talk about it further.

What do you think?

Do you feel that there are differences in societies across the world, in national cultures, in terms of short-term and long-term thinking?

Think of a country like Pakistan, which at one time had a short-term Hofstede score of almost zero.

Such a low Hofstede score—in fact, at one time the lowest in the world.

Do you agree that such differences exist among the cultures of the world with respect to long-term and short-term thinking?

Just think about it, and if you want to comment, you can.

Another very important cultural dimension of the Geert Hofstede model is restraint versus indulgence.

As the name suggests, restraint means there are certain cultures in the world that tend to restrain themselves from worldly comforts. Their approach is not towards enjoying life—it is more towards work, even workaholism.

For example, Japan has a very low score in indulgence.

They are very workaholic.

They are loners.

They generally will not enjoy the money they have.

They are already cash-rich. Their accounts are full of cash.

Still, they will not enjoy their money.

Their money keeps piling in their accounts.

This is a very interesting example of Japan.

There are countries like the USA that have extremely high scores when it comes to indulgence.

They have a society that, even if they don’t have money, will like to indulge. What will they do?

They will use their credit cards.

The US is a country where, even when there is no money in the pocket or in the bank account, if they have credit cards, they will go for indulgence—some hobbies or pleasures they cannot avoid.

They will go hiking.

Money is not a barrier for many people in cultures like the US.

They will borrow money, but they will indulge in worldly pleasures.

What do you think?

Do you feel that such differences exist between countries?

But let me tell you a very important thing: it is possible that within a society there may also be differences among people. Some people are more indulgent, some people are more restrained within their societies.

But what happens from the business angle is that individual cultural differences do not really benefit businesses.

Businesses make decisions—acquisitions, mergers, or international alliances—in such a way that they reflect broader and cumulative differences.

So when we say that the majority of people in the US adhere to indulgence, it means the culture of the US, from a business point of view, is more indulgent than the Japanese culture.

That is very important and should remain in your mind.

On that note, you should check the difference between your own culture and the cultures of other countries.

If you feel that your culture is more indulgent or less indulgent, write it down.

Write your comments.

But let me know the country of your origin.

Now, friends, let us try to apply this knowledge of the power distance index (PDI), individualism versus collectivism index, masculinity index, uncertainty avoidance index (UAI), long-term orientation (LTO) versus short-term orientation index, and restraint versus indulgence.

On these dimensions, let us compare countries.

First is Brazil.
Number two is China.
Number three is Germany.
And number four is the USA.

You can include another set of countries in this kind of example I am taking. What you can do is include your country also.

Make this chart, and then you will be able to understand where your culture stands.

This is a very good exercise for you.

Just look at this example.

Look at the diagram I am showing, and create the same diagram.

Whether you use your Excel sheet or any other tool, make your diagram with all these four countries and write down the Hofstede scores for your country. Then write an analysis about your culture when you compare it with the other countries.

I will show you and demonstrate how you analyze this kind of data.

I will explain to you.

Let me tell you this.

All this data is easily available online.

You can go to Google and find out the scores of all the countries on all the dimensions of Geert Hofstede.

For example, in this case, if we look at the power distance index, we see that the lowest score is Germany’s and the highest is China’s.

What does it mean?

It simply means that in Germany, people do not accept differences between the powerful and the not-so-privileged.

The gap between the haves and the have-nots is not acceptable, at least culturally.

I am not saying that there are no rich or poor people. There are rich and poor, but society does not give major or extra importance to a rich person or the privileges he has in Germany. That does not happen.

That is the meaning of this.

The power distance score of Germany is the lowest, 35, below average.

When we say average, we mean 50, because the scale is from 0 to 100, and 50 is the average.

It is definitely below average at 35.

This aligns with the logic that power distance should not really exist.

On the other hand, it is very high in the case of Brazil and China, as you can see here.

Looking at the scores of individualism versus collectivism, what we find is that China has a very low score of only 20, while the US has a very high score of 91.

Germany’s score is also moderately high, like the US, and definitely above average, 67.

What is very clear is that China is a highly collectivist society.

Individuals do not have the same kind of importance as society.

It is a highly collective society compared to a very individualistic one like the US.

An individualistic society looks for uniqueness, independence, freedom, and non-interference.

They want recognition of the individual, not the group.

Advancement in US companies is based on individual performance.

In contrast, in China, individual performance is not as important. Instead, the performance of the group working on a particular project and its outcome decides the rewards and compensation of people in Chinese companies. That difference exists.

If we talk about masculinity versus femininity, we have already discussed a lot about these differences.

What it indicates here is very clear: the scores of Germany and China are almost similar, at 66, which is above average.

It means the societies of China and Germany are very masculine, if not extremely masculine.

That is actually the case with Japan.

We have not included Japan in this comparison.

If we had included Japan, it would stand out as a starkly distinct culture.

We will talk about Japan in the next slides when we compare Japanese culture with US culture.

Here we see that the masculinity score is lowest for Brazil in this comparison.

But let me tell you, the most feminine cultures in the world are from Scandinavia.

Countries like Sweden, Belgium, Luxembourg, and Denmark.

There you will find scores around 20, 25, or 30—very low, much below average.

These are more feminine cultures, and we have already discussed the differences, where the slogan is “you live to work” in masculine cultures, while in feminine cultures it is “you work to live.”

Basically, life is more important in feminine cultures than work.

At the same time, the United States is also more masculine, as you can see here.

But they are not as masculine as Japan.

We will talk about that later in the next few slides.

Now coming to uncertainty avoidance, which means the propensity to take risks or avoid risks, or to pre-plan in a very detailed or rigid manner to make sure there are no awkward results, even if it means delays.

Both sides have positives and negatives.

Whether uncertainty avoidance is high, it has advantages and disadvantages.

If uncertainty avoidance is low, it also has advantages and disadvantages.

For example, if uncertainty avoidance is very low, cultures tend to take a lot of risks.

High risk, high gain.

For example, in this case, China has a below-average score on uncertainty avoidance.

In China, people are not afraid of failure.

It clearly shows that, compared with other countries, they are not afraid of failure.

The score is very low—30, much below the average.

In Brazil, the score is 76, still lower than Japan, but definitely high.

In Brazil, people tend to be very sure about whatever they are doing, ensuring there are no awkward outcomes. They go to great lengths to avoid uncertainty.

But that takes a toll on innovation.

If failure is not acceptable, innovation will disappear.

What do you think in your society, in your culture?

Do you think your country’s score should be higher than average or lower?

Think about it, and you can check your country’s score by Googling the Hofstede scores on uncertainty avoidance.

Now, long-term versus short-term orientation.

When we compare Brazil, China, Germany, and the United States, we find that the most short-term oriented country is the United States.

As I already gave you the example of the recent Capitol Hill riots—avoidable, but they happened because of instigation by a US leader.

It was not in good taste for a superpower like the USA.

But the culture is short-term.

People think short-term.

They do not look at things objectively.

They do not think about the consequences of such unprecedented riots at the apex of the United States.

What is happening is that people are thinking very short-term.

The scores confirm this. These scores have been developed over the years, and they clearly explain what actually transpired in the US during the recent political riots.

At the same time, China’s score is very high on long-term orientation.

At one time, it was even more than 100.

Initially, when the survey was done, the score was found to be over 100 for China.

This means China is the world’s most long-term oriented culture.

You can easily see this from the Chinese reforms that started in 1979. They have continuously worked on infrastructure, research, innovation, and many other areas.

They have kept working despite not getting immediate benefits.

Today, China has reached a stage where it can become the world’s superpower, and the new world order may be China-led.

People are already talking about that.

Economically, it is soon going to surpass the US to become the number one economy in the world.

The long-term orientation of the culture explains all these outcomes.

There are many things in this particular chart that I am giving as an example.

When you add your country here, look at the merits and demerits.

Although let me tell you one thing—there is a thing called merits and demerits in cultures.

Every culture has its own way of doing things, and it achieves excellence with the cultural profile they have.

There is no single way to succeed.

Every country, with whatever culture it has developed over thousands of years, cannot change these cultural aspects overnight.

But with the right environment, they will definitely achieve success.

This is the fact.

We will talk more about this later because it concerns our cross-cultural management aspect.

This fact should be very clear.

The US versus China in this cultural dimension.

Now, restraint versus indulgence.

Again, the USA is at the top with a very high score on indulgence, as I told you, even if they don’t have money in their pockets, they will use credit cards, but continue with their usual routines.

In contrast, the lowest score in indulgence is China’s, at 24.

What does it mean?

It means Chinese society is diametrically different from US society on this dimension.

Chinese culture is highly restrained, which is also the case in Japan.

We will compare Japan and the USA soon.

You will see that Japan is also a very restrained culture.

On all these dimensions, we can definitely get some cues about what types of cultures exist according to Geert Hofstede’s scores, and you will get an idea of the cultures of different countries and how to deal with them.

Now, if you talk about the cultural dimensions country-wise.

For example, if you look at Brazil, we'll start with Brazil as the first culture.

We see that Brazil's scores are highest in power distance and uncertainty avoidance, and moderate to lower in other dimensions.

What is the meaning of this?

The meaning is that Brazil, as a culture, is less individualistic, less masculine, less long-term oriented, but fairly above average when it comes to indulgence.

The score of Brazil in indulgence is also quite high. In three dimensions, they display higher scores—power distance, uncertainty avoidance, and indulgence.

While they indicate a low score in individualism versus collectivism, long-term orientation is also below average.

That is the short-term thinking culture, and it is more feminine in nature because the score is almost average.

It is between less masculine and more feminine.

If we talk of China, we find that Chinese society is very strong in power distance, masculinity, and long-term orientation, but very low on individualism, which means it is more collective in nature.

It is low in uncertainty avoidance.

It is a very risk-taking kind of culture.

It is also very low on indulgence.

It is a very restrained culture.

When we see this, we find that Chinese culture has a very strong acceptance of the authority of certain people and highly masculine traits.

Success, wealth, and power have a lot of meaning in this society, but they also have a very long-term orientation, so they are ready to wait for the benefits of whatever they do on a long-term basis.

This is the way we can understand more about China.

If we talk about Germany, we find that Germany has very high scores on long-term orientation.

That is very interesting when we compare it with the USA.

It is very good, and also it is fairly masculine, above average.

The individualism score is also very high.

Uncertainty avoidance is also very high.

It means they are very particular about whatever they are doing, and they are probably afraid of failure.

They make sure that things are on the right track.

I am not saying it is a good thing, but that is what their culture is.

Germany is very low, below average, at least in indulgence, and below average in power distance.

This also indicates the culture of Germany when we compare it with other countries.

This type of society is not actually similar to US culture, which is quite different.

If we look at US culture, we find that it is very strong in terms of individualism, masculinity, and indulgence.

But it is weak when it comes to power distance.

That is actually a positive thing.

It does not accept the importance of certain privileged people, which is indicative of a very strong democracy, and it has low uncertainty avoidance.

It is a very risk-taking kind of society, but they are very short-term thinkers. They are not strong in long-term orientation.

That is the explanation of the United States.

