Cross-Cultural Training Session 9 and 10

Today, we started the class with the presentations and we moved to the topic of corporate culture, which should have been done for the group assignments. A corporate culture should bridge cultural differences and integrate employees from different national cultures under one set of corporate vallues, beliefs, attitude, and above-all behavioral rules. Then, we moved on to the onion rings that included symbols (words, pictures, gestures or objects, that have specific meaning in a firm such as titles, dress code, work hours), heroes (individuals with a certain chracteristics which act as a role model for careers and desired behaviors), rituals ( activities to integrae employees from different national and professional cultures such as Budgeting and Controlling, Project Management, Greeting, first name) and practices (bringing all elements together). Hofstede created a system, similar to the national culture, for corporate culture. Process-oriented vs. Results-oriented, Employee-oriented vs. Job-oriented, Parochial (firm) vs. Professional (Job) (do you like the job or the firm you are working for), Open system (innovative, welcoming) vs. Closed system (, Loose control vs. Tight control, Normative (Processes/Rules) vs. Pragmatic (focus on Market/Results). Haier would be results-oriented, somewhere in between for employee-oriented vs. job-orientated, professional (job) because they could choose more of how they work at the company, leaning into more open system, tight control, somewhere in between normative and pragmatic. Then, we did a case study on IKEA, and I did the first question. 

The biggest advantage for a company that offers the same product range around the world is economies of scale. When you sell the same product throughout the world, the company can buy their raw material together, saving the company alot of money every year. It reaches a large number of people. People from all around the world would be aware of IKEA’s distinctive product variety. 

Disadvantages: One product that could sell well in one country would probably not sell well in another due to cultural differences, pricing and customer preferences.The same products could be used as a different thing depending on the country. For a country, a particular product can be used for something practical and another as something decorative, so the adaptation of the catalog is vital in showcasing the product ranges. 

Another disadvantage could be that the products that are least popular in terms of sales would not be sold out because the same items are sold everywhere else. Thus, there is no chance for the least popular items to be sold out.

Although IKEA had standardized products and their operations kept the costs low it led however to: Ignoring the different tastes and preferences of the market, Ignoring the different ways that people purchase furniture. This lead IKEA to change the model of operating by: Giving greater ownership to its subsidiaries, maintaining the ability to adapt furniture, customizing to suit the local market. The result is costs being increased, but this localization approach would be necessary for sales.

For Lifan, their corporate culture is process-oriented (MAS, UAI), job, parochial (firm), open system, tight control (PDI) and normative. 

For IKEA, their corporate culture is result-oriented, employee-oriented, parochial (firm), open system, loose control (PDI) and pragmatic. 

Then, we did a review and the preparation for the exam next week. There will be the Hofstede, THT and Hall, Corporate Culture, CAGE, how would you use the CAGE model to doing international business? (The acronym CAGE stands for Culture, Administrative, Geographical, and Economic). Go to a country with a low CAGE distance country. How you are going to adapt while using the 3A strategy, the 3A won't be in the exam. What are the similarities between the cultural dimensions, and what is for? Measure and compare the differences of the cultural category dimension. Culture is a qualitative phenomenon, which is difficult to cover, so we are trying to express this qualitative phenomenon in numbers, quantitatively. Adapting the 7P's, to be respectful of other cultures, able to understand the cultural differences when doing business. Difference between personality and culture, personality you own, culture we share (apart of). Culture shock and reverse culture shock (reintegration shock), 4 steps for expats—selection, preparation, deployment, and return. 

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