Chapter 7 Organizational Culture

Managing Organizations in a Global Economy: An Intercultural Perspective

First Edition

John Saee

Copyright by South-Western, a division of Thomson Learning. All rights reserved.

What is corporate culture?Corporate culture is an ideology shared by

members in an organization (Ouchi 1981; Pascale & Athos 1981; Deal & Kennedy 1982).

The sense making and control mechanism that guides and shapes the attitudes and behavior of employees (Robbins, Millet, Cacioppe 1998).

Functions of organizational cultureOrganizational culture defines

boundary.

Organizational culture conveys a sense of identity for its members.

Organizational culture facilitates commitment by its members.

Organizational culture provides standard code of conduct.

Relationship between the culture and the success of an organization.

Management is fast realizing that organizational culture is the driving force behind its successful operations.

Peters and Waterman (1984): “Without exception, the dominance and coherence of culture proved to be an essential quality of the excellent companies” (p. 75).

Organizational Culture and NationalCulture

Cultural preferences will influence the models people give to the organizations.

Are organizational cultures as influential as national cultures?

National values are always likely to overrule contrasting organizational values.

Hofstede’s research has shown that national culture values have significant impact on employees’ organizational performance, and the cultural values employees bring with them to the organization are not easily changed by the organization.

Dimensions of organizational culture.

Cultural comparisons were made between different subsidiaries of the same MNC (Hofstede 1980). It was found that different cultures existed in each subsidiary.

How far can a company go to implement an organizational culture across different national cultures? An organization should seek to evolve

a culture, which complements the national one but still manages to maintain its own corporate identity and individuality.

Organizational Cultures in MNCs

To determine the organizational culture requires examination of three aspects (Trompenaars 1993): The general relationship between employees

and their organization.

The vertical or hierarchical system of authority defining superiors and subordinates.

Views of employees about organization’s destiny, purpose, goals, and their place in it.

Trompenaars (1993) identified and described four types of organizational cultures: “family,” “Eiffel tower,” “guided missile,” and “incubator.”

“Family”Strong emphasis on the hierarchy and

orientation to the person.

“Eiffel Tower”Strong emphasis on hierarchy and orientation

to the task. “Guided Missile”

Strong emphasis on equality in the work place and orientation to the task.

“Incubator”Strong emphasis on equality and personal

orientation.

Organizational Cultures and Country Preferences

Trompenaars and Hampden-Turner attempted to identify national patterns of corporate culture. They surveyed 13,000 respondents across 42 countries.

The author suggests that MNCs should adjust their local organizational cultures to fit the cultures of the countries where they have operations.

Managing Multiculturalism and Diversity

What is workforce diversity? Today, the workforce is comprised of people

who are different and who hold a wide range of attitudes, needs, desires, values, and work behaviors (Saee 1990, 1993; Rosen & Lovelace 1991; Deluca & McDowell 1992; Morrison 1992).

Perceptions of the impact of cultural diversity on organizations.Ineffective management of cultural diversity

within most organizations stems from the nature of corporate culture which is basically mono-cultural and it does not value cultural diversity (Karpin 1995).

Organization may be parochial, ethnocentric, or synergistic in its strategic response to cultural diversity (Adler 1997).

Organization may be defined in terms of its organizational culture as monolithic or pluralistic (Hellriegal, Jackson, Slocum 1999).

Disadvantages because of cultural diversity:

Problems most frequently occur in convergence situations when the organization needs employees to think and act in similar ways.

These problems may be:Attitudinal

Perceptual

Communicational

Increased anxiety among managers because of a culturally diverse environment also presents a problem (Irwin & More 1994).

Advantages because of cultural diversity:

Employees from various cultural backgrounds can assist organizations in understanding cultural effects on buying decisions, marketing decisions, and in mapping strategies to respond to them.

Sales benefit if consumers have some opportunities to interact with organizational representatives of their own communities (Saee 1998).

Enhanced creativity, flexibility, problem solving, especially for complex problems involving many qualitative factors (Hayles 1982).

Strategies for managing cultural diversity

Cultural diversity in the workforce can be a source of strength for an organization, provided the organization manages that diversity effectively.

Cultural dominance: Doing the things the way they are done in your

own culture.

Accepting new ideas is facilitated (Adler 1997).

New perspectives, better communication, and cooperation (Saee 1998).

Cultural accommodation:An attempt to imitate the practices of the host culture,

blending into it.

Cultural compromise:Both sides make concessions in order to work more

successfully with each other.

Cultural avoidance:Acting as if there are no differences and no conflict

exists.

Cultural Synergy: Cultural synergy involves a process in

which managers form organizational strategies, policies, structures, and practices based on, but not limited to, the cultural patterns of individual organization members and clients (Adler 1997).