This is the way we analyze these scores with Hofstede's model.

I strongly suggest that you use this chart and plot it, including your country.

Make a comparison of where you stand.

You will find it very interesting.

If you want, you can also include Japan in this because Japan is a very distinct culture, and it will give you a very good idea about your country. If you share that particular image in the Q&A section of this course, it will be very useful for the other students.

You can also analyze.

You can give your own analysis of your culture, and you can comment on it.

Let me tell you, a profile of any culture cannot be treated as bad or good with this analysis.

This analysis is only for business decision-making—how to do things.

The idea of cultural comparison is to find ways and means of managing and getting the best performance.

For example, in our case study of UNP, the US was involved, and then Sweden was involved.

Sweden is a very feminine kind of country, with a very low score—something like 15 to 20—in masculinity versus femininity.

Italy was also involved in that.

It is not because of the culture.

There are no implicit or inherent demerits of a culture.

No culture is bad.

It is just that you should know how to manage and get the best results.

This is what I wanted to convey to you.

In the next lecture, Dr. Jain is applying Hofstede's model to compare the US Culture with that of Japan.

Friends, are you satisfied with the comparisons?

Should we do some more comparisons?

The comparison between Japanese culture and US culture is very important.

I think there is still scope for comparing the culture of Japan and the US.

My idea is that this comparison between Japanese and US culture, using the Hofstede score, would be a very good way to get a solid understanding of this model.

Personally, my opinion has been that the Hofstede model is very popular and the most widely used in businesses for making business decisions.

There is no harm in taking up the comparison of the cultures of Japan and the US.

It will only add to your confidence in this model—how you can use it.

You should definitely try this model, comparing your country with whichever country you want.

I think this kind of exercise will definitely help you.

You will become very confident when it comes to cross-cultural management.

You not only compare cultures, but you also gain many insights about them.

And those insights actually give rise to several ideas and theories.

I think it will serve a very good purpose.

I will try to explain Japanese culture.

I will describe Japanese culture and how it is different from other cultures.

As per the dimensions suggested by Geert Hofstede, I will compare Japanese culture with US culture.

You will find the scores of US culture in this column, and the scores of Japanese culture in another column on different dimensions—mainly Hofstede’s cultural dimensions.

I will explain and compare the scores of Japan with those of the US.

If we talk about the cultural dimension called uncertainty avoidance, the meaning of which is that a higher score displays a high level of avoidance of awkward or uncertain results related to any action, project, or business.

Cultures with high uncertainty avoidance index scores display a high level of pre-project work, research, and ensuring that everything is perfect.

There is no deviation in the implementation of projects or business.

The focus is on avoiding awkward or negative results.

On this dimension, the score of Japanese culture is 92.

When we compare the same score of American culture, the US score is 46.

Against 46, the Japanese score of 92 in uncertainty avoidance is extremely high.

It is among the highest in the world.

Because of this, there is a peculiarity and uniqueness in Japanese culture, as deviation is rare.

Looking at the second dimension suggested by Geert Hofstede, the power distance index (PDI), which indicates acceptance of the hierarchical status of every individual in society, and how acceptable it is to society.

It reflects the existence of powerful people who dominate others and enjoy privileged status due to strong hierarchies in society.

A higher score indicates the existence of strong hierarchies and the higher status of individuals.

If we compare Japan’s score with that of the US, we find that the US score is much below average on PDI, which means US society is not really hierarchical.

In Japan, it is somewhat hierarchical—a borderline hierarchical society.

It is better than many other Asian societies, such as South Korea or China, where the PDI scores are much higher.

From Western standards, Japan appears hierarchical, but from Asian standards, not so much.

The third dimension of Geert Hofstede is the masculinity versus femininity index score.

Japanese culture is highly masculine.

In fact, it is the most masculine culture in the world.

If we compare this score with US culture, which should also be masculine because of the high level of individualism, the US score is just 62, while Japan’s is 95.

This indicates a higher level of competition in Japan.

However, competition among individuals does not exist in Japan due to high pluralism and collectivism.

The individualism index score in Japan is much lower compared to the US, where it is 91.

Japanese society is collective in nature.

Competition exists instead among groups, companies, and business houses.

That competition is extremely high, which is why Japanese culture is regarded as the most masculine in the world.

The fifth dimension of Geert Hofstede is LTO—the long-term orientation.

The score of Japanese culture compared with the US is extremely high.

The US score is much lower.

This means Japanese culture is highly long-term oriented.

Their actions, planning, and slow decision-making reflect this.

Japanese companies focus on long-term aspects such as market share rather than quarterly or yearly profits.

Finally, the sixth dimension of Geert Hofstede’s framework is indulgence.

This indicates the extent to which a society restrains or indulges in worldly comforts and impulses.

We find that Japanese culture scores below average on indulgence.

The US, in comparison, has a much higher indulgence score.

Finally, if we talk about the cultural context, Japanese culture is a high-context culture.

In high-context cultures, societies operate on inherent rules and regulations that need not be communicated verbally.

In low-context cultures, such as the US, people manage daily life with more verbal communication and expression.

It is easier to understand low-context cultures.

It is much more difficult for outsiders to understand high-context cultures.

That creates many challenges and barriers for outsiders to succeed in Japan.

Friends, we studied a lot of very important information in this module, and we now definitely know that it is possible to draw good inferences about the cultural traits of high context or low context to varying extents. There is a thing called the highest context, or the lowest context—it can be in between.

There is no black and white.

It is the greys, actually. The high-context or low-context culture mapping of different nations makes it possible to draw good inferences.

We also studied in this module that Hofstede's cultural dimension model is one of the most popular and widely used tools to compare national cultures and see cultural differences.

These models discussed in this module can help managers increase their cross-cultural competence for effective leadership and for appropriately dealing with and managing multicultural teams.

These multicultural groups have to be managed efficiently, which requires certain skills and competencies that can be obtained through these very popular models.

These cultural dimension models can help in making important strategic international business decisions.

We are on the same page on this point that all these models are definitely useful and very easy to use.

In fact, scores and data are easily available online, and you can easily find them free of cost.

Finally, similar ideas can also be used to manage multicultural remote teams.

I told you about that.

In the current situation, with current global challenges and the pandemic, the work-from-home culture has been embraced by a very large number of organizations, and it is going to remain for many years to come.

Those remote multicultural teams require similar ideas, along with some new knowledge and new experiences. I will definitely be updating this course in the near future.

In this module, the instructor has shared some of the most interesting ideas related to the need to fine-tune leadership approaches to the local cultural needs while moving to other national cultures.

Now, friends, in the next module that refers to leadership, management style, and national cultures, we have very pertinent questions like: when a successful leader changes the country and thus gets into a different culture, what in his leadership does he have to adapt, and what has to be retained or maintained from the home culture?

These are the questions we are going to address in this module.

Questions like: Is the effectiveness of a certain leadership style influenced by cultural differences?

Are there certain preferred leadership styles in the local cultures that produce outstanding leadership?

Or at least can we understand the perception of the local people, the local cultures, regarding which type of leadership and leadership traits are more effective for them?

Questions like: are there universal qualities in a leader that are appreciated equally by followers all over the world?

Are there any common traits that are revered by all cultures? If they exist, then focusing on such traits will be very helpful, especially in identifying the most competent global business managers, competent intercultural managers, and intercultural communicators.

Or does the question arise that things are even more complicated than what we are talking about?

Are there more complexities involved in understanding the relationship between leadership styles or management styles and local national cultures?

What kind of organizational culture do management practices around the world follow?

Can we identify the typical management styles of different countries?

Are they really helpful?

Are they going to help us improve our cross-cultural competence?

These are the things that we will try to look into in this particular module.

Are these management styles affected by the implicit preferred leadership styles of the dominant local cultures?

This is also a very important question to be discussed.

These are the types of questions in this particular module.

Hello friends.

Welcome back.

We have already talked about ways of understanding cultural differences among nations, and we have discussed several cultural models and certain theories that give us insights into how we can do cross-cultural management.

But don't you think that leadership, the leadership style, is also very important and should matter?

What do you think about the opening case study of this course about UNP?

Did you see any leadership failure anywhere?

Did you see any gaps with respect to leadership?

These are the things that we still want to discuss in this course so that we have an understanding of the role of leadership in managing different national cultures and cultural differences.

These discussions should give us insights into how to carry out cross-cultural management in situations like what transpired in the UNP case, as well as in many similar situations.

What are the possible issues in different cultures? That needs to be understood.

Some of the issues are:

1. Expectations of the followers from the leader—employees have certain expectations depending on their national culture. Because they have different belief systems, behaviors, attitudes, and values, their expectations about the attributes and personal characteristics of the leader will also differ.

2. The nature and quality of the leader–follower interaction, which includes the exchange of information, ideas, and the relationship between the leader and the followers.

3. The ability of leaders, especially foreign leaders, to adapt—leaders from a different culture need to adapt to the local culture, local expectations, and the profile of the local followers.

4. Identifying the most effective leadership styles in a specific country—for example, in the UNP case, could Upjohn’s managers identify effective ways of leading the employees of the Swedish group as well as the Italian group? How could they understand which leadership styles would be effective?

5. The ability of leaders to fine-tune leadership practices—this means adapting leadership approaches to local values and preferences, belief systems, attitudes, and behaviors. Is it possible to fine-tune practices in this way? Can leaders develop such capabilities, and can organizations identify such leaders who are able to do this?

6. The ability of leaders to build a suitable local corporate culture—for example, in the UNP case, was it possible for Upjohn’s managers to build acceptable and expected local corporate cultures within the Swedish and Italian groups?

7. The ability of leaders to manage diversity, especially in foreign cultural groups.

These are some of the questions that come to mind when we talk about the impact of leadership on managing cultural differences.

Do you agree with these questions when we are trying to understand cross-cultural management and the ways of managing such situations?

What are your views?

Write them down in the Q&A section of this course.

Let's look at some of the more popular leadership theories that will help us more in our pursuit to find better ways and means of managing people with different cultures in a business context.

Friends, one of the simplest theories, but a very popular one in this respect, is called the LMX theory.

That is, the leader–member exchange theory.

What is the concept of this theory?

The concept focuses on the quality of the relationship between the leader and the members of the team.

It becomes even more important when the leader is from a different cultural background, whether he or she is able to build a high-quality relationship with the members of culturally different teams.

Is it possible?

Does the leader have that capability?

And is it possible to really create that?

What are the ways of doing it?

How to do it requires a lot of knowledge, which we are trying to understand in this course.

The influence of the members on the leader, especially in a cross-cultural situation, is very important when it comes to understanding the LMX theory.

What is the impact of the leader–member exchange interaction and the influence of the members on the leader?

What does the leader grasp from that kind of interaction, especially in culturally different, cross-cultural situations?

In this theory, efforts are directed toward building high-quality leader–member exchanges based on trust, liking, loyalty, and mutual respect.

That is the idea of this LMX theory.

This theory is very subjective in nature.

It depends on the situation, but it is very important and is a very good starting point for understanding the role of leadership in effectively managing cross-cultural situations.

Friend,

What do you think?

