Chap005 006.mrm

The Role of CultureThe Role of CultureManaging Across National and Organizational Cultures

Chapters 5 and 6, Hodgetts, Luthans and Doh, International Management: Culture, Strategy and Behavior , 6th edition (New York: McGraw-Hill Irwin, 2006)

Adapted from PowerPoint slides by R. Dennis Middlemist, Professor of Management, Colorado State University

Mark McKennaBUS 162 (6), International and Comparative ManagementSan Jose State University

OVERVIEWOVERVIEW

1. Applying Hofstede’s Cultural Dimensions

2. Organizational Cultures

3. Multiculturalism

APPLYING APPLYING HOFSTEDE’S HOFSTEDE’S CULTURAL CULTURAL DIMENSIONSDIMENSIONS1. Cross-Cultural Differences

and Similarities

2. Six Basic Cultural Variations

3. Exercise: A Jumping Off Place

Differences and Differences and SimilaritiesSimilaritiesChallenges for effective cross-cultural

management◦ Parochialism: the tendency to view the world

through one’s own eyes and perspective◦ Simplification: the process of exhibiting the

same orientation toward different cultural groups

Similarities across cultures◦ In US and Russian firms organizational

behavior modifications led to performance improvements

◦ Antecedents of organizational commitment were similar in US and Korea firms

Differences and Differences and SimilaritiesSimilaritiesDifferences across cultures

◦ In the criteria used in evaluating personnelNetherlands France Germany Britain

RealityAnalysisHelicopterLeadershipImagination

ImaginationAnalysisLeadershipHelicopterReality

LeadershipAnalysisRealityImaginationHelicopter

HelicopterImaginationRealityAnalysisLeadership

◦ In the norms and rules regulating wages, compensation, pay equity, and maternity leave

◦ In labor relations, job design, and the design of employee training programs

Basic Cultural VariationsBasic Cultural Variations1) What is the nature of people?2) What is the person’s relationship to

nature?3) What is the person’s relationship to

other people?4) What is the modality of human

activity?5) What is the temporal focus of human

activity?6) What is the conception of space?

A Jumping Off PlaceA Jumping Off PlaceA successful, mid-sized Ohio-based US

manufacturing firm decides to open a plan near Madrid, Spain.

Factors in the decision include:◦ The end of its licensing agreement with a

German firm◦ New patents and technology◦ Lower labor costs in Spain

The Spanish partner will provide on-site support; the US firm will provide capital, technology and training

A Jumping Off PlaceA Jumping Off PlaceIf the venture in Spain is successful, the

US manufacturer plans to use this experience to open plants first in Italy, then in France

Put yourself in the position of an international consultant or manager◦ What differences would you anticipate

between Spain and the US?◦ How might lessons learned in Spain need to

be adapted for operations in Italy?◦ How would France differ from both, and

from the U.S.?

Figure 4-5: A Power-Distance Figure 4-5: A Power-Distance and Individualism-Collectivismand Individualism-Collectivism

Figure 4-6: A Power-Distance Figure 4-6: A Power-Distance and Uncertainty-Avoidanceand Uncertainty-Avoidance

Figure 4-7: A Masculinity-Figure 4-7: A Masculinity-Femininity and Uncertainty-Femininity and Uncertainty-AvoidanceAvoidance

A Jumping Off PlaceA Jumping Off PlacePower

Distance

Indivi-dualism

Uncertainty

Avoidance

Masculinity

USALow(40)

High(91)

Low(46)

Mid(62)

SpainMid(57)

Low(51)

High(86)

Low(42)

Italy Low(50)

High(76)

High(75)

Mid(70)

France Mid(68)

Mid(71)

High(86)

Low(43)

Caveats and an ObservationCaveats and an ObservationCaveats…

◦ What is typical?◦ How discrete are subcultures?◦ Are values and beliefs fixed or fluid?◦ What are the significant “dimensions”?◦ Are attributes generalizable or situation

specific?Observation…

◦ “Understanding the properties and prospects of nations requires openness to the richness and diversity of national practices and institutions” (Brendan McSweeney, http://geert-hofstede.international-business-center.com/mcsweeney.shtml)

ORGANIZATIONAL ORGANIZATIONAL CULTURESCULTURES

1. Definition

2. Interactions between National and Organizational Cultures

3. Strategic Predispositions of International Organizations

4. A Typology of Organizational Cultures

DefinitionsDefinitionsHodgetts, Luthans and Doh (p. 154)

◦ “shared values and beliefs that enable members to understand their roles and the norms of the organization.”

Edgar Schein (1997, p. 12)◦ “a pattern of shared basic assumptions that

the group learned as it solved its problems of external adaptation and internal integration, and that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.”

