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Harvard Business School

9-394-177
March 24, 1994

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National Culture and Management

What is the role of national culture in business and management? Do various cultures differ in their approaches to management, and if so, in what ways? What problems are encountered when doing business across cultures, and what can managers do about them?

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These questions are becoming increasingly important as more and more business is conducted across national lines. Just a few years ago, only a small percentage of Americans had direct dealings with managers from other countries. But now, as many American firms have wholly-owned foreign affiliates, as others have been acquired by foreign firms, and as still others are participating in international joint ventures or strategic alliances, American managers are working directly with people from all over the world. For a growing number of managers, working in a cross-cultural environment is a fact of daily life.

Yet the relationship between culture and management is not clearly understood. At one extreme, some people doubt that culture has any impact on management at all. They find it easier to claim that human behavior is basically the same all over the world, that "business is business everywhere." This view, although convenient, is naive in that it fails to recognize that fundamental differences exist among people around the world. It may also be dangerous in that it does not alert managers to challenges they face in a cross-cultural setting.

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At the other extreme, some people exaggerate the importance of culture, using it to explain almost everything that involves more than one country. For example, the superior performance of Japanese firms during the 1970s and 1980s was frequently attributed to some unspecified attribute of "Japanese culture," rather than to manufacturing practices or quality techniques or government policies that may have had little, if anything, to do with culture. Similarly, when frictions arise during negotiations between firms from different countries it is easy to blame "cultural difficulties," when in fact these same frictions may arise in almost any negotiations, whether domestic or international. Just because a conflict involves firms from different countries doesn’t mean that the problem is cultural in nature.

Why should it be difficult to understand the relationship between culture and management? Part of the problem can be traced to a lack of clarity about the concept of "culture." Exactly what is culture, anyway? In what ways do cultures differ? If we cannot offer clear answers to these questions, our ability to speak meaningfully about culture will never advance far. A second problem

Professor Philip M. Rosenzweig prepared this note as the basis for class discussion. Copyright © 1994 by the President and Fellows of Harvard College. To order copies, call (617) 495-6117 or write the Publishing Division, Harvard Business School, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1

394-177

National Culture and Management

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lies in the tendency to assume that all members of a culture behave in an identical fashion—that is, to think in terms of cultural stereotypes. Many people are reluctant to address a topic that involves sweeping generalizations and therefore avoid the topic altogether. Finally, part of the problem lies in a lack of systematic thinking about the ways that culture is manifested in business settings. Even if we believe that cultures differ, and even if we avoid the pitfall of stereotypes, how do cultural differences affect managers? A useful treatment of culture and management should be able to relate culture, at a broad level, to specific aspects of management.

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