What is the nature of the expectations of the follower?

What triggers these expectations?

What recreates them?

What shapes the expectations?

What are the dimensions that make up these expectations?

One of the theories—implicit leadership theory—I will talk about. It is a very popular and very famous theory, which explains the expectations of the followers. According to it, these are the implicit influences of national cultures based on unique values, beliefs, behaviors, and attitudes of different cultures of the world.

What actually is this implicit influence?

It is nothing but the unconscious expectations of the followers about the preferred personal characteristics and attributes of the leader, especially a leader from a different national background.

It does not matter which national background he comes from, but the important question is whether he can understand these unconscious expectations.

That is very important because it is not conscious.

Followers will not be able to tell the leader what they want. Even if the leader talks to the followers about what they want, they will not be able to express it.

This is unconscious, which means even the followers do not articulate it and are unable to do so.

That is very important.

Do you think unconscious awareness can help the followers tell the leader what they want from him?

Is it speakable?

Is it communicable?

What do you think?

These are expectations that are implicit in nature, and that is why the theory is called implicit leadership theory.

This theory is very famous.

It is called the GLOBE study.

What is the GLOBE study?

The GLOBE study is about universal leadership preferences.

The study was started several years ago by House and his fellow scientists (House et al.).

What they did was search for outstanding leadership styles in different cultures of the world.

They wanted to map different characteristics and attributes of leaders required for outstanding leadership in different countries.

They studied 112 different behavioral and attribute descriptors, such as diplomacy, the ability to inspire, or being determined, many different descriptors that may contribute to or impede the formation of outstanding, effective leadership in different national cultures.

That was the aim.

The main lead author of this study, House, along with his researchers, identified out of these 112 descriptors six global leadership dimensions.

They found that these six dimensions play the maximum role in contributing to or impeding the creation of outstanding leadership in different countries.

They created scores from 0 to 7 on these six global leadership dimensions, called CLT leadership dimensions.

That means Culturally Endorsed Implicit Leadership Theory.

These are called the CLT leadership dimensions.

Friends, these six dimensions are identified by the GLOBE project for assessing the CLTs across global cultures.

I just told you that CLTs mean culturally endorsed leadership traits.

These six identified cultural dimensions of the GLOBE study are:

1. Charismatic value-based leadership – a CLT dimension that tends to inspire, motivate, and expect high performance from others based on firmly held core values. The ability to understand those core values, especially in a culturally different or cross-cultural situation, is a very difficult task, and it really requires charismatic and value-based leadership. Core values-based leadership is very important here.

2. Team-oriented leadership – this refers to effective team building and implementation of a common goal. Being able to build such a team requires team-oriented leadership.

3. Participative leadership – this is the degree to which managers involve others in making or implementing decisions. The kind of participative involvement of team members with the leader indicates the level of participative leadership.

4. Human-oriented leadership – this refers to humane and supportive leadership. The degree of humaneness and supportive nature of the leader defines this type of leadership.

5. Autonomous leadership – this signifies independent leadership. It looks at how independent and autonomous a leader is, how much he or she is dependent on the team, and how much on the organization. These aspects are covered under autonomous leadership.

6. Self-protective leadership – this signifies the security of the individual leader or group members, even if it requires certain controversial decisions. The focus remains on ensuring the security of the leader and the group members. In certain cultures, this is important, while in others, something else may be more important—or a combination of CLT dimensions may be relevant.

For most major countries, the GLOBE study found scores from 0 to 7, reflecting leadership style differences among the countries.

This project is very helpful and is one of the most authoritative research studies—a long study done on thousands of managers and companies across the world.

This CLT theory (culturally endorsed implicit leadership theory) includes six dimensions:

• Charismatic

• Team-oriented

• Participative

• Humane

• Autonomous

• Self-protective

For example, if we take Mexico and Germany, we find their scores from 0 to 7 for all six dimensions. These scores are available for any country.

In our UNP case study, we can also find similar scores for the US, Sweden, and Italy.

Scores above 4 generally signify that these CLT attributes contribute to outstanding leadership, while scores below 4 tend to impede outstanding leadership. This is the general explanation for these scores.

For example, in our own case, if we look at the scores of the US, Sweden, and Italy, we find that Sweden and Italy have almost the same average scores on the CLT dimensions. However, they differ significantly on the charismatic, participative, human-oriented, and self-protective dimensions.

When we compare Swedish scores with the US, or Italian scores with the US, we see significant differences in these dimensions.

These score differences definitely indicate friction and the differing implicit expectations of the Swedish and Italian groups compared to the US managers.

This requires careful study by leaders so that inferences from these scores can be used for effective cross-cultural management by US companies managing in countries like Sweden, Italy, or elsewhere.

In our UNP case, these scores can definitely be used to draw inferences for leaders who want to practice effective cross-cultural management.

Do you see the benefits of these scores in the UNP case?

What is your opinion?

If you look at these scores, do you see the relationship between these scores and Hofstede's cultural dimensions model?

You can analyze those relationships.

And if you want to compare your country with the US or other countries, you can create a similar table. Write down all six CLT dimensions and compare those scores with other countries, just like you did with the Hofstede model.

This is a very useful model.

These scores are easily available online, and you can find them for all countries.

A global culture cannot be built with anything less than ethical leadership and ethical behavior. Let's see why?

Now, friends, we have a fairly good idea that leadership has an impact on cross-cultural management, and there are issues that are related to leadership.

What do you think? Do you think that leadership plays a very important role?

If you have some ideas about other issues related to leadership that are not covered in this course, do share your ideas in the Q&A section so that those ideas can be included in the course later on.

In the meantime, there are certainly more issues that I want to discuss, and they relate to building a global corporate culture.

Don't you think that in the case of UNP, if very professional work had been done on creating a global culture based on ethical values suitable to the culture of the US, to the culture of Sweden, to the culture of Italy, if that had been created, do you feel that things would have been different?

Let us discuss that issue.

Building a global corporate culture and ethical behavior in a cross-cultural environment is a very challenging task, which requires highly trained people.

You will soon start appreciating that after completion of this cross-cultural management course, you will find it is not difficult to get fully trained people who specialize in managing such cross-cultural environments.

Those global leadership traits are available at a premium, but they are available.

How much does the cost of a premium person with those kinds of skills matter, compared to spending $1 billion, for example, in the case of UNP?

Building a global corporate culture and ethical behavior in a cross-cultural environment requires ethical global leadership, which spearheads and builds the core global culture of the organization and protects it.

That is the objective, in my view. In my view, a global culture cannot be built with anything less than ethical leadership and ethical behavior.

It is not possible otherwise. What happens, actually—and probably that is what happened in the UNP case also—is that the difference in cultures, as perceived by the management, and in this case of UNP, when I say management, I mean the parent company, conflicts with the opinion and practices of multicultural workers.

In this case, I am talking of workers of Swedish origin and Italian origin. And of course, in a multicultural environment, the US workers are also included in this.

What are the cultural practices, for example, in Sweden? What are the practices in Italy? What are the practices in the US?

Those multicultural workers' practices and the differences as perceived by the management can create conflict, and ethical issues can also arise in this.

For example, in the UNP case, lost morale, disgruntled employees—somewhere the question of ethics comes into their mind. Without the question of ethics, the morale of the employees will not go down. Somewhere, they will feel that the organization is not acting ethically.

That is what actually comes first to mind. That is the reason in the UNP case, some of the key talent left the company, in spite of the fact that they were loyal to the company.

These ethical issues came to mind. Definitely, that is the reason they left and joined other companies.

Without these issues arising, it cannot happen. The ethical part should not be forgotten in such cases. That is very, very important.

Building the core ethical values can be done by rewarding ethical behavior and punishing transgressions, but very carefully. In a cross-cultural environment, how you punish transgressions requires a lot of brainstorming.

The parent company actually has to be very, very sensitive when they are being judgmental about other cultures.

This punishment actually has to come from the leadership of the local culture only. The local people, the local leadership, should be able to punish such transgressions, if any.

That reinforces the faith in the ethical corporate global culture—punishment organization-wide, worldwide—which may include, for example, in the UNP case, US workers, Swedish workers, or Italian workers.

But how to initially manage this issue of rewarding and punishing in other cultures—in the Swedish culture and the Italian culture, in this case—has to be done very tactfully.

Again, tactfully means on ethical grounds only.

Giving the right signals to the workers that whatever is being done is being done with the core objective of maintaining and protecting the core ethical values of the organization.

And then, of course, all these efforts have to be supported by ethics programs. Programs and practices in the organization maintain the ethical culture and ethical global culture on a worldwide scale.

This kind of leadership builds the global corporate culture and ethical behavior in this kind of cross-cultural environment.

A multicultural environment is a very, very specialized task. But it is very, very important.

Building an ethical global corporate culture is very, very important. Work on this has to start at the very beginning of the merged organization, or any other kind of interaction that is taking place in the organization on an international level, for international trade, alliances, or joint ventures.

Whatever the situation, these issues will definitely emerge. And there, the role of worldwide global leadership, capable leadership, cultural awareness, and cultural competency—all these things will matter.

Now, friends, another angle to look at this issue is the ability of leaders and managers to manage diversity in a cross-cultural environment.

How do they do it?

That becomes another issue.

What do you think? Worldwide diversity—can it be managed by a handful of managers from the parent company, or does it have to be managed at a local level by the managers at the local units?

For example, in the UNP case, in the Swedish group, or in the Italian group, certain managers had to be brought on board to be able to manage diversity.

What do you think? What are your views?

Please share your views on this issue.

As per research and practices in organizations, what has emerged in the literature and research papers is that diversity management on a global scale starts with a global definition of diversity, or the definition of global diversity.

National cultures’ diversity.

What is required is to correctly redefine and recognize all kinds of diversity.

It is not just about national diversity.

Saying that the Swedish group is there, the Italian group is there in the UNP case, and then the US workers are also involved.

In UNP, there are three types of groups.

But there can also be diversity on gender issues.

There can be diversity from other angles.

Maybe in the Swedish group and the Italian group, there are workers from other nationalities also.

Those minority groups cannot be ignored.

Depending on the situation, you have to define the major, minor, hidden, and open—all kinds of diversities. Depending on the situation, this diversity can take different forms and names.

The second step in diversity management is to redefine discrimination.

What are the areas where discrimination on national cultures, issues related to multicultural workplaces, or issues related to parent and subsidiary company relationships occur?

For example, in the UNP case, there can be different types of discrimination that have the potential to create dissatisfaction among employees, especially those of different cultures.

Employees of companies that have been acquired.

Parent company managers can hide discrimination, which can actually eat away at the performance of employees of other cultures.

You have to identify and redefine discrimination, and clamp down on all its forms.

That is also very, very important.

And it has to be done very sensitively.

We will discuss at the end of this course several ways and means of using these techniques, and how the UNP case could have been dealt with to avoid the situation. We will do it later.

But for now, you have to understand that discrimination and its identification are important, especially cultural discrimination.

A third very important aspect of diversity management relates to the celebration of diversity.

Now this is a very strong pose.

Can you really celebrate diversity?