InteractionsInteractionsThe values and beliefs employees

bring to the workplace affect their behavior within the workplace

Working for MNC may accentuate rather than moderate or erase cultural differences

Cultural differences across subsidiaries often cause coordination problems

Important dimensions of cultural difference within organizations include: motivation, relationship, identity, communication, control, and conduct

European’s Perceptions of Cultural European’s Perceptions of Cultural Dimensions of U.S. Operations/Same Dimensions of U.S. Operations/Same MNCMNC

Activities

Job

Corporate

Open

Tight

Conventional

Outputs

Person

Professional

Closed

Loose

Pragmatic

30 31 32 33 34 35 36 37 38 39 40 41 42

Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and European Operations (B) of the Same MNC

European’s Perceptions of Cultural European’s Perceptions of Cultural Dimensions of European Operations/Same Dimensions of European Operations/Same MNCMNC

Activities

Job

Corporate

Open

Tight

Conventional

Outputs

Person

Professional

Closed

Loose

Pragmatic

30 31 32 33 34 35 36 37 38 39 40 41 42

Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and European Operations (B) of the Same MNC

STRATEGIC STRATEGIC PREDISPOSITIONSPREDISPOSITIONS

1. Ethnocentric

2. Polycentric

3. Regiocentric

4. Geocentric

Strategic PredispositionsStrategic Predispositions

Ethnocentric predisposition◦ A nationalistic philosophy of

management whereby the values and interests of the parent company guide strategic decisions.

Philosophies of Management

Ethnocentric predisposition


Strategic PredispositionsStrategic Predispositions Polycentric predisposition

◦ A philosophy of management whereby strategic decisions are tailored to suit the cultures of the countries where the MNC operates.




Polycentric predisposition


Strategic PredispositionsStrategic Predispositions Regiocentric predisposition

◦ A philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis.






Regiocentric predisposition


Strategic PredispositionsStrategic Predispositions Geocentric predisposition

◦ A philosophy of management whereby the company tries to integrate a global systems approach to decision making.








Geocentric predisposition

Geocentric predisposition

Typology of Organizational Typology of Organizational CulturesCultures

Adapted from Figure 6–2: Organizational Cultures

Person Emphasis

Task Emphasis

Equity

Hierarchy

Fullfillment-oriented culture

INCUBATOR

Project-oriented culture

GUIDED MISSILE

EIFFEL TOWER

Role-oriented culture

FAMILY

Power-oriented culture


Family culture ◦ Power oriented and headed by a leader

who is regarded as a caring parent◦ Management looks after employees,

ensures they are well-treated◦ May promote loyalty and commitment or

lead to support for an ineffective leaderEiffel tower culture

◦ Jobs are well defined◦ Everything is coordinated from the top◦ Relationships are specific and job-related◦ Status remains with the job


Guided missile culture ◦ Work is typically undertaken by teams or

project groups◦ Individual expertise is more important than

formal hierarchies◦ Team members are interdependent and (at

least potentially) equalIncubator culture

◦ Organizations as incubators for self-expression and self-fulfillment

◦ Little formal structure◦ Focus is on development of an innovative

product or service

MULTICULTURALISMULTICULTURALISMM1. The Evolution of

International Corporations

2. Problems and Advantages of Diversity

3. Putting It All Together

The Evolution of The Evolution of International CorporationsInternational Corporations

Phase1

Domestic firms

Phase2

International firms

Phase3

Multinational firms

Phase4

Global firms

Source: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent Publishing, 1991), p. 123.

Phases of MulticulturalismPhases of MulticulturalismDomestic firms

◦ Focus on delivering a product or service in a domestic market

◦ Ethnocentric perspective – “one good way”◦ Multicultural challenge is to manage intra-

national cultural diversityInternational firms

◦ Multidomestic market-oriented strategy◦ Polycentric or regiocentric perspective –

“many good ways”◦ Multicultural challenge is to manage cross-

cultural relationships with clients and employees

Phases of MulticulturalismPhases of MulticulturalismMultinational firms

◦ Focus is on lower costs and increasing efficiency

◦ Multinational perspective – “one least-cost way”

◦ Multicultural challenge is to manage intra-organizational cultural diversity

Global firms◦ Global dominance through mass

customization◦ Geo/multicentric perspective – “many good

ways”◦ Multicultural challenge is to manage both

internal and external diversity

Problems and AdvantagesProblems and AdvantagesProblems associated with diversity

◦ Lack of group cohesion◦ Mistrust of others◦ Erroneous or biased perceptions◦ Miscommunication

Advantages of diversity◦ Enhanced creativity◦ Better decision making; preventing

groupthink◦ More effective and productive performance

Cross-cultural groups are better at innovation; single culture groups are more effective performing routine tasks

Putting It All TogetherPutting It All Together

Complexity in organizational culture◦ Interface between national and

organizational culture◦ Types of organizational culture◦ Degree of multiculturalism

Implications for managers◦ National cultural values

Impact on employee behavior Are not easily changed

◦ Particularly important when considering The management of human resources Mergers and acquisitions

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Chap005 006.mrm