Can you think of the ways companies, especially the managers of the parent company, can find ways and means of celebrating diversity, especially multicultural diversity and multicultural workplaces?

In the case of UNP, for example, there were 35,000 employees of the merged entity.

Employees were from not only the US, Sweden, and Italy, but also from other nationalities.

Are we able to convey the message to all the workforce across the worldwide presence of the organization that the organization is there to celebrate diversity, whether major or minor?

All diverse groups in the organization are welcome, and the organization is ready to celebrate their presence.

The leadership has to find all possible ways of celebrating diversity.

How they do it will depend on the situation.

Some kinds of budgets may be required.

Some celebrations of festivals of all cultural groups are required.

How do you institutionalize those celebrations of the different festivals of the different minority or majority groups, cultural groups, and national cultural groups?

Keeping track of all the possible opportunities where diversity can be celebrated is a very innovative process, and the right leadership can do it.

It is not difficult to do.

It is doable.

Another very important aspect of global diversity management, cultural diversity management, is finding ways and means of reaching out to all the interest groups, all the cultural groups—whether major, minor, hidden, or open—in all departments, all parts of the organization, in all countries, wherever the organization is present.

How do you reach out?

You have to find out the ways.

The leadership needs to find out the ways. Not only that—their next job is to keep reaching out to the people.

People should not be left behind.

Minority groups should not be left behind.

Identify the minority cultural groups.

This kind of leadership is the need of cross-cultural management.

Finally, a very important aspect: the managers and leaders, especially of the parent company, should not assume that whatever they gossip about, whatever they convey in meetings or at any other event of the organization, any kind of official engagement, will be taken as a joke.

Once you communicate something, it can result in big problems.

The same thing happened in the UNP case. Small things escalated, and as a result, in less than a decade, the names of all the organizations involved vanished from the market.

Small loose talk or small jokes about other cultures can escalate into big issues. That assumption is something a good leader, a good global leader, will never make.

What do you think of this kind of diversity management?

Can it be expected from the most effective global leaders?

Do you think there are many other things that can be done for diversity management by such leaders?

If you think so, do share your ideas.

Management styles in different countries are not only affected by cultural factors and cultural differences, but are also influenced by the history of the country, infrastructure, environment, and many other factors. For that reason, although leadership does play an important role in explaining management styles, management style differences cannot be understood using any single theory, like GLOBE research or the Hofstede model.

Friends, do you think that leadership styles, as explained in the CLT theory and the CLT dimensions, will have a direct impact on the way management is run in different countries, on the management styles in different countries?

What is your opinion on this?

I think you will appreciate that CLT dimensions are implicit dimensions, while management styles are affected not only by preferred leadership—and that is unconscious leadership preferences—but also by many other factors.

In the conscious mind, there are cultural differences among countries, even within the European continent. In different European countries, you find many cultural differences, as explained by Hofstede’s model.

Management styles in different countries are not only affected by cultural factors and cultural differences, but are also influenced by the history of the country, infrastructure, environment, and many other factors. For that reason, although leadership does play an important role in explaining management styles, management style differences cannot be understood using any single theory, like GLOBE research or the Hofstede model.

Those facilities, tips, and techniques cannot be applied universally.

In such a case, it is important to understand the features, salient characteristics, and specific attributes of management styles in these countries. That is my view.

What do you think?

If you think there can be some ways of understanding management styles in different countries, and if you have any ideas, do share.

As per my understanding, it is important to study the typical management styles, their features, and characteristics in those countries.

For some of the countries, I will explain to you some of the salient features—the summary of typical management styles.

For example, if we talk about Germany, the management style is more of a hierarchy plus consensus. In Germany, typical management styles are characterized by a clear chain of command.

It means there is a hierarchy, but it does not mean there is no consensus. Considerable value is placed on consensus-building. That is why this management style in Germany is called the hierarchy plus consensus management style.

In Germany, managers at all levels strive for excellence and perfection in processes and procedures. If any manager is looking at those perfections, the excellence is considered a strong liking for the existing system in Germany, and rewards are given to such managers.

That is the general situation in Germany, where you also find a good level of solidarity among managers and workers.

In other words, the status of workers and managers is very equal. It is single status.

While in many other countries, you will find many distinctions between managers and workers—for example, in Italy—in Germany, you find a fair amount of solidarity among managers and workers.

However, managers normally work long hours. They tend to follow and obey rules. They focus on fair play. A justified working style is prevalent in Germany, and they are always ready to welcome instructions from their superiors.

This is the typical management style.

Similar styles exist in many countries with some variations. I will continue giving you more examples of countries, explaining the salient features and characteristics of their typical management styles.

Similar information can be gathered for almost all countries.

For example, if we talk about the typical management style in France, it is generally an autocratic style. Autocratic management style prevails in France. This is generally observable, and decisions are usually taken at the top.

Orders are communicated across the organization in a top-down manner, which means decisions taken at the top are conveyed throughout the hierarchy. That is why it is called a top-down approach.

In France, ultimate success is often considered less important than heroics in carrying out projects.

Because of the history of France—where people have pride in their history and admire figures like Napoleon, who might have failed but whose heroics are still admired—this culture still prevails in France.

That is why you see situations more focused on heroics rather than ultimate success.

In France, there is also a high tolerance for managers’ blunders. That is quite unusual and surprising, but it exists.

At the same time, interdependence with mutual tolerance and teamwork is very common in France.

French employees generally have faith in their appointed leaders and managers.

This is the typical characteristic and feature of management style in France.

Now, friends, talking about the typical management style of Japan, which is generally referred to as ringi sai consensus, the management style in Japan is characterized by a confusing hierarchy, which means authority is at the top.

Definitely, it is there.

But it is also characterized by the fact that top management, or top managers, generally do not play any major role in day-to-day working or everyday affairs, so their involvement is very minimal.

They occasionally initiate policies after getting consensus and recommendations from the bottom for such policies. And they really take time to initiate such policies.

Occasionally, they appear in such roles to initiate policies once they are built on the ideas and suggestions from the bottom and approved by many people in the organization.

Their role comes at that point.

Obviously, a large number of people are involved in policy formulation in Japan.

Ratification of the policy at the top, at the right time, is done and conveyed across the organization.

There is a process involved, from a bottom-up approach, and then a top-down approach.

This cyclical way of decision-making is most common in Japan.

If we talk about the typical management styles in Spain, these are generally referred to as the human force.

There are very different types of management styles where human attributes and human influence play a very important role.

Do you see if these different management styles echo the type of management styles that exist in your own country?

You should try to find out.

If you want to share a similar account of management style, the typical management style in your country, do share it with me or with the group in the Q&A section, but just mention your country of origin along with your account for the other fellow students.

The human force management style of Spain is characterized by autocratic but charismatic leadership.

Here, the leadership does affect management style, and decisions made by managers are often not based on pure logic, but rather on intuition.

Again, echoes of the human force are here.

Intuition is there.

Then there is a focus on personal influence, and the human force is very much present in the management style in Spain, where employees are motivated by managers because of the personal influence and power of the human force exerted by the managers on the employees.

What it means is that the style of working in Spain is declamatory in nature, theoretical in nature.

That is what it is in Spain.

Generally, the decisions made by managers are supposed to be irreversible, so it is not expected that managers would be forced to reverse their decisions.

Because it is autocratic, because it is charismatic, because it is declamatory in nature, and because it is characterized by personal influence and human force, the whole typical management style of Spain is very unique in nature.

If we are talking about the typical management style of Sweden, it is very important for us because our opening case study involved three geographic regions: the US, Sweden, and Italy.

It will be very important for us to understand.

Talking about Sweden, the management style in Sweden is primus inter pares, which means it is a democratic style of working with flat hierarchies and fewer layers of hierarchy.

It is not the tall hierarchy; it is mostly the vertical hierarchy. Managers in Swedish management styles are easily accessible.

They are ready to support, they are ready to guide, and they are always available for help.

Typically, there is also a Swedish law that in companies based in Sweden, important decisions should be based on the suggestions of many people and on overall consensus building.

That law is there, which is very typical of Sweden.

Now, friends, our focus on the USA is very important because we have been talking about the parent company Upjohn, which acquired Pharmacia of Sweden, which had already acquired Farmitalia of Italy.

It is very important for us to understand the typical management style of the US.

Whatever knowledge we are gaining in this course—with respect to leadership, cultural differences, their identification, and the different theories in this course about cross-cultural management—all these tips, techniques, and methods will give you skills. Coupled with the knowledge of the typical management styles in the countries involved and the major cultural groups coming from these countries, it will become comfortable and doable for you to effectively manage situations like the UNP case study we discussed.

In the US management style, the focus is mainly on getting things done.

This is a very unique type of management style where top managers are supposed to get the job done by whatever means. Generally, they try to find shortcuts for success, for making money, for getting more profits for the organization, and for allowing the possibility of monetary benefits to the employees, because money speaks in the US.

CEOs are expected to act, and they definitely enjoy a lot of authority. They seldom fail to act because they have to get things done, and whatever is required to achieve that, they can use any tactics to get the job done.

The motivation of employees in US management styles mostly comes from monetary rewards rather than other things. That is very typical of it.

At the same time, the managers are very capable in the working of US companies, because if they are not capable, they are generally fired very quickly.

Hire and fire is a very common practice in the US management style.

At the same time, these capable managers expect complete independence and freedom across the organization, from the lower level to the top level. Independence and freedom are very important.

That becomes the leadership style as well as the management style in the USA.

Finally, we are talking about management styles in Italy.

Italy is another focus area for us to understand in this course because we are discussing the opening case study of UNP, where Italy is also one of the regions involved in finding the solution to the problem.

The Italian management style is characterized by a pyramidal hierarchy.

That is very typical of Italy.

You must have noticed that when we are talking about the typical management styles of different countries, the styles are not very similar.

These styles are unique to each country because of the unique cultures of the world and the many factors involved in developing management styles.

That is why you will find that no two countries have very similar management styles. There are many differences as far as management styles are concerned, and that is the reason there is no single way of categorizing such styles. Individual countries have to be discussed for this purpose.

The pyramidal hierarchy is the main feature of the Italian management style, and the final decisions are normally centralized at the top.

Being a pyramidal hierarchy, the Italian management style naturally takes a top-down approach.

Among the employees, however, there exists great respect for supervisors, managers, and bosses.

Generally, consensus is expected on decisions, and it is normally available in the Italian management style.

At the same time, the style of working is team-oriented and participative in nature.

This is the typical management style of Italy.

You can see this when we compare the management styles of the US, Sweden, and Italy, which we had discussed earlier in this course. But here we have described them in more general terms.

You do see differences in the management styles, and those differences were at play and had to be managed somehow.

This course focuses on the ways, means, and approaches for such cross-cultural management.

Now, before closing this particular unit of the course, let us finish by comparing the management styles in Japan and the US in more detail. This will serve as a demonstration to you of how you can compare two different countries with each other as far as management styles are concerned. You can use a similar approach for your own country as well.

If you do something similar, do share it with the other students in this course. Write and share your notes in the Q&A section, or send them to me.

I will put them in the Q&A section for the benefit of the students.

Or I can include your ideas, if they have merit, in the course itself in the resource section. That can also be done.

In the next lecture, we will start with the comparison of the management styles of Japan with those of the US.

In the next few videos, the instructor explains that management styles are unique to each nation and can not be categorized like national cultures or implicitly preferred leadership styles.

Friends, if we compare Japanese and US management features and characteristics of the management system, and if we talk about aspects like lifetime employment, it is actually quite high in Japan and very low in the US. People are not working in US companies for lifetime employment, and employers in the US are not providing lifetime employment, but this is not the case in Japan.

A system of providing lifetime employment does exist. They take care of their employees. The welfare of employees is very good, and systems are created in such a way that people work with the organization for a lifetime.

Although in very recent times these characteristics are diluting, the line between these differences is blurring now. But still, these features can easily be seen when you work with Japan.

The second aspect is about discrimination.

In general, there is no discrimination on the basis of caste or race. Those things are not there in Japan, but there is discrimination based on gender. Discrimination in favor of males and not in favor of females does exist.

It is generally said by experts that the reason Japanese companies discriminate against women is that they believe women will not work for them for a lifetime. They may leave the companies if they are married, if they move from one city to another, or for various other reasons.

The practical reality is that women often leave organizations, which companies do not like. The system does not appreciate that turnover.

The main reason for discrimination, as experts have found out, is this perception. This discrimination does exist.

You can say that the level of discrimination in Japanese companies is medium, while in US companies it is very low.

But in the US, it is generally complained that racism and discrimination against Black people exist. That part is there in the US.

Of course, you cannot compare apples and oranges. They are two different things.

In general, if we talk about experts’ opinions, discrimination exists in the Japanese system on a moderate scale, while it is very low in US companies.

The reason I am talking about these differences is that most people are aware of the ways of doing business in the US or in some of the English-speaking European countries.

A comparison of these parameters on the main management features, when we compare Japan and the US, will definitely help you understand the Japanese market.

Now, if we talk about the third dimension of management features that we are comparing with the US, let us look at recruitment procedures.

In the Japanese management system, the recruitment procedure of HR departments is very rigorous for the simple reason that they are looking for the cream—and cream only. The best companies in Japan look for the best candidates, so they conduct a lot of interviews, several rounds, to be absolutely sure that the person being recruited is the cream.

It also emanates from Japan’s high score on uncertainty avoidance. As you know, Japanese culture scores very high on uncertainty avoidance. They do not want any bad or awkward results. They take a lot of time to decide and work things out.

That cultural aspect shows up in the recruitment procedure as well.

The recruitment procedure becomes very rigorous, while in the US, as we understand from doing business in the US and other English-speaking countries, recruitment processes are low to medium. They are more need-based.

In the Japanese style of working, even if the need is urgent, they will not dilute their recruitment processes or steps. They keep it rigorous.

Even if the position is left empty, they will not recruit a person until they are fully satisfied at the recruitment stage itself.

If we talk about the fourth dimension of management style when comparing countries, we should consider the level of employee training—the training provided by the company, the investment made in employees, and the focus and conviction about how much training is required.

In Japanese companies, training is a continuous process.

Why is it continuous? Japanese business leaders expect their employees to work for a lifetime, and they see employees as key success factors. That is how they differentiate themselves from other companies—by having good, well-trained employees.

It is like Japanese companies to resort to and invest in continuous training of their employees.

In the case of US companies, we find that the training process is applied as and when required. US companies do not have continuous training. It is more of an application of need and practicality.

One reason for this is that in US companies, employees have individual freedom, and they can easily be expected to leave the company whenever they find a better job elsewhere.

It makes little business sense for leaders in US companies to invest heavily in continuous training of employees.

Obviously, this difference does exist.

Friends, if we talk about the fifth parameter of comparing the management style of Japan with the US, let us talk about the workers’ unions.

What types of unions exist? What is the workers’ protective environment? What avenues exist to protest or complain, or to go to some organization in the case of becoming a victim of unexpected behavior by the employer? That is the role of the workers’ union.

The job of a union is to look after the welfare of the workers, especially the blue-collar workers on the shop floor.

In the Japanese system of management, generally expected workers’ unions are single unions with which companies have enterprise agreements. It is a well-accepted fact that each big company in Japan has the recognition of a single workers’ union, generally created by the companies themselves.

They are not really independent workers’ unions, as is the case in the US and many other English-speaking countries in Europe. It is quite different.

It is a kind of enterprise unionism. This enterprise unionism exists in Japan, and it is quite different—but it works very well.

You should not assume that this is a kind of monopoly by Japanese companies to exploit employees. That is not true.

Rather, enterprise unions take a middle way, keeping the interests of the organization as well as the interests of the workers.

That works very well because if both are happy, things will work for a longer time, the relationship will be more sustainable, and it will be more cordial. That is what actually happens.

But it is debatable whether this enterprise unionism is really the correct protection of the labor force. A lot of debate takes place on this issue, on the union system in Japan, which is quite different from that in many other advanced countries.

If we talk about workers’ position and their status in the organization, generally, we focus on the status of the blue-collar workers versus the white-collar workers.

In the Japanese style of functioning, we see that the blue-collar workers and the white-collar workers have a single status.

For all practical purposes, the status is single for the simple reason that each white-collar worker has to start by becoming a blue-collar worker.

They have to spend time on the shop floor. They have to eat the same food that other shop floor workers eat. They have to be with them until they graduate into the white-collar role.

Job differences cannot exist. The system is like that.

The difference between the blue-collar and the white-collar workers is not there in the Japanese management style. It is a single status.

In the case of the US, also, to a great extent, there is hardly any discrimination between blue-collar workers and white-collar workers. But yes, their income levels are different, and that difference definitely exists.

Although there is a shortage today of blue-collar workers, their status has actually gone up in recent times.

If we talk about the seventh parameter in understanding Japanese management style versus the US, we are talking about decision-making—how decision-making takes place in medium to large organizations in Japan versus how it is done in the US.

In management jargon, we would say that the decision-making process in Japanese companies is bottom-up. This means that generally, ideas and decisions start from the shop floor, and a lot of importance is given to those kinds of suggestions and ideas.

Generally, top management people are very powerful, but they do not involve themselves in the day-to-day activities. They only come into the picture when it is really required and at the right time, if some decision-making has to be done at their level.

Generally speaking, it is based on the bottom-up approach and the periodic flow of ideas and suggestions.

In fact, they really work very fast on those ideas because, with time, the Japanese system has evolved, and they have learned that it works very well.

It improves product features, efficiency, and output. Listening to the bottom line at the shop floor and supervisor level, and understanding the difficulties they face, really helps the company to create a strategic advantage vis-à-vis other companies.

That is the learning Japanese companies already have, and they are very proud of it.

In the case of US companies, generally speaking, the approach is normally top-down. Although there is a lot of emphasis on individual freedom, people at all levels have opportunities to speak up, to put forward complaints, or to suggest ideas.

Generally, ideas and concerns are listened to in US companies.

But finally, it is well-accepted that the most powerful people at the top—their ideas, and what they say in decision-making—prevail.

The meaning of the top level in US companies has more to do with profits, shares, compensation for the top executives, and the numbers or statistics they generate for the company.

Generally, what happens is that it is the individual preference of the top executive in US companies whether they want a top-down approach, a bottom-up approach, or some trade-off in between.

This often depends on the type of industry and the nature of the business the company is in. In US companies, they choose between bottom-up, top-down, or a mix of the two approaches.

This is what we already know. I need not explain the management style of US companies in detail. Most people in English-speaking countries already know the main features of the US management and working style.

Now, friends, only a few of the other parameters we will discuss when talking about the differences in the management style of Japan compared with US companies are the nature of the workers’ groups—what kind of workers are there, and the categories of workers.

I am not talking about blue-collar or white-collar. I am talking about permanent workers, temporary workers, or a mix of them.

What are the methods of dealing with workers? How is labor managed? We are talking about labor laws, employee welfare, and internal recruitment.

Workers’ groups in Japan generally comprise core workers, who are expected to be working for a lifetime, and peripheral workers.

The peripheral worker system has evolved in recent times in Japan. These are not permanent staff, and depending on the needs of the companies, they may be increased or decreased as required. There is a hire and fire in the peripheral workers category.

These two categories exist in Japan, while in US companies, it is generally not the case, at least in the US market itself. However, US companies in overseas markets do sometimes follow this system of core and peripheral workers—permanent and temporary groups.

In Japan, it is very common now.

If we talk about employee welfare—the type of welfare and the focus of the companies toward employees—what type of welfare are we talking about?

In the Japanese management style, companies provide employees with the best working environment, compensation, and many other benefits.

Basically, the focus of Japanese companies is not on compensation, which is based on seniority and the number of years someone has worked in the company. Instead, they provide a complete package of welfare, which includes low-interest loans, cheaper housing facilities, free conveyance, and free food in the company.

In many companies, they provide free lunch and many other facilities like medical care at almost no cost, along with loan systems. Interest-free or low-interest loans actually help Japanese companies maintain better control over employees. They treat it as a lever to have better control and a stronger grip on employees.

It is very prevalent to provide interest-free or low-interest loans to employees when the need arises.

Finally, when talking about the management style of Japan versus the US, we should mention another aspect: internal recruitment. This means that if vacancies exist at certain higher levels, it is very common practice in Japan to recruit somebody internally from within the organization. That is their priority. If they are not able to find someone to fill the position internally, only then do they go outside.

The focus and first choice of Japanese companies is internal recruitment.

In the US, it is purely based on the profile and requirement of the job, the right match with the role, and they do not differentiate between internal employees or someone from another company.

It purely depends on HR professionals and consultants, who determine what profile is required for a particular post and whether it should be filled internally or externally.

The consensus in the US is that a position can easily be filled by someone from a third organization, an outsider. This is very common.

The management style of Japan is definitely unique. There is nothing really wrong with the Japanese management style of working. It is just that understanding this management style is very important.

Friends, we studied leadership and management styles.

And now we know that in this module, we learned that local employees are certainly influenced by the local culture and have unconscious preferences.

In other words, they have preferences for the traits of an outstanding leader as defined by their local cultures.

What are those traits?

What are the preferred traits, the implicit traits, that outstanding leaders should have in those cultures?

We have understood this, and we have also understood that local influence does matter in forming those preferences.

Therefore, when a leader moves to other countries, they have to learn and unlearn many personal habits, perceptions, and sometimes even beliefs and values.

That is a difficult area, but it has to be addressed to match the expectations of the host culture.

It is a very complicated process that requires a high level of intercultural competence.

We finally studied the GLOBE project, which was undertaken by almost 200 researchers from 62 countries and took ten years to complete.

The GLOBE project CLT dimensions, that is, culturally endorsed implicit leadership theory dimensions, can help leaders fine-tune their leadership styles when dealing with different cultures, multicultural workplaces, multicultural teams, and even multicultural remote teams.

Leader–follower interaction and exchange is a complex process involving expectations, trust, emotions, and the ethical values of the local culture.

These are some of the key aspects.

Finally, we also learned in this module that prevalent management styles and typical hierarchies vary from country to country, even sometimes within the same region of the world.

For example, within Europe, we have different countries with very different types of typical management styles and different types of hierarchies in their workplaces.

These are the things we learned in this module.

The starting point of cross-cultural management and cross-cultural competency building is to accept the fact that there is no good or bad culture. It is just that each national culture is unique, but has the potential to deliver better results if handled properly.

Friends, do you know that 100 Israeli managers working in Silicon Valley in the US found that Israeli-American managers thought in more complex ways than managers who considered themselves to belong only to Israeli or only to American cultures?

The result was that the peers of these employees rated them as more competent managers, and they were actually promoted faster.

These are the facts. Many such facts relate to cultural adaptation, the intercultural existence of multicultural work teams, and intercultural communication.

There are definitely things beyond just understanding cultural differences, which we talked about in the last module.

This understanding in terms of leadership differences or management style differences is not sufficient. We have to go beyond understanding those differences and look for astonishing and incredible facts about different cultures and the existence of people from multiple cultures in multicultural work teams.

Do you think that cultural differences have an impact on the potential for business success in different national cultures?

These are the questions we are going to take up in this module.

Questions like: Can there be theoretical ideas that can help to design flexible organizations, flexible organizational structures, and management mechanisms in various cultural atmospheres that are starkly different from each other?

These are the things we are going to take up in this particular module, and we will try to look at the different cross-cultural management theories in this module, which definitely go beyond understanding differences in management styles.

The overall performance of jungles in their natural state is definitely better than that of all the cities and towns of humans.

The first theory in cross-cultural management is the jungle theory of cross-cultural management.

What do you think? Why am I talking about the jungle? Why do I bring the jungle into this, and why have I chosen this as the first theory to discuss?

It is called the jungle theory because the jungle is a very natural ecosystem with a very diverse range of animals, and yet, without any intervention from humans, it works very well.

It maintains balance.

The performance of jungles is definitely better than that of all the cities and towns of humans.

The excellence of these jungles and forests is managed by certain forces—the diversity of animals and their interdependence and coexistence with each other are very remarkable.

That is why I have chosen this theory. I am very sure that you will appreciate the fact that this idea of the jungle and forest, and the theory connected with it, should help in cross-cultural management.

Let us look at what this theory actually says. In the animal kingdom, we know that there are very different and diverse types of animals. Each one is a winner in its own right and wants to live longer because it values what they are.

Everybody is happy with the faculties they have—whether it is a tiger, an elephant, or any other animal. They have their own food habits, their own communication skills, their own ecosystem, and their own way of living.

All the animals have their own style, their own culture—you will notice that. Similarly, diverse cultural traits do not represent losers and winners.

In a jungle or a forest, every animal is a hero within its own species, which has survived thousands, and probably millions, of years on Earth without major problems.

Similarly, diverse cultural traits do not represent losers and winners.

It supports the fact, which I mentioned earlier, that there are no bad cultures or good cultures.

You cannot compare or assume that a particular culture is backward or forward, a bad or losing proposition, or a winning proposition.

You cannot say that.

Each culture simply requires an enabling environment to perform to the best of its capabilities and succeed, just like in a jungle or a forest.

They get the right platform and the right environment, and they progress very well.

The same animals, when placed in a zoo or in captivity, get diseases. They do not perform the way they are supposed to in the wild. They perform really well in the wild, but in captivity, it doesn’t work.

The same thing happens when we talk about cross-cultural management.

For example, if we talk about the UNP case, if the Upjohn managers had understood that the Swedish and Italian companies would work better when left to their own ways, with minimum intervention, they would have achieved their goals more effectively.

The benefit of the merger and acquisition was the product pipeline. R&D could have been managed, and if the Swedish and Italian cultures, their ways of working, and their people had been left to their natural style, Upjohn would have done better by providing a better enabling environment, along with appreciation and celebration of diversity.

It was very important that they celebrated this diversity and these differences. In that case, this jungle theory, or forest theory, would have helped in making all three entities—all three geographical cultures—winners. The chances of UNP becoming a success and achieving a high level of integration would have been very high.

At the same time, diverse animals in a jungle are interdependent on each other in keeping the jungle ecology in check, healthy, and in balance.

This theory is actually being debated in several conferences, but the ideas have already been presented in certain forums.

This idea is likely to gain a lot of traction in business. If this method of jungle and forest theory is used in cross-cultural management—especially in mergers and acquisitions and similar situations—I think cross-cultural management will give very good results.

The kind of fiasco with UNP, where Upjohn, Pharmacia, and Farmitalia all vanished from the market to become part of Pfizer, illustrates what happens when the big fish eats the smaller fish. The market becomes more monopolistic, which is not good for the industry as a whole.

This was the jungle theory of cross-cultural management.

You can read more about it, and you will find similar ideas in other research papers.

Friends, what do you think about the UNP case?

Did you notice certain kinds of shock and stress among the employees of Upjohn, the employees of Pharmacia, and perhaps the erstwhile employees of Farmitalia? From their own perspective, they were, I think, encountering their own type of shock and stress, which we call cultural shock and stress.

This theory of cultural shock and stress is very important.

According to Kim (1988), cultural shock is not a linear and constant process of adapting and changing, but a constant and cyclic one. Thanks to intercultural stress situations, people develop intercultural communication and adaptation skills through a continuous process of development and learning.

According to him, stress is treated as a positive phenomenon with respect to the adaptation process.

But of course, shock can result in sudden fiascos.

In all probability, the reaction of Upjohn was the result of cultural shock.

Cultural stress is still acceptable because cultural stress makes you learn new things and new methods of dealing with situations.

But it definitely does not add to the cost.

What really happened with UNP and the reduction in profits?

If the formula had been good, cultural stress would have helped Upjohn rethink the strategy, celebrate diversity, and ensure that the outcomes and results brought about by Pharmacia and Farmitalia employees were as desired and as required by the market.

After all, the merger was in the mutual interest of both entities.

This theory talks about the intensity of culture shock, which can lead to wrong decisions by managers, like what happened with the Upjohn managers.

While cultural stress is not as intense, it gives room for rethinking and, in some ways, hiding the feelings.

If you do not understand a particular culture, you may go through stress and not feel good about that culture.

Instead of experiencing cultural shock, if you can reduce it to cultural stress, you will be able to find ways of dealing with it and ensure that there are no adverse impacts on your company or your entity.

That is the idea of this theory.

When we talk about cross-cultural management, we are talking about multicultural workplaces in multinational companies or companies dealing with international operations.

Now, friends, there is another cultural theory on which I have actually worked a lot.

When I talk about cross-cultural management, we are talking about multicultural workplaces in multinational companies or companies dealing with international operations.

When we talk about multicultural workplaces, there are people of different nationalities, in particular groups, with their own belief systems. They are, in a way, different animals in the jungle.

They have their own habits, food habits, and perspectives in their own right.

What happens is that certain people from some national backgrounds are more comfortable with colleagues of certain nationalities than with others from a third nationality.

The level of comfort between two pairs of workers in the same team, with different cultural backgrounds, can vary from one pair to another, depending on the interaction of the two persons in the pair with their different cultural backgrounds and beliefs.

According to the research paper submitted by me along with Professor Rahul Singh of BIMTECH in 2013, I started work on this research and studied the level of comfort between employees of local and foreign cultures in multinational firms.

The result of this study indicated that if you know which combinations of cultural peers, or cultural background pairs, in multicultural workplaces have more comfort or less comfort, and the reasons for those differences, and if you find methods to deal with those situations and restructure teams in such a way that the level of comfort gaps is not very high, it is possible to manage the situation better.

For example, in the UNP case, the three cultures involved were American, Swedish, and Italian.

Italian culture is Indo-European, Swedish culture is Scandinavian and more feminine in nature, while US culture is more masculine in nature.

If you study the level of comfort between these three types of cultures, you will find that, in all probability, cultural comfort between Italians and Swedes would be better compared to combinations involving Swedes versus Americans and Italians versus Americans.

These studies can be done using the Hofstede model as well. You can also look at this research paper.

You can find out the cultural comfort scores of different countries, similar to Hofstede’s scores, and get an idea of which countries are culturally near and which are culturally distant.

These kinds of studies can help you in managing cross-cultural environments and multicultural workplaces in international operations.

What do you think? From your own imagination, if you are a colleague with someone from the African continent, or if you have a colleague from a European or US culture in your country, do you see the possibility of your nearness, or less or more comfort, with a particular person of a particular origin?

Do you really see this?

Try doing this kind of exercise and find out if you have that situation.

If you are working in any multicultural workplace, try to find out: do you see those differences? Do you really feel that there are differences in the level of comfort of the local culture with foreign cultures in business and in the workplace?

What do you think—will the cultural adaptation of different cultures in multicultural workplaces or multicultural situations like UNP follow a particular pattern? Will it be smooth, or will it be constant?

What is your opinion about the shape of cultural adaptation—of one culture with another, or a particular culture with another?

As per the theory and the research done by James Rajshekhar and Frank Renard in 2013, which you can find online, they found that cultural adaptation has stages, specific stages.

The time frame may vary from situation to situation, and country to country, but the stages more or less match in cultural adaptation with any type of cultural interaction.

It depends on which culture is adapting to which.

For example, in the UNP case, when we talk of American culture with Sweden, or American culture with Italy, what will be the stages of adaptation?

The stages may be the same, but the time frame may vary. It may be a little easier to reach the mature stage with Sweden, and it may take longer for American culture to adapt to Italian culture.

These differences remain, but the stages are very similar, as observed by many experts.

According to this theory, the stages of cultural adaptation start with the pre-departure ups and downs.

For example, if we take Upjohn managers being deputed to Sweden to oversee operations, in the pre-departure stage, there would be misconceptions about the new culture and certain jitters and ups and downs.

At the stage when the person moves to a different culture, being exposed to a new reality, there is a certain honeymoon period. At this time, the person’s emotional well-being is at a very healthy level.

With time, this may get converted into cultural shock or cultural stress, coupled with acute homesickness.

Depending on the time frame of the assignment in the new culture, homesickness can be more intense. The person misses the lifestyle enjoyed for many years in their home culture, and the distance from loved ones adds to the situation.

After a certain time of shock and stress, the person begins to adapt to the new culture.

This is a very good phase, and it should last longer to complete the assignment in the destination culture.

Again, when the time comes to return to the home culture, similar pre-return ups and downs occur. But this time, the person has experience. They have experienced the honeymoon period, the cultural shock, and the homesickness, which they eventually learned to cope with.

With this experience and a new set of ups and downs, the person returns to the home culture with excitement.

After some time, this excitement dips into poor emotional well-being, as the person misses the good elements and moments of the new culture.

With this experience, including the honeymoon phase and the excitement phase, the person finally becomes well-adapted and confident in dealing with new cultures. The person is now more culturally aware and more culturally competent.

What does this mean?

This particular theory provides a very good idea of the methods of creating cultural awareness and cultural competence among employees.

In the case of UNP, Upjohn managers should have been sent on a cyclic basis for assignments of 1 to 3 or 4 months immediately after the merger, so they would have passed through these stages and become well-adapted, with strong cultural competence and cultural awareness.

If more managers had been sent and placed in key positions to manage Pharmacia operations in Sweden and the already acquired Farmitalia Italian group, they would have managed cross-cultural situations much better.

The parent company needs to regularly send its managers for short- and medium-term assignments to subsidiaries abroad.

This is the inference we can get from this theory. And this is also the lesson.

Then friends,

A very popular and very interesting theory of Horwitz S.K. and Horwitz I.B., I believe, mooted in 2007, propagates the idea that cognitive diversity is actually good.

If we relate this theory to the fact that in the jungle and forest theory, animals of different types definitely give better results for the overall balance and functioning of the forest ecosystem, it becomes clear.

If certain species are removed from the forest, it may lead to major damage to the forest environment. For example, in many forests and jungles in India, where the tiger population was reduced to zero, the degradation of the entire ecosystem began. This is a proven fact.

The same thing applies when this theory propagates that cognitive diversity among humans helps build a better environment for improved business performance.

Many researchers, as per this theory, contend that physical diversity characteristics such as race, age, sex, and gender differences—also known as bio-demographic diversity—positively influence the performance of companies. This is because team members contribute unique cognitive attributes based on their experiences stemming from their demographic backgrounds.

One example I would like to give to support this theory: you will notice that only a handful of multinational companies from Japan are truly successful in electronics and automobiles.

But many, in fact, the majority, of multinational companies originating from Japan have failed in international business because of their ethnocentric approach and monolithic culture. These companies have not been able to bring in outsiders or other cultures within their work environment, and they have not been able to succeed internationally.

Companies like Sony, Mitsubishi, Toyota, and Suzuki have partially or fully succeeded in becoming very successful international companies. But their numbers are limited compared with companies from Western Europe and the USA.

If you look at the Fortune 500 list, you will find the number of Japanese companies much lower than that of many other countries.

The reason is very simple. The major failure of Japanese companies has been their inability to appreciate cultural diversity in the recruitment process and in maintaining human talent within the organization.

Such failures have badly hurt many excellent companies from Japan.

Many observations actually support this theory, and it has a lot of traction in international business, including mergers and acquisitions.

If we apply this same theory to the UNP case, if Upjohn managers had been able to manage Pharmacia, the Swedish group, as well as the Italian group, they would have been very sure that overall performance would have been very good if cross-cultural management had been conducted properly, with proper understanding, cultural competence, and cultural awareness.

If Upjohn managers had been trained in this area well in advance before going into the merger and acquisition, this theory would have ensured that the overall performance of UNP, as a fully and properly integrated, culturally integrated entity, would have been much better in the market.

Friends, we had a very interesting module, and we found that in this module, there is definitely nothing called bad or good culture.

People from all national cultures can give outstanding performances given the right opportunity, work environment, and leadership.

We also learned in this module that cross-cultural shocks and stresses can prove to be great cross-cultural teachers, with the potential to increase cross-cultural competency, which depends on a team of managers with very high-quality cross-cultural competence.

We also learned that the process of cross-cultural adaptation is a set of stages involving several ups and downs, periods of highs and lows of emotional well-being, and stable stages of adaptation in between.

Those stable stages of adaptation are the real focus, as they are the periods that actually benefit the organization.

These are the things we studied in this module.

We also learned that having multicultural work teams can increase the chances of business success. That was a great learning outcome.

We will be talking about this more in the course.

We now know that the level of comfort between managers from different cultures and cultural backgrounds may vary according to specific cultures. There are many permutations and combinations—people with dual cultures, single cultures, or high levels of acculturation.

This whole area is very complex, but with the type of understanding we have gained through the cross-cultural models studied in this module, things become easier, and it helps in making good business decisions.

Upjohn seemed to be the victim of Ethnocentrism, which is widely prevalent in US companies. The module answers the questions raised by the case study to drive home the point that culturally competent managers are required to carry out the cultural integration of such overseas acquisitions.

Friends, we are now through with the knowledge about the different cultural differences, the differences in leadership styles, and in management styles.

We also have some understanding of cultural differences through certain cultural theories, where I discussed with you that the main theories indicate there is something called bad culture or good culture. It is just how you manage the cultures.

Every culture is a winner. In the context of all this knowledge, do you think we can now answer the questions that were raised in the opening case study of Upjohn and Pharmacia UNP?

Should we now go back to those questions and try to answer them with the newfound knowledge about culture, cultural differences, leadership, management styles, their interrelationships, and the several theories we have discussed?

Let us try this now.

Let us see whether we are equipped with the knowledge to answer these questions.

If we revisit the questions raised in the opening case study, what we really wanted to learn from this course were things we have already discussed, either in brief or in detail, with examples or additional case studies.

The first question was: What kind of cultural differences matter when companies from different countries merge?

Not all types of cultural differences would matter. As you know from Hofstede’s model and its cultural dimensions, differences exist. We know management style differences exist, but the real question is: Which ones matter most?

Let us try to answer this question first.

From the knowledge we have gained, it is clear that for managing international operations, mergers and acquisitions, and other aspects of international business, management style differences are very important.

For example, in this case, understanding the differences between US, Swedish, and Italian management styles is essential. That much is clear.

The second important aspect is the structure of command—the management hierarchy.

How does it differ between the US, Sweden, and Italy?

This is of great interest because, frankly, we cannot manage the culture of acquired companies unless we understand the structure and hierarchy of command their employees are used to. From this angle, it becomes very important.

Then comes the role of managers.

For example, in the Swedish management style, managers are easily accessible. They are available for discussion and help.

Is this the system in the US? If not, then what should be done about it?

What exactly is the role of the manager? To what extent should he or she involve themselves in day-to-day activities, policy-making, or decision-making? That also has to be understood.

These cultural differences are very important.

Then comes the question of workplace freedom. This mattered a lot in the case of UNP, where Swedish employees felt workplace freedom was missing when working with US managers. This is also very important.

The decision-making process is another critical factor: whether it is decentralized or centralized, top-down or bottom-up. Understanding these differences in decision-making processes is essential.

The methods of rewards, promotions, and compensation also need to be compared. What is common across these three countries would be very important to find out.

These factors are key in reducing cultural shock. Rewards, promotions, and compensation—and understanding the differences between the three nations—are very important.

Then there are aspects and issues regarding the recognition of the work done by employees.

How is it recognized? What is the role of managers and management in recognizing the work of employees?

How should it be done? What is the process in different cultures?

Those differences, along with procedures and processes, have to be understood.

And very importantly, the process of acculturation.

What does this mean? It means cultural training of US employees, cultural training of Swedish employees, cultural training of Italian employees, and of other nationalities if they are present.

How are they to be acculturated to the merged company?

This process of acculturation is very important, and it requires a lot of professional help.

Now, friends, the second question raised by the case study we discussed was about understanding whether the case study indicates a match between the described cultural characteristics and what we know now.

We already have some idea about cultural differences.

We know what the common cultural differences are, and we know about the management styles and the cultures of countries like Sweden, the US, and Italy.

Do we have the wherewithal to understand the match between what we know and what is indicated in the case study?

Let us try to understand that.

What we know about the US is a kind of structured individualism among US managers.

That has been very clearly indicated in the case study.

It states that the US managers were not really ready for the type of cross-cultural management required in this case, and that they were stuck in their individualism and ethnocentric approach toward dealing with the Swedish and Italian employees.

This resulted in many problems.

The morale of the employees of the erstwhile Pharmacia and Farmitalia went down. We also know about the egalitarianism of Swedish employees, which was very visible.

These employees from Pharmacia, the Swedish employees, had been complaining about the inclusive style of management, teamwork, and consensus-building.

Those egalitarian views of Swedish employees were clearly indicated in the case study.

What we know definitely matches what was discussed in the case study.

Regarding the Italian employees, not much was discussed about them in the case study, except that they had to deal with two different types of managers and bosses.

Earlier, they had Swedish bosses, and later, they had to deal with US bosses as well.

It was mentioned that the management styles of Sweden, as well as the US, did not conform to the expectations of the Italian employees.

It is very clear that the characteristics described, at least for the US and Swedish cultures, are very much in line with what we now know about the cultures of the US and Sweden from what we have learned in this course.

Using those models, we can certainly work out and do a deeper study on these aspects.

On the face of it, it is very clear.

The culture of Italy has not been discussed in great detail in the case study, but that can be done.

Now, friends, the third question in the opening case study was: What could have been done right by the managers in the case study?

That is very important. In fact, it is the most important part of this case study and the purpose of this course.

What exactly could have been done right by the US managers? That is critical.

Let us discuss that part.

Talking about the right things that could have been done by the US managers:

First of all, they had to start appreciating the cultural differences and understand, as we have learned in this course, that no culture is bad. Cultures have developed in their own way in a given environment, and they have the potential to deliver the best results if handled properly.

The meaning of handling properly is that there is no point in imposing one’s own culture on another culture. What is required is to understand the culture and get the business done according to that culture, because employees will only perform within the framework of what they have been practicing for a very long time.

That appreciation by the Upjohn managers should have been the starting point.

The second thing they should have done was to constantly acculturate both US and Swedish managers.

As we have discussed in this course, managers should have been sent from both sides—the US as well as Sweden—to each other’s countries for short- to medium-term assignments of two to six months.

This would definitely have helped in cultural adaptation and in building a better understanding of each other’s cultures.

This pool of acculturated managers from both sides would have served as the best bridge between the two entities, getting the job done in a way that delivered results while maintaining the satisfaction of the different cultural groups. Employees would have been happy to work in their own familiar environments, in line with the cultural makeup of their mindset.

It is very clear from our understanding that cultural acculturation would have brought managers from both sides together. These managers would have been the critical link between the two entities.

From this acculturated team of managers, over time, identifying the best cultural managers from both sides would have made the integration much easier, without creating cultural friction among employees.

Another important thing that could have been done by the Upjohn managers was to ensure a reasonably high level of decentralization while dealing with the Pharmacia group.

Decision-making should have been decentralized, and with the help of acculturated managers from both sides, supported by the right intercultural training and talent, it would have been easy to maintain control in a decentralized decision-making environment.

Another very important aspect would have been the right kind of diversity management at both the corporate level and the local level.

In Sweden, Italy, and the US, diversity management based on ethical values would have helped a lot.

Finally, the aim of all these efforts should have been to build a justified and ethical corporate culture, while ensuring the right kind of freedom was available to different cultural groups.

The common goal of ethical corporate culture is a universal concept that exists in all cultures.

It is not that Swedish or Italian employees never wanted an ethical corporate culture—they would have always welcomed common grounds in corporate culture.

But at the functional level, they had to be given the right environment, one that their minds accepted and their cultures aligned with.

These were the right approaches.

The result, however, was that within a decade the company name and everything connected with it vanished.

Now friends,

One question—the fourth question in the opening case study—related to why most parent companies, as in this case, want to impose their own ways of thinking and their own culture on the acquired company in the first place.

Can we answer this question with the help of what we have studied in this course?

What do you think? Can we really do this? Are we prepared for this kind of question? Are we equipped to answer it?

In my opinion, we are definitely prepared, and we already know from this course how to answer this question.

If you have some views, do share those views as well.

Let us try to answer this question.

The question remains: why does the parent company want to impose its own ways on the acquired company?

It appears that parent companies, if their managers are not trained interculturally, often have a general feeling of superiority—some kind of self-myopia.

They lack intercultural training, cultural competency, and cultural awareness. Because of this, they are unable to see the bigger picture.

This self-myopia leads them to feel that since the company has been acquired, the parent company has the right to make things better. They often believe the best way to do this is to impose their own culture.

Being the parent company, managers feel it is their duty to teach what they believe are better ways of doing things to the employees of the acquired company.

They think it will work, but it actually doesn’t, because of their failure to develop the right cultural competency and cultural awareness.

This becomes a barrier, and despite their good intentions, they end up creating bigger problems.

This becomes an issue for both the parent company and the acquired company, and in such situations, mergers and acquisitions often fail.

Another point from our course is that managers in some cultures, or in most cultures, sometimes try to find shortcuts.

Instead of understanding the bigger picture, with a myopic mindset and an urge to get things done faster, they try to impose their systems and ways of doing things on the employees of the acquired firm.

This habit of finding shortcuts becomes very problematic.

In many companies, the corporate environment is full of daily and routine work. In such an environment, the tendency to find shortcuts becomes a breeding ground.

This is very common in industry and in the corporate world. Unless managed properly and guided correctly by the top management, such managers will not adopt the right ways of doing things.

The longer and more careful ways of managing, especially in cases like mergers and acquisitions, are very important.

Basically, it is a failure of such managers to see the bigger picture. The bigger picture has to be shown to them by the right vision and guidance of top management.

That is very important. For this, cultural awareness is essential.

Training to increase the cultural competency of managers is very important, and it is very much possible.

Ideas, skills, and methods are available for this purpose. They just need to be deployed.

Now, friends, another question in the case study was: what kind of cultural awareness is actually required in such cases?

This question can be easily answered by understanding what is actually required.

Let us try to answer this.

Cultural awareness is required across many dimensions.

For example, as has been mentioned, cultural awareness should include knowledge of at least the immediate concern.

In the UNP case, managers of Upjohn should have been very clear about Italian and Swedish culture—their management styles, their ways of thinking, and their ways of doing things.

For this, intercultural training should have been in place, carried out routinely and consistently. That was very much the need of the hour.

Such intercultural training is possible. Experts and consultants are available who can provide this kind of training to US managers.

At the same time, similar training should have been given to Pharmacia employees as well.

The idea is to understand local customs, management styles, traditions, local government structures, laws and provisions, ways of working of the local government, and the state of the local economy.

For example, in this case study, awareness of the US economy, the Swedish economy, and, of course, the Italian economy would have been essential.

Knowledge of these aspects is not difficult to acquire for managers.

Acculturation—by sending employees of Pharmacia as well as Upjohn to each other’s locations for short assignments—would have further increased cultural awareness. The purpose of such exchanges is experiential learning, which becomes very useful in such cases.

The aim should have been to develop both professional and social skills for dealing with different cultures. The type of acculturation that would have come through the movement of managers for adaptation to different cultures, via short-term assignments, would have gone a long way in increasing cultural awareness and cultural competency of managers on both sides.

It was not just the managers of Upjohn, but also the managers of Pharmacia who needed this training.

Such training would definitely have moved things in a positive direction and would have given positive results for the merger between Pharmacia and Upjohn.

Finally, friends, the last question in the opening case study was: Can the local units be left to use their own ways of doing things?

Is it required? Is it necessary? What actually is required?

The answer to this question is absolutely on a case-by-case basis.

In this particular case, it was not very much required that the local units—in this case, Pharmacia, including the Italian part—be left entirely on their own to do things their way.

It was not required that Upjohn leave them completely to their own ways of working. If the right process had been used, these companies would have been welcoming to new ideas. There was no barrier to such things.

The problem was the degraded morale of the employees because of the constant hammering by Upjohn managers.

If the right training had been given, it would not have been necessary to leave them entirely to their own ways.

At the same time, the knowledge we have gathered in this course shows that employees of Pharmacia would have done better in their own environment. They would have performed better under the supervision of talented intercultural managers—managers who were acculturated and had the right intercultural training.

If that had been employed, the right kind of freedom could have been given to the local units. This would have resulted in the right environment, with the possibility of making certain improvements where required.

What was actually happening was that the local units needed good leadership and good management. That was more important.

They were definitely willing to adjust to new realities. There was no question about that. But at the same time, a severe alteration of the work environment should not have been made. That was the most important point.

What was required was proper acculturation and space to work. The employees of Pharmacia should have been given their own space. Their ways of doing things should have been appreciated, their diversity celebrated, and the managers of Upjohn should have reached out to them without judgment and without imposing their own ways of working.

That was what was required.

The answer to this question, then, is that local units should be allowed to use their own ways—yes and no. It has to be done using the right trade-off, carefully respecting the sensitivities of the local units. That was very important.

If it had been handled properly, the local units could have added new capabilities and delivered a better performance than expected, though it would have taken some time.

Such kinds of acculturation take time. Acculturation time was required in this case.

Professionally trained cross-cultural managers should have been deployed to handle these issues, using the process we have already discussed.

What do you think?

Could we really have done the right things in this case study? What do we understand from it? Could we have approached it differently?

What is your opinion? If we had taken the kind of approach discussed here, would it really have helped in the preservation of the merged company, UNP?

Do you think we could have saved the company from upheavals, considering the timelines of events, including the merger, the resignation of the Upjohn CEO, the later failure of the Pharmacia CEO, and ultimately the sale of the company to Pfizer?

Do you think the answers we have shared and discussed would have helped? Or did we leave some stone unturned, where further discussion is required?

There are certain areas that perhaps are still unanswered. Do you think so?

Please share your ideas.

Congratulations on diligently completing this important learning course. Please feel free to write your query, if any, on the UDEMY messaging system. Please watch the next video on the final thoughts and reflection on the course by the instructor. Wishing you a greater level of cross-cultural competency, now that you have completed this course. And a great career in international business. As a reward for your hard work in completing this course, the instructor of this course is pleased to share a complimentary copy of a research-based book titled - Multinational Workplaces - The War of Seasoned Minds, written by him along with Prof. Susana Costa e Silva, Catholic University of Porto,  Portugal, for your review, reading, and record. Do share your feedback on the same. And rate this course too, to enable the course to reach more talented students like you.

Friends, I am very thankful to you for choosing this course and for going so far as to reach the conclusion of this course we have completed.

For the time being, we have completed all the lessons of this course.

In the future, I will be adding more resources and case studies to this course, and I will keep you posted.

I would request you to look into those announcements made by me and review the new resources.

For now, I congratulate you on completing this course, and I am very sure that you must be feeling confident. As far as understanding the different cultures of the world is required for business purposes, for business decisions, and for understanding cultural differences, leadership style differences, management style differences in different countries, and cross-cultural management tips, tools, and models, you now have the knowledge.

Although a lot of research and information is available on this subject from different sources, I have included in this course only those concepts that are most popular and most widely used by business people around the world, and which have really helped them in carrying out international business.

That was my aim in this course, and we went through a couple of case studies and some practical examples.

I am very happy that you have been able to complete this course.

I again congratulate you on completing this course and request that you share it with your friends and contacts for their benefit.

If you have any comments on this course as a whole or any suggestions for improving it, please share your feedback and rate the course.

Thank you very much.

Hello to you!

Today I have some appreciative comments for you.

I want to take a moment to congratulate you on fully completing this course.

Your dedication and perseverance throughout this journey have been truly commendable.

Completing a course is no small feat, and I am incredibly proud of the progress you have made and the knowledge you have gained along the way.

I also want to remind you that this course is just one piece of the puzzle.

It is part of our larger VJ Export Import Master Courses series, consisting of 25 courses that I had told you about earlier as well.

These courses are designed to provide you with a comprehensive understanding of the export industry.

On my part, as I had mentioned earlier, I am committed to helping you expand your learning even further by giving you access to more similar courses in the series. On your part, I again have a small request for you.

Your feedback and rating are incredibly valuable in refining this course and ensuring it remains world-class.

I kindly ask you to leave a rating for the course along with your honest feedback, in case you have not done so yet.

Once again, congratulations on completing the course.

Keep up the fantastic work that you have done in this course, and remember, I am here to support you every step of the way, personally, even after you have completed this course. You can reach out to me anytime for any mentoring or support that you may need.

Thank you very much.

Hello and welcome, and thank you so much for completing this amazing course.

I truly appreciate the time and effort you have invested in developing all types of skills, whether related to export documentation, compliance, international regulations, logistics, or global marketing strategies.

In this short bonus video lecture, I want to share with you a few optional ways you can continue your learning journey, access additional resources, and stay connected with me for future guidance, all while remaining fully compliant with Udemy policies.

If you want to continue receiving educational content on exports, global compliance updates, HS code classification tips, EU/US regulations, logistics strategies, and real-world case studies, you are welcome to connect with me on LinkedIn.

I regularly post export-related insights, free updates, and practical examples that many learners find very useful.

Again, this is completely optional, but if you would like to connect, this is my LinkedIn profile: LinkedIn.com/in/vijeshjain. Along with my activities on LinkedIn, YouTube, Instagram, and many other social media platforms, I frequently share publicly available articles, guidance notes, and updates related to topics such as documentation and compliance, Indian and international customs rules, labeling requirements, global market trends, and policy changes in the EU, USA, UK, and Middle Eastern regions, as well as best practices for exporters.

These free resources can help you stay informed and confident as your export business grows.

For learners who need personalized clarity on specific export matters, such as HS decisions, regulatory compliance, product classifications, labeling reviews, customs queries, international market strategies, or even Amazon US product launch advisory, I also provide such guidance outside Udemy.

If you ever require any of this tailor-made support, you may contact me directly. My email ID is vijesshjain@gmail.com.

Please note that this is only an optional way to reach me outside Udemy, and it is not required to complete this course. It is also not part of the Udemy purchase for this course, which keeps this message fully compliant with Udemy policies.

In addition, I want to cordially invite you to my Discord Knowledge Hub, which has several channels, including the Q&A section, discussion channel, discussion lounge, video lectures channel, and announcement channel. No registration is required to access this knowledge hub or any of these channels.

Simply click the invite link, which is also provided in the resource section of this lecture, and you can access my Discord Knowledge Hub.

Before I close, I want to sincerely thank you once again for joining this course.

I truly hope that this specialized training has added real value to your knowledge base and to your professional journey in international trade.

My mission is to help learners navigate exports more confidently, whether it is compliance, export documentation, import documentation, logistics, or expanding into global markets.

I wish you tremendous success in your future business endeavors, and I look forward to staying connected with you on your path ahead.

Thank you once again, and all the best in your international journey.

Take care of yourself, and see you in another course in this